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Income Tax - Case Laws
Showing 21 to 40 of 806 Records
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2021 (9) TMI 1507 - KERALA HIGH COURT
Nature of expenses - expenditure incurred by the assessee for renovation of the lease hold premises for setting up a new show room - revenue expenditure or capital expenditure - HELD THAT:- As questions of law raised in the appeal are considered by this Court in assessee's own case for the AY 2007- 08, and answered in favour of the assessee and against the Revenue. The said judgment is reported in Joy Alukkas India Pvt. Ltd v. The Assistant Commissioner of Income Tax [2014 (6) TMI 80 - KERALA HIGH COURT]
Having regard to the view already taken by this Court on the substantial questions being considered in the appeal on hand, the questions are answered in favour of the assessee and against the Revenue. Hence, the appeal fails.
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2021 (9) TMI 1502 - ITAT BANGALORE
TP Adjustment - provision of back-office support services/income received from ITES segment - comparable selection - HELD THAT:- Exclusion of Universal Print, TCS e-serve and Infosys BPO from the list of comparables and remand BNR Udyog Ld. AO/TPO to consider it afresh in light of the observations made by coordinate bench of this Tribunal reproduced hereinabove.
Negative working capital computed by the Ld.TPO, without appreciating the fact that assessee is a captive service provider - We find that in the case of Software AG Bangalore Technologies (P.) Ltd. [2016 (3) TMI 1384 - ITAT BANGALORE] passed by this Tribunal, it has been held that negative working capital adjustment shall not be made in case of a captive service provider as there is no risk and it is compensated on a total cost plus basis.
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2021 (9) TMI 1501 - BOMBAY HIGH COURT
Revision u/s 263 - AO had passed an order of assessment order, admittedly, against non existing entity - ITAT had passed an order setting aside the order of CIT on the grounds that any order against non existent entity is bad in law - HELD THAT:- We totally agree with the view expressed by ITAT that framing of assessment against non existing entity would go to the root of matter and was a jurisdictional defect. The assessment proceedings against non existing company was illegal and any order passed therein was without jurisdiction and null and void as held by this court in the matter of Alok Knit Exports Ltd. [2021 (8) TMI 777 - BOMBAY HIGH COURT]
ITAT has not committed any perversity or applied incorrect principles to the given facts and when the facts and circumstances are properly analysed and correct test is applied to decide the issue at hand, then, we do not think that question as pressed raises any substantial question of law.
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2021 (9) TMI 1498 - MADRAS HIGH COURT
TDS u/s 195 - Income taxable in India - Royalty - use of the assessee customer in India of operating net work payments - whether a non resident companies, ACI of Singapore and IRPL of Australia have permanent establishment in India through the medium of assessee company? - Whether the Tribunal was right in holding that the amounts paid by the assessee company to the non resident company for use of the assessee customer in India of operating net work payments, ATMs is not Royalty as per the provisions of Section 9(1)(vi) of the Income Tax Act? - HELD THAT:- It is not disputed before us that the substantial questions of law, which have been raised in this appeal, have been answered in favour of the assessee in the decision of Engineering Analysis Centre of Excellence Private Limited [2021 (3) TMI 138 - SUPREME COURT] as held amounts paid by resident Indian end-users/distributors to non-resident computer software manufacturers/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements, is not the payment of royalty for the use of copyright in the computer software, and that the same does not give rise to any income taxable in India, as a result of which the persons referred to in section 195 were not liable to deduct any TDS u/s 195. Decided in favour of assessee.
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2021 (9) TMI 1497 - SUPREME COURT
Seeking change in the name of the applicant/appellant and appropriate amendment to the cause title are allowed.
Applicants/appellants seeking liberty to withdraw the instant appeals for the reasons indicated in the applications allowed.
