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Showing 141 to 160 of 1848 Records
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2018 (6) TMI 1710 - KERALA HIGH COURT
Advances made to rural branches u/s 36(1)(viia) - Deduction of provision for bad debts in terms of Section 36(1)(viia) - definition of “Rural branch” for the purpose of arriving at deduction u/s. 36(1)(viia) - HELD THAT:- The definition of non-scheduled bank as noticed from the Banking Regulation Act was “any bank which is not included in the second schedule to the Act”. Though there was a separate definition of co-operative banks in the Banking Regulation Act, the Division Bench held that the co-operative banks for the purpose of section 36(1)(viia) would be treated as included and entitled to such benefit.
A reading of clause (a) under section 36 (1)(viia) would dispel any doubts regarding such inclusion. The deduction in respect of any provision for bad and doubtful debts to the extent of 7½% of the total income is applicable to scheduled banks not being one incorporated outside India, a non scheduled bank or a co-operative bank other than those specified. Under the second limb the deduction is to the extent of 10% of the aggregate average advances by the rural branches of such bank. The rural branches of the category of banks referred to in the first limb would be entitled under the second limb. We agree with the decision and there is no reason for us to take a different view in the present case especially in an appeal instituted by another assessee.
The question raised is also as to the sustainability of the dictum in Kannur District Co-operative Bank [2014 (8) TMI 635 - KERALA HIGH COURT]that while identifying the 'rural branches', the co-operative banks are also to be brought under the rigour of the definition of a "Rural Branch".
The Division Bench found that the view was covered by the earlier judgment in Lord Krishna Bank Ltd.[2010 (10) TMI 860 - KERALA HIGH COURT]. - Also see MALAPPURAM DISTRICT CO-OP. BANK LTD VERSUS INCOME TAX OFFICER, WARD-2, TIRUR. [2014 (10) TMI 1023 - KERALA HIGH COURT] - Decided against assessee.
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2018 (6) TMI 1709 - DELHI HIGH COURT
Grant of Regular Bail - Blackmail and Extortion - threat to publicize morphed photographs - HELD THAT:- While an exhaustive study of the authorities on the point may disclose some degree of oscillation in the precedential pendulum, the unalterable median is, and always is, that bail is the rule, and jail is the exception; the corollary would be that, if one is to abandon the rule, and embrace the exception, there must necessarily be overwhelming reason, and justification, to do so - To arrive at any opinion, it would be necessary to examine the cases of the individual applicants, individually. While doing so, this Court is required to be alive to the fact that investigations, in the present case, are as yet incomplete, as several of the alleged extortionists/blackmailers, named by the complainant or by the witnesses, are yet to be traced and apprehended.
Bail Application 752/2018, of Harish Tiwari, and Bail Application 1332/2018, of Subhash Sharma, are rejected. Bail Application 401/2018, of Ashok Sagar, is allowed, and he is directed to be released on bail, subject to his furnishing security to the tune of ₹ 1 lakh, along with two solvent sureties of like amount, to the satisfaction of the learned Trial Court - the release shall be subject to various conditions imposed.
Bail application disposed off.
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2018 (6) TMI 1708 - ITAT DELHI
Exemption u/s 11 - specific services to member as well as non-members by charging fees - HELD THAT:- Rendering specific services to member as well as non-members by charging fees and applicability of exemption u/s 11 of the Act has already been decided by the Hon’ble Delhi High Court [2012 (11) TMI 429 - DELHI HIGH COURT] by holding that the assessee society is entitled to get benefit u/s 11.
DR also raised an issue that post amendment to the proviso to Section 2(15) of the Act , the situation has become altogether different from the AY 2009-10 onwards and the activities of the Assessee are liable to be treated as business activities, however, we realized that co-ordinate bench of ITAT at Delhi in the assessee’s own case for the AYs 2008-09 & 2009-10 duly considered and adjudicated the said issue and nothing is brought on record by Ld. DR, contrary to the said judgments and/or filing of any appeal against the same. - Decided against revenue.
