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Income Tax - Case Laws

Showing 401 to 420 of 6519 Records

• 2013 (12) TMI 728
  

  Whether interest u/s 234A, 234B, and 234C be charged on notional income - Held that:- The assessee has received compensation and interest thereupon only after the judgment of the Hon'ble Supreme Court in the year 2001 - Only due to judicial pronouncement, the assessee has become entitled to receive the additional compensation and interest thereupon - The interest can be charged only on the income received and not from the date on which it was entitled to receive interest - No interest can be charged on notional interest - Following CIT Vs. ICD, Syndicate [2006 (3) TMI 90 - KARNATAKA High Court] - No interest can be charged when there is no real income - The interest will have to be charged in the year when income was earned - It cannot be charged retrospectively when there was no receipt in the hands of assessee - Decided in favour of assessee.

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• 2013 (12) TMI 727
  

  Disallowance of expenses on advertisement, publicity and sales promotion, vehicle upkeep expenses, payments made to hotels u/s 37 - Held that:- On analysis of provisions of sub - sections to section 37 - The issue raised by the assessee regarding aggregation of items specified in sub-section (3B) is a debatable issue - The AO could not have filed an application under Section 154 to rectify the mistake as it is not a mistake apparent from record - The CIT (A) and Tribunal have erred in interpreting the deduction under Section 37 (3A)/(3B) by reading the word 'or' after each of the clauses (i), (ii) and (iii) of sub-section (3B). The word 'or' has to be seen in the context of the deduction for expenses on any one or more of the items. Such expenses have to be aggregated for the purposes of allowing deduction - If the words of the Statute are in themselves precise and unambiguous, then no more can be necessary than to expound these words in their natural and ordinary sense. The words thesemselves alone do, in such case, best declare the intention of the law givers - Decided in favour of Revenue.

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• 2013 (12) TMI 726
  

  Whether tax dues of company be recovered from its directors - Held that:- Tax dues of a private company can be recovered from its Directors in the circumstances specified in Section 179 of the Act - Section 179 of the Act cannot be invoked if such a Director proves that non recovery cannot be attributed to any gross neglect, misfeasance or breach of duty on the part of the petitioner in relation to the affairs of the company - The petitioner has thus proved that non recovery of the tax due against the company cannot be attributed to any gross neglect, misfeasance or breach of duty on her part in relation to the affairs of the company - Neither the ACIT nor the CIT have referred to any material nor they have referred to any evidence to indicate any gross neglect, misfeasance or breach of duty on the part of the petitioner in relation to the affairs of the company - Decided in favour of petitioner.

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• 2013 (12) TMI 725
  

  Unaccounted investment and undisclosed income - Held that:- The Tribunal was justified in restoring the matter to the AO with direction to recompute the peak - The AO was wrong in his method of peak by pick and choose method - As per he peak theory defined in the Sampath Iyengar's Law of Income-tax - Where the credits appear not in the same account but in the accounts of different persons. Even then, if the genuineness of all the person is disbelieved and all the credits appearing in the different account are held to be the assessee's own moneys, the assessee will be entitled to set off and a determination of the peak credit after arranging all the credits in the chronological order - Decided against Revenue.

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• 2013 (12) TMI 724
  

  Change in accounting period for maintaining uniformity - Held that:- The period of three months from March to June, was shown by the assessee and proper tax has been paid - This is merely an adjustment of the accounting system for maintaining uniformity in the accounting system permissible as per the guidelines issued by the Institute of Chartered Accountant - After examining the entire material, the Tribunal observed that there is no escapement of tax - Decided in favour of assessee.

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• 2013 (12) TMI 723
  

  Undisclosed investment - purchase of shares on credit from different 207 persons - Held that:- The details and other evidences in the nature of cheques, their dates, amounts, particulars of banks and addresses of the persons who are stated to have sold the shares, which have also been transferred by the Company in the name of the assessee - The burden which initially lay upon the assessee stood effectively discharged - No addition ought to have been made - Decided against Revenue.

