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Showing 161 to 180 of 935 Records
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2013 (6) TMI 782
Issues Involved:
1. Quashing of the order directing payment of tax for the entire period of authorization.
2. Mandamus to accept tax on a quarterly basis in accordance with Section 4 of the Karnataka Motor Vehicles Taxation Act, 1957 (KMVT Act).
Summary:
Issue 1: Quashing of the order directing payment of tax for the entire period of authorization
The petitioner sought to quash the order dated 07.05.2013 by the JCT & Secretary, Karnataka State Transport Authority, which directed the petitioner to pay tax for the entire period of authorization. The petitioner, holding an All India Tourist Permit issued u/s 88(9) of the Karnataka Motor Vehicles Act, 1988, contended that the tax should be payable on a quarterly basis as per Section 4 of the KMVT Act. The respondent argued that the vehicle, covered by an All India Permit issued by the State Transport Authority, Nagaland, must pay taxes for the entire period of authorization, as monitoring the vehicle's movement throughout the year is impractical.
Issue 2: Mandamus to accept tax on a quarterly basis in accordance with Section 4 of the KMVT Act
The petitioner argued that u/s 4 of the KMVT Act, the owner has the choice to pay tax quarterly, half-yearly, or yearly. The respondent countered that the authorization issued by Nagaland is valid for one year, and the petitioner must pay taxes for the entire period as per the authorization. The court examined the provisions of the KMVT Act and the MV Rules, 1989, noting that tax is levied on all motor vehicles suitable for use on roads, irrespective of actual use. The court referred to precedents, including the case of STATE OF KARNATAKA vs K. GOPALAKRISHNA SHENOY, which upheld the validity of such tax demands.
Conclusion:
The court held that the demand for tax for the entire period of authorization is valid and has a rational nexus to the object of Section 4 of the KMVT Act. The petitioner's argument that the tax should be payable quarterly was rejected, and the writ petition was dismissed. The court emphasized that the reasonableness of taxation cannot be tested based on its adverse effect on the petitioner's business interests.
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2013 (6) TMI 781
Issues involved: The judgment involves the following issues: 1. Taxability of mesne profits received by the assessee as capital receipt, 2. Treatment of mesne profits in book profits under Section 115JB.
Issue 1: Taxability of mesne profits received as capital receipt:
The department raised objections regarding the taxability of mesne profits received by the assessee, contending that it should be treated as revenue in nature based on a decision of the Hon'ble Madras High Court. The assessee argued that the mesne profit for unauthorized occupation of premises is a capital receipt not chargeable to tax, citing relevant case laws such as Narang Overseas Pvt. Ltd. Vs. ACIT and CIT Vs. Mrs. Annamma Alexander. The CIT(A) found in favor of the assessee, holding that the mesne profit received is capital in nature and not chargeable to tax, aligning with the decision of the Special Bench and the Hon'ble Bombay High Court.
Issue 2: Treatment of mesne profits in book profits under Section 115JB:
The AO added the mesne profits to the book profit under Section 115JB, as the receipt was treated as revenue and not credited to the profit and loss account. However, the CIT(A) deleted the addition, stating that the mesne profit is capital in nature and hence not chargeable to tax. The CIT(A) observed that while the mesne profit was reflected in the profit and loss account, it was rightly taxable for computing book profit, but since it is capital in nature, the income computed under Section 115JB was also deleted. The Tribunal upheld the CIT(A)'s decision, confirming that the mesne profit being capital in nature cannot be taxed under Section 115JB.
In conclusion, the appeal of the department was dismissed, and the order of the CIT(A) was upheld in both issues involved in the judgment.
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2013 (6) TMI 780
Issues involved: Appeal regarding assessment year 2005-06; deletion of income addition on estimate basis; grant of depreciation allowance without maintained books of accounts; justification of depreciation claim based on material on record.
Deletion of income addition on estimate basis: The appellant contended that the income should not have been estimated at 4% instead of 5% due to the absence of maintained books of accounts. The Tribunal held that the agreement for estimation of profit at 5% for a previous year did not bind the assessee for the current assessment year. It was established that in the absence of books of accounts, the assessing officer can estimate income based on available material. The Tribunal found it permissible to accept profit estimation at 4% when agreed upon by both parties, and dismissed the appeal filed by the revenue, stating no interference was necessary.
