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Income Tax - Case Laws
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2005 (2) TMI 750 - ITAT MUMBAI
Revision - Of orders prejudicial to interest of revenue, Deductions - Profits and gains from industrial undertakings, etc., after certain date
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2005 (2) TMI 749 - ITAT MUMBAI
Minimum alternate tax - liability to be taxed u/s 115JA - Sale of shares as part of ‘book profit’ in the Profit & Loss Account - Capital gains tax - Difference between sale price and revalued price at which the shares were shown in the books of account - HELD THAT:- Though there was capital gain on sale of shares under the Income-tax Act, 1961 the sale proceeds were invested in specified securities under section 54EA and hence the capital gain which would otherwise have been chargeable to tax stood exempted from capital gains tax. Shares of one company were sold and shares of another company, which were also specified securities u/s 54EA of the Income-tax Act, were acquired. The Accounting Standards referred to in the assessment order were incorporated in section 211 of the Companies Act with effect from October 1998 and hence were not applicable for preparation of accounts under the Companies Act for the previous year under consideration. Nothing has been brought to our notice to suggest that the accounts of the assessee-company prepared and submitted before the Assessing Officer were either rejected or modified by the authorities under the Companies Act or not approved/adopted in the Annual General Meeting of the assessee-company. Thus, the book profit of shown in the accounts of the assessee-company stood not only certified by the statutory auditors of the assessee-company but also accepted by all concerned under the Companies Act.
In the case before us, the accounts as also the book profits shown therein are duly certified by the statutory auditors of the assessee-company and the impugned adjustments sought to be made by the Assessing Officer are also not authorized by Explanation to sub-section (2) of section 115JA which is similar to Explanation to section 115J. Hence, the adjustments made by the Assessing Officer to the book profit shown by the assessee in the Profit & Loss Account cannot be sustained in law.
Having considered all the facts and circumstances of the case before us in the light of the law laid down by the Hon’ble Supreme Court in Apollo Tyres Ltd.’s case [2002 (5) TMI 5 - SUPREME COURT] and the Hon’ble jurisdictional High Court in Kinetic Motor Co. Ltd.’s case [2003 (1) TMI 47 - BOMBAY HIGH COURT], wherein an identical issue was involved and decided against the Department, we find no merit in the appeal filed by he Department.
Appeal filed by the Revenue is, therefore, dismissed.
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2005 (2) TMI 748 - ITAT MUMBAI
Deductions u/s 80-IA and 80HHC - Profits and gains from infrastructure undertakings - Unabsorbed depreciation - comparable market price - Duty drawback - Inclusion of sales tax in total turnover - Lease & Buyback - freight outward in closing stock - HELD THAT:- Accordingly, the deeming provision of section 80-IA(7) for treating the eligible industrial undertaking as the only source of income of assessee for computation of deduction u/s 80-IA(5) is applicable to assessment year 1996-97 and subsequent years, being succeeding to the "initial assessment year" which is assessment year 1995-96. In that view of the matter, the depreciation of Rs. 3.66 crores, allowed in respect of Kurkumbh unit for assessment year 1994-95 could well be set off against income/profit of assessee from other units in that year (assessment year 1994-95) as the aforesaid deeming provision of section 80-IA(7) was not applicable in assessment year 1994-95; and so the same was rightly set off in assessment year 1994-95 and in turn, the said notional unabsorbed depreciation amount of Rs. 3.66 crores, could not be carried forward in assessment year 1995-96 so as to deduct the same from the eligible profit of Kurkumbh unit in assessment year 1995-96 for the purpose of computing deduction under section 80-IA.
Thus, we find no fault with the impugned order of ld. CIT(A) in directing the Assessing Officer not to reduce the amount of Rs. 3.66 crores as unabsorbed depreciation from the eligible profits of Kurkumbh unit while computing deduction u/s 80-IA for assessment year 1995-96. We, therefore, decline to interfere with the same on this count.