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2021 (9) TMI 1496 - KARNATAKA HIGH COURT
Disallowance u/s 40[a][i] - Tribunal directing to exclude those amounts which were actually paid and did not remain payable as on the last day of the previous year while making disallowance - HELD THAT:- Substantial question of law no.1 is covered by the decision of the Hon’ble Apex Court in the case of Palam Gas Service [2017 (5) TMI 242 - SUPREME COURT] wherein the said question of law has been answered by the Hon’ble Apex Court in favour of the revenue and against the assessee.
Deduction u/s 10A - disallowance on account of non deduction of tax under Section 195 in violation of a specific provisions of the Act - HELD THAT:- Question of law has been answered in the case M/S. GEM PLUS JEWELLERY INDIA LTD. [2010 (6) TMI 65 - BOMBAY HIGH COURT] in favour of the assessee and the same has been accepted by the Board in circular No.36/2017 dated 02.11.2016.
Computation under Section 10A - Exclude the leased line expenses both from the export turnover as well as the total turnover in computing deduction u/s 10A - HELD THAT:- These questions are answered in favour of the assessee by case of Commissioner of Income - tax, Central-III Vs. HCL Technologies Ltd. [2018 (5) TMI 357 - SUPREME COURT]
Delayed employees contribution to PF/ESI - whether provisions of Section 43B are not relevant to the issue and not applicable to the facts of the case? - HELD THAT:- These questions are answered in favour of the assessee by the Hon’ble High Court of Karnataka in the case of Essae Teraoka (P.) Ltd.[2014 (3) TMI 386 - KARNATAKA HIGH COURT]
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2021 (9) TMI 1494 - BOMBAY HIGH COURT
Allowance of its Managing Director's remuneration in the computation of business profits - HELD - Question No.2 which was framed is no more an issue since identical question has been answered by this court [2014 (9) TMI 283 - BOMBAY HIGH COURT] and by an order[2016 (7) TMI 1679 - BOMBAY HIGH COURT] - Mr. Mistri also relies upon the Commissioner of Income Tax Vs. Woodward Governor India P. Ltd. [2009 (4) TMI 4 - SUPREME COURT]
Respondent requests the matter be taken up after one week so that he can consider the submissions made by Mr. Mistri and also be ready to argue on Question No.1.
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2021 (9) TMI 1492 - ITAT DELHI
Disallowance u/s.14A. r.w.r. 8D - CIT-A held that no disallowance can be made when there is no exempt income and AO not been able to establish any nexus between the exempt income if at all earned by the appellant and any expenditure incurred to earn this income - HELD THAT:- As find from the computation of income filed in the paper book that no exempt income has been claimed by the assessee either in the return of income or in the computation of income. This fact has also been noted by AO, at the first page of the order.
Once there is no exempt income, then there is no question of any disallowance u/s.14A, and therefore, in the case of Cheminvest Ltd [2015 (9) TMI 238 - DELHI HIGH COURT] no disallowance can be made. Decided in favour of assessee.
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2021 (9) TMI 1490 - ITAT SURAT
Ex parte order passed by CIT (A) out of assessment order passed by AO u/s 144 r.w.s 143(3) - HELD THAT:- As the assessment was carried out u/s 144 r.w.s 143(3) of the Act and the impugned order passed by the ld. CIT(A), is an ex parte order and non-speaking order, therefore, we do not wish to make any comments on the merits of the grounds raised by the assessee.
Assessee could not plead his case successfully before the ld. CIT(A). We note that the ld. CIT(A) did not discuss the assessee’s case on merits based on the material available before him hence it is a violation of principle of natural justice. Therefore, without delving much deeper into the merits of the case, in the interest of justice, we restore the matter back to the file of Ld. CIT(A) for de novo adjudication and pass a speaking order after affording sufficient opportunity of being heard to the assessee, who in turn, is also directed to contest his stand forthwith. Appeal of the assessee is allowed for statistical purposes.
