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2011 (6) TMI 817 - ITAT AMRITSAR
... ... ... ... ..... ement Ltd.’s case (supra) as also the view of the Division Bench of this Court in Dharmendra Sharma’s case (supra). 13. In these circumstances, we respectfully agree with the approach adopted by a Division Bench of the Bombay High Court in Pamwi Tissues Ltd.’s case (supra). 14. In these circumstances indicated above, we are of the opinion that no substantial question of law arises for our consideration in the present appeal. The appeal is, thus, dismissed.” 6. In our opinion, the ratio laid down by the Hon’ble Delhi High Court in the case of CIT Vs. P.M. Electronics Ltd. (2009) 177 Taxman 1 (Delhi) is squarely applicable to the facts of the present case and respectfully following the judgment of the Hon’ble Delhi High Court (supra), we do not find any merit in the appeals filed by the Revenue and accordingly, we dismiss the same. 7. In the result, both the appeals are dismissed. The order was pronounced in the Open Court on 8th June, 2011.
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2011 (6) TMI 816 - ITAT HYDERABAD
Penalty Proceedings u/s 271(1)(c) - Assessee had understated the income by not deducting tax at source on certain payments made which attracts TDS and by not addition certain expenditure to total income on which TDS was made beyond due dates - Non deduction of TDS by the assessee was resulted in such disallowance of Expenditure u/s 40(a)(ia) - Penalty proceedings were initiated by AO
HELD THAT - In our opinion, the mistake committed by the assessee was compensated by disallowing the expenditure. Further, the Revenue cannot penalise the assessee by levying penalty u/s 271(1)(c). In order to levy penalty u/s 271(1)(c), there has to be concealment of particulars of income of the assessee or the assessee must have furnished inaccurate particulars of its income. Present is not the case of concealment of income or it is not the case of Revenue that the assessee has furnished inaccurate particulars of income. The department has not found out that the assessee has furnished any factual incorrect information and the assessee is not guilty of furnishing of inaccurate particulars of income.
In our opinion, the conditions laid down in section 271(1)(c) is not complied with. In our opinion, the conditions laid down in section 271(1) (c ) of the Act is not complied with. Being so, levy of penalty is not justified merely because the assessee has claimed certain expenditure that expenditure is not eligible in view of the provisions of section 40(a)(ia) and for that reason, expenditure is disallowed. Penalty cannot be levied for mere making of a claim of the expenditure which is not sustainable and deletion of penalty by the CIT(A) is justified. We place reliance on the judgement of the COMMISSIONER OF INCOME-TAX VERSUS RELIANCE PETROPRODUCTS PVT. LTD. [2010 (3) TMI 80 - SUPREME COURT]. Accordingly the ground raised by the revenue holds no merit.
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2011 (6) TMI 815 - ITAT MUMBAI
Revision Powers of Commissioner u/s 263 on Grounds other than the grounds of Revision Proceedings set out in the show cause notice - Assesse claim u/s 80IA was allowed in the course of the scrutiny assessment proceedings u/s 143(3) in 2001, learned Commissioner, in 2010, required the assesse to show cause as to why the assessment order so allowing the claim not be subjected to revision u/s 263
HELD THAT:- We find that the impugned revision order is indeed not sustainable in law. A plain reading of the impugned revision order clearly shows that the conclusion drawn in the revision proceedings are different from the reasons for revision proceedings set out in the show cause notice extracts from which are set out in the revision order itself. It is important to note the shifting stand of the Commissioner so far as reasons for subjecting the assessment order to revision proceedings.
In the show cause notice, the learned Commissioner was of the view that deduction under section 80IA was “ not allowable since steam is a transient product does not have any shelf life”. This plea about lack of shelf life of steam did not find mention in the revision order, but in the impugned revision order, learned Commissioner notes that that “as the cost of production of steam equals the sales value, no profit can be attributed to the transaction” and that “thus the deduction under section 80IA resulted in the assessment being erroneous and prejudicial to the interest of the revenue”.
However, by the time, learned Commissioner reached the operative portion of the revision order, he entirely abandoned these grounds about inadmissibility of claim of deduction under section 80IA on merits, and set aside the assessment order on the ground that AO had not made proper enquiries “in the present case, the Assessing Officer failed to make proper enquiries for making such deduction.