Following the judgment of the Hon’ble Apex Court of India in the case of Tata Iron & Steel Co. Ltd. v. State of Bihar [1962 (9) TMI 49 - SUPREME COURT], we are of the considered view that whatever principle the assessee may have adopted in the cost audit records for value of captive or internal transfers, such transfers, will have to be assigned a commercial value in terms of sub-section (9) of section 80-IA.
We agree with the view has been held by the ld. CIT(A) that is the more appropriate market price will be the domestic price of the same goods actually purchased by the assessee in preference to the selling price of a very small quantity by the other undertaking of the assessee. It is necessary to bear in mind that sub-section (9) of section 80-IA does not at all mandate the market price has to be necessarily the selling price of goods actually sold by the assessee. On the other hand, the requirement is that the goods should be valued as per the market price.
If the actual selling price realized in a given factual situation is demonstrated by the assessee as not the appropriate market price then such a selling price can be discarded in favour of more appropriate and representative market price. Thus, we are of the considered view that the findings/conclusions drawn by ld. CIT(A) are justified.
Income from other sources should be excluded from eligible profit for the purpose of computing deduction u/s 80-IA - From the perusal of ld. CIT(A)’s impugned order it is clear that whatever alternative method is applied there is enough evidence on the record to signify that the profits of both the undertakings on the external sales have a higher rating compared to the Global Profit earned by the assessee.
As such, we are of the view that the adoption of the formula of global profit by Assessing Officer is not sustainable in view of clear findings of ld. CIT(A) based on evidence on record; and that the manner in which ld. CIT(A) has adopted transfer pricing policy is in line with the intent and purpose of section 80-IA(9). The approach of ld. CIT(A) in averaging the sales price and application of such average to the total transfers during the year should understandably be acceptable. If the market price on each day of transfer is not ascertainable then the principle of averaging will meet the test of the proviso to section 80-IA(9) also. Besides, in the case of wide fluctuations between two extremes, the adoption of the weighted average formula will avoid any distortion in the depiction of reasonable profits. The principle of averaging will result in a reasonable depiction of a representative market price, which can be applied to the totality of transfers during the year. We, therefore, find no fault with the decision of CIT(A) on the issue to the extended not disputed by the assessee.
Duty drawback - Since the method of computation of eligible profit for the purpose of deduction u/s 80-IA is the same in all the three years in respect of Kurkumbh and Patalganga II, the eligible units, as also the ineligible/other units; and ld. CIT(A) has accepted the method of computation of eligible profit in assessment year 1995-96 and which we have upheld, we do not find any valid reason for CIT(A) to differ in subsequent years 1996-97 and 1997-98. Therefore, the order of CIT(A) is modified in the manner that we direct the Assessing Officer to allow deduction u/s 80-IA in accordance with the computation submitted by assessee except with regard to ground No. 2(c) in assessment year 1996-97 and ground Nos. 1(c) and 1(d) in assessment year 1997-98, which were not pressed and subject to verification of OS income as directed by us above.
Thus ground No. 1 in revenue’s appeal for assessment years 1996-97 and 1997-98 comprised in issue No. 1 tabulated above, together with ground Nos. II and I in assessee’s appeals for assessment years 1996-97 and 1997-98 respectively, comprised in issue No. 2 in assessee’s appeals, stand disposed of by this decision.
In the result, assessee’s appeals are allowed in part as indicated above.
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2005 (2) TMI 747 - ITAT MUMBAI
Minimum alternate tax - difference between the revalued price of the shares and the book value of shares as shown prior to revaluation to the Investment Revaluation Reserve Account in the balance sheet - whether the ‘net profit’ as shown in the audited profit and loss account can be altered - HELD THAT:- In the case before us, we are concerned with section 115JA which brings "book profits", and not "total income", to the charge of Minimum Alternative Tax. Explanation to sub-section (2) of section 115JA defines "book profits" to mean "net profits as shown in the profit and loss account for the relevant previous year prepared under sub-section (2)", as increased or decreased by the amounts mentioned therein. It is clear that no discretion is available to the Assessing Officer to alter the ‘net profit’ as shown in the Profit and Loss Account prepared in accordance with the provisions of Parts II and III of Schedule VI to the Companies Act except in the manner provided in the Explanation to sub-section (2) of section 115JA.