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2021 (9) TMI 1489 - BOMBAY HIGH COURT
Penalty u/s 274 r.w.s. 270A - assessment order itself has been passed in breach of the mandatory requirements u/s 144B - HELD THAT:- One of the requirement u/s 144B is to serve upon the assessee a show cause notice alongwith a draft assessment order. In the affidavit in reply filed by one Ambernath Khule, the Jurisdictional AO affirmed on 31st August 2021 on behalf of respondents, in paragraph 5 it is admitted that no specific show cause notice u/s 144B was issued.
As provided in Sub-Section 9 of Section 144B of the Act, the assessment order will be non-est. The assessment order which is impugned in the petition is, therefore, quashed and set aside. The consequent demand notice as well as the notice for penalty also are quashed and set aside. It is open to the department to take steps as advised in accordance with law.
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2021 (9) TMI 1488 - BOMBAY HIGH COURT
Penalty notices issued u/s 270 A and 271 AAC (1) - Respondent did not comply with the mandatory requirement prescribed u/s 144 B (1) (xvi) (b) - HELD THAT:- Admittedly, there has been a variation prejudicial to the interest of assessee. In the affidavit in reply to the Petition, at paragraph 7, it is stated “I say that the communication of the Draft assessment order to the assessee, however, is currently not being reflected in the case history visible to the Jurisdiction Assessing Officer.”
Revenue stated that he has subsequently received instructions that the draft assessment order was not communicated to the assessee. Therefore, we have no option but to set aside the impugned assessment order, the consequential notice of demand and penalty notices as the order, as provided under Sub section (9) of Section 144 B is non est.
Concerned officer may take such further steps as advised in accordance with law. Petition disposed of.
Respondent is handing over a cheque to Mr. Dalal in compliance with the order dated 23rd August, 2020. Statement is accepted.
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2021 (9) TMI 1486 - ITAT DELHI
Assessment of trust - Exemption u/s 11 - Surplus received - HELD THAT:- Surplus received was deleted by the CIT(A) based on the earlier order for A.Y. 2010-11 and the stand of the assessee was accepted by the Revenue in that year. Thus, Ground No. 1 of the Revenue’s appeal in the present Assessment Year is dismissed.
Depreciation claim - As during the year under consideration, the assessee in its books of account claimed depreciation on the movable assets of the Trust, however this depreciation amount was added back in the return of income and was not claimed as application of income which is evident from the balance sheet and computation of income. Thus, Ground No. 2 of the Revenue’s appeal is dismissed.
Inter organization donation received - ITAT upheld the findings of the CIT(A) when such additions made was found to be untenable. The facts are similar in the present assessment year 2014-15, hence Ground No. 3 of the Revenue’s appeal is dismissed.
Corpus donations are not the income since it has been specifically received by way of corpus and this view is upheld by the Tribunal in A.Y. 2010-11. Thus, Ground No. 4 of the Revenue’s appeal is dismissed. Revenue has not pointed out any distinguishing facts in the present Assessment Year to that of earlier Assessment Years. Therefore, all the grounds of the Revenue are dismissed.
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2021 (9) TMI 1482 - ITAT AMRITSAR
Exemption u/s 11 - refusing to grant registration u/s 12AA (1)(b)(ii) - utilization of the fund and receipt thereof from the agriculture activities - whether the activities of the assessee are genuine, and the object of the assessee are charitable in nature or not? - HELD THAT:- We have gone through the record from the record it is discernible that the ownership document per duly placed by the assessee before the CIT exemption and also before us which clearly shows that the ownership of the land vested in the assessee. Assessee had also placed on record the sale of agricultural produce by filing the form J - The documents clearly shows that the finding recorded by the CIT exemption was against the record. In any case at the time of grant of registration under section 12 AA of the of the Income Tax Act what is required to be seen is whether the activities of the assessee are genuine, and the object of the assessee are charitable in nature or not. No comments were made by the CIT exemption in respect of above said two aspect and the whole premise of rejection order of the registration was based on utilization of the fund and receipt thereof from the agriculture activities.
