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Showing 181 to 200 of 1515 Records
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2016 (1) TMI 1342
Validity of order u/s 263 of the Act - Held that: - it is clear that the said notice u/s. 263 of the Act has not been signed by the “Commissioner of Income Tax” rather it has been signed by ACIT, Hqrs., Burdwan - The Hon’ble Allahabad High Court in the case of Rajesh Kumar Pandey [2012 (9) TMI 829 - ALLAHABAD HIGH COURT] has expounded that when the Ld. CIT has not recorded his satisfaction, but it was the satisfaction of the Income Tax Officer (Technical) who is not competent to revise his order u/s. 263 of the Act, the order passed was liable to be set aside.
The assumption of jurisdiction u/s 263 of the Act in the present case is not valid - Order u/s 263 of the Act is accordingly quashed and the appeal of the assessee is allowed.
Appeal allowed - decided in favor of assessee.
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2016 (1) TMI 1341
Reopening of assessment - proof of issuance / receipt of notice u/s 143(2) - reasons to believe - Held that:- here was no fresh tangible material forwarded by the ADIT (Inv.) vide letter dated 24.03.2011 which was the foundation on which the AO has made up his mind on 25.03.2011, to reopen the original assessment completed u/s 143(3) of the Act which was supervised by Additional Commissioner u/s 144A and thereafter the Commissioner exercising his revisional power u/s 264 of the Act. Also, we find force in the contention of the ld. AR that there was no evidence in the hands of the AO while he took the sanction of Commissioner u/s 151(2) to reopen the original assessment completed u/s 143(3) after 4 years. The process of manufacture of the Pan Masala was already on record during the original assessment and simply by saying that manufacturing process from stage ‘A’ to ‘H’ did not take place at the eligible unit without a shred of evidence to support the said information cannot be termed as a new tangible material and link to base a reason to believe escapement of income. Therefore, the entire reopening is vitiated on this count.
In the present case, the ld. DR could produce before us only an order sheet dated 24.11.2011 wherein it is written by the AO that notice u/s 143(2) has been issued; other than that there is no mention of the mode of service, when it was dispatched etc.. Her assertion that the Director and GM (Taxation) has appeared before the AO on 28.11.2011 goes to show that they have appeared pursuant to the receipt of notice u/s 143(2) cannot be accepted because it is clearly written on the order sheet on 28.11.2011 by the AO that the assessee had submitted objection in respect to reopening of the assessment and this fact is stated by the AO in the impugned reassessment order.
We had given time and directed the ld. DR to file affidavit, if any, of the AO to support the claim of issuance / dispatch / service of the 143(2) notice, however, we find that the ld. DR have not filed any affidavit on behalf of the Department to support their contention that AO in fact had issued the notice. The ld. DR fairly conceded that neither could she trace a copy of the notice u/s 143(2) nor could bring copy of the dispatch register to buttress her claim that in fact, notice u/s 143(2) had been issued. In such a scenario, mere order sheet entry without following up by issuance 143(2) notice as required by law and dispatching the same to the correct address of the assessee and by merely mentioning that 143(2) notice has been issued in the show cause notice for special audit cannot substitute the mandatory requirement of law in respect to issue of notice u/s 143(2) in reassessment proceedings as held by Hon’ble Supreme Court in Hotel Blue Moon (2010 (2) TMI 1 - SUPREME COURT OF INDIA). Therefore, on this count also, the assessee succeeds and the entire reassessment proceedings is vitiated for non-issuance of 143(2) notice by the AO. -
No material neither tangible nor incriminating material in the hands of the AO to assume jurisdiction to reassess the assessee, so AO has erroneously usurped jurisdiction which law does not permit him to do on the reasons given above, so the entire action of AO is ab-initio void and is quashed. - Decided in favour of assessee.