It is thus clear that there has been a shift in the stand of the Commissioner on whether it was a fit case for revision on the ground that the assessee was not eligible for deduction under section 80IA in respect of notional sale of steam or whether it was a case for revision on the ground that the Assessing Officer did not make necessary verifications about the claim made by the assessee. The reason given in the show cause notice is former, while the reason for which revision powers are finally exercised in the impugned order are latter. Even with regard to the reasons of ineligibility of deduction under section 80IA in respect of notional sale of steam, the reasons are different at the notice stage and at the time of the impugned order, but all that ceases to be relevant because the ground on which the assessment is finally set aside is that “the Assessing Officer failed to make proper enquiries”. The reasons for which impugned assessment is set aside is thus entirely different from the reasons which were set out in the show cause notice.
In the case of Synergy Enterprises Solutions Pvt Ltd Vs DCIT (ITA No 2076/Mum/2010), identical issues were dealt with where following the decision in the judgement of MAXPAK INVESTMENT LIMITED. VERSUS ASSISTANT COMMISSIONER OF INCOME-TAX. [2006 (4) TMI 199 - ITAT DELHI-F] was followed, it was held that "CIT has not mentioned the ground on which action is proposed to be taken under section 263 in the show-cause notice, it is deemed that he was not satisfied that it was a fit ground for taking action under the section, with the result that the final order, if based on the ground which he had earlier considered not fit for taking action under the section, will have to be set aside as not based on any ground which may justify his belief that the order passed by the Assessing Officer was erroneous insofar as it is prejudicial to the interests of the Revenue."
It is therefore, held that, Once we come to the conclusion that the impugned order is null and void, it is not for us to advise the Commissioner as to what should he do. He is always at liberty to do whatever action he can take in accordance with the law, but we cannot give life to a null and void order by remitting it back to the learned Commissioner for giving an opportunity of passing the fresh order after giving the assessee an opportunity of hearing.
In case, it is possible for the Commissioner to pass a fresh order at this stage, in accordance with the scheme of the Act, he can very well do so, but in case the time limit for passing such order has already expired, we cannot extend the same by directing him to pass the order afresh after giving an opportunity of hearing to the assessee.
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2011 (6) TMI 814 - ITAT HYDERABAD
Disallowance of Proportionate Interest on Investment u/s. 36(1)(iii) - Investment made for Advancement of Business Purposes - Assessee failed to substantiate its claim that the investment was made for advancement of business purposes - CIT(A) disallowed the proportionate interest on investment made - HELD THAT:- We are in opinion that similar issue was considered in assessee’s own case of 2008, where the matter was restored back to AO to verify the nexus between the borrowed funds and investments made and thereafter decide the issue in accordance with law after giving reasonable opportunity of being heard.
In view of the above, we direct the AO to examine whether the assessee had borrowed certain funds on which liability to pay tax is being incurred and on other hand, certain amounts had been advanced/invested in sister concern/others without any business purposes that is also without interest and in such circumstances, the interest to the extent the advance/investment had been made without carrying any interest cannot be allowed u/s. 36(1)(iii) - Matter Restored Back.
Disallowance of Credit for TDS claimed - TDS certificates were issued in the name of JV. As TDS certificates were not standing in the name of the assessee company, CIT(A) upeld the disallowance of credit for TDS claimed - HELD THAT:- Identical issue was addressed by Tribunal in INCOME TAX OFFICER & OTHERS VERSUS LIMAK-SOMA JV., M/S. CSCHK-SOMA (JV) & M/S. SOMA-PATEL ASI (JV) [2010 (9) TMI 695 - ITAT, HYDERABAD] where it was held that unless the assessee offers the income for taxation, the TDS cannot be given credit.
Respectfully following the order of the Tribunal, we set aside the issue to the file of the Assessing Officer to examine whether the assessee offered the income for taxation, and if the assessee offered the inacome for taxation for the assessment year under consideration, credit to the TDS is to be given accordingly to the assessee.