In our view the same is not permitted in view of the law laid down by the Hon’ble Supreme Court in the matter of Anand Social [2020 (2) TMI 1293 - SUPREME COURT], Dawoodi Bohara Jamat [2014 (3) TMI 652 - SUPREME COURT].
In the present case the finding recorded by the CIT exemption is not arising out of the record, rather it is contrary to the record. In our view the assessee was able to prove that the objects of the assessee are charitable, and the activities of the assessee are also genuine. Therefore, respectfully following our decision in the case of Saraswati Education [2021 (9) TMI 840 - ITAT AMRITSAR] we direct the CIT exemption to grant registration to the assessee society from the date of application. Decided in favour of assessee.
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2021 (9) TMI 1481 - GUJARAT HIGH COURT
Applicability of the provisions of sections 148 and 148 A - constitutional validity and vires of the Explanation contained in Notification No.20/2021 dated 31.03.2021 as well as Notification No.38/2021 dated 27.04.2021, which extend, for the purpose of issuance of Notice under Section 148 , the time limit specified in Section 149 or sanction u/s 151 of the Act from 31.03.2021 to 30.04.2021 and from 30.04.2021 to 30.06.2021 respectively - HELD THAT:- According to the petitioner, the Financial Act has substituted the provision of section 147 with effect from 01.04.2021 and the time limit has been set to issue the notice under section 148 which is extended by Notification No.20 of 2021 and 38 of 2021, there cannot be two parallel provisions applicable simultaneously. The validity of the notice is challenged so also Notification No.20 of 21 issued by the CBDT by purportedly exercising the powers conferred by section 3 (1) of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020.
We have heard the learned senior advocate, Shri Tushar P. Hemani with learned advocates, Ms.Vaibhavi Parikh and Mr.Parimalsinh Parmar for the petitioner. It is urged fervently that even the Revenue Authorities could not have extended the operation of repealed provision of section 148 beyond 31.03.2021 under the guise of a clarificatory explanation in the notifications.
Issue NOTICE to the respondents returnable on 05.10.2021. Pleadings be completed and office of learned Additional Solicitor General shall be served through e-mail.
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2021 (9) TMI 1480 - MADRAS HIGH COURT
Validity of order passed u/s 92-CA(3) - Computation of limitation - HELD THAT:- Writ Court noting that as against the draft assessment order, the assessee has approached the Dispute Resolution Panel (DRP), the writ petitions were disposed of by permitting the respondents/writ petitioner to pursue the statutory remedy as opted by it and accordingly, the writ petition was closed.
In such circumstances, the Appellant cannot be aggrieved over the said order, and the Learned Writ Court did not apply the conclusion arrived at, by which in so far as the writ petition filed by the respondent herein.
With the observation, that the writ petition is unnecessary. Since the writ petition filed by the respondent writ petitioner in W.P. No. 35420 of 2019 was not disposed of on merits along with the other cases but has been closed as the respondent had availed the alternate remedy before the DRP.
Appellant submitted that the ratio laid down by the Learned Writ Court would not apply to the respondent-writ petitioner. This issue is obvious, because, the writ petition filed by the respondent-writ petitioner was not adjudicated on merits and was closed, as the respondent chose to avail the alternate remedy provided under the Act by approaching the DRP. It is made clear that the respondent-writ petitioner would be entitled to canvass all legal and factual issues before the Income Tax Appellate Tribunal, before which the appeal is now pending, including the point relating to limitation.
Accordingly, the writ appeal is disposed of.