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• 2013 (12) TMI 722
  

  Exemption u/s 10(23AAA) - Held that:- Both the financial institutions namely Veerashiva Sahakara Sangha and Karnataka Veerashaiva Vidyabhivrudhi Samsthe do not fall within Section 11(5) of the Act as they are not approved - Once the fund is approved by the Commissioner in accordance with the Rules made in this behalf, the contribution made by the employees to the said fund do not form part of the total income and consequently, it does not attract tax - Decided in favour of assessee.

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• 2013 (12) TMI 721
  

  Whether land and building are to be treated as separate assets for the purpose of section 50C - Held that:- The interpretation of Section 50C of the Act is ascertained by the Court - On analysis of sub-section (1) it appear that there must be a transfer of a capital asset, which means, the land or building or both - The consideration received or accrued on the transfer is less than the value adopted or assessed or assessable by an authority of the State Government on which the stamp duty is paid - If the valuation adopted by the Stamp Valuation Authority is more than the consideration received, then such value has to be treated as the full value of the consideration received or accrued for the purpose of Section 48 - Land and building has to be valued combining together and taking into consideration the valuation adopted by the Sub Registration Authority or by the report of the Departmental Valuation Officer - Decided against assessee.

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• 2013 (12) TMI 720
  

  Non-allowance of the credit of Securities Transaction Tax (STT) u/s. 88E in view of the assessee's tax liability for the current year being determined u/s 115 JB - MAT - CIT(A) allowed the assessee's claim - Held that:- No infirmity in the impugned order; the same being rather the consistent view of the Mumbai Benches of the Tribunal. The order by the Tribunal in the case of Horizon Capital Ltd. (supra) has been since confirmed by the high court in CIT v. Horizon Capital Ltd. [2011 (10) TMI 489 - KARNATAKA HIGH COURT]. We, may, however, clarify that the rebate u/s. 88E is only in respect of the tax chargeable under the head profit and gains of business or profession, and not any other. As such, only as much of tax under the MAT provisions which relates to the income, though based on book profit, attributable to the profits of the assessee's business arising from taxable securities transactions, would stand to be allowed, in view of the qualifying condition of section 88E.

  Disallowance u/s. 14A read with rule 8D - assessee contests the same on the basis that the investment under reference, i.e., on which the dividend income stands received by it, being shares in different companies, are held by it as stock-in-trade, and not as investment, so that rule 8D(2)(ii) is not applicable - Held that:- Rule 8D shall apply qua the shares held as stock-in-trade. See ITO vs Daga Capital Management Pvt. Ltd. (2008 (10) TMI 383 - ITAT MUMBAI).

  The language of rule 8D(2)(ii) itself provides the mandate inasmuch as it prescribes or authorizes a disallowance only qua investment income from which is not taxable, so that in limiting the amount worked out with reference to the total investment; the same also yielding taxable income, we have only sought to operationalize the said rule. It would also be appreciated that not doing so would also violate the principle of only net income (from any source) being subject to tax inasmuch as a disallowance for the total interest as per rule 8D(2)(ii) would in effect bring the share trading income to tax without deduction of the interest expenditure allocable or attributable thereto

  The assessee, in the instant case, has suo motu disallowed ₹ 1,22,295/-. Its argument for non-application of s.l4A(l) is thus even otherwise infirm. The disallowance by the Revenue, per rule 8D, works to ₹ 12,23,627/-, a part of which stands to be deleted and the balance confirmed, as indicated above. Under the circumstances, the assessee gets part relief. - Decided partly in favour of assessee.

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• 2013 (12) TMI 719
  

  Addition u/s 68 - Held that:- The amounts represented by such FDRs standing in different names in the account books of the Pat Sanstha - The FDRs being question did not belong to the AOP - The amounts treated as unexplained investments of the AOP for assessment years 1999-2000 and 2000-01 have been assessed in the hands of Agresan Sahakari Pat Sanstha Ltd. for the very same assessment years as unexplained cash credits u/s 68 - The impugned additions are unsustainable as it would amount to taxing of the same income twice i.e. in separate hands for the same assessment years - Decided against Revenue.