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2018 (6) TMI 1707 - ITAT PUNE
TP Adjustment - comparable selection - HELD THAT:- Assessee was providing e-learning solutions i.e. IT enabled services like content technology services, desktop technology services, e-learning and conversion services to its associated enterprises.
Accentia Technologies Ltd to be excluded as being not functionally comparable to the activities carried on by the assessee
Not considering foreign exchange gain as operating income while calculating the PLI of assessee - The foreign exchange fluctuation is in respect of revenue earned from the associated enterprises vis-à-vis provision of ITES services and hence, the same forms part of the operating income / cost. The Assessing Officer / TPO is thus, directed to verify the claim of assessee in this regard and re- compute the PLI of assessee and the comparables. It may also be pointed out that the assessee had chosen filter of export sales exceeding 75% for comparables. Thus, the foreign exchange fluctuations arising with regard to exports cannot be treated as non-operating in nature even in the case of comparables. See B.C. MANAGEMENT SERVICES PVT. LTD. [2017 (12) TMI 255 - DELHI HIGH COURT]
Risk adjustment - As relying on STARENT NETWORKS (INDIA) PVT. LTD.[2018 (4) TMI 32 - ITAT PUNE] we direct the Assessing Officer to verify the above said claim of assessee and re-compute the margins of assessee and also the mean margins of comparables in line with our directions and determine transfer pricing adjustment, if any, is to be made. The grounds of appeal raised by the assessee are thus, partly allowed.
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2018 (6) TMI 1706 - GUJARAT HIGH COURT
Unexplained cash credit - addition made towards unsecured loans / gifts - tribunal confirmed addition - HELD THAT:- Assessee failed to prove the capacity of the concerned persons who alleged to have given the unsecured loan and/or gift, it cannot be said that the learned Tribunal has committed any error in confirming the additions made by the AO and confirmed by the CIT (Appeals) as unsecured cash credit.
So far as submission on behalf of the assessee that all the concerned persons gave their confirmation, the aforesaid confirmations are neither here or there. These confirmations are required to be decided and/or considered along with the capacity / financial capacity of the concerned persons. Mere confirmation alone is not sufficient. In a given case, it may happen that a labourer may give a confirmation of ₹ 1 Crore, but ultimately the same is to be decided or considered, considering his paying capacity.
Thus it cannot be said that the Tribunal has committed any error. No substantial question of law
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2018 (6) TMI 1705 - ITAT PUNE
Additional income declared by the appellant in the course of survey u/s.133A - deemed income u/s.69A - claim of set off of brought forward losses against the additional income - disallowance of provision for warranty - HELD THAT:- Income offered on the basis of the impounded documents collected during the survey action conducted on 24-01-2007 on the assessee. These documents clearly reflect the unexplained expenditure and unexplained receipts relates to sale of flats to the parties. Assessee is a Builder and his business is to construct the flats and sell the same to the customers. All these details clearly indicate the business nexus of the receipts/expenditure to the core business activities of the assessee. It is not the case that there was any cash impounded or seized in this case to deny such claim of set off as the source of the same becomes very vague issue. The entries available on the impounded material suggest the business nexus of the additional income.
The income in question is derived from the business activities of the assessee although they are outside the books of account of the assessee. Having held so, the taxability of the same under the head ‘business’ or ‘income from other sources’ is the next issue for adjudication. Considering the existence of business nexus, we are of the opinion that there is no reason why such income is taxed as ‘income from other sources when the source for the same from the business activity, is already demonstrated by the assessee during the proceedings before the assessment/appellate authorities. Unaccounted receipts/expenditure constitutes business receipts/expenditure. As such, the judgment of jurisdictional High Court in the case of CIT Vs. Sheth Developers Pvt. Ltd. [2012 (8) TMI 159 - BOMBAY HIGH COURT] affirms that the income from business is required to be taxed as ‘business income’.