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2011 (6) TMI 813 - ITAT AHMEDABAD
... ... ... ... ..... ollowing the same the issues arising in Asst. Year 2006-07 are required to be restored to the file of AO for deciding afresh after considering the amendment in the constitution, whether it is a retrospective and accordingly it would be applicable to earlier years and if the assessee is held to be a mutual concern in this year then further, whether interest income or income from house property as claimed by the assessee would be exempt on account of principle of mutuality. In our considered view all the issues are kept wide open for deciding afresh by the AO after he takes decision on the applicability of principle of mutuality to the assessee. As a result, the appeal filed by the Revenue as well as the Cross Objection filed by the assessee both are allowed but for statistical purposes. 9. In the result, the appeal filed by the Revenue and the Cross Objection filed by the assessee both are allowed but for statistical purposes. Order was pronounced in open Court on 17.06.2011.
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2011 (6) TMI 812 - ITAT MUMBAI
Interest Accrued but Not Due on Securities - Added to Total Income or not? - CIT(A) confirmed some amount representing accrued interest on securities, but not falling due for payment. Such interest, which is in the process of accrual, is at the incipient and inchoate stage, maturing into taxable income only when it becomes due and payable in terms of issue of such security.
HELD THAT:- Tribunal in own case followed the decision of DCIT VERSUS BANK OF BAHRAIN & KUWAIT [2010 (8) TMI 578 - ITAT, MUMBAI], where following the decision of UNITED COMMERCIAL BANK VERSUS COMMISSIONER OF INCOME-TAX [1999 (9) TMI 4 - SUPREME COURT], where it was held that the "Bank cannot be prevented from urging in the return that the interest on govt. securities accrued only on the specified coupon dates notwithstanding that credit has been taken in the profit & loss account for the interest on day to day basis." Thus, the issue has been decided in favour of the view that the interest accrues only on the specified coupon dates and not on day to day basis - Decision in Favour of Assessee.
Disallowance of Loss on Unmatured Forward Contracts - HELD THAT:- We find that this issue is also squarely covered by the Special Bench decision in the case of DCIT VERSUS BANK OF BAHRAIN & KUWAIT [2010 (8) TMI 578 - ITAT, MUMBAI] in assessee’s favour, wherein, it was held that "where a forward contract is entered into by the assessee to sell the foreign currency at an agreed price at a future date falling beyond the last date of accounting period, the loss is incurred to the assessee on account of evaluation of the contract on the last date of the accounting period i.e. before the date of maturity of the forward contract.” Respectfully following the aforesaid decision of the Tribunal we hold that loss on unmatured foreign exchange contract have to be allowed as deduction - Decision in Favour of Assessee.
Change in Valuation of Securities as per RBI guidelines - Statutory Compulsion u/s 145A - Assessee made changes in valuation policy as per RBI guidelines which was not accepted by AO - CIT(A) held that the change in valuation policy was bonafide but it cannot be applied retrospectively and asked assessee to revalue the security as at the beginning of the year
HELD THAT:- We find that the change in the method of accounting became necessary because of the RBI guidelines and therefore it cannot be said that the change in the method of valuation was not bonafide. The direction to change the value of opening stock will result in distortion of profits and no real effect being given to the changed method of valuation.
We agree with the contention of the learned counsel for the Assessee that provisions of section 145A, is a statutory compulsion with regard to valuation of inventory, which would necessarily include the opening stock also. As far as the case of the assessee is concerned, the change in method of accounting falls within the ambit of section 145 according to which the method of accounting and the change in the method of accounting, if it is bonafide, and if it is regularly followed thereafter has to be accepted as it is.
The revenue in such circumstances cannot place any condition that the opening value of securities should also be changed. If securities as on the beginning of the year is also revalued the then changed method of accounting will become meaningless. We, therefore, hold that in a case of voluntary change in the method of accounting followed by the assesse, all that has to be seen is as to whether the change is bona fide and regularly followed thereafter. If the above condition is satisfied, then the changed method of accounting has to be accepted. In such an even there is no need to revalue the securities as on the beginning of the year.
We are therefore, of the view that the direction of the CIT(A) to revalue the security as at the beginning of the year should be deleted and we direct accordingly.