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• 2013 (12) TMI 718
  

  Expenses incurred by overseas branch – Held that:- Following assessee's own case for A.Y 1991-92 - If the expenses are shared/ allocated/ apportioned/ non-exclusive head office expenses then they will fall within the limits under section 44C of the Income Tax Act, 1961 (the Act) - If expenses are exclusively incurred by the head office for the Indian Branch then they shall be considered under general provisions of the Income Tax Act,1961- Expenses incurred by the bank overseas branches directly pertained to the operations and business of the Indian branches - Decided in favour of assessee.

  Interest paid to set off against interest received – Held that:- Following Aruna Mills Ltd. vs. CIT [1956 (8) TMI 45 - BOMBAY HIGH COURT] - There was no nexus between the receipt of interest by the assessee company and the payment of interest under the provisions relating to payment of advance tax - The first case the assessee was being paid interest for making the advance payment and in the second case he is made to pay interest for failure to pay the advance payment - The provision for payment of interest in the Act is not as compensation for use of the money belonging to the creditor which a debtor has, but the payment is for an entirely different consideration - There was a default in complying with the statutory obligation to make advance payment of tax - The interest cannot be strictly called a penalty, it was in the nature of penalty because it was for a default - On this basis also the rule of netting was not accepted – Decided against assessee.

  Expenses incurred – Held that:- Indian law limits certain deductions of a permanent establishment with respect to head office expenditures. The deduction of amounts characterized as executive and general administration expenditures (not interest) is capped at five percent of the adjusted total income of the permanent establishment - The restrictions for allowing expenses incurred by the PE being head office expenses which are covered by Sec.44C of the Act (domestic law) as well as other expenses incurred in India are within the fold of Article 7(3) of the DTAA - As far as expenses incurred in India attributable to the business carried on in India are concerned, they have to be allowed subject to the limitations provided in the Act – Decided in favour of assessee.

  Expense on entertainment of staff members – Held that:- The Tribunal estimated 10% of the entertainment expenses to be attributed to the staff members entertaining the clients and accordingly allowable to that extent – Partly allowed in favour of assessee.

  Expenses on rent, repairs and depreciation – Held that:- Following Britannia Industries Ltd. [2005 (10) TMI 30 - SUPREME Court] - The claim of expenditure on rent, repair/depreciation on Guest House is not allowable - Decided against assessee.

  Amount paid to RBI – Shortfall in CRR and SLR – Held that:- Following Assessee's own case for the assessment year 1992-93 and DCIT V/s. Dhanalakshmi Bank Ltd [2000 (8) TMI 246 - ITAT COCHIN] - The interest paid to the RBI was not penalty and accordingly the interest expenditure is allowable - Decided in favour of assessee.

  Club membership fee – Held that:- Following assessee's own case in A.Y 1990-91 and Otis Elevator Co. (India) Ltd. vs. CIT [1991 (4) TMI 53 - BOMBAY High Court] - The assessee is entitled to deduction on account of annual subscription paid to the clubs, in respect of its employees - Decided in favour of assessee.

  Interest paid to overseas branch – Held that:- Following Sumitomo Mitsui Banking Corpn. vs. DDIT(IT) [2013 (1) TMI 509 - ITAT MUMBAI] - When the transaction between the overseas head office of the assessee and its unit in India was a transaction as between principal and principal - Any income cannot arose in favour of the assessee either directly or indirectly since the gain in overseas office was offset by the loss incurred in the Indian branch - There cannot be a valid transaction of sale between the branch office of the assessee in India and its head office - It is a elementary proposition that no person can enter into a contract with oneself and debiting or crediting one's account cannot alter this legal position. The interest paid to the overseas branch head office is an allowable deduction by virtue of provisions of DTAA and at the same time the said interest paid by the India PE is not chargeable to tax under the provisions of IT Act being income to self - Decided in favour of assessee.