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2016 (1) TMI 1340
Offence under PMLA - provisional attachment of properties - Held that:- On being asked by this Tribunal, the counsel for appellant could not offer any explanation on behalf of appellant as to how he has met his household expenses during this period. When the appellant was earning salary of more than ₹ 1,00,000/- per month which is deposited in the bank account and there are no withdrawals to meet out household expenses and he does not offer any explanation as to how the household expenses were met during the relevant period i.e. financial year 2011-12, it gives sufficient reasons to draw adverse inference against the appellant.
This adverse inference when considered in the light of the allegations made in the charge sheet, will prima facie show that there is substantial probable cause to believe that the appellant was in possession of alleged proceeds of crime and the amount of ₹ 4,86,900/- seized by the police on 7-2-2012 is out of such alleged proceeds of crime and not out of the sum of ₹ 5,50,000/- withdrawn on 4-8-2011 by the appellant from Allahabad Bank as claimed by him. The explanation offered by the appellant to explain the amount of ₹ 4,86,900/- seized on 7-2-2012 by the Police from his residential house is liable to be rejected.
Thus we are of the considered view that the explanation offered by the appellant to explain the amount of ₹ 4,86,900/- seized on 7-2-2012 by the Police from his residential house is liable to be rejected. The explanation offered by the appellant in respect of the amount of ₹ 4,86,900/- is held to be an afterthought to wriggle out of the allegations of money laundering and to project the same as untainted property. Consequently the appeal is dismissed
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2016 (1) TMI 1339
Addition on account of 'Istridhan' under section 68 - Held that:- The assessee explained that this amount was received from his wife and filed affidavit of Smt. Mukhtiar Kaur, wife of Shri Basant Singh (assessee) (PB-117) in which she has merely stated that ₹ 10,000/- have been saved annually out of the money given by her husband i.e. by the assessee, but the counsel for assessee pleaded before the ld. CIT(Appeals) that such amount was accumulated by wife of the assessee on different occasions by way of gift etc. from their parent and in- laws side at different regular occasions. The affidavit of wife of the assessee is thus, contradictory as against submissions made by the assessee before ld. CIT(Appeals). Further, the affidavit of wife of the assessee is not supported by any evidence or material on record. Thus, assessee failed to prove credit worthiness of his wife and the genuineness of the transaction in the matter. - Decided against assessee
Unexplained credit under section 68 - Held that:- Even if there are certain contradictions in the statement of Shri Jeet Singh and Shri Hari Singh, the same would not be significant as is required under the Criminal Law, therefore, the judgements relied upon by ld. counsel for the assessee clearly apply to the facts of the case in support of the assessee. We, therefore, do not find any justification to sustain the orders of authorities below. The initial onus upon assessee has thus, been discharged to prove genuine credits in the matter. The Assessing Officer has not brought any evidence against the assessee to contradict or rebut the material on record. We, therefore, set aside the orders of authorities below and delete the addition
As regards the credit in the name of Shri Gurdiwan Singh, assessee, however, submitted that subsequent to the statement recorded on 06.11.2008, Shri Gurdiwan Singh filed his affidavit before ld. CIT(Appeals) on 16.05.2009 confirming giving of loan to the assessee. Such an affidavit filed at the subsequent stage without making retraction to the earlier statement given to Assessing Officer would not serve any purpose. Further affidavit of Shri Gurdiwan Singh has not been supported by any evidence or material on record, therefore, authorities below were justified in making and confirming the addition of ₹ 10 lacs. Thus, assessee failed to explain genuineness of the credits in respect of ₹ 10 lacs.
Addition shown to have been given by Shri Iqbal Singh, assessee has not produced any evidence before authorities below to explain even his identity, what to say of credit worthiness and genuineness of the transaction in the matter. He was also not produced before Assessing Officer for examination. Therefore, in the absence of any evidence or material on record, authorities below were justified in making and confirming addition. This ground of appeal of the assessee is accordingly dismissed.
Unexplained cash credit - Held that:- CIT(Appeals) on one of the issue has already noted that the Enforcement Directorate have intimated that the matter is under investigation and in progress, therefore, this issue could be decided by the Enforcement Directorate. Since issue before authorities below was addition under section 68 of the Act, therefore, the issue shall have to be decided on the basis of the parameters prescribed for genuineness of the transaction under section 68 of the Act which, in our opinion, assessee has been able to prove that he has received the money in question from Shri Pritam Singh through genuine transaction. We, therefore, do not find any justification for the authorities below to make and sustain the addition of ₹ 20 lacs.
