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2014 (9) TMI 130 - AT - Income TaxAssessment u/s 153A - Preliminary expenses disallowed – Interest u/s 36(1)(iii) disallowed - No incrementing material found - Held that:- No incrementing document was found during the search operation with regard to preliminary expenses - such addition/disallowances could not have been made in the assessments finalized as a result of search u/s 143(3)/153A of the Act - there is nothing clear either from the assessment order of the AO or from the order of the CIT(A) with regard to the nature of the preliminarily expenses - It is also not clear whether such expenses were allowable at all – True nature of transaction regarding interest u/s 36(1)(iii) was not ascertained by authorities below - The true nature of transaction and legal contentions has not been considered by the authorities below - thus, the matter is to be remitted back to the AO for fresh adjudication. Gain on FCCb due to repayment – Held that:- Held that:- The issue was raised first time by the CIT(A) - the time period before the CIT(A) was too short to thrash out the new issue in detail - several factual and legal issues have not been dealt in detail by the CIT(A) - there was inadequate opportunity to the assessee at the level of the CIT(A) for making the enhancements of income – thus, the matter is to be remitted back to the AO for fresh adjudication. Addition of bogus purchases disallowed - Held that:- CIT(A) has made certain observations while confirming the disallowance which were not confronted with the assessee - CIT(A) has not made anything clear with regard to the names of the suppliers whose premises were covered in search operation - What evidences were gathered with regard to the accommodation entries is also not clear - The issue regarding the non-substantiating the purchases by the sister concerns was never confronted to the assessee – thus, the matter is to be remitted back to the AO for fresh adjudication. Deduction u/s 80IB - profit derived from Jammu Unit – Opportunity of being heard not provided - Held that:- The issue was decided without providing adequate opportunity of being heard to the assessee - adverse observations were also not confronted with the assessee – thus, the matter is to be remitted back to the AO for fresh adjudication. Deduction u/s 80IA – suppression of profit on purchase and sale - Held that:- Although the disallowance was made by the AO for claim of deduction u/s 80IA - the CIT(A) has sought compressive details/information from the assessee - the time period of hearing before the CIT(A) was just over three months which was not adequate having regard to the complex nature of the business of the assessee and geographical scattered branches of the assessee from where the assessee was required the details to be submitted before the CIT(A) - in such a short period the required/asked details could not have been collected by the assessee to comply the query raised by CIT(A) - Certain requirements of confronting the assessee were not specifically met by the CIT(A) by giving specific opportunity on these issues - for making a huge addition for not allowing deduction u/s 80IA of the Act, which was allowed in some of the assessment years while framing the assessment u/s 143(3) of the Act a detailed and adequate opportunity needs to be provided to the assessee – the matter is required to be remitted back to the AO for fresh adjudication. Suppression of profit by making transactions of purchases and sales – Held that:- Assessee contended that no incrementing material found during the course of search hence no disallowance is to be made while framing the assessment u/s 143 (3)/153A of the Act - no adequate opportunity was given by the AO – thus, the matter is remitted back to the AO for fresh adjudication – Decided in favour of Assessee.
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