  Expenses incurred for earning the income exempt u/s 10(15)(iv)(h) – Held that:- The expenditure incurred for earning the non-taxable income has to be disallowed - There may be direct expenditure incurred for earning exempt income but expenditure incurred for the composite/indivisible activities in which taxable and non-taxable income is received, then the principle of apportionment will apply - The AO has not brought out any direct expenditure incurred for earning the exempt income in question and disallowed the proportionate expenses by considering total expenditure incurred by the assessee and booked to the P&L Account - When there is no direct expenditure incurred for earning the exempt income then the apportionment of the expenditure is only for such expenditure which has been incurred for composite/indivisible activities resulting in taxable and non taxable income - The expenditure which is common for the activities for taxable and non-taxable income, the disallowance has to be considered - Section 14A was not in existence when the assessment in the said case was completed by the AO – As per the provision inserted by the Finance Act, 2001 retrospectively w.e.f 01/04/1962 - The disallowance of the proportionate expenditure incurred for composite or indivisible activity in which taxable and non-taxable income is received has to be examined in the light of the provisions of Section 14A - AO has not examined the issue by considering the expenditure which is incurred for the composite/indivisible activities in which taxable/non-taxable income is received – The issue was set aside for fresh consideration.

  Deduction u/s.36(1)(viia) and section 44C – Held that:- The adjusted total income for the purpose of Section 44C means total income computed in accordance with the provisions of the Act and interalia after giving effect to the deduction u/s. 36(1)(viia) - The conjoined reading of section 36(1)(viia) as well as section 44C makes shows that for computation of deduction u/s. 36(1)(viia) the deduction u/s. 44C has to be given effect and similarly for deduction u/s. 44C, deduction u/s. 36(1)(viia) has to be given effect - The deductions have to be given after calculating the income as per the provisions of the Act - Deduction u/s. 44C has to be given after taking into account deduction u/s. 36(1)(viia) and deduction u/s.36(1)(viia) has to be given after taking into account deduction u/s. 44C – The view of AO is accepted – Decided in favour of Revenue.

  Head office expenditure – Held that:- The assessee has claimed 5% of the adjusted total income as head office expenditure under section 44C - The assessee has filed a certificate from the head office auditors confirming head office administrative expenses - The assessee has debited the head office administrative expenses in the P&L Account at Rs.15,10,18,863/-, the AO restricted the deduction only to the extent of the amount which was debited to the P&L Account - The AO has not examined the certificate from the head office auditors regarding the actual expenditure incurred in respect of head office administrative expenses - The CIT(A) has also not examined this issue by taking into account the certificate from the head office showing actual expenses incurred – The issue was restored for fresh adjudication.

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• 2013 (12) TMI 717
  

  Assessment on amalgamated company - Validity - Held that:- Following IMPSAT (Pvt.) Ltd. vs ITO ITAT, Delhi 'A' Bench [2004 (7) TMI 299 - ITAT DELHI-A] - Assessment on a company which has been dissolved and struck off the register of companies u/s 560 of the Companies Act,1956, is invalid, even though the company participated in assessment proceedings- There is no provision in the IT Act to make assessment on a dissolved company-it is not a case of discontinuance of business so as to attract section 176 nor does Section 159 cure the lacuna - Once a company is dissolved it become a non existent party and therefore no action can be brought in its name - There is no provision in Income Tax Act, 1961 to make an assessment thereon - Decided against Revenue.

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• 2013 (12) TMI 716
  

  Project Development Expenditure - Capital or Revenue - Held that:- The assessee-company is expanding its already started line of business by expanding its scale of operation - Following M/s Reliance Footprint Ltd V/s ACIT [2013 (12) TMI 161 - ITAT MUMBAI] - The question that whether the Assessee is entitled to a particular deduction or not will depend on the provisions of law relating thereto and not on the view which the Assessee might take of his own rights; nor can the existence or absence of entries in his books of account be decisive or conclusive in the matter - The said expenditure were incurred towards salary to the employees, travelling and conveyance, telephone expenses, professional fees paid, audit fee and other miscellaneous expenses towards registration as stamp duty charges, license application fees, repair and maintenance etc - Such expenses cannot be said to have generated any capital advantage to the assessee and the same is in the nature of revenue expenditure irrespective of the fact that the assessee has given dual status of such expenditure in its books of account and computation of income claiming it as revenue expenditure - Following Asahi India Safety Glass Limited [2011 (11) TMI 2 - DELHI HIGH COURT] - The expenditure which is incurred, which enables the profit making structure to work more efficiently leaving the source of the profit making structure untouched is an expense in the nature of revenue expenditure - The expenditure under consideration incurred by the appellant for expansion of the existing line of business or for maintenance and operation of the already established stores is an allowable deduction under section 37 - Decided against Revenue.