We have also examined the allowability of statutory deductions out of such additional income disclosed during search and seizure/survey actions. There are binding decisions to support the claim of deduction qua the deductions u/s.80IB, 40B of the Act etc. Therefore, in principle, granting statutory deductions out of such additional income arising out of business activities is sustainable.
Linking the additional income to the business activities OR income from other sources - HELD THAT:- Items of income that are chargeable to tax under the head ‘income from other sources’ as per the provisions of section 56 of the Act, are specified therein. The deemed income like the present case is certainly not specified in the said section. Further, it is not the case of the AO that the said unaccounted income of ₹ 53 lakhs and ₹ 78 lakhs cannot be classified to any other head of income. In fact, section 56(1) of the Act provides for bringing such items of income under the scope of section 56 of the Act. Therefore, the decision of the AO in treating the same as chargeable to tax under the head ‘income from other sources’ is not valid as the source for such additional income is clearly determinable as chargeable u/s.28 of the Act. Further, there is no law to automatically tax each and every ‘unaccounted income’ disclosed during search/survey actions as ‘income from other sources’.
In our view, such income needs to be treated as the ‘business income’ of the assessee and consequently, the benefit of set off/carry forward should be granted to the assessee against such additional business income of the assessee in both assessment years. Accordingly, the decision of CIT(A) stands reversed on this issue. - Decided in favour of assessee.
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2018 (6) TMI 1704 - KERALA HIGH COURT
Grant of Special Rebate - Section 12 of the Kerala Value Added Tax Act, 2003 - prohibition applicable to presumptive regime - whether the tax payable by the assessee on the suppressed purchase value under Section 6(2) of of the Act of 2003 is liable to special rebate under Section 12 of the said Act? - HELD THAT:- There are no analogy that can be drawn from Venus Marketing. Venus Marketing was with respect to the input tax credit claimed by a presumptive dealer. With respect to presumptive dealers, there is a specific prohibition, in claiming input tax credit under Section 11 of the Act of 2003. In the case of persons, who switch over from the presumptive regime to regular tax payment, there is an enabling provision under Rule 12 of the Kerala Value Added Tax Rules, 2005. An assessee, who is under the presumptive regime is to make an application pointing out his intention to changeover and from that time onward the assessee is entitled to input tax credit. Even when such changeover is allowed in the course of an year, the presumptive tax paid before the changeover is not entitled to input tax credit.
The procedural mandate distinguishes input tax credit allowable under Section 11 from special rebate deductible under Section 12. The claim under Section 11 has to be supported by invoices; which in the instance of best judgment were suppressed and later detected. While input tax is a claim to be made by the assessee, special rebate is a deduction permissible in the return itself. Hence the assessing authority when determining the turnover and levying tax is obliged to grant the deduction to tax payable under sub-section (2) of Section 6 as special rebate.
The assessee is entitled to special rebate on the purchases added to the turnover returned, on best judgment assessment - the questions of law is answered in favour of the assessee and against the revenue - Revision dismissed.
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2018 (6) TMI 1703 - NATIONAL COMPANY LAW TRIBUNAL, BENGALURU BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- The Operational Creditor has filed rejoinder dated 8th November, 2017 to the statement of objections filed by the corporate debtor and vehemently refuted the false allegations made against the Applicant and also produced e-mails wherein the Corporate Debtor admitted its liability to pay the outstanding amount and sought for extension of time for the payment of the same. The Operational Creditor further stated that despite reasonable time granted by the Applicant, the corporate Debtor failed to clear the dues.
Petition is admitted - moratorium declared.
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2018 (6) TMI 1702 - NATIONAL COMPANY LAW TRIBUNAL — CHENNAI BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- The financial creditor has filed the rejoinder wherein all the pleas/objections taken by the corporate debtor/guarantor have been controverted and has submitted that since the debt is due and payable, and the same is not interdicted by some law, the same is payable and it is of no matter that the debt is disputed so long as the debt is due - the record/evidence that has been mentioned is sufficient to ascertain the existence of default on the part of the corporate debtor/guarantor.