Disallowance on account of use of telephone and motor vehicle for personal purposes - Held that:- No merit in this ground of appeal of the assessee. The assessee has not produced any evidence before us to contradict the finding of fact recorded by the authorities below. Since the expenses were not subjected to verification and no log-book or details have been maintained and the assessee submitted before ld. CIT(Appeals) that non-business use of vehicles cannot be ruled out, would clearly support the findings of authorities below that these expenses were not subject to verification and were not supported by the vouchers. The disallowance was, therefore, justified.
Addition on account of household withdrawals - Held that:- No merit in this ground of appeal of the assessee. The assessee has failed to produce details of household expenses as per requirement of the family. Therefore, authorities below were left with no alternate except to estimate the household expenditure. Before us, no sufficient evidence or material is produced to justify the withdrawal
Levy of penalty under section 271(1)(c) - Held that:- As assessee did not produce any evidence before the authorities below to explain the addition to the capital account and on part of unexplained credit penalty imposed is confirmed.
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2016 (1) TMI 1338
Payments made for collaborative project - assessee not carrying out scientific research itself, that it had the copy right of such scientific research, that it was not entitled to claim deduction u/s.35/35AB - Held that:- There were more than 10 parties with whom the assessee had entered into agreement during the year under appeal, that the AO had not discussed and analysed the agreement as suggested by the tribunal. We are of the opinion the matter needs further verification and investigation. Therefore, in the interest of justice we are restoring back the issue to the file of the AO. He is directed to decide the issue as per the directions given by the Tribunal for the last three AYs. Ground no. 1 is allowed in favour of the assessee, in part.
Disallowance u/s. 80M - Held that:- Expenditure which are not directly relatable to earning of expenditure could not be deduction from dividend income on ad hoc basis for the purpose of allowing deduction u/s. 80M of the Act. We reverse the order of the FAA. See Zindal Iron and Steel Company case [2008 (7) TMI 606 - ITAT MUMBAI] - Ground no. 2 is decided in favour of the assessee.
Adjustment made under the transfer pricing (TP) provisions - Held that:- The arm's length principle of transfer pricing is based on the premise that the amount charged by one related party to another for a product must be the same as if the parties were not related. An arm's length price in respect of a foreign transaction, therefore, is the price which that transaction would obtain in the open market. If the above basic principle is examined with regard to the facts of the case under appeal it becomes very clear that there is no shifting of income to the non-resident entity. Due to a bona-fide mistake the assessee adopted a particular figure, but, if the overall picture is looked in to, it becomes clear that there was act or intention of diverting the profits by the assessee. Considering the peculiar facts and circumstances of the case, we are of the opinion that view taken by the FAA cannot be endorsed. Reversing his order, we decide ground no.3 in favour of the assessee.
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2016 (1) TMI 1337
Disallowance u/s 14A r.w.r 8D - Held that:- In the case of CIT Vs Gujrat Power Corporation Ltd (2011 (3) TMI 1440 - Gujarat High Court) as held that the assessee had demonstrated that it had other sources of investments and no part of the borrowed could be stated to be used for the purpose of earning tax free income, the invocation of the provisions of section 14A for taxing such interest was not justified. Thus we respectfully following the ratio laid down, delete the addition of ₹ 5,49,368/- under rule 8D(2)(ii). As regards the balance addition of ₹ 4,21,973/- we find merit in the arguments of the ld AR that 0.5% of dividend yielding investments should be disallowed and not on the entire investments . We, therefore direct the AO to calculate the disallowance of 0.5% under rule 8D(2)(iii) by taking those investments which yielded dividend during the year. Thus, the appeal of the assessee is partly allowed. The AO is directed accordingly. - Decided in favour of assessee.
