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2014 (2) TMI 514 - AT - Income TaxAddition made u/s 43B of the Act - Assessee has not furnished any explanation to the proposal - Held that:- The assessing officer found that the sales were shown as net of trade discount - the assessee debited an amount in the profit & loss account and claimed the same as sales-tax paid over and above sales-tax collected - The explanation called for by the lower authorities was not properly responded by the assessee – thus, giving one more opportunity to the assessee to explain how the payment was made over and above the tax collected may not prejudice the interest of the revenue – thus, the order set aside and the matter remitted back to the AO for fresh adjudication. Validity of block assessment proceedings – Held that:- Notice u/s 143(2) shall be issued on or before 30-09-2006 - no notice was issued u/s 143(2) - the issues concluded by operation of law cannot be reopened in view of the specific provisions contained in Second Proviso to section 153A(1) of the Act - The main issue with regard to addition was remitted back to the file of the assessing officer – Decided in favour of Assessee. Addition of proportionate interest and diversion of interest bearing funds – Held that:- The assessee clearly demonstrated before the CIT(A) that sufficient interest free / own funds were available for making advance to relatives and investment in shares - The assessee has also filed copies of the statement of accounts in respect of respective years to explain the availability of non interest bearing funds - when the assessee had sufficient non interest bearing funds, advances made from and out of the non interest bearing funds cannot be a reason to disallow interest on the borrowed funds – Relying uponMunjal Sales Corporation Versus Commissioner of Income Tax [2008 (2) TMI 19 - Supreme Court] - when the assessee has sufficient own funds and profit, it cannot be said that the borrowed funds were diverted – thus, the CIT(A) has rightly deleted the addition - From the orders of the CIT(A) and the materials filed by the assessee before this Tribunal, it is obvious that non interest bearing funds were available with the assessee – Decided against Revenue. Addition towards unexplained investment in construction – CIT(A) deleted the addition only on the ground that the assessee is entitled for exemption u/s 10(23C)(vi) - Held that:- The Tribunal found that the term "any income" referred in section 10(23C) does not include the money collected for admission of the students over and above the prescribed fee - the income generated in the course of running of the educational institution, the income generated from the property held under trust and any voluntary donation other than for admission of the students may fall within the term "any income" referred in section 10(23C) of the Act – thus, the assessee was entitled for exemption us 10(23C) of the Act - the assessing officer has made only protective assessment - a further addition on protective basis in the hands of the trustee, viz. the present assessee cannot be justified – Decided against Revenue. Addition towards unaccounted receipts – Held that:- The assessee furnished the name and address of Smt. Hazeena so as to enable the department to make necessary enquiries - In spite of that the assessing officer has not made any enquiry – Relying upon CIT vs Lakshmi Hospital [2011 (7) TMI 532 - Kerala High Court] – Decided against Revenue. Payment of sales-tax over and above the sales-tax collected – The decision in AA Salam. Versus Assistant Commissioner Of Wealth-Tax. [2006 (8) TMI 235 - ITAT COCHIN] followed - when the sales-tax collected was not routed through the profit & loss account, the claim of the assessee that he made the payment over and above the sales-tax collected needs to be verified – thus, the matter remitted back to the AO for fresh adjudication.
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