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• 2013 (12) TMI 715
  

  Cutting and polishing of rough diamonds - Manufature or not - Additional depreciation - Held that:- Raw diamonds and cut and polished diamonds were different and distinct marketable commodities having different uses - Therefore, a company engaged in cutting and polishing raw diamonds for the purpose of export was engaged in the processing of goods to convert them into marketable form - The raw and uncut diamond is subjected to a process of cutting and polishing which yields the polished diamond, but the polished diamond is a new article or thing which is the result of manufacture or production - The cut and polished diamond could not be treated a new article or thing and that cutting and polishing of diamonds cannot be held manufacturing or production - Cutting and polishing of rough diamond in to polished diamond is not manufacturing or producing of a new article or thing - Decided against assessee.

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• 2013 (12) TMI 714
  

  Unexplained cash credit - Held that:- The assessee has only source of income i.e. income from other sources, interest on loans and interest on bank - The assessee has only bank account maintained with Allahabad Bank - She has opened one bank account with Standard Chartered Bank, Gariahat Branch, Kolkata just to deposit the sale proceeds of jewellery, which was handed over by her mother for the purpose of charity - The assessee produced the letter of Smt. Rampiyari Devi which clearly states that she is having gold and diamond jewellery, which was received at the time of her marriage, and expressing her will for charity out of the sale proceeds of the above jewellery through her daughter - Even the sale proceeds were deposited in the Standard Chartered Bank Account only for the purpose of depositing sale proceeds of jewellery, for which the assessee was only custodian and this account was opened just as a facilitator - Immediately after sale of jewellery the amount was deposited in this bank and was issued cheque in the name of Ramkrishna Mission for the purpose of charity - By producing the evidence before the lower authorities the assessee has discharged the initial burden which lies upon him. Now the burden shifts on the department as to why the assessee's case cannot be accepted and why it must be held the entry, thought purporting to be in the name of a third party, still represent the income of the assessee from an undisclosed income - The AO or the CIT(A) has neither examined these evidences nor put to cross examination like that of sale bill, the valuation report or the ownership letter written by assessee's mother - The assessee has produced all the evidences and which have arbitrarily been rejected by the lower authorities - Assessee was never the owner of gold and diamond jewellery instead her mother has handed over the possession of jewellery for doing charity out of the sale proceeds of the same and assessee acted accordingly - Decided in favour of assessee.

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• 2013 (12) TMI 713
  

  Penalty u/s 271(1)(c) - Under valuation of WIP and deduction u/s 80HHC - Held that:- Following assessee's own case for earlier years - The principle in both years remains same - The penalty for concealment of income cannot be made where there is difference in calculation of an exemption as claimed by assessee and as allowed by Assessing Officer due to difference in opinion in respect of various heads of expenses and income relating to export or non-export income - Decided against Revenue.

  Penalty for depreciation on film city - Held that:- The assessee relying upon the decision in A. V. Mevyyappa Chettiar claimed depreciation @ 25% on studio building - Up to the date of filing of return that is on 31.12.1999 the decision of the case remained in favour of assessee - Later on the Hon’ble Supreme Court reversed the decision - The depreciation claimed under bonafide belief does not amounts to furnishing of inaccurate particulars of income - Decided against Revenue.

  Carry forward of loss of amalgamating company - Held that:- At the time of filing of return, the assessee was under a bonafide belief that it will continue to carry on the business of amalgamating company - The addition was debatable as is apparent from the order of Ld. CIT (A) in respect of quantum additions wherein he had reduced the disallowance from Rs. 3 lacs to Rs. 2.50 lacs - Decided against Revenue.