Grant of depreciation allowance without maintained books of accounts: The Tribunal relied on a circular by CBDT stating that depreciation allowance should be separately calculated when profit is estimated and prescribed particulars are provided by the assessee. Referring to a judgment by the Rajasthan High Court, it was established that depreciation and interest payments must be allowed separately when estimating profit. Based on this, the Tribunal concluded that depreciation should be allowed separately. The High Court, in agreement with the Tribunal's findings, held that there was no need for interference and dismissed the appeal.
Conclusion: The High Court dismissed the appeal, upholding the Tribunal's decision regarding the estimation of income and the grant of depreciation allowance.
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2013 (6) TMI 779
Issues involved:
The issues involved in this judgment include confirmation of addition made by the Assessing Officer u/s.68 of the Act, application of sec.69A instead of sec.68, lack of reasonable opportunity of hearing, treatment of Short Term Capital Gain as business income, violation of principles of natural justice, and the need for further verification of facts regarding the transactions.
Confirmation of Addition u/s.68:
The AO made additions of &8377; 7 lakhs in the hands of each person based on information received from HDFC Bank regarding transactions through demand drafts. The AO noted that the drafts were consecutively numbered and made by different applicants from specific banks. Despite attempts to comply with the AO's requests, no satisfactory compliance was made, leading to the additions.
Lack of Reasonable Opportunity of Hearing:
The CIT(A) held that the AO was justified in adding the amounts due to the absence of addresses and identities of the persons from whom the loans were received. The appellant contended that the addition was made without providing copies of materials relied upon by the AO, thus violating principles of natural justice.
Treatment of Short Term Capital Gain:
The appellant argued that Short Term Capital Gain on sale of shares should be treated as such instead of business income, emphasizing that this ground was not raised before the CIT(A) but the facts were on record. The appellant sought a direction for the Assessing Officer to consider Short Term Capital Gain.
Further Verification of Facts:
After hearing both sides, it was deemed necessary to ascertain certain facts regarding the transactions. The AO did not verify the correctness of computer-generated accounts provided by the appellant, leading to the decision to restore the issue back to the AO for proper investigation. The appellant was directed to appear before the AO with requisite information within 30 days for verification.
Conclusion:
The Tribunal allowed all eleven appeals for statistical purposes, emphasizing the need for proper verification of facts and adherence to principles of natural justice in the assessment proceedings.
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2013 (6) TMI 778
Issues Involved:
1. Disallowance of expenses for free distribution of gold coins.
2. Alleged inhumane, illegal actions by the AO (not pressed).
Summary:
1. Disallowance of Expenses for Free Distribution of Gold Coins:
The assessee, engaged in manufacturing watches and calculators and trading mobiles, claimed expenses of Rs. 4,77,58,412 for free distribution of gold coins. The AO disallowed these expenses due to lack of evidence supporting the claim. The CIT(A) upheld the disallowance, noting several inconsistencies and lack of concrete evidence.
The CIT(A) observed:
- Purchase of gold from Opal Industries, a wall clock manufacturer with no expertise in gold.
- Transactions were not credible, including advance payments without creditworthiness verification.
- No evidence of transportation or conversion of gold bars to coins.
- No advertisements or customer identification for the gold coin scheme.
The CIT(A) concluded that the expenses were not incurred wholly and exclusively for business purposes, applying the test of human probabilities as per Sumati Dayal vs. CIT 214 ITR 801 (SC).
2. Alleged Inhumane, Illegal Actions by the AO:
This ground was not pressed during the proceedings.
Detailed Judgment:
Additional Evidence and Relevance:
The additional evidence provided by the assessee, including invoices and affidavits, was deemed irrelevant as it did not establish the insertion of gold coins in mobile sets. The evidence only supported the existence of a godown and the business of trading in mobile sets.
Contention of Disallowance of Entire Amount:
The assessee claimed only Rs. 1,80,86,421 as net expenses after reimbursement from foreign companies. However, the AO examined the entire expenditure, as the reimbursement was not directly correlated with specific advertisement expenses. The AO's approach was upheld, rejecting the contention of only net amount being claimed.