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2016 (1) TMI 1336
Proceedings initiated under Section 153C - assessment barred by limitation - period of six assessment year as computed with reference to the date of satisfaction recorded by the Assessing Officer of the searched person - Held that:- The six assessment years for which assessment/re-assessment could be made u/s 153C of the Act would also have to be construed as from the reference date of handing over of assets/documents to the Assessing Officer of the assessee. In the case in hand, it would be the date of recording satisfaction under section 153 of the Act i.e. 2nd November, 2009, and so the six assessment years which would eligible for assessment/re-assessment would be from assessment year 2004-05 to assessment year 2009-10. The assessment/re-assessment in respect of assessment year 2002- 03 and 2003-04 would be beyond the period of six assessment year as computed with reference to the date of satisfaction recorded by the Assessing Officer of the searched person. Accordingly, we, therefore, hold that the assessment for assessment years 2002-03 and 2003-04 are outside the scope of section 153C of the Act and being without jurisdiction, liable to be quashed. - Decided in favour of assessee.
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2016 (1) TMI 1335
Determining the ALV of the property as fixed by the Municipal authorities - Held that:- As perused the orders furnished before us in the case of the assessee and his wife and find that there is no material difference in the orders passed in earlier years and this year. No new material has come on record to suggest that the ALV of the vacant flats should not be fixed at some other value other than the Municipal value. There is no change in fact therefore, the contention of the Ld. DR that during this year there are materials to show that the ALV is more than the Municipal valuation may not be correct. - Decided in favour of the assessee
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2016 (1) TMI 1334
Computing deduction under section 10A - Held that:- We find that the Hon’ble High Court of Karnataka in the case of Tata EIxsi Ltd (2011 (8) TMI 782 - KARNATAKA HIGH COURT) has held that while computing deduction under section 10A expenditure incurred by the assessee, if excluded from the export turnover (“ET”), should also be excluded from the total turnover (“TT”).
TDS u/s 195 - whether he payment in question was reimbursement and therefore there was no obligation to deduct tax at source on the part of the Assessee? - Held that:- In our view it would be unnecessary to go into the question whether the payment in question is reimbursement of expenses or in the nature of FTS or the question whether the services rendered made available technology to the Assessee in terms of Article 12(4) of the India USA DTAA, because even assuming the sum in question is to be disallowed u/s.40(a)(ia) of the Act, the disallowance will only go to enhance the profits derived by the Assessee from the business of export of computer software and on such enhanced profits deduction u/s.10A of the Act has to be allowed, thereby rendering tax implication on the Assessee insignificant. As rightly contended on behalf of the Assessee the consequence of disallowance u/s.40(a)(ia) of the Act will be that the business profits of the Assessee to that extent will stand enhanced. - Decided against revenue
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2016 (1) TMI 1333
Rightful dues of the petitioner under the incentive scheme - Held that:- The second respondent has considered the matter and by the order impugned dated October 1, 2015 has declined the incentive to the extent due under the original notification of December 28, 2012. The concerned authority has found that the petitioner is entitled to the maximum of about ₹ 99,000/- under the incentive scheme in view of the subsequent notification of September 25, 2013.
In the light of the discussion above and particularly since the authority under Section 5 of the said Act does not permit a benefit already vested to be withdrawn from the hands of the beneficiary, WP is allowed by setting aside the order impugned dated October 1,2015 and by requesting the second respondent to reconsider the matter and pay the rightful dues of the petitioner under the incentive scheme in accordance with the notification of December 28, 2012 but without taking into account the first clause of the subsequent notification of September 25, 2013 to the extent that such clause detracts from the quantum of the incentive that an exporter is entitled to under the original notification. Appropriate steps should be taken by second respondent to ensure that the rightful dues of the petitioner are made available to the petitioner within six weeks from date. It will also be open to the petitioner to seek appropriate interest for the period of delay.
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2016 (1) TMI 1332
SSI Exemption - clubbing of clearances - Held that: - To club the turn-over of two units which are statutorily recognized by various Government authorities, evidences should have been put forth by the Revenue to the effect that one or other of these units is merely a dummy unit with no manufacturing facility or clearance of its own - In the present case, no such evidence has been brought on record - clubbing of turn-over is not permissible - appeal dismissed - decided against Revenue.