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• 2013 (12) TMI 712
  

  Disallowance u/s 40A(3) – Held that:- The cash payment as per the seized documents were made by the Assessee outside the books of accounts - The onus is on the Assessee to prove the source of these expenses - The provisions of Sec. 40A(3) will not be applicable – The sources of these expenses were not explained by the assessee - The AO verified and came to the conclusion that the actual cash payment made by the Assessee is lower than the amount disallowed by the CIT(A) - Partly allowed in favour of assessee.

  Withdrawal from bank account – Held that:- The Assessee has assisted the transporters to open these bank accounts as the transporters are located at faraway places so that the payment can be made to these transporters through cheque and the transporters or his truck driver may withdraw the amount as and when it is needed - The AO has nowhere held that the transport charges paid by the Assessee are bogus - The AO presumed that these bank accounts belonged to the Assessee - The amount withdrawn by a person from his bank account cannot be regarded to be his income - Under Sec. 4 of the Income Tax Act the income tax is chargeable only on the real income - The amount withdrawn from the bank account represents only the current asset of the Assessee – Decided in favour of assessee.

  Undisclosed cash payment – Held that:- The Assessee has disclosed only a sum of Rs.6,31,00,000/- during the year as undisclosed income of the Assessee - The Assessee had made cash payment during the year amounting to Rs. 8,50,39,441 - Until and unless the income is earned by the Assessee, the Assessee cannot make the payment - Income is earned by the Assessee prior to making of the cash payment - The Assessee has not utilized the income for making the cash payments - The income declared by the Assessee in the subsequent year cannot cover the cash payments made by the Assessee during the year - Therefore, out of the cash payments of Rs. 8,50,39,441/-, we allow telescoping only to the extent of Rs. 6,31,00,000/- - Partly allowed in favour of assessee.

  Unaccounted sales – Held that:- The Assessee was a conduit for carrying on the business of Shri Anil H. Lad in respect of iron ore illegally extracted - Once the revenue has found the statement of the Assessee to be correct that the Assessee was engaged in unaccounted sales to accommodate the illegal mining carried out by one (Shri Anil H. Lad), there cannot be any falsity in the statement of the Assessee that the Assessee was earning Commission on this unaccounted sales from 2-4% - The estimation of the profit cannot be at the whims of the A.O that he may apply any rate of profit. The estimation of the profit must be based on the material evidence found during the course of search or as may be gathered by the A.O to support that the estimate made by the A.O is not arbitrary and is bonafide - Part of the statement cannot be accepted as true and the other part of the statement as false - No cogent material or evidence was brought to our knowledge that the assessee has earned the profit @ more than 4% - Partly allowed in favour of assessee.

  Suppressed profit – Held that:- From the print out of the Balance sheet found and seized, it is apparent that this Balance sheet is subject to Audit and was not signed by any of the responsible persons - The Balance Sheet does not have any conclusive evidence on the basis of which the income can be determined - The Assessee is maintaining the regular books of accounts. The accounts are duly audited by the Auditor and the Auditor has duly certified the Profit & Loss A/c and Balance sheet which were furnished along with the returns. The Audited Profit & Loss and Balance Sheet depicts the correct and fair Profit & Loss Account. The unaudited rough print out of the Balance sheet cannot substitute the audited Profit & Loss and Balance sheet – The issue was set aside for fresh adjudication. Unaccounted investment – Held that:- The CIT(A) has rightly confirmed the addition because the investment in the plot of land made on 16.12.2006 was not accounted for during the impugned assessment year – Decided against assessee.