Claim of Expenditure on Gold Coin Scheme:
The assessee's claim of distributing 68 kgs of gold coins was found inconsistent and unsubstantiated:
- Lack of credible evidence of the gold coin scheme and advertisements.
- Inconsistencies in the purchase and conversion of gold.
- Improbability of inserting 20g gold coins in mobile sets without detection.
- Unbelievable cost ratio of gold coins to mobile sets.
The affidavit from Shri Subhash Gujar, who claimed to have converted gold bars to coins, was deemed unreliable due to inconsistencies and lack of supporting evidence. The entire scheme was considered improbable and not credible.
Conclusion:
The appeal was dismissed, upholding the disallowance of Rs. 4,77,58,412 for the free distribution of gold coins. The assessee failed to establish the genuineness of the expenditure as wholly and exclusively for business purposes.
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2013 (6) TMI 777
Issues involved: Appeal against order u/s 263 of the Act related to assessment year 2006-2007.
Summary:
The appeal was filed against the order passed by the Commissioner of Income-tax u/s 263 of the Act, challenging the treatment of Foreign Currency Convertible Bond (FCCB) issue expenses. The Assessing Officer allowed the claim u/s 37(1), but the CIT held that the expenditure should have been considered u/s 35D for amortization. The Tribunal referred to a previous case where it was held that such expenses are deductible in full in the year of incurring. As there was no contrary decision brought forward, the assessment order was deemed not erroneous or prejudicial to the interest of revenue. The Tribunal concluded that the CIT was not correct in setting aside the assessment order, and thus, the appeal was allowed.
The Tribunal considered the dispute regarding the deductibility of FCCB issue expenses amounting to &8377; 2.35 crore. While the assessee claimed deduction u/s 37(1) in one go, the CIT opined that the expenditure should have been amortized over the period as per section 35D. The Tribunal referred to a previous case where it was held that such expenses are revenue in nature and deductible in full in the year of incurring. Since no contrary decision was presented, the assessment order was not considered erroneous or prejudicial to the interest of revenue. The Tribunal held that the CIT was not justified in setting aside the assessment order, and thus, the appeal was allowed.
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2013 (6) TMI 776
Addition u/s 14A - Held that:- When the very basis for employing Section 14A of the Act on factual matrix is lacking, the disallowance to the extent of 10% of dividend income was not permissible. When it transpires from record that the assessee's own funds were at higher, then the investment made by it and with nothing to indicate that the borrowed funds were utilised for the purpose of investment in shares and for earning dividends, the Tribunal committed no error in disallowing the sum of ₹ 1,14,43,040/-.
As far as other administrative expenses are concerned, the Revenue had requested to restore the matter back to the Assessing Officer. However, to put an end to the entire dispute with regard to other expenses, the assessee permitted disallowance of ₹ 5 lakh. The Tribunal considering the volume and quantum of investment disallowed the said amount of ₹ 5 lakh, which though is on estimated basis, it is a reasonable base and, therefore, the first question merits no consideration.
Allowance of Corporate Debt Restructuring expenses - Held that:- Once the expenditure is held to be revenue in nature incurred wholly and exclusively for the purpose of business, it can be allowed in its entirety in the year in which it is incurred. However, considering the the decision in the case of Madras Industrial Investment Corporation Ltd. (1997 (4) TMI 5 - SUPREME Court ), when the spreading is done for over a period of six years and as the assessee-respondent has no objection to such revenue expenditure being spread out, though it could have insisted for this amount allowed in the year under consideration, with no such objection having been raised, the Revenue would not succeed in this issue as the expenditure is held to be revenue in nature.
Waver of principal amount of loan - Held that:- Amount of loan waived by the Financial Institution cannot be brought to tax as appellant's income u/s.28(iv) and/or sec.41(1) of I.T. Act. Addition is deleted
Addition under Section 115JB being the expenditure estimated on earning of dividend income under Section 14A - Held that:- The addition under Section 115JB of the Act of a sum of ₹ 1,14,43,040/- when was made as an expenditure estimated on earning of dividend income under Section 14A of the Act, without reiterating the rationale of confirming deletion of such amount as has been elaborately done at the time of deciding question No.1, this deletion requires to be confirmed.