On the issue that there is no sanction/approval of RBI due to which the "corporate guarantee" in question is not enforceable is stated to be wholly vague and baseless because as per article 3 of the loan agreement, the corporate debtor/guarantor assured the financial creditor of its ability to provide such guarantee in accordance with the applicable law and regulations. Therefore, the corporate debtor/guarantor cannot hide itself behind its own failure to obtain any required approval to wriggle out of its liability or consequences of default - further, the failure on the part of the corporate debtor/guarantor to obtain such approval, does not impinge upon the validity of the guarantee issued.
The application of the financial creditor is complete in all respect - application admitted - moratorium declared.
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2018 (6) TMI 1701 - NATIONAL COMPANY LAW TRIBUNAL — CHENNAI BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- Counsel for the corporate debtor has been fair enough to admit that the corporate debtor has not taken any step after completion of the term of the JDA either to make payment or to make any communication till the receiving of the notice under section 8(1) of the I and B Code, 2016, which has been sent to the corporate debtor on March 8, 2018. It appears that the corporate debtor has come up with a frivolous defence after receiving notice under section 8(1) of the I and B Code, 2016 and has not made any payment/communication to the operational creditor as was envisaged as per the terms and conditions of the JDA - it is safely concluded that the corporate debtor has defaulted in making payments to the operational creditor.
The operational creditor has complied with section 9(3)(b) and (c) of the I and B Code, 2016, by filing affidavit, where it has been deposed that the stand taken by the corporate debtor in its reply dated March 21, 2018 is a mere afterthought and as such, none of the claims so made in the reply were ever made prior to the same - The operational creditor has fulfilled all the requirements of law for admission of the application. This authority is satisfied that the corporate debtor has committed default in making payment of the outstanding debt claimed by the operational creditor.
Application is admitted and the commencement of the corporate insolvency resolution process is ordered which ordinarily shall get completed within 180 days, reckoning from the day this order is passed - moratorium declared.
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2018 (6) TMI 1700 - ITAT DELHI
Undisclosed income - Unexplained deposits in bank account - as per the ITS information, AO came to know that the assessee has deposited in Kotak Mahindra Bank for acquiring bonds/debenture - CIT(A) was of the view that the assessment has to be made on substantive basis in the case of the assessee as the assessee is having his own business and has been filing regular return of income and convinced that the addition of ₹ 1 lakhs - HELD THAT:- Bench asked the ld. DR to furnish the details of substantive additions made in the hands of Shri Ajay Taneja or any other person. The ld. DR could not furnish such details. On the other hand, he pointed out that no substantive additions have been made in the hands of any other member of the Taneja Group.
In our considered opinion, if no substantive additions have been made in any other hands, there is no room for addition to be made on protective basis in the hands of the assessee. In our considered view, there cannot be any protective assessment without there being a substantive assessment. We, therefore, decline to interfere with the finding of the ld. CIT(A). - Decided against revenue.
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2018 (6) TMI 1699 - CESTAT MUMBAI
Maintainability of application - adjournments were being sought without justifiable reason for last four occasions - HELD THAT:- When this matter was called out on the finally adjourned date of 5th June 2018, there was neither a request for adjournment nor the presence of a representative of the applicant - matter is proceeded to be disposed off.
Except for a mention, in passing, of the lack of financial wherewithal to comply with the terms of deposit ordered by the Tribunal, no ground, or documentation to support such ground, is on record. It is observed that the application is composed almost entirely of generalities of allegations that are not supported with evidence and of vague philosophy that rambles about the adequacy of grounds for subjecting an order of pre-deposit of the Tribunal to fresh scrutiny.
In the circumstances, and in the face of continued lack of representation despite adequate opportunity being offered to the applicant, there are no other option but to dismiss this application - application dismissed.