There is nothing before us to suggest that the accounts of the assessee-company prepared and submitted before the Assessing Officer were either rejected or modified by the authorities under the Companies Act or were not approved/adopted in the Annual General Meeting of the assessee-company. Thus, the book profit as shown in the accounts of the assessee-company stood not only certified by the statutory auditors of the assessee-company but also accepted by all concerned under the Companies Act. In other words, the book profit as shown in the accounts of the assessee was book profit for all intent and purposes under the Companies Act.
In the case before us, the accounts as also the book profits shown therein are duly certified by the statutory auditors of the assessee-company and the impugned adjustments sought to be made by the Assessing Officer are also not authorized by Explanation to sub-section (2) of section 115JA which is similar to Explanation to section 115J. Hence, the adjustments made by the Assessing Officer to the book profit shown by the assessee in the Profit & Loss Account cannot be sustained in law.
Thus, in the light of the law laid down by the Hon’ble Supreme Court in Apollo Tyres Ltd.’s case [2002 (5) TMI 5 - SUPREME COURT] and the Hon’ble jurisdictional High Court in Kinetic Motor Co. Ltd.’s case [2003 (1) TMI 47 - BOMBAY HIGH COURT], wherein an identical issue was involved and decided against the department, we find no merit in the appeal filed by the Department.
Appeal filed by the Revenue is, therefore, dismissed.
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2005 (2) TMI 746 - ITAT MUMBAI
Deduction of tax at source - ‘Assessee in default’ - interest u/s 201(A) - reimbursement of expenses - commission payment - payments made to other foreign entities other than the Lead Managers - nature of services - fees for technical services within the meaning of Article 113 of the DTA Agreement between India and U.K - HELD THAT:- The reimbursement of expenses made by the assessee amount are not taxable as it will not come within the purview of section 9(1)(vii) of the Income-tax Act. So also the payment to Bankers amounting to Rs. 4,38,150 and Rs. 8,76,065 and Rs. 6,85,654 are all payments for services rendered as they were admittedly paid towards fees and they arise in India and thus liable to be deducted tax at source u/s 195. However, in view of DTA with UK is applicable and these payments will not fall within the definition of ‘fee for technical services’ u/s 134(c) and hence they are not taxable in India and assessee is not liable to deduct tax from them. Consequently, it is not an ‘assessee-in-default’ u/s 201. Therefore, interest u/s 201(A) is not chargeable.
Since the assessee has not made application u/s 195(1) of the Income-tax Act to the Department, all the payments made by the assessee that are found liable for TDS on the entire lump-sum payment. Thus, we hereby find that all the issues raised by the assessee on merits are accordingly answered.
Admittedly, the assessee has not furnished the required details while filing the return for the year corresponding to the GDR issue in question, keeping vacant the relevant Column No. 6 available in the return. Therefore, the aspect of when the limitation starts in the absence of any specific direction given in the statute and it will not start unless the taxing authorities came to the knowledge of said issue. It is the contention of the Department that soon after it came to know the issue, they have issued show-cause notice stated supra and hence, the assessee could not show that the Department has committed any deliberate delay or it has not taken action within reasonable time in the absence of any specific time laid down by the statute. Thus, we find that this contention regarding limitation raised by the assessee will not stand for legal scrutiny. Accordingly, we hereby up-hold the same finding the issue raised by the assessee as devoid of merits and dismiss the same.
In the result, the appeal filed by the assessee is disposed off accordingly.