Interest for Broken Period - Allowed or Not as Deduction? - AO held, claim for exclusion of broken period interest in respect of various purchases of securities during the year represented interest accrued upto the date of purchase of securities is part of the purchase consideration and the broken period interest cannot be allowed as deduction - HELD THAT:- Issue has been considered by the Hon’ble Bombay High Court in the case of AMERICAN EXPRESS INTERNATIONAL BANKING CORPORATION VERSUS COMMISSIONER OF INCOME-TAX. [2002 (9) TMI 96 - BOMBAY HIGH COURT], wherein it was held that purchase price of the securities should be bifurcated into (1) interest accrued upto the date of purchase and (2) balance of the price and interest should be allowed as revenue expenditure in the year of purchase provided the bank follow such a practice. In view of the above, we do not find any infirmity in the order of the CIT(A).
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2011 (6) TMI 811 - ITAT BANGLORE
... ... ... ... ..... 10). At the cost of repetition, we state that the assessee, being a cooperative bank, though received interest from Non-SLR investments, the same continues to be part of the business funds which are required for the banking business of the assessee. These are funds are invested in the manner provided/specified by the provisions of Banking Regulation Act and also by the provisions of Karnataka State Cooperative Societies Act, 1959. In this context, it cannot be said that the interest received from Non-SLR investments are not forming part of the banking business of the assessee cooperative bank. In the light of the above reasoning, we are of the view that the CIT(A) is justified in granting deduction u/s 80P(2)(a)(i) in respect of interest income amounting to ₹ 17,10,000/- and therefore, we see no reason to interfere with his order. 11. In the result, the appeal filed by the department is dismissed. The order pronounced on Friday, the 10th day of June, 2011 at Bangalore.
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2011 (6) TMI 810 - GUJARAT HIGH COURT
... ... ... ... ..... disclosed and established. Assessee had furnished complete details of the gift. Tribunal noted that none of the departmental authorities made any attempt to find out whether the explanation of the assessee was false. Tribunal relied on decision of Division Bench of this Court in case of National Textiles v. Commissioner of Income Tax reported in 249 ITR 125, wherein Bench observed that if the assessee gives an explanation which is unproved but not disproved, it would not lead to inference that assessee's case is false. We are also in broad agreement with the same. Relying on the decision of Nashaben H. Jariwala, wherein it was observed that merely because assessee failed to prove the gift in the manner required by the department, it is not possible to conclude that assessee concealed her income, tribunal in the present case deleted penalty. No substantial question of law is arising. Tribunal has in facts of the case deleted the penalty. Tax Appeal is therefore, deleted.
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2011 (6) TMI 809 - ITAT CHENNAI
... ... ... ... ..... rder of the ld. CIT(A), which has become infructuous and the same is dismissed. 12. As regards appeal of the Revenue for the assessment year 2007-08 in ITA No. 729/Mds/2011 is concerned, it was contended by both the sides that the facts and issue involve for the year under consideration is same as for the assessment 2006-07 and the decision to be taken in 2006-07 should be applied here. 13. After having heard both the sides and considering the material on record, we find that the issue involved is identical and facts are similar as in the appeal for the assessment year 2006-07 in which, we have dismissed the appeal of the Revenue on this point in earlier part this order, therefore, applying the same basis and adopting similar reasoning, we uphold the order of the ld. CIT(A) and dismiss this appeal of the Revenue also. 14. As a result, both the appeals of the Revenue and the CO of the assessee are dismissed. Order pronounced soon after the conclusion of hearing on 01.06.2011.
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2011 (6) TMI 808 - ITAT KOLKATA
... ... ... ... ..... by that finding. If any other evidence is produced in penalty proceedings, it is open to the Incometax Officer to come to a different conclusion. The only way in which income from an undisclosed source could be assessed is to make the assessment on the basis that the previous year for such income was the financial year. 6. We find from the above facts and the case law of Hon’ble Bombay High Court in the case of Jaynarain Babulal (supra) that in case the income is disclosed, in respect to capital gain, in assessment year 2005-06 and the same is to be assessed in assessment year 2008-09, penalty u/s. 271(1)(c) cannot be levied in the relevant assessment year 2005-06 because the income of capital gain is not at all assessable in that assessment year. Accordingly, we delete the penalty levied and confirmed by lower authorities and this appeal of the assessee is allowed. 7. In the result, the appeal of the assessee is allowed. 8. Order pronounced in open court on 30.6.2011.