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2013 (6) TMI 775
Issues involved: Delay in filing final report in criminal case u/s C.R.No.14 of 2013 of Kunnamangalam Excise Range.
The petitioners, accused Nos.1 and 2, sought direction for finalizing the investigation and filing a final report in the above case registered on 22/12/2012. The petition was based on the delay in filing the final report by the Excise Inspector, Excise Range, Kunnamangalam.
The learned Senior counsel for the petitioners argued that the second sample was sent through the court and its result received, suggesting that proceedings could be dropped based on Annexure-C report. However, the investigating officer had not completed the investigation. Reference was made to a previous order (Annexure-G) where a similar direction was given to file a final report within three weeks.
The learned Public Prosecutor, on instruction, requested more time to complete the investigation. After considering the submissions, the Court decided to direct the Excise Inspector to expedite the investigation without further delay.
Therefore, the Court disposed of the petition by instructing the Excise Inspector, Kunnamangalam Excise Range, to expedite the investigation in C.R.No.14 of 2013 and submit a report to the court as soon as possible.
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2013 (6) TMI 774
Classification of goods - parts of illuminated glow sign boxes - classified under CTH 94 or 49? - Held that: - The Tribunal in its own case i.e. M/s.Tanzeem Screenarts [2005 (12) TMI 135 - CESTAT, MUMBAI] held that where the printed plastic sheets are cleared along with the part of glow signs are held to be classifiable under Chapter heading 94.05 of the Central Excise Tariff - In the present case as the proprietor of M/s. Tanzeem Screenarts in her statement specifically admitted that the plastic sheets are cleared along with the other parts of glow sign - the goods in question are classifiable under Chapter 94 of the Central Excise Tariff - appeal dismissed - decided against appellant-assessee.
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2013 (6) TMI 773
The Appellate Tribunal CESTAT CHENNAI directed the applicant to make a predeposit of Rs. 65.00 lakhs by a certain date. The applicant requested an extension due to financial crisis, having already deposited Rs. 15.00 lakhs. The Tribunal granted an extension of eight weeks for compliance, with a new deadline of 06.09.2013. The miscellaneous application was disposed of.
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2013 (6) TMI 772
Issues involved: Confirmation of penalty u/s 271(1)(c) of the IT Act based on estimation of sales and income without production of supporting documents.
Summary:
The appeal was filed against the order confirming the penalty u/s 271(1)(c) of the IT Act due to estimation of sales and income without proper documentation. The AO estimated sales at Rs. 30 crores due to lack of verifiable sales bills and stock register, adding Rs. 68,76,860 for sales suppression and disallowing expenses. The CIT(A) upheld the sales estimation but adjusted the income calculation method. The ITAT reduced the net profit rate to 1.2% and confirmed an addition of Rs. 9,38,907. The assessee argued that penalty shouldn't apply for estimated income without material evidence, citing relevant court decisions. The Tribunal agreed, canceling the penalty as the assessee had disclosed all income particulars despite lacking supporting documents. The Tribunal referenced various court decisions supporting the stance that penalty cannot be imposed solely on income estimation without concrete evidence. Consequently, the penalty was canceled, and the appeal was allowed.
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2013 (6) TMI 771
Issues involved: Appeal against deletion of disallowance under section 40(a)(ia) of the Income Tax Act for assessment year 2008-09.
Summary:
The Revenue appealed against the deletion of disallowance made by the Assessing Officer under section 40(a)(ia) of the Income Tax Act for the assessment year 2008-09. The assessee, engaged in trading paper products, had initially filed a return declaring income of &8377; 9,37,400. The Assessing Officer disallowed an amount of &8377; 28,43,035 under section 40(a)(ia) after finding that TDS was deducted but not remitted to the Government account within the specified date. The CIT(Appeals) observed that the assessee had substantially complied with TDS provisions and that the amendment by Finance Act, 2010 was curative in nature and applicable retrospectively from 01.04.2005. The CIT(Appeals) held that the Assessing Officer's disallowance was not justified as the TDS was remitted within the statutory period, allowing the expenses. The Tribunal upheld the CIT(Appeals) decision, dismissing the Revenue's appeal.
In conclusion, the Tribunal upheld the CIT(Appeals) decision, dismissing the Revenue's appeal against the deletion of disallowance under section 40(a)(ia) for the assessment year 2008-09.