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2005 (2) TMI 745 - ITAT AHMEDABAD
... ... ... ... ..... e amended provisions of section 36(1)(vii) the assessee need not establish that debt has become bad and considering that the assessee had not been able to recover any amount despite filing suit and obtaining decree, there was no chance of recovery of the said debts and, therefore, CIT(A) had correctly allowed the assessee rsquo s claim. ITAT, Delhi Bench in the case of Vigyan Chemical Industries (supra). In Vigyan Chemical Industries rsquo case (supra) observed that where legal remedies were not perused institution of legal suit for recovery of due is not condition precedent for allowance of bad debts. Mere fact that legal proceedings were not instituted, does not warrant conclusion that debts have not become bad. 16. In view of the above discussion, we are inclined to reverse the findings of the lower authorities and direct the Assessing Officer to allow the assessee rsquo s claim for bad debts amounting to Rs. 12,23,598. 17. In the result, appeal of the assessee is allowed.
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2005 (2) TMI 495 - ITAT RAJKOT
Allowability ... ... ... ... ..... ascertaining the profit made during the year. That could be an occasion to find out whether the society had a surplus out of which a rebate could be given to the loyal customers. But even if the ascertainment was at the time of making up of the accounts, the actual rebate was related back to the date of sales and the sales figure was reduced in the trading account. There was a clear decision to give a rebate to those members of the assessee-society who had done large business as an incentive for the purpose of encouraging the co-operative movement and the rebate was not to be given if there was a loss. Therefore, the Tribunal was right in holding that the payment of rebate by the assessee-society to its members was an expenditure incurred wholly and exclusively for the purpose of the business. Respectfully following the aforesaid decision of the Hon ble High Court, we dismiss the appeals of the Revenue on this issue. 8. In the result, the appeals of the Revenue are dismissed.
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2005 (2) TMI 494 - ITAT RAJKOT
Method Of Accounting - addition made on account of low gross profit - correctness of the sales/purchases in the books of account - best judgment assessment - HELD THAT:- The duty of the Assessing Officer is to administer the provisions of the Act in the interest of public revenue and to prevent evasion or escapement of tax legitimately due to the State. At the very same time, the duty of the Appellate Authority is to ensure not only that the provisions of the Act are administered in the interest of public revenue so as to prevent evasion/ escapement of tax, but at the very same time to ensure that only the tax legitimately due to the State is collected.
The First Appellate Authority has all the powers which the original authority may have. In the absence of any statutory provisions to the contrary, the appellate authority is vested with the plenary powers, which the subordinate authority has in the matter. In this case, the CIT (Appeals) himself has looked into audited accounts as well as quantitative statement of daily sales and purchases and compared it with the rate prevailing in Ahmedabad Bullion Merchant Association and found that the profit arrived at in each and every transaction was correct. All these exercise was done by the CIT(A) in the presence of the Assessing Officer. No ground has been taken by the Revenue with regard to any additional materials relied on by the CIT (Appeals) in contravention of rule 46A, while reaching to such conclusion.
The Hon'ble Supreme Court in Brij Bhushan Lal Praduman Kumar v. CIT [1978 (10) TMI 2 - SUPREME COURT], categorically observed that while making "best judgment assessment", the Assessing Officer should keep in mind what honestly he believes to be fair estimated or the proper figure of assessment. Furthermore, Hon'ble Calcutta High Court in the case of CIT v. Popular Electric Co. (P.) Ltd.[1992 (3) TMI 15 - CALCUTTA HIGH COURT] wherein it was observed that while making "best judgment", the Assessing Officer should make independent and well grounded estimate and such estimate may be based on adequate and relevant materials.
In the instant case no mistake has been pointed out by the Assessing Officer either in the books of account or in the statement of purchases, sales and stock which was maintained quantitatively on day-to-day basis. The findings recorded by the CIT(A) at page Nos. 3 and 4 have not been controverted by the department by bringing any positive material on record. We are, therefore, inclined to agree with the learned AR, Mr. Rindani, that the assessee has maintained proper books of account and full details regarding the purchases, sales and stock registers were furnished to the Assessing Officer in which no defect whatsoever was pointed out, thus there was no reason before the Assessing Officer for rejecting the book results and thereby estimating the profit merely by comparing the assessee's G.P. rate. M/s. Gayatri Bullion, which was standing entirely on different footings than the assessee.
