Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2017 (3) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (3) TMI 93 - KERALA HIGH COURTUnexplained credits - Held that:- Though the assessee had claimed that the said credit balance was from its Nepal company, despite various requests and opportunities provided, the assessee did not produce copies of audited accounts of the Nepal company for each of the years falling in the block period. Despite that, both the first appellate authority and the Tribunal erroneously proceeded on the basis that the assessee had produced audited accounts of Nepal company. Insofar as this case is concerned, a reading of the order passed by the Tribunal itself would show not only that the Tribunal and the first appellate authority had not even examined whether the assessee has established these three essential conditions, on the other hand, a reading of the order passed by the Tribunal would show that the Tribunal has given undue importance to its erroneous assumption that the assessee has produced audited accounts. Further, the Tribunal has also swayed by the fact that the mode of transaction of funds was transparent, ignoring the fact that even if the money came by way of bank cheques and was paid through the process of banking transaction that by itself is of no consequence. - Decided against assessee Additions towards service charges from sister concern at Nepal and the service charges from students - Held that:- As is evident from the orders impugned before us, it is the mercantile system which has been following by the Nepal company whereas the assessee was following cash system. The justification assigned by the Tribunal for upholding the cash system of accounting adopted by the assessee is the uncertainty involved in realisation of the amounts due. According to us, even if it is later realised by the assessee that some of the receivables as per mercantile system were not actually realised, the remedy available to the assessee, is to seek rectification. This has been recognised in judgment in C.I.T. v. United Provinces Electric Supply Co. [2000 (4) TMI 5 - SUPREME Court ]. For these reasons, we are unable to sustain this finding of the Tribunal as well. - Decided in favour of the revenue
|