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2015 (7) TMI 945 - AT - Income TaxValidity of assessment order under section 144 - Held that - Assessee could not substantiate the incorrectness in the action of the Assessing Officer for passing the assessment order under section 144 of the Act. We, however, have carefully perused the orders of the lower authorities and we find that the requisite information sought by the Assessing Officer were not furnished by the assessee before him, therefore, the action of the Assessing Officer was approved by the ld. CIT(A) and during the course of hearing of the appeal no defect was pointed out in the order of the ld. CIT(A). We accordingly confirm the order of the ld. CIT(A) approving the action of the Assessing Officer for completing the assessment under section 144 of the Act. - Decided against assessee. Profit inclusive of reversal of NPA provisions - Whether CIT(A) correct dismissing the additional ground taken by the appellant that the profit of ₹ 2,86,25,894/-was inclusive of reversal of NPA provisions of ₹ 2,01,97,000/-initially made by the appellant in A.Y, 2004-2005 and 2006-2007 respectively without appreciating the fact that the profit to the extent of Rs,2,01,97,000/- was only the book entry and not the actual profit? - Held that - The ld. CIT(A), re-examined the issue in detail and has finally held that the Assessing Officer is free to allow loss to the assessee after revising the assessed loss in assessment years 2004-05 and 2006-07 after carrying out proper verification for relevant assessment records of the earlier assessment years, instead of giving a proper direction to re-compute the income keeping in view the provisions for reversal entries initially made in earlier years. Assessing Officer is required to assess proper income in the hands of the assessee. Therefore, the events of earlier years should be kept in mind while computing the real income of the assessee. Since the assessee has placed evidence with respect to the provisions of NPA in earlier years, the said facts require a proper verification. We accordingly modify the order of the ld. CIT(A) and direct the Assessing Officer to examine the claim of the assessee in the light of earlier assessment orders relevant to the assessment years 2004-05 and 2006-07. - Decided in favour of assessee for statistical purposes. Addition on account of possible leakage - Held that - The assessee has claimed expenses at ₹ 12,32,067/- but it could not produce the supporting evidence before the Assessing Officer and the Assessing Officer has made disallowance of 20% of the total claim which was reduced by the ld. CIT(A) to 10%. Since the assessee could not produce evidence in support of the expenses, we find no infirmity in the ad hoc disallowance made by the ld. CIT(A). - Decided against assessee. Non-deduction of tax on interest debited to the profit and loss account - disallowance u/s 40(a)(ia) - Held that - Disallowance of ₹ 2,58,538/- is proper for want of non-deduction of TDS under section 40(a)(ia) of the Act. So far as deletion of addition of ₹ 23,37,707/- on account of production of form 15H is concerned, we raised a specific query from the ld. counsel for the assessee as to when it was filed and whether any comments were called from the Assessing Officer, as there is no specific finding of the ld. CIT(A), but the ld. counsel for the assessee could not furnish any explanation to the satisfaction of the Bench. We are, therefore, of the view that this issue with regard to production of form 15H relating to ₹ 23,37,707/- requires fresh adjudication by the Assessing Officer. We accordingly set aside the order of the ld. CIT(A) and restore the matter to the file of the Assessing Officer with a direction to verify the production of form 15H and after making verification, disallowance under section 40(a)(ia) of the Act may be re-computed - Decided partly in favour of assessee for statistical purposes.
Issues Involved:
1. Validity of assessment order under section 144 of the Income-tax Act, 1961. 2. Inclusion of reversal of NPA provisions in the profit. 3. Disallowance of expenses due to lack of supporting evidence. 4. Addition under section 40(a)(ia) for non-deduction of TDS on interest payments. Detailed Analysis: 1. Validity of Assessment Order under Section 144 of the Income-tax Act, 1961: The assessee challenged the action of the Assessing Officer (AO) for passing the assessment order under section 144 of the Income-tax Act, 1961. The Tribunal noted that the requisite information sought by the AO was not furnished by the assessee, leading to the assessment under section 144. The CIT(A) approved this action, and no defect was pointed out during the appeal. Thus, the Tribunal confirmed the order of the CIT(A) approving the AO's action. 2. Inclusion of Reversal of NPA Provisions in the Profit: The assessee contended that the profit included Rs. 2,01,97,000/- from the reversal of NPA provisions made in earlier years (2004-05 and 2006-07), which were book entries and not actual profit. The CIT(A) examined the records and noted the adjustments made in subsequent years. The Tribunal found that the AO should assess the proper income by considering the events of earlier years. The matter was restored to the AO for verification of facts from the relevant assessment years. 3. Disallowance of Expenses Due to Lack of Supporting Evidence: The AO made an ad hoc disallowance of Rs. 2,46,413/- due to the non-production of books of account and verification of bills/vouchers. The CIT(A) reduced this to Rs. 1,23,207/-. The Tribunal found that since the assessee could not produce supporting evidence, the ad hoc disallowance made by the CIT(A) was justified and upheld the decision. 4. Addition under Section 40(a)(ia) for Non-Deduction of TDS on Interest Payments: The AO added Rs. 3,55,95,031/- for non-deduction of TDS on interest payments. The CIT(A) verified the details and found that only Rs. 25,96,245/- exceeded the Rs. 10,000/- threshold, out of which form 15H was furnished for Rs. 23,37,707/-. The CIT(A) restricted the addition to Rs. 2,58,538/-. The Tribunal noted that the verification of form 15H was necessary and restored the matter to the AO for fresh adjudication regarding the production of form 15H. The disallowance of Rs. 2,58,538/- was upheld. Conclusion: The appeals of both the assessee and the Revenue were partly allowed for statistical purposes, with specific directions for verification and re-computation by the AO where necessary. The Tribunal emphasized the need for proper verification of facts and adherence to the provisions of the Income-tax Act.
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