  Bogus purchases – Held that:- The assessee was engaged in the trading of the iron ore - During the course of carrying out the trading in iron ore the assessee has accommodated Shri Anil H. Lad and M/s VSL and Sons for selling iron ore procured by them through illegal mining carried out in their mining - The purchases made by the assessee from these firms which were without bills were shown by the assessee in his books of accounts as if the assessee has made purchases from various parties - The sales made by the assessee were duly accepted by the revenue - At the most, where the Assessee had saved any tax in procuring the bogus bills, the Assessee could have made more profit but the purchases made by the Assessee cannot be disallowed - The gross profits as per the books of assessee were 16.35% and 6.06% for the assessment year 2007-08 and 2008-09 respectively - Once the purchases are disallowed the gross profit will increase to 50.9% and 90.7% for the assessment year 2007-08 and 2008-09 respectively - No material or evidence whatsoever showing the comparative instance was produced before us to justify such a high gross profit - No addition on account of bogus iron ore purchases can be made as without procuring the iron ore by incurring the cost in our opinion the assessee cannot sell the iron ore - The revenue could have added the profit on such purchases @ 4% as the assessee categorically stated that he was carrying out the sales on behalf of Shri Anil H. Lad on commission basis and the evidences found during the course of search and survey also prove that the assessee is being used as conduit to siphon off iron ore which was illegally mined by M/s VSL & Sons firm of Shri Anil Lad - The assessing officer had disallowed the expenses incurred by the assessee for the purchases u/s 37(1)of the Income Tax Act - The purchase cost in the case of a trader in our opinion is allowed as deduction u/s 28 itself as u/s 28 is only the profit and gains of any business or profession which are chargeable to Inc. The consideration received by the assessee on the sales cannot be regarded to be the profit and gains of the profession. Section 28(1) does not make total revenue receipt to be chargeable to Income Tax Act – Decided in favour of assessee.

  Undisclosed stock – Held that:- The assessee only declared the stock of Rs. 41,00,000/- during the impugned assessment year and as claimed by the assessee and accepted by the A.O Rs. 6,00,00,000/- in the assessment year 2006-07 - Undisclosed stock of Rs.10.75 crores was found and accepted by the assessee lying at Krishnapatnam, Nellore district – The telescoping is not allowed under any accounting principles for sum of Rs. 6 crores against the income of Rs. 6,41,00,000 - The order of the CIT(A) sustaining the addition to Rs. 4,75,00,000/- is confirmed – Decided against assessee.

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• 2013 (12) TMI 711
  

  Reassessment u/s 147 - Held that:- The auditor has mentioned in the Audit Report that the assessee made recoveries against recoverable written off to the tune of Rs.5.56 crore, which was credited to the Profit and loss account - When the auditor is reporting that the amount of recoveries has been credited to the P&L account, it shows that the said amount had found its way into the taxability net - There was appropriate, full and true disclosure of all the relevant aspects on this point - The assessment has been reopened on the basis of audit report already available on record making such observations, aptly demonstrates that there was no failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment - The material condition for reopening the case is lacking.

  The solitary basis for the initiation of reassessment is the audit report furnished by the assessee along with the return of income indicating that the amount representing recoveries was credited to the P&L Account - Such audit report was available with the AO at the time of framing assessment - The AO did ask about the details of the such amount debited to the P&L account, which amount is `net’ of the recoveries - When such details were furnished and no addition was made, it has to be presumed that the AO got convinced with such details - There is no fresh material coming into the possession of the AO which prompted him to issue notice u/s 148 - Consideration of the same material already on the record of the AO, which led to the initiation of reassessment is a case of change of opinion - Decided in favour of assessee.

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• 2013 (12) TMI 710
  

  Whether notice u/s 142(1) issued after end of one year from the relevant assessment year is barred by limitation or not - Held that:- Following DIT vs. KLM Royal Dutch Airlines [2007 (7) TMI 577 - DELHI HIGH COURT] - The notice issued u/s 142(1) of the Act is valid and consequently the assessment order passed cannot be held to be invalid in law - As per the proviso inserted to section 142(1) of the Act by Finance Act 2006 with retrospective effect from 1-4-1990 has clearly done away with any limitation with regard to the issuance of notice u/s 142(1) of the Act - The issue was restored for fresh adjudication.

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• 2013 (12) TMI 664
  

  Surrender of stock - During the course of survey u/s 133A – Excess stock of Rs. 4,73,155/- was found on physical verification of stock - Held that:- The assessee surrendered the value of stock of Rs. 4,73,155/-. The assessee has clearly calculated the excess stock and has paid taxes thereon – The assessee has also disclosed to that extent in the return of income – Decided in favour of assessee.

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