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2016 (1) TMI 1331
Revocation of CHA License - forfeiture of security deposit - violation of time limit prescribed in Regulation 20(1) - Held that: - reliance placed in the case of Sri Radhakrishna Shipping (P) Ltd. v. C.C. (General), Mumbai [2014 (11) TMI 909 - CESTAT MUMBAI], where it was held that if any of the intermediary steps such as such issue of SCN, drawing up of an inquiry report, or passing of a revocation order is beyond the periods mandated under Regulation 20 of the 2013 Licensing Regulations, the eventual order of revocation would be invalid - appeal allowed - decided in favor of appellant.
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2016 (1) TMI 1330
Provision of pay revision - CIT (A) opined that whole amount of adhoc provision made by the appellant in the account books needs to be disallowed rather than making a 10% disallowance - Held that:- The employees are entitled to revised pay from the date it was due and payable by the employer. However, the quantum may vary, as in the present case, initially the revision was estimated @ 13.25%, however, later on it was crystallized @ 17.5%. The provision in the present case was made on the basis of 13.25%, however, later on it was required to be revised and in fact revised @ 17.5%. Therefore, we do not find any merit in the conclusion draw by ld. CIT (A).Thus the orders of ld. CIT (A) as well as AO are hereby set aside. We also find that the case of the assessee is covered by the decision of the ITAT Jaipur Bench in the matter of Jhalawar Kendriya Sahakari Bank Ltd. vs. ACIT [2014 (8) TMI 1127 - ITAT JAIPUR] whereby the claim of the assessee was allowed. - Decided against revenue
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2016 (1) TMI 1329
Validity of the assessment order passed u/s 153A/143(3)- Held that:- As the assessments in both these cases passed u/s. 153A r.w.s. 143(3) were not made, based on any incriminating material found or seized during the course of search of thereafter. The additions are purely based on the material already available on record. Hence, all the additions are deleted and the ground raised by the assessee are allowed. See Smt. Rashmi Wadhwa Versus DCIT, Central Circle-8, New Delhi [2016 (1) TMI 1093 - ITAT DELHI] - Decided in favour of assessee.
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2016 (1) TMI 1328
Scheme of Arrangement in the nature of Demerger - Held that:- In light of the facts and circumstances, the applicant has sought dispensation from holding of such meetings of the creditors. Considering the facts and submissions, the said dispensation of the meetings of the creditors of the applicant Resulting Company is granted.
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2016 (1) TMI 1327
Scheme of Arrangement, in the nature of Demerger - Held that:- Considering the submissions advanced on behalf of the applicant, dispensation is sought from the procedure prescribed under Section 101(2) of the Companies Act, 1956 and under Rule 46 to 65 of the Companies (Court) Rules 1959 and the same is hereby granted.
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2016 (1) TMI 1326
Validity of provisions of the Prevention of Money Laundering Act - constitutional validity of Sections 3, 5, 8, 9, 17 to 19, 23, 24 & 44 of the PML Act - That the provisions of the Act are capable of being misused - Held that:- Section 8, as amended by the Amendment Act of 2013, cannot be said to be arbitrary and violative of the fundamental right of a person if the proceedings are continued under the PML Act, even if the trial of a scheduled offence results in an acquittal and the alleged proceeds of crime pertained to that scheduled crime.
The challenge to Section 9 of the Act on the ground that if the Adjudicating Authority confirms a provisional attachment order and the guilt is recorded under Sections 3 and 4, there is a provision for confiscation and hence the statutory remedy of appeal is foreclosed. This proposition may not be accurate . Even after an order of confiscation is made, an appeal is provided for to challenge the basis of such order when the finding of guilt is naturally challenged in appeal. It is merely an enabling provision providing for the consequence of a finding of guilt in respect of the offences alleged under the PML Act.