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2011 (6) TMI 807 - ITAT DELHI
... ... ... ... ..... is therefore, not sustainable as the income of the Institute is exempt not only u/s 10(23C)(iv) but also under section 11. The institute is an educational institute and hence its income will also be exempt under section 11 as education falls within the meaning of charitable purpose under section 2(15) of the Act.” 7. In light of the above, ld. counsel of the assessee contended that this issue stands covered in favour of the assessee by the decision of this tribunal as above. 7.1 Ld. Departmental Representative could not controvert this proposition. He fairly agreed that this issue stands covered by the said tribunal order. 8. Accordingly, in the background of the aforesaid discussion and precedent, we do not find any infirmity or illegality in the order of the Ld. Commissioner of Income Tax (Appeals), hence, we uphold the same. 9. In the result, the appeal filed by the Revenue stands dismissed. Order pronounced in the open court on 16/6/2011 upon conclusion of hearing.
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2011 (6) TMI 806 - ITAT MUMBAI
... ... ... ... ..... Management Pvt. Ltd. (2008) 119 TTJ (Mum.) (SB) 289, is not applicable to the facts of the case. In any event, the said Mumbai Special Bench decision in Daga Capital Management Pvt. Ltd. (supra), was reversed by the Hon'ble Bombay High Court in Godrej & Boyce Mfg. Co. Ltd. v/s DCIT, (2010), 328 ITR 081 (Bom.). Further, the Hon'ble Bombay High Court in CIT v/s Reliance Utilities & Power Ltd. (2009) 313 ITR 340 (Bom.), has laid down that if there are interest free funds as well as interest bearing funds, a presumption could arise that the investments would have been made out of interest free funds. As in this case, the interest free funds are far in excess of the investments, we uphold the order of the Commissioner (Appeals) that no amount of expenditure by way of interest is disallowable under section 14A of the Act. Consequently, these grounds are dismissed. 5. In the result, Revenue’s appeal is dismissed. Order pronounced in the open Court on 24.6.2011
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2011 (6) TMI 805 - ITAT MUMBAI
... ... ... ... ..... correct. On the face of these confirmations and evidence, the conclusion drawn by the Revenue is based on only conjecture and surmises. Thus, we agree with the contentions of the learned Counsel and, consequently, delete the addition of 6,00,000. Thus, the assessee succeeds on this ground. 32. Ground no.4 is addition on account of alleged unexplained investment in jewellery. 33. The Assessing Officer has held that an amount of 1,76,470, as undisclosed jewellery during the course of search. 34. Before us, the learned Counsel has not seriously contested this addition. Keeping this in view, we confirm this addition and dismiss ground no.4. 35. Ground no.5 is regarding levy of interest under section 234B. Levy of interest is mandatory and consequential in nature. Accordingly, this ground is dismissed. 36. In the result, assessee’s appeal for A.Y. 2006-07 is allowed in part. 37. To sum up, all the appeals are allowed in part. Order pronounced in the open Court on 15.6.2011.
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2011 (6) TMI 804 - ITAT CHENNAI
... ... ... ... ..... what would be the exact position when transactions take place. There is no past history of this assessee. Therefore, in these circumstances, we are unable to accept the version of the assessee. We, therefore, set aside the findings of the ld. CIT(A) and reverse the same. The grounds raised by the Revenue, in this regard, are allowed. 11. The next ground is in relation to claim of the assessee that the travel expenditure, incurred in foreign currency, when reduced from the export turnover should be excluded from the total turnover also. This issue stands squarely covered by the decision of Chennai Bench in the case of M/s Saksoft (121 TTJ 865) which is mentioned in Ground No.3.1 of the appeal. This fact could not be denied by the Revenue and was found to be correct. Hence, this issue being covered by the order of the Tribunal, is decided in favour of the assessee. 12. In the result, the appeal of the Revenue is partly allowed. Order pronounced in the open court on 30.6.2011.