In the result, the appeal of the Revenue is dismissed.
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2005 (2) TMI 491 - ITAT VISAKHAPATNAM
Rectification ... ... ... ... ..... nd, therefore, the record must be relevant to that assessee. 10. We have gone through the case laws relied by the learned Authorised Representative, and we find that the contention of the assessee is duly supported by the aforesaid case laws. No decision, which has taken contrary view, has been pointed by the learned Departmental Representative. The information on the basis of the record of the HUF no doubt may give jurisdiction to the AO to take an action under s. 147, but provision under s. 154 cannot be used in place of s. 147. The information based on the record of the HUF can be the base regarding reasons to believe under s. 148 but it cannot be regarded to be a mistake apparent from the record of the assessee as AOP and HUF both are the different assessees. 11. We, therefore, under these facts and legal position, set aside the order of the authorities below and quash the order passed by the AO under s. 154. 12. In the result, all the appeals of the assessee are allowed.
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2005 (2) TMI 490 - ITAT VISAKHAPATNAM
Search And Seizure ... ... ... ... ..... copy of the bank statement filed in the case of Madhavi Finvest (P) Ltd. and on the basis of the enquiry conducted from the said company and without giving or issuing letter to the assessee asking for the reasons why this addition should not be made. A perusal of the assessment order shows that there is no evidence collected by the AO during the search in the case of Smt. B. Surya Prabha that the assessee has invested the said amount. This addition in our opinion does not satisfy the conditions laid down in s. 158BB(1) that the undisclosed income should be assessed on the basis of the evidence found as a result of the search and such other material or information which are available with the AO and are relatable to the evidence so found and therefore, on this basis this addition also cannot be sustained in block assessment and is liable to be deleted. We, accordingly delete the addition so made from the asst. yr. 1995-96. 101. In the result, the appeal of assessee is allowed.
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2005 (2) TMI 488 - ITAT VISAKHAPATNAM
... ... ... ... ..... edundant and ineffective. The provision of s. 139 in our opinion cannot be interpreted in such a manner as to make any of the sub-section to be redundant. 13. When the s. 139(3) is applicable to a specific clause of assessee, and the assessee falls within that category, the assessee, in our view, should have filed the return within time as permissible under s. 139(1) r/w s. 139(3). The assessee in this case did not claim the loss within the time, but claimed when the return was filed. Therefore, we do not find any illegality or infirmity in the order of the CIT(A) confirming the action of the AO denying the claim of the assessee for the carry forward of the loss incurred under the head income from short-term capital gains. The learned Authorised Representative when the Bench asked in the Bar was fair enough to concede that there is no case law in his favour. We accordingly dismiss the appeals of the assessees. 14. In the result, all the appeals of the assessees are dismissed.
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2005 (2) TMI 485 - ITAT MADRAS-D
... ... ... ... ..... ct the AO to consider only the interest which is actually credited or accrued interest to the account of assessee and delete the estimated additions towards interest income. For the asst. yr. 1998-99 also, the AO shall consider similarly and there cannot be double additions once in 1997-98 and another time in 1998-99. Regarding Revenue Secretary announcement that for the asst. yr. 2002-03, there was no scrutiny, we are of opinion that Revenue Secretary has no right to make such announcements and it has no binding effect. Accordingly, we reject the grounds taken by the assessee in the light of the above observations. 15. With reference to the miscellaneous petition filed by the Revenue against granting of stay, as we have dismissed the appeals of the assessee, thus miscellaneous petition has become infructuous and accordingly, dismissed as infructuous. 16. In the result, the appeals filed by the assessee as well as the miscellaneous petition filed by the Revenue are dismissed.