The power of search, seizure and arrest are considered an important tool in any investigation. Such power being available in matters relating to economic offences is not unusual. Identical provisions are found in the Customs Act, 1962, the Prevention of Food Adulteration Act, 1954, the Railway Property ( Unlawful Possession Act, 1966, etc. Further, as investigation precedes the filing of a charge sheet under Section 173 Cr.P.C , the exercise of power of search, seizure and arrest as part of investigation would not prejudice any person as such measures are controlled by other provisions of the Cr.P.C. Section 65 of the PML Act does provide that the provisions of the Cr.P.C. would be applicable including the provisions for investigation under the Act. Section 19 is assailed also on the ground that there is no judicial body provided to scrutinize the initial action as in the case of scheduled offences. However, Section 19 (3) itself provides that every person arrested under the Act would be produced before a Magistrate within 24 hours of such arrest. Further, the contention that such arrest may not be warranted by an officer under the Act, may not be tenable. If the authorized officer, on the basis of material in his possession has reason to believe that the person is guilty of an offence punishable under the Act , he being empowered to arrest is akin to powers conferred on authorized officers under other legislation which power of arrest
As Section 23 of the Act has been amended it is evident that as it existed post the Amendment Act, 2009, in so far as the presumption arising in inter-connected transactions, where money laundering was alleged to be involved in two or more transactions , and if one or more such transactions was proved to be involved in money laundering then for purposes of adjudication or confiscation under Section 8 , unless otherwise proved, it could be presumed that the remaining transactions formed such inter-connected transactions. Hence if the scheduled offence resulted in acquittal, in terms of Section 8 the presumption with regard to inter connected transaction ceased to exist. However, with the Amendment Act of 2013, by the inclusion of the phrase "or for the trial of the money laundering offence" after the words "for the purpose of adjudication or confiscation under Section 8" - the offence of money laundering is sought to be treated as not being dependent on the result of the trial of the scheduled offence. Such a presumption is now possible by virtue of the 2013 Amendment. As already noticed, the offence of money laundering is no more inextricably linked to the proceeds of crime of a scheduled offence.
Under the Amendment Act of 2013, there is an initial presumption that the alleged proceeds of crime on the basis of which an offence under Section 3 of the Act is alleged, are involved in money laundering. In a proceeding under Section 8 (1) of the Act , the defendant is not an accused. It is now possible for the Adjudicating Authority in construing the provisions of Section 24 as applicable to proceedings under Section 8 (1) as well. This places a person being proceeded against under Section 8 (1) at some disadvantage. This construction, by virtue of the impugned amendment, cannot be held to be violative of Article 14 of the Constitution of India, merely on the ground that it may cause hardship on account of such proceedings being initiated. Hence, Section 24 as amended by the Amendment Act of 2013 is held to be constitutionally valid.
In so far as Section 44 of the Act there is no material placed before the Court as to any incongruous situation having arisen wherein the Special Court not being able to reconcile the provisions in arranging the manner in which it has proceeded, thereby resulting in any prejudice being caused to any person or resulting in a miscarriage of justice. This court is not therefore in a position to proceed on a speculation as to particular situations having arisen that could be held as rendering the procedure prescribed, or other infirmity rendering, the creation of the Special Courts or the procedure contemplated as being unconstitutional. The petitions lack merit and are dismissed.
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2016 (1) TMI 1325
Addition made on account of low drawings - explanation to nature and source of such expenditure - Held that:- In this case even though there has been search in the case of the assessee but no material whatsoever has been brought on record which may prove that the assessee has actually incurred the expenditure as has been estimated by the AO. The AO in this case has merely estimated the drawing of the assessee; therefore,it is of the view that the Revenue has not discharged his onus until and unless the Revenue has discharged his onus the assessee cannot be expected to explain the nature and source of such expenditure. On this basis itself, the addition in each of the assessment years cannot be sustained otherwise also noted that in this case the AO has simply taken the withdrawal made by Sri Mahaveer Singh, i.e., the assessee, ignoring the fact that the assessee was residing in Hotel Neelam along with his wife, Smt. Aruna Sankhla, sons Sri Hement Raj Sankhla, Sri Harsh Raj Sankhla and daughter, Sarita Shankla who were the partners thereof.