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2021 (9) TMI 1477 - ITAT BANGALORE
TP Adjustment - not providing unabsorbed cost adjustment to the assessee on account of untilized capacity - HELD THAT:- We notice that this Tribunal has in assessee’s own case for AY 2014-15 set aside the issue to the TPO for consideration afresh and directed the TPO to grant an adjustment on account of capacity utilisation by calling for relevant information on capacity utilisation in the case of comparable company by exercising his power u/s 133(6) of the Act to collate the information on capacity details of the comparable companies such as actual capacity in units, installed capacity, break up of fixed and variable cost, product wise segmental profitability (if any) and provide the assessee an opportunity by sharing the details so obtained on the comparable companies, and accordingly grant the adjustment for capacity under-utilized. The Tribunal also held that if challenges on the lack of information / data are accepted than the adjustment should be made to the tested party. Thus set the order of the AO on this issue remand the same to the AO/TPO for consideration afresh as directed by the Tribunal in AY 2013-14.
Loss/gains arising from fluctuation and restatement of foreign currency ought to be treated as non-operating in nature - TPO has considered forex fluctuation as being operating in nature while computing the margin of the assessee as well as the comparable companies - HELD THAT:- In the context of transfer pricing, the Bangalore Bench of the Tribunal in SAP Labs India Pvt. Ltd. [2010 (8) TMI 676 - ITAT, BANGALORE] has held that foreign exchange fluctuation gain is part of operating profit of the company and should be included in the operating revenue. In the light of above judgement, which is being followed consistently by the various Benches of ITAT, we hold that the amount of foreign exchange gain/loss arising out of revenue transactions is required to be considered as an item of operating revenue/cost, both of the assessee as well as comparables. Hence, the AO was justified in considering forex loss as operating cost.
AO/TPO will compute the ALP of the international transaction in question in accordance with the directions given above after affording assessee opportunity of being heard.
Claim as loss incidental to the business in year of write off - HELD THAT:- It is not in dispute that the assessee wrote off the countervailing and excise duty by debiting its profit and loss account to the extent it was ineligible to claim the duty credit and consequently claimed the same as a deduction under Section 37(1) of the Act. Since the credit cannot be claimed by the assessee and the said amount was written off, the same ought to be allowable as business expenditure under Section 37(1) of the Act more so, when the conditions specified for claim for expenditure under Section 37 of the Act are satisfied.
Chandigarh Bench of ITAT in the case of Mohan Spinning Mill [2012 (4) TMI 781 - ITAT CHANDIGARH] allowed CENVAT credit written off by the assessee as a business expenditure under the provision of Section 37 - DRP held that cases cited by the learned counsel for the assessee were cases where either the registration certificate was surrendered or the business itself was closed. The DRP directed the AO to examine whether the credits were actually written off and if so allow the claim as bad debt.
In our view, the sum in question can be regarded as loss incidental to business. It is no doubt true that in the event of loss, the year in which the loss crystallized is important. The assessee’s claim that the original invoices were lost and hence the assessee could not claim credit for duty paid is not disputed. In such circumstances, to allow the claim as loss incidental to the business in year of write off ought to have been accepted. We therefore direct that the claim of the assessee should be allowed as deduction.
Allowable business expenditure - Admission fees paid to employee of the assessee for securing admission for the employees child in a school - HELD THAT:- The sum in question is personal expenditure of the employee. The employer having met those expenses, the employer should regard is as a perquisite in the hands of the employee. Admittedly, the sum in question has not been regarded as perquisite in the hands of the employee and therefore the sum in question was rightly disallowed by the AO. We find no grounds to interfere with the order of the DRP. Reliance placed by the learned counsel for the assessee on the decision of Gopalpur Tea Company Limited. [1985 (2) TMI 78 - ITAT CALCUTTA-C] is on payment of bonus over and above the statutory limit and that ratio cannot be applied to the facts of the present case. Hence, we dismiss Gr. raised by the assessee.
Disallowance of irrecoverable insurance claim - HELD THAT:- This Tribunal in assessee’s own case for AY 2014-15 remanded the issue to the AO with direction to the assessee to furnish the required details to show that claim made for recovery from the insurance company was rejected to the extent of sum claimed as deduction by the assessee and directed the AO to examine the claim of the assessee in the light of the details that may be filed. We are of the view identical order would meet the ends of justice in the present AY also.
