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2021 (10) TMI 86 - AT - Income TaxCorrect head of income - Capital gain OR business income - conversion of capital asset into stock in trade - HELD THAT:- It is settled law that there can be no estoppel against law. Moreover, statement of Mr. Sudhir Dhingra reproduced in the assessment order also refers to section 45(2) and therefore, how can the taxability of income be brought into force in this year merely on the basis of statement of the main promoter when section 45(2) itself provides for the taxability in the year of sale of stocks. Moreover, Mr. Sudhir Dhingra stated in his statement to offer income in previous year relevant to AY 2015-16 as can be seen from para (v) of CIT(A)’s order page 121 and not in the year under appeal. In our considered opinion, obtaining completion certificate of the project from the Appropriate Authority as on 8.5.2013 does not ipso facto give rise to any business income. As read/seen& considered the objections raised by the first appellate authority which in our considered opinion are more or less on the same lines as adopted by the assessing officer. We do not concur with such observations and findings recorded by the first appellate authority and we thus hold that the addition as long term capital gain and made in the assessment order and confirmed by the first appellate authority do not stand to the test of law and are not justified on the facts and circumstances of the case and hence we delete the above said both the additions and allow the grounds of appeal of the assessee. Bogus of job work - HELD THAT:- Contention of CIT(A) that evidence filed by the assessee selfserving documents and circumstantial evidence leads to the conclusion of A.O. that Sh. Mohinder Kumar Garg was an old employee of the assessee company cannot take the case of revenue anywhere. It would be enough for us to say that voluminous documentary evidences filed by the assessee to which we have made elaborate reference above are clearly establishing the genuineness of the job work expenses. In the face of direct documentary evidences, how can the so called circumstantial evidences be relied. Documentary evidences filed by the assessee before the lower authorities which have been referred by CIT(A) in his appeal order to which reference has also been made in the written submissions filed by the assessee and to which out attention was drawn clearly establish that job work expense claimed by the assessee to have been paid to M/s Sai Exports are quite genuine and established. In the result, the grounds of appeal in the appeal of the assessee are allowed. Non genuine purchases of fabric made by the appellant - HELD THAT:- We do not want to burden our order by repeating the whole hosts of documentary evidences filed in this case which establish that the purchases made by the assessee from the above said two suppliers are genuine purchases. We have gone through the observations made by CIT (A) in his appeal order and we do not agree with them. Opening of the bank account by the suppliers in the same bank in which assessee had bank account is not something which is unusual as it may be necessary for the smoothness of the banking and avoid the loss of time in collecting the cheques etc. We find that the burden to prove purchases was very well discharged by the assessee. There is no incriminating material found as a result of search in respect of purchases fabric made by the appellant from M/s Super Connection India P. Ltd. & other companies and whatever has been mentioned in the form of statements cannot be regarded as incriminating material. Even the survey proceeding referred in the assessment order does not indicate any incriminating material. Disallowance u/s 14A - assessee company has shown dividend income on mutual fund / shares and balance was deleted by CIT(A) - HELD THAT:- It is seen that there is exempt income only to the extent of ₹ 49,301/- and for this reason also, disallowance under section 14A could not have exceeded this amount in view of the decision of Joint Investment Ltd.[2015 (3) TMI 155 - DELHI HIGH COURT] and hence we uphold the order of CIT(A) to this extent.
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