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2023 (6) TMI 816 - AT - Income TaxAdmission of additional evidences by CIT(A) - HELD THAT:- CIT(A) for admission of additional evidences had relied on the decision rendered in the case of CIT vs. Virgin Securities and Credits P. Ltd.[2011 (2) TMI 207 - DELHI HIGH COURT] and concluded that the admission of additional evidences was crucial for the disposal of appeal. Before us, no fallacy in the findings of CIT(A) has been pointed out by Revenue nor has Revenue pointed that the required procedure was not followed by CIT(A) before admission of additional evidences - no reason to interfere with the order of CIT(A) - Decided against revenue. Addition on account of delayed deposit of PF/ESI - HELD THAT:- AR has fairly submitted that the issue in the present ground is covered against the assessee by the decision of Checkmate Services Pvt. Ltd. (2022 (10) TMI 617 - SUPREME COURT) - we uphold the action of AO and set aside the order of CIT(A) on this ground. Disallowance u/s 14A r.w.r. 8D - Mandation of recording satisfaction - assessee had suo moto disallowance - HELD THAT:- CIT(A) while deciding the issue has noted that suo moto disallowance made by assessee was not found to be defective by AO and no adequate satisfaction as mandated u/s 14A(2) of the Act was recorded by AO before invoking Rule 8D. Before us, no fallacy in the findings of CIT(A) to the extent of his recording a finding that no proper satisfaction was recorded by AO before invoking Rule 8D has been pointed out by Revenue.Once the procedure prescribed under Section 14A(2) r.w. Rule 8D has not been followed by Revenue then in that case the Revenue cannot proceed to work out the disallowance on ad hoc basis over and above that has been made by assessee. We, therefore, direct the AO to restrict the disallowance u/s 14A as suo-moto made by assessee. Decided against revenue. Compensation received by the assessee - Short Term Capital Gain or income from other sources - HELD THAT:- We find that CIT(A) after placing reliance on the decision of Vodafone [2012 (1) TMI 52 - SUPREME COURT] has held that the compensation received by the assessee was not merely for transaction of one or more tangible rights but was receipts of bundle of rights as investing partner as the whole profit making process was impaired - assessee was never engaged till date in insurance business with any other party and genuineness of the transaction was beyond the shadow of doubt. As held compensation received by the assessee was akin to liquidated damages and therefore in the nature of capital receipts. He has for the reasons noted in the order and which have been reproduced hereinabove has held the AO’s attempt to bring the compensation in the category of assets described u/s 55(2)(a) of the Act for taxation as Short Term Capital Gains was erroneous. No fallacy in the findings of CIT(A) has been pointed out by Revenue. Deduction u/s 80IB - new unit in Jammu (Sambha) backward district - close connection between the assessee and Berger Paints Co. to whom most of the sale were made from Jammu Division and assessee was not generating much profits in the business from other business whereas the return generated from Jammu Division was higher than the total income of the Manufacturing and Processing business - HELD THAT:- CIT(A) has held that AO was not justified in invoking the provision of Section 80IB (10) of the Act as the foundational facts were not supplied by the AO and the action of AO was not in accordance of law. He has further given a finding that on verifying the detailed working submitted by assessee, the assessee has demonstrated that the Jammu Unit for which the assessee has claimed deduction was operating at lowest rate of profit and sales made to Berger Paints was at lower price as compared to other unrelated customers. He has further given a finding that the deduction was allowed to the assessee in scrutiny assessment proceedings in earlier years on similar facts. Before us, Revenue has not pointed to any fallacy in the findings of CIT(A) nor has placed any material on record to demonstrate that the observations of CIT(A) while allowing the claim of the assessee is not based on the material on record. Decided against revenue.
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