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2009 (7) TMI 651 - HC - Income TaxAdvance Tax- The assessee who was carrying on business of running a rice mill and who, it appears, had started the business afresh, had filed his return of income for the assessment year in question and had claimed a loss of Rs.1,70,480, mainly attributable to the deduction due to depreciation on the investment made in the rice mill. On scrutiny the Assessing Officer noticed that there were discrepancies in the capital account and investment made, as claimed by the assessee, before the banks such as State Bank of India, Karnataka State Finance Corporation, State Bank of Mysore, TGMC Dank, Tumkur, etc., and further that the assessee had not reflected the trading activities in sale of rice, for which purpose, it appears, the assessee had been purchasing considerable quantities of rice from a dealer at Manvi, etc. In this context, the assessee had been issued with notices under sections 142(1) and 143(2) of the Act. The assessee gave a letter stating that he was offering a further income of Rs. 10 lakhs, mainly to buy peace with the department and to avoid further scrutiny. Held that- in this situation it cannot be said that assessee had defaulted in payment of installment of advance tax, as the amount of Rs. 10 lakhs was offered by way of income for the first time as per the assessee’s letter, thus the addition of income under section 234A and 234B in the case of the assessee was not necessary and not justified.
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