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2013 (6) TMI 770
Issues involved: Appeal against the order of the ld. CIT(A), Jaipur regarding reopening of completed assessment u/s 147 and denial of deduction u/s 10BA on duty draw back.
Reopening of assessment u/s 147:
The appellant challenged the reopening of the completed assessment u/s 147, arguing that the original assessment was framed u/s 143(3) and deduction u/s 10BA on duty draw back was allowed by the Assessing Officer. The Tribunal noted that the issue of reopening was not pressed during the hearing, and hence, did not require further comments.
Denial of deduction u/s 10BA:
The main grievance of the assessee was the denial of deduction u/s 10BA on duty draw back by the Assessing Officer, which was upheld by the ld. CIT(A). However, the appellant's counsel contended that a similar issue was decided in favor of the assessee in a previous order dated 31-01-2013. The Tribunal observed that the issue had already been adjudicated in the assessee's favor in a previous case, where it was clarified that profits derived from export of articles should be considered only from the business of the undertaking and not from any other business carried on by the assessee. The Tribunal, therefore, allowed the ground of appeal related to deduction u/s 10BA in favor of the assessee.
Additional Grounds:
The appellant sought permission to raise additional or alternative grounds during the appeal hearing, but as these grounds were general in nature, they did not require any specific comments from the Tribunal.
Conclusion:
Based on the findings and precedents cited, the Tribunal partly allowed the appeal filed by the assessee, specifically on the issue of deduction u/s 10BA. The decision was pronounced in the open court on 20-06-2013.
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2013 (6) TMI 769
Issues involved:
The judgment involves the deletion of an addition of Rs. 1.45 crores made by the Assessing Officer u/s. 68 of the Income-tax Act, 1961, based on a loan taken by the assessee from Mr. Ishwar Adwani.
Assessment by Assessing Officer:
The Assessing Officer framed the assessment u/s 143(3) of the Income-tax Act, adding Rs. 1.45 crores u/s. 68 on the ground that the loan taken from Mr. Ishwar Adwani was not satisfactorily explained by the assessee.
Arguments before CIT(A):
The assessee appealed before the ld CIT(A) and presented various arguments, leading to the deletion of the addition after satisfying the conditions of (i) identity of donors; (ii) creditworthiness of donors; & (iii) genuineness of loan transactions. The ld CIT(A) considered legal pronouncements to support the decision.
Reasoning of CIT(A):
The ld CIT(A) found that the appellant provided sufficient evidence to establish the genuineness of the loan, including the identity and creditworthiness of the creditor. The ld CIT(A) held that the appellant met all requirements, and the addition u/s. 68 was deleted.
Appeal before Tribunal:
The Revenue appealed the decision of the ld CIT(A) before the Tribunal, arguing that the matter should have been remanded to the Assessing Officer for further enquiry u/s. 68 of the Income-tax Act.
Tribunal's Decision:
After considering the arguments, documents, and details, the Tribunal observed that the Assessing Officer had accepted the repayment of a portion of the loan, indicating acceptance of the genuineness of the transaction. The Tribunal upheld the decision of the ld CIT(A) to delete the addition of Rs. 1.45 crores u/s. 68, as the appellant had fulfilled the necessary requirements.
Conclusion:
The Tribunal dismissed the appeal of the Revenue, affirming the deletion of the addition made by the Assessing Officer u/s. 68 of the Income-tax Act.
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2013 (6) TMI 768
Issues involved: Scrutiny of input services for CENVAT credit eligibility, irregular credit availed, examination conducted, prima facie satisfaction for pre-deposit relief, remand to Commissioner (A).
In this judgment by the Appellate Tribunal CESTAT BANGALORE, the appellant's eligibility for CENVAT credit of tax paid on various input services was under scrutiny. The Commissioner (A) observed irregular credit availed but failed to provide details on the examination conducted. The appellant contended that they should satisfy the authority on the claims for each input service to seek relief on pre-deposit.
The Tribunal noted that the materials on record needed testing at the prima facie stage and decided it was inappropriate to keep the appeal pending. Consequently, the appeal was remanded to the Commissioner (A) to reach a prima facie conclusion based on the merits of the case to make an appropriate order under Section 35F of the Central Excise Act, 1944 read with Finance Act, 1994.