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2011 (6) TMI 803 - ITAT MADRAS
... ... ... ... ..... wherein it has been held that transformer upto to DP structure is a gadget for transmission of power generated by wind mill and is an integral part of the windmill eligible for 100 per cent depreciation. No contrary decision was cited by the ld. D.R. We, therefore, do not find any justifiable reason to interfere with the order of the ld. CIT(A) which is confirmed and ground of appeal of the Revenue is dismissed in both the years under consideration. 22. The cross objections filed by the assessee for both the year under consideration are in support of the order of the ld. CIT(A), who allowed relief to the assessee. Thus there being no grievance of the assessee from the order of the ld. CIT(A), the cross objections filed by the assessee are infructuous and hence are dismissed as having become infructuous. 23. In the result, both the appeals filed by the Revenue and both the cross objections filed by the assessee stand dismissed. Order pronounced in the court on 30th June, 2011
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2011 (6) TMI 802 - ITAT JAIPUR
Unaccounted investment in purchase from unaccounted income - Assessee has made purchases from M/s M.D.R Jewellers which were in turn purchased by M/s M.D.R Jewellers from M/s Amit Agency - The AO considered purchases from M/s Amit Agency as bogus - Therefore, made the addition.
HELD THAT:- We observe that all the purchases made by assessee are verifiable. Most of the purchases are made from Jewellers. Partner of M/s M.D.R Jewellers who appeared confirmed having made sales to the assessee. It is further seen that purchases made from M/s M.D.R Jewellers were made through made from known sources.
Thus, we are of the considered view that the AO decision was not justified. The Hon'ble Supreme Court in the case of SREELEKHA BANERJEE VERSUS COMMISSIONER OF INCOME-TAX [1963 (3) TMI 47 - SUPREME COURT] has held that the suspicion howsoever strong cannot take the place of evidence. We order accordingly.
Rejection of Books of Accounts - Reduction in Trading Addition - CIT(A) confirmed the rejection of books of accounts on the account that sales made to two concerns have been established as bogus, therefore sales are not fully verifiable - Also, it reduced the trading addition made by AO - HELD THAT:- Complete books of account were produced before learned CIT(A) which were audited. In our considered view, observations of ld. CIT (A) regarding bogus sales are not correct as assessee has made sales from its stock which has not been disturbed, sales made by assessee have been accepted. If other parties are bogus then it cannot be said that the genuine party who made sales to these parties are also bogus.
Written submissions filed on behalf of the assessee are self-explanatory. In some of the branches the GP rate shown is higher and only in one branch the GP rate declared by assessee is lower, reason for the same has been explained. No defects in the books of account were found. All the purchases and sales are vouched. Therefore, we are of the considered view that there was no justification in making trading addition and sustaining partly at the end of the learned CIT(A). We hold that learned CIT(A) was not justified in restricting the trading addition - Accordingly, same is deleted
Unexplained Cash Credits u/s 68 - AO treated an amount so transferred through journal entry as unexplained cash credit - whether journal entry passed or odd can be added as unexplained cash credit - HELD THAT:- CIT(A) held that AO has not understood the accounting sequence of the adjustment entry in question and wrongly considered the same as unexplained credit which was factually incorrect. Findings of CIT(A) find support from the decision of Hon'ble jurisdictional High Court in the case of COMMISSIONER OF INCOME-TAX VERSUS HAZARIMAL MILAPCHAND SURANA. [2002 (9) TMI 29 - RAJASTHAN HIGH COURT] wherein the Hon'ble Court has held that mere book entry does not create income.
In view of the reasoning given by learned CIT (A) we confirm his order on this issue.
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2011 (6) TMI 801 - ITAT CHANDIGARH
Rejection of Books of Account u/s 145(3) - Addition on account of Low profit Rates - The assessee's business is of sale and purchase of gold and gold jewellery. AO rejected the books of account u/s 145(3) and addition was made on account of alleged low gross profits.