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2021 (9) TMI 1474 - SC ORDER
Notice u/s 153C against deceased person - liability of legal heir of late assessee - As per HC notice, be it under Section 148 of the Act or Section 153C of the Act, issued to a dead person, is unenforceable in law. If such is the legal position, the Revenue cannot contend that as they had no knowledge about the death of the assessee, they are entitled to plead that the notice is not defective - HELD THAT:- We are not inclined to interfere with the impugned order. The Special Leave Petition is accordingly, dismissed. Pending application, if any, stands disposed of.
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2021 (9) TMI 1473 - KARNATAKA HIGH COURT
TDS u/s 195 - Royalty - amounts paid by the concerned persons resident in India to non-resident, foreign software suppliers - Whether constitutes as taxable income - whether assessee had purchased only a right to use the copyright i.e. the software and not the entire copyright itself, the payment cannot be treated as Royalty as per the Double Taxation Avoidance Agreement and Treaties? - HELD THAT:- As assessee submits that the substantial questions of law raised herein are squarely covered by the ruling of the Hon’ble Apex Court in the case of Engineering Analysis Centre of Excellence Private Limited vs. The Commissioner of Income Tax and another [2021 (3) TMI 138 - SUPREME COURT]
As Revenue could not dispute the same, the substantial questions of law are answered in favour of the assessee and against the revenue.
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2021 (9) TMI 1472 - ITAT CHANDIGARH
Exemption u/s 11 - dummy face for diverting of receipts - huge fees collected under non educational heads - assessee was doing commercial activities by collecting huge amounts from students under various heads some of which were not incidental to its objectives and was earning huge profits which were ploughed back to create assets in the form of capital investments - huge fees collected under non educational heads, CIT(A) has found the heads to be incidental to the purpose for which the trust existed - HELD THAT:- Vis-à-vis the issue of huge fees collected under non educational heads, CIT(A) has found the heads to be incidental to the purpose for which the trust existed. On considering the facts relating to the issue, as out lined in the order of the AO in the table where various amounts collected by the assessee are tabulated, we see no reason to disagree with the CIT(A).
We find that the heads listed therein, which form major part of the fee collection, are by way of admission fees, art & crafts expenses, educom charges, transport charges, printing & stationary charges, etc. They are no doubt related to the educational activities of the assessee. Remaining collections in the form of discount & rebate, penal ty charges, insurance claim refunds, etc. are very minor collections and in any case are normal collections incidental to the carrying of the activity of imparting education. DR was also unable to point out how the heads under which the amounts were collected were not related or incidental to the activities of imparting education carried on by the assessee. Therefore, we do not find any infirmity in the findings of the Ld.CIT(A) vis-a-vis this aspect.
For the reasonableness of the amount collected CIT(A) has stated that to be beyond the ambit of taxation and drawn support from decisions in the case of St Peters Education Society [2016 (6) TMI 536 - SUPREME COURT] CBDT Circular No.14/2015 and the decision of the Jurisdictional High Court in the case of Pinegrove International Charitable Trust Vs. Union of India & Others, [2010 (1) TMI 49 - HIGH COURT OF PUNJAB AND HARYANA AT], all to the effect that mere generation of surplus would not lead to the conclusion that the assessee does not exist solely for educational purpose. Ld.DR was unable to controvert the same before us .we therefore do not find any infirmity in the findings of the Ld.CIT(A) in this regard also.
Payment of royalty - Perusal of the MOU signed by the assessee with M/s G.D. Goenka Pvt . Ltd reveals that as per the said agreement M/s G.D. Goenka Pvt . Ltd. was to only provide guidance to establish, manage and develop the school by way of providing preopening guidance & support, providing guidelines for documentation of records, supporting in marketing and advertisement of the school, providing manual for operations in alignment with the core standards, support in recruitment of Principal & staff, training & support for staff development and providing continuous support in all areas. These services, we find, are merely support services so as to ensure that the education being imparted in the assessee’s school is in consonance with the standard established by the brand M/s G.D. Goenka Pvt . Ltd as per the agreement entered into with them. The Ld.DR was unable to show as to how these services could be read as M/s G.D Goenka having control over the day- to-day activities of the running of assessee’s school.