Ultimately, the stay application was disposed of, and the appeal was remanded to the Commissioner (A) for further proceedings.
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2013 (6) TMI 767
The appellate tribunal CESTAT Bangalore allowed the appeal of the appellant regarding eligibility for CENVAT credit on service tax paid for rent-a-cab and outdoor catering service, citing a precedent from the Hon'ble High Court of Karnataka. The impugned order was set aside.
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2013 (6) TMI 766
Benefit of deduction u/s. 10B - Held that:- The share has been transferred before March 2003, interim dividend has been received by the transferee which has also been verified from the bank statements of Altana Pharma AG. As the Assessing Officer himself has verified such clinching evidences and has accepted them in order, therefore, in our considerate view we do not find any reason to hold that there was a change in ownership to the detriment of the assessee company visa- vis section 10B(9) of the Act. Considering all the facts relating to transfer and the remand report, we hold that the substantial share holding was always with the assessee at the end of the financial year entitling it for the claim of exemption u/s. 10B(9) of the Act - Decided in favour of assessee
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2013 (6) TMI 765
Assessee is entitled to exemption under Section 10A of the Income Tax Act with reference to addition of disallowance under Section 43B, as the consequence of the disallowance and add back made by the Assessing Officer is an increase in the business profit of the assessee.
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2013 (6) TMI 764
Issues involved:
The issues involved in this judgment are the imposition of penalty u/s.271(1)(c) on the addition to the extent of Rs. 25,48,649/- on account of Gross Profit and valuation of Closing Stock.
Issue 1: Penalty on Gross Profit addition
The assessee challenged the addition of Rs. 25,48,666/- before the ld.CIT(A), while penalty proceedings were initiated by the AO and a penalty of Rs. 8,14,412/- was imposed. The AO made the addition by estimating net profit after rejecting books of account. The Tribunal later deleted the entire Gross Profit addition made by the AO. The penalty was imposed by the AO before the Tribunal order in quantum proceedings. The Tribunal held that no addition stands confirmed on which a penalty has been imposed by the AO. The Tribunal found that no penalty is justifiable on the GP addition as it was already deleted by the Tribunal in quantum proceedings.
Issue 2: Penalty on Stock Valuation
Regarding the unaccounted investment in stock found during a survey and disclosed by the assessee, no penalty was deemed justified. Even if some part of the addition stood upheld by the Tribunal, imposing a penalty on the returned income itself was not warranted. The Tribunal highlighted that there were no provisions in section 271(1)(c) to address situations where additional income is included in the return based on material found during a survey. In the absence of such provisions, it was held that the assessee did not conceal any income or furnish inaccurate particulars of income. Consequently, the penalty imposed by the AO and confirmed by the CIT(A) was deemed unsustainable and was deleted.
In conclusion, the Appellate Tribunal ITAT Ahmedabad allowed the assessee's appeal, holding that the penalty imposed u/s.271(1)(c) on the Gross Profit addition and stock valuation was not sustainable. The Tribunal found that the penalty was not justified as the Gross Profit addition had been deleted in quantum proceedings and there were no provisions to penalize the inclusion of additional income based on survey findings in the return.
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2013 (6) TMI 763
Issues involved: Appeal against CIT(A) order u/s 143(1) for 2008-09 assessment year - Ex-parte order, non-consideration of Additions on merits.
Summary:
The appeal was filed against the CIT(A) order for the 2008-09 assessment year, focusing on the ex-parte order and non-consideration of Additions on merits. The assessee returned an income of &8377; 21,10,54,885/- which was processed u/s 143(1) and later selected for scrutiny assessment. The AO observed exempt dividend income and made disallowances u/s 14A and for assets purchased for setting up a camp office. The CIT(A) passed an ex-parte order, which the assessee contested, citing non-representation issues. The ITAT, considering the principles of natural justice, decided to restore the issue back to the CIT(A) for a fair hearing, emphasizing the importance of "audi alteram partem." The ITAT allowed the appeal for statistical purposes, emphasizing the need for a reasonable opportunity of being heard for the assessee. The order was pronounced on 14th June 2013.
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