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2018 (6) TMI 1698 - CESTAT KOLKATA
Provisional release of imported consignments - non-compliance with the order of the Tribunal - HELD THAT:- The matter is adjourned for 15 days from today so as to enable the Revenue to file appeal against the orders of this Tribunal. By that time it is expected that Respondent will file the appeal against the Orders dated 15/05/2016 & 14/06/2018 and obtained a stay from its operation. Further, the Commissioner is also directed to follow the provisions contained in Section 49 of the Customs Act in letter and spirit so as not to impose any conditionality which is unwarranted under the Custom Act.
As per the CESTAT procedures and rules, any submission against the Order passed by it is to be laid before the Bench by filing Affidavit/Miscellaneous Application through Registry for its consideration. It is absolutely not permitted by any parties to appeal to directly address any letter to the Member of the Bench. Perhaps, the Respondent is not aware of these rules and provisions and hence he entered into a direct communication with the Member which is impermissible.
The copy of this order is being marked to Chief Commissioner of Customs, Kolkata for his information.
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2018 (6) TMI 1697 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of dispute or not - HELD THAT:- The fact that the Corporate Debtor agreed to pay tentative amount of ₹ 1 crore, but finally settled for ₹ 75 Lakhs plus GST show that there some discussion was going on with regard to amount actually payable to the 1st Respondent, therefore, it can be accepted that there was an existence of dispute about the payment of debt.
Application not maintainable and is dismissed.
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2018 (6) TMI 1696 - MADRAS HIGH COURT
Principles of natural justice - case of petitioner is that the respondent failed to afford personal hearing to the petitioner before passing the final assessment orders - HELD THAT:- It is mandatory to afford personal hearing before passing final assessment orders pursuant to the pre-revision notices. The authority ought to have issued an independent notice of hearing fixing a specific date for appearance irrespective of the fact as to whether she receives objections or not.
The respondent failed to afford personal hearing and mechanically passed orders - Therefore, the impugned orders passed by the respondent are violative of principles of natural justice and hence, the same are liable to be set aside.
The matters are remanded back to the respondent for fresh consideration - petition allowed by way of remand.
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2018 (6) TMI 1695 - ITAT KOLKATA
Addition u/s 37 r.w 40(a)(ia) - service charges paid to M/s Golden Trust Financial Services (GTFS) hereafter for having acted as its agent - CIT(A) examining assessee’s exclusive method of accounting in service tax receivable on output services as against inclusive method of service tax payments in respect of inputs services thereby holding the impugned expenditure to be eligible for deduction - assessee is a company engaged in corporate insurance business - HELD THAT:- We posed a specific query as to whether the said operating expenditure included any commission agency services or infrastructure usages or not. There is no such material on record to this effect. It emerges therefore that the assessee has been following its consistent practice wherein agency and infrastructural service are being availed from the payee GTFS as accepted by the AO himself in preceding succeeding assessment years as discussed in above extracted CIT(A)’s findings.
Taxpayers before us as has already filed all the relevant particulars of the agency and infrastructure utilized on secured as already discussed at length in the CIT(A)’s findings under challenge. Coupled with this is the clinching lower appellate authority’s conclusion that these two entities are not group concerns at all. The assessee’s directors’ names along with their respective stake holdings as well as payee firm’s partners’ details reproduced hereinabove do not show any group(s) relationship before these. The Revenue’s very fair in not involving section 40A(2)(b) of the Act even to prove the contrary. It is therefore a case of the assessee having availed both agency as well as infrastructure network of the payees GTFS carrying out in its corporate insurance agent business.
Assessing Officer had invoked only section 37 in doubting genuineness of the impugned payments. Mr. Usman at this stage submits that CIT(A) ought to have applied section 40(a)(ia) disallowance as well since the assessee had not deducted TDS at the prescribed rate as per tabulation chart extracted forming part of CIT(A)’s detailed discussion. We fail to agree with the Revenue’s instant technical plea. The fact remains that the assessee has filed its payee’s computation of income, income tax return as well as the corresponding assessment order sufficiently indicating that the impugned payment had been duly assessed as his case in its hands.