On the basis of the chart if the drawings of all the family members who were putting together are taken into account the drawings of all the family members were much more than the drawings estimated by the AO. On this basis also, the addition is liable to be deleted.
The total disallowance in each of the assessment years as has been depicted in the facts stated above whereas from ₹ 147087 to 18640 the estimate made by the AO should have been reduced by this expenditure or the AO should have considered this expenditure also, therefore, it is of the view that the estimate made by the AO is merely an estimate which is not based on the facts of the case. - Decided in favour of assessee.
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2016 (1) TMI 1324
Penalty order u/s. 271(1)(c) - Furnishing of inaccurate particulars of income and concealment of particulars of income - Held that:- Assessing Officer in assessment order and in penalty order we find that penalty was initiated for furnishing of inaccurate particulars of income in respect of various unaccounted purchases and sales and on account of disallowances whereas the satisfaction recorded in penalty order reveals that assessee had concealed the particulars of income to the extent of ₹ 20,41,931/-. Furnishing of inaccurate particulars of income and concealment of particulars of income are the two limbs of Section 271(1)(c) which is apparent from the language of the section itself wherein the two limbs has been differentiated by the use of word 'or',.
The penalty proceedings had been commenced against the assessee on a particular footing viz. concealing of particular of income, but the final conclusion for levying the penalty was based on a different footing together, viz. on the footing of furnishing inaccurate particulars of income. Under the circumstances, it could not be said that the assessee had been given a reasonable opportunity of being heard before the order imposing the penalty was passed. The very basis for penalty proceedings against the assessee initiated by the Income-tax Officer disappeared when the Appellate Assistant Commissioner held that there was no suppression of income of the assessee. The conclusion of the Tribunal that the Inspecting Assistant Commissioner had no jurisdiction to impose a penalty u/s. 271(1)(c) for concealment was correct - Decided in favour of assessee.
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2016 (1) TMI 1323
Not allowing the surrendered amount to be considered as project cost - surrender was made on account of unexplained expenditure - Held that:- Section 292C of the Act is quite clear that in case of any document found during the course of survey, the presumption is against the assessee to consider that the document is owned by the assessee. Though the presumption is a rebuttable one, but in the present case, nowhere at any stage the assessee had even tried to rebut the same. So far, the assessee is right in adding the said amount in its return of income. However, adding the said amount in its project cost will amount to taking the fact of surrendering the income to an unreal extent. The amount is considered to be of the nature of unexplained expenditure, the expenditure which were not recorded in the books of accounts, once the amount expanded were out of an undisclosed income of the assessee, the assessee after surrendering the same cannot ask for increase in project cost by this amount. The contention of the learned D.R. that by adding the surrendered income in the project cost on the one hand and paying taxes on such income on the other hand, would amount to nullifying the effect of surrender, as the assessee will take benefit of the same in succeeding year, is correct. In view of the above, the action of the Assessing Officer in not allowing the surrendered amount to be considered as project cost is found to be correct.
Penalty u/s 271(1)(c) - Held that:- We have upheld the action of the Assessing Officer in not treating the surrendered amount as part of the project cost. In this background, we also agree with the contention raised by the learned D.R. that only because the assessee has voluntarily surrendered the income, penalty could not be levied, is not a correct proposition. However, there are other reasons for which the penalty in such a case cannot be levied. Firstly, the assessee has filed its return of income including the surrendered income and has paid taxes on the same. The income has been assessed at the same amount. The only dispute is with regard to the amount being treated by the assessee as a part of its project cost. However, we do not find any reason to uphold the levy of penalty in such circumstances. The assessee has made a claim by treating the surrendered income as a part of its project cost, which has been declined by the Assessing Officer. There is a difference of opinion between the assessee and the Assessing Officer. This is neither a case of concealment of income, nor furnishing of inaccurate particulars. The assessee has disclosed every thing properly.
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9911796707