HELD THAT:- In view of facts of the present case and in the absence of any defects being pointed out in the books of account maintained by the assessee, merely because there was a fall in the GP rate as compared to the preceeding year and the nature of the trade being carried on by the assessee being sale and purchase of gold jewellery, where the rates of gold had increased, we find no merit in the rejection of books of account and the estimation of profits. Accordingly, we direct the Assessing Officer to accept the trading results shown by the assessee and delete the addition.
Deduction u/s 40A(2) - Assessee in addition to the carrying on its main business had also carried on the business of sale of cloth - As he couldn't succeed in such business, the total sales were made at the same rate as of purchase price to its sister concern - As he suffer no losses - AO estimating GP rate at 15% and attached Provision of 40A(2)
HELD THAT:- It is not apprehensible that the assessee has entered into a new venture and had made investment in the purchase of stock which was sold with no margin of profit to its sister concern. In each line of business some margin of profit is earned by the person trading in the business and in the absence of any such profits, we are in agreement with the order of the authorities below that the provisions of section 40A(2) are attracted in the case because the transaction was with a sister concern and not at the market rate as the goods were sold at its cost price. However, we find the rate of 15% applied by the AO to be excessive and direct the Assessing Officer to apply net profit rate of 5% to the transactions to determine the additional income in the hands of the assessee.
Non genuine Expenses in Profit and Loss Account - CIT(A) confirmed the addition of 10% of expenses as debited to the profit & loss account - HELD THAT:- In the first instance, there is no merit in such disallowance of the expenses, in cases where an estimation of income is made by rejecting the books of account. Further, the AO has failed to point out the exact expenses which are not verifiable. We have upheld the trading results shown by the assessee in its business and resale of gold and gold jewellery and accepted the book version declared by the assessee. Accordingly, we direct the AO to restrict the disallowance to 1/10th out of car expenses, car depreciation and telephone expenses. No disallowance is warranted in probability of expenses being unvouched unless it has been established that the expenditure claimed by the assessee are unvouched.
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2011 (6) TMI 800 - ITAT- INDORE
... ... ... ... ..... rovided that built-up area of shops or other commercial establishments included in the housing project should not exceed 5 per cent of the aggregate built-up area of the housing project or 2000 sq.ft. whichever is less. The provisions as they read applicable from assessment year 2005-06. In the present appeal, the assessment year 2006-07, therefore, the law applicable to the relevant assessment year will be applicable. 11. We have noted, as argued, the built-up area of the bungalow is more than the prescribed limit and since the completion certificate was not issued to the assessee till date, therefore, we are of the view that the decision in Heeranandani Akruti J.V. (39 SOT 498) (Mum) rather supports the case of the Revenue, consequently, the assessee is not entitled to claimed deduction. We, therefore, find no infirmity in the stand of the ld. CIT(A). The same is affirmed. Finally, the appeal of the assessee is dismissed. Order pronounced in the open Court 23rd June, 2011.
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2011 (6) TMI 799 - GUJARAT HIGH COURT
... ... ... ... ..... . 4. Mrs. Mauna Bhatt, learned Senior Standing Counsel appearing on behalf of the appellant-revenue is not able to dispute the aforesaid position. In the circumstances, it is not necessary to set out the facts and contentions in detail. 5. The Supreme Court in the case of Assistant Commissioner of Income Tax and another v. Hotel Blue Moon supra has held that if an assessment is to be completed under Section 143(3) read with Section 158-BC, notice under Section 143(2) of the Act should be issued within one year from the date of filing of block return. Omission on the part of the assessing authority to issue notice under Section 143(2) cannot be a procedural irregularity and the same is not curable and, therefore, the requirement of notice under Section 143(2) cannot be dispensed with. 6. In the light of the aforesaid position, the question is accordingly answered in favour of the assessee and against the revenue. The appeal is, accordingly dismissed with no order as to costs.
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2011 (6) TMI 798 - CESTAT, AHMEDABAD
100% EOU - exemption from NCCD imposed on POY cleared for captive consumption - Held that: - NCCD is not leviable in respect of goods cleared availing the benefit of N/N. 108/95-CE dated 28.8.95 - NCCD is not leviable in respect of clearance to 100% EOUs also - appeal allowed - decided in favor of appellant.
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