Section 40(a)(ia) 2nd proviso inserted in the Act by way of the Finance Act, 2012 with effect from 01.04.2013 prescribe non application of the impugned provision in case the assessee’s concerned is not an assessee in default as per section 201(1) 1st proviso. Hon'ble jurisdictional high court’s decision in TIRUPATI CONSTURCTION [2016 (8) TMI 1310 - CALCUTTA HIGH COURT] has concluded that the said proviso is a curative one having retrospective effect from 01.04.2005. We therefore decline the Revenue’s arguments seeking to invoke u/s 40(a)(ia) of the Act. We further hold that hon'ble jurisdictional high court’s land mark decision in CIT(A) vs. M/s S.K. Tekriwal [2012 (12) TMI 873 - CALCUTTA HIGH COURT] has further concluded that the section 40(a)(ia) does not apply in case of short deduction of TDS than the prescribed rate.
CIT DR next reiterates Revenue’s two remaining averments that the assessee has followed exclusive method of its inbound receivables as against inclusive method for impugned expenditure whilst claiming service tax component (supra). Learned counsel representing assessee clarifies that this assessee is not registered under the service tax regime. What it has done it is to claim the impugned expenditure after making the actual payment which is duly allowable under the Act. It has further not claimed any benefit arising out of its exclusive method as well. We therefore reject Revenue’s instant argument.
CIT-DR’s lastly contends that the argument that CIT(A) has erred in both law as well as on facts in adopting judicial consistency on the issue of the impugned payments of ₹66.18 crores despite the facts involved in the relevant previous year are altogether different than in preceding and succeeding assessment years. There is no material on record pin-pointing any such distinction on facts summarized in the lower authorities’ findings extracted in preceding foregoing discussion. We therefore do not find any substance in Revenue’s instant last argument as well. - Decided against revenue
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2018 (6) TMI 1694 - AUTHORITY FOR ADVANCE RULINGS, RAJASTHAN
Levy of GST - reimbursement of expenses and salary paid by M/s Habufa Meubelen B.V.(HO) to the liaison office established in India - Registration of Liaison Office required or not - HELD THAT:- The reimbursement of expenses and salary paid by M/s Habufa Meubelen B.V to the liaison office, is not liable to GST, as no consideration for any services is being charged by the liaison office - Further, the kind of reimbursement claimed by them from their HO is also falling out of the purview of supply of service and as there are no such taxable supplies made by the Liaison office, they are not required to get themselves registered under GST.
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2018 (6) TMI 1693 - GUJARAT HIGH COURT
Classification of imported goods - payable duties - HELD THAT:- The petitioner is not interested in exercising the option for provisional relief thereto. Instead, the petitioner requests that the permission for reexport may be granted. The petitioner has already applied for such purpose. The concerned authority i.e. the respondent no.2 has not yet taken any formal decision nor communicated the same to the petitioner. We are informed that the goods are of perishable nature.
The respondent no.2 is directed to decide the petitioner's request for reexport of the goods and convey the same to the petitioner latest by 05.07.2018.
Petition disposed off.
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2018 (6) TMI 1692 - ITAT DELHI
Assessment u/s 153A - addition as the profit earned by the assessee based on the documents found during the course of search - HELD THAT:- In this case the documents were found from the assessee, wherein, the name of the assessee is also mentioned in short form, assessee failed to explain the contents of the documents including the paper showing the transaction as well as the contents of the MOU.
In view of this, we reject the contention of the ld AR, uphold the orders of the lower authorities confirming the addition as undisclosed income of the assessee, and dismiss ground of the appeal of the assessee.
Unaccounted Profit on Sale of Industrial plots at Village Jharsentli, Faridabad - first contention of the assessee is that above transaction has not happened and these are tentative or estimates - HELD THAT:- Argument of the assessee is that out of the 16 plots, four plots have not been sold and therefore they cannot be considered as the final sale price. This argument does not merit any consideration for the reason that AO has divided the profit based on the date of sale of the plots when they are registered. AO himself has stated that up to 31st October 2001 only 12 plots was sold and balance 4 plots were sold later on. Further the assessee has also borrowed jointly sum from somebody on interest and interest cost thereon as been reduced from the profit. With respect to the sale of 12 plots, the assessee has complete details about the name who bought the plot of land, the documented sale price etc. These facts are not disputed. Therefore based on all these facts, it cannot be said that the papers are merely an estimate or projection.