No infirmity in the findings of the CIT(A) that there being no relationship between the assessee and M/s G.D. Goenka Pvt. Ltd. and the services being provided to maintain the brand name of M/s G.D. Goenka Pvt . Ltd. it cannot be said that the royalty paid by the assessee to M/s G.D. Goenka Pvt . Ltd. tantamounted to diversion of its profits.
As for the aspects of accumulation of profits the findings of the Ld.CIT(A) are to the effect that the assessee has complied with the provisions of law in this regard. DR was unable to controvert the same before us.
We do not find any reason to interfere in the order of the Ld.CIT(A) allowing assessee’s claim of exemption u/s 11 of the Act .
Disallowance of rent paid to one Smt .Suman Bansal - The factual findings of the CIT(A) that the ownership of Smt .Suman Bansal of the land leased to the assessee was established by documentary evidences, has not been controverted before us. Therefore, the findings of the AO that there was no evidence of ownership of land by Smt .Suman Bansal , meri ts no consideration. The findings of the CIT(A) to the effect that the land had been leased by the assessee consistently for educational purpose and the rental payments were consistent with the past history of the assessee had also remained uncontroverted before us. He has also stated that the rental payment , in his view, was reasonable payment for such a huge chunk of land in a capital city like Jammu. The assessee had justified the same by stating the market value of the land as assessed by the Revenue Authorities and, therefore, the rent paid was much less considering its huge market value. The Revenue has been unable to controvert this factual finding of the Ld.CIT(A).
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2021 (9) TMI 1471 - ITAT DELHI
Assessment u/s 153A - Assessee argued assessment was a completed assessment and not abated besides that no incriminating material was found during the course of search - HELD THAT:- We find that the assessee has filed original return of income on 29.09.2013 and search took place on 23.07.2015. Therefore, assessment for Assessment Year 2013-14 was concluded assessment as on the date of search. From order of the ld AO we do not find that addition has been made on the basis of the any incriminating material found during the course of search.
CIT(A) has also merely relied upon the statement of director and other person recorded during the course of search. Further, merely statement could not have been used in absence of any incriminating material found during the course of search corroborating such statement. Further, merely because the books of account was not available during the course of search such non availability of books of account also cannot be used against the assessee to make an addition in a concluded assessment. In view this, we find the issue is squarely covered by the decision of Kabul Chawla 2015 (9) TMI 80 - DELHI HIGH COURT]. Even during the course of hearing also ld DR could not show us any incriminating material based on which the addition has been made. Accordingly, we direct the ld AO to delete the above addition made without any incriminating evidence and reverse the orders of the lower authorities. Appeal of assessee allowed.
Disallowances of expenses incurred for running the business of the assessee - Estimation of income - assessment u/s 153A was completed wherein, total income of the assessee was computed @ 1% total sales - CIT(A) who in fact reduced the net profit to 0.5% instead of 1% determined by the assessee - HELD THAT:- On reading of the assessment order it is apparent that the income of the assessee was arrived at by rejecting books of accounts of assessee in terms of provision of section 145(3) of the act. He has determined profit of the assessee at 1% of the total bogus sales issued by the assessee. Such determination of the profit at the rate of 1% which was reduced by the learned CIT – A 0.5% has resulted in deriving at the net profit of the assessee after deduction of all the expenses incurred by the assessee. Therefore, there is no room for allowance of any expenditure to the assessee where net profit is determined. Even otherwise the ld CIT(A) has reduced the quantum of percentage from 1% to 0.5% for allowing the expenditure to the assessee. In view of the above facts we do not find any infirmity in the order of the lower authorities.- Decided against assessee.
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