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2005 (2) TMI 483 - ITAT MADRAS-C
Depreciation, Actual cost ... ... ... ... ..... the supplier and the reason for the same is that there was no equipment and the assessee has merely financed the transaction. The lease rental structure also shows that out of Rs. 2 crores, Rs. 60 lakhs have been paid in the very first month and remaining lease rental of Rs. 3,16,000 from 7th month to 60th month was paid. This shows that the transaction is merely a finance transaction and not a lease transaction. Therefore, we are of the view that the CIT(A) has rightly held this transaction to be the case of mortgage and not lease. This lease transaction was made just to claim depreciation to reduce the tax incidence. Accordingly, we uphold the order of the CIT(A) on this issue and dismiss this ground of appeal. 38. The issue as regards to straight lease transaction with M/s Carews Pharmaceuticals is remitted to the file of the AO and all other issues of the assessee s appeal are dismissed. 39. In the result, the assessee s appeal is partly allowed for statistical purposes.
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2005 (2) TMI 481 - ITAT LUCKNOW-B
Deemed Gift ... ... ... ... ..... ng the said interest of Rs. 89,52,969 as deemed gift under section 4(1)(c) of the Gift-tax Act in favour of the sister concern(s) from whom no interest had been charged on the advances/loans. The First Appellate Authority cancelled the said gift tax assessment by following the reasoning given in the case of M/s. Sahara India (Firm), the case which we have discussed hereinabove. The Department has filed this appeal disputing the order of the CGT(A). The assessee has filed cross-objections supporting the order of the First Appellate Authority. 23. Since facts and issues are identical to the case of Sahara India (Firm), we, for the reasons mentioned in paras 17 to 21, uphold the order of the First Appellate Authority and reject the grounds of appeal taken by the Department. Consequently, the cross-objections filed by the assessee are allowed. 24. In the result, both the appeals filed by the Department are dismissed and both the cross-objections filed by the assessee are allowed.
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2005 (2) TMI 479 - ITAT LUCKNOW-A
Business Income ... ... ... ... ..... he AO has already allowed claim for depreciation in full, then the direction given by the learned CIT(A) to the AO to allow full depreciation is not perverse or uncalled for Ground fails. 74. Ground No. 1(ix) relates to deletion of addition of Rs. 20,77.406 made by the AO towards machinery spares and repairs and identical issue was before the Tribunal in the case of the assessee for asst. yr. 1990-91 and Tribunal vide its order dt. 23rd Dec., 1993 in ITA No. 1288/All/1993 has already decided this issue in favour of the assessee and the learned CIT(A) has also taken note of the fact. As the learned CIT(A) has followed the order of the Tribunal, there is no infirmity in the order and we also confirm the view taken by the learned CIT(A) which is based on the decision of the Tribunal in the case of the assessee for just preceding year. 75. Ground Nos. 1(x) and (xi) are already discussed in ground Nos. 1 to 1(v) above. 76. In the result, the appeal of the Department is dismissed.
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2005 (2) TMI 477 - ITAT JODHPUR
Reason To Believe ... ... ... ... ..... ich is placed at page NO.1 of the paper book, wherein the AO has proposed to assess the assessment year (sic) and not to reassess the same. This may be taken to be inadvertent mistake but when this fact is considered in the light of the reasons for reopening, it assumes ominous overtures and reveals the initial intention of AO that somehow or the other, he wanted to scrutinise this case. Be that as it may, we are of the considered opinion that there are no valid reasons for reopening whereby it could be stated that income chargeable to tax has escaped assessment. The reassessment proceedings are not a tool in the hands of the AO to correct the oversight or mistakes or inadvertence while making the original assessment. The AO did not have acquired valid jurisdiction under s. 148/147. Thus, we uphold the findings of the learned CIT(A). There is no need to decide the case on merits in. case he has held the very basis as void ab initio. 12. In the result, the appeal is dismissed.