Assessee is merely a broker and whatever profit arises would squarely falls on the shoulders of the owner of the property and not on the broker - On the similar facts and circumstances in the case of the assessee for different years, we have already dealt with this argument. For the similar reasons we also reject this contention of the assessee. Furthermore we are of the opinion that documents shows emphatically and clearly that in the whole project the assessee was also partner along with the managing director of the company sold plot. These facts were not denied by the assessee further assessee did not produce on its own the managing director of the seller company before AO to show that the profit belongs to him. It was also not denied that the plot originally to be sold was subdivided into 16 plots and therefore there is bound to be expenditure for roads, electricity etc, no evidences were furnished that who incurred this expenditure. Contrary to this, the document shows that the assessee has maintained a detailed account where cash has been received and expenditure have been defrayed. It cannot be said that that assessee was merely a broker and has not earned profit on sale of the 16 plots.
Determination of profit - Assessing officer reduced the amount of lesser sale consideration received by cheque and added the same as a cash has been received of that amount by the assessee. We are not in agreement with the Ld. assessing officer on this issue. If there is a reduction in the sale price with respect to the 4 plots from the amount mentioned in the seized document, then the Ld. AO should have granted deduction of the same amount in the consideration paid by them by cheque however same should not have been added the cash receipt. In fact, he granted a sum of ₹ 1985000/- as deduction from the gross profit. To this extent the Ld. assessing officer is directed to reduce the overall profit of ₹ 2, 18, 46, 799/– and proportionate profit of the assessee.
Deduction of certain expenditure out of the profit of the profit - documents found during the course of search are required to be believed completely. When some additions are made based on those papers, there is no reason that information contained in those papers should not be believed. The amount of compensation is precisely mentioned in the seized papers. Therefore, such figure cannot be an estimate or projections. If the above amount of compensation is not included in to the total expenditure computed by the ld AO for working out the overall profit then, such sum must be granted to the assessee as deduction and then overall profit needs to be worked out - AO is directed to verify the computation of profit, if the amount of compensation is not included in the expenditure, then the profit amount deserves to be adjusted accordingly. Further, the amount of charges paid for EDC, the assessee has not given any evidence of payment of such charges - assessee does not have any evidence that assessee has incurred these expenditure. Therefore, there is no information available that assessee incurred this expenditure. Therefore, we do not find any infirmity in the order of the Ld. assessing officer in not granting deduction of this amount from the gross profit shown by the assessee.
We do not find any infirmity in the order of the lower authority in taxing the 50 % of the profit based on information contained in the loose papers found during the course of search. However, with respect to the determination of overall profit we direct the ld AO to reduce the sales consideration by ₹ 1985000/- because of difference in sale price and further adjustment because of compensation paid of ₹ 5.50 lakhs. Accordingly ground no three of the appeal is partly allowed with above direction.
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2018 (6) TMI 1691 - ITAT MUMBAI
Rectification of mistake u/s 254 - Fair Market Value (FMV) and its computation - Disallowance u/s 14A - HELD THAT:- No separate Ground was raised about the 14A disallowance under a separate head. It is found that Ground No.1 (c) remained unadjudicated as pointed out by the assessee. Therefore, we are recalling our order in that regard. As far as Grounds No.1(a) and 1(b) are considered we would like to observe that case laws relied upon by the assessee were not considered while passing the order [2016 (4) TMI 709 - ITAT MUMBAI]
We recall our order in that regard also. The registry is directed to fix the case before regular Bench so that appeal filed by the assessee can be heard afresh.
As a result, Miscellaneous Application filed by the assessee is allowed.
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