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2005 (2) TMI 475 - ITAT JODHPUR
Penalty levied u/s 271(1)(c) - concealment of income or filing of inaccurate particulars of income - HELD THAT:- A careful perusal of the impugned orders clarify that although the assessee has surrendered these amounts during the course of survey, but the same were not reflected in the ensuing returns of income. The explanations tendered were not accepted by the learned AO. So, non-acceptance of the explanation of the assessee, and mere non-filing of appeal against the impugned additions, do not ipso facto lead to the finding that the assessee had concealed the income. There may be hundred and one reasons for such action of surrender of the assessee. Something more is required under the penalty proceeding to nail the assessee for concealment of income or of filing of inaccurate particulars of income. This aspect is missing from the penalty order.
The parameters for penal proceedings are entirely different from making addition in quantum of income declared. When the additions are made on estimation, no penalty can be levied. When explanation of the assessee is not found to be plausible and hence rejected, this is again not a just reason to levy penalty u/s 271(1)(c) of the Act. Consequently, penalty u/s 271(1)(c) is not leviable in this case. I draw support from the abovementioned decisions.
In the result, the appeal is allowed and the penalty is set aside.
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2005 (2) TMI 473 - ITAT JODHPUR
... ... ... ... ..... ving the same from the claimed agricultural income of Rs. 29,780. The learned CIT(A) rejected all submissions made in this regard on behalf of the assessee, and also simply brushed aside the plethora of judicial pronouncements relied by the learned Authorised Representative by simply mentioning in his order, but by not giving any reasons, at all, for such rejection. 10. I am of the view that the sum total of all the decisions relied by the learned Authorised Representative in his written submission, is that, in case the addition was made after rejecting the explanation of the assessee, this fact simpliciter, would not lead to the conclusion that the assessee has committed or omitted either of the ingredients, of s. 271(1)(c) of fact. Something more is required to be proved by the Department. In my opinion, the penalty is not leviable on any of the above addition. Hence, the penalty is set aside. The appeal of the assessee is accepted. 11. In the result, the appeal is allowed.
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2005 (2) TMI 472 - ITAT JODHPUR
Full And True Disclosure ... ... ... ... ..... SB), wherein it was held that initiation of reassessment proceedings would be valid if alleged creditor confesses that so-called loan transaction with assessee was not genuine and he acted as a name lender, but initiation of reassessment proceedings would be invalid where alleged creditor confesses or states that he was a name lender to some parties but name of assessee is not appearing in such list. 5. In the given cases also, the lending of name by the searched person to these assesses was even a fact. So, according to the learned Authorised Representative, reopening cannot be done. 6. On the other hand, the learned Departmental Representative has fairly conceded to the above. 7. In view of the ratio of the above Tribunal order, the reopening is held to be invalid. Otherwise also, on merits when the depositor has confirmed the respective payments with explained source of income, the same cannot be added under s. 68 of the Act. 8. In the result, all the appeals are accepted.
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2005 (2) TMI 470 - ITAT JODHPUR
Speculative Loss ... ... ... ... ..... amounting to Rs. 1,98,247 due to erroneous appreciation of facts and is accordingly deleted. 14. The controversy has been clearly set at rest by the learned CIT(A). The learned Departmental Representative could not convince the Bench otherwise. In the result, the findings of the learned CIT(A) are upheld. Of course, any inaccuracy existing in the accounts of M/s Nav Bharat Krishi Udyog (P) Ltd. should not be held against the genuine transactions of the assessee. This addition has been correctly deleted. This ground of appeal is also dismissed. 15. The next issue is taken by the Department against the deletion of the addition made for fictitious of loss of Rs. 33,199. This issue is related to the issue of suppression of stock. When the suppression of stock has been held to be not correct, this addition is a natural consequence thereof. Hence, this ground does not survive in the light of above finding. This ground is also dismissed. 16. In the result, this appeal is dismissed.
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