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Showing 181 to 200 of 2170 Records
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2019 (4) TMI 1997
Penalty u/s 271(1)(c) - as argued Non specify in which limb of sec. 271(1)(c) penalty proceedings has been initiated, i.e. whether for concealment of income or furnishing of inaccurate particulars of income - unaccounted stock found in survey - income surrendered on account of unaccounted stock in response to notice u/s 148 - HELD THAT:- Since, there was no return of income filed by the assessee, therefore, the said surrendered made by the assessee in any case includes the business income as well as unaccounted stock. Once, the assessee has disclosed the income on account of unaccounted stock as well as business income for the year under consideration then the addition made by the AO based on the statement of the assessee recorded U/s 133A of the Act would be regarded as without any valid evidence disclosing undisclosed income of the assessee. Therefore, the said addition though accepted by the assessee would not ipso facto lead to the conclusion that the assessee has concealed particulars of income or furnishing inaccurate particulars of income.
Assessing Officer has not substantiated the addition by making reference to any incriminating material or other information to indicate such undisclosed income. Therefore, in the facts and circumstances of the case where the addition made by the AO is purely on the basis of the statement recorded U/s 133A of the Act the same would not attract the penalty U/s 271(1)(c) of the Act. Hence, the penalty levied by the AO is deleted. Since we have deleted the penalty levied by the AO on merits, therefore, we do not propose to not into the legal ground raised by the assessee regarding validity of initiation of penalty. Appeal filed by the assessee is allowed.
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2019 (4) TMI 1996
Scheme of Merger - seeking order to convene, hold and conduct the meeting of Equity Shareholders and Unsecured Creditors in relation to the Transferee Company - Sections 230 to 232 of the Companies Act, 2013 - HELD THAT:- Various directions regarding holding and convening of various meetings issed - directions regarding issuance of Notices also issued.
The scheme is approved - application allowed.
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2019 (4) TMI 1995
Assessment u/s 147 - assessment proceeding by the Sales Tax Department, which could not be finalized, the income tax assessment should not be finalized unless the sales tax issue is finally conclude - HELD THAT:- Tribunal passed the order of remand on the ground that notice under Section 148 of the I.T. Act referred to some assessment by the Sales Tax Department which had not attained finality - since the very basis of the assessment proceeding under Section 148 was based on an assessment proceeding by the Sales Tax Department, which could not be finalized, the income tax assessment should not be finalized unless the sales tax issue is finally concluded - after the Tribunal's impugned order, the assessee has informed Income-tax Officer-1, Raigarh on 27/03/2018 that the Sales Tax issue has also attained finality as no proceeding either on behalf of the assessee or by the Sales Tax Department is pending before the High Court.
As the stage of assessment undertaken by the Sales Tax Department, it is for the Tribunal to decide the matter on merits both on factual and legal score including the issue pertaining to the validity of notice un/s 148 of the I.T. Act.
Accordingly, the appeal is allowed. The impugned order is set aside and the matter is remanded back to the Tribunal for deciding the assessee's appeal on merits in accordance with law. It is made clear that we have not expressed any opinion on merits of the issue which shall be dealt with by the Tribunal on the basis of the material available on record.
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2019 (4) TMI 1994
Dishonor of Cheque - sufficient averments in the complaint to meet the requirement of Section 141(1) or not - submission is that there was no averment in the complaint that the first Respondent was incharge of and was responsible to the "company" for the conduct of the business - HELD THAT:- In the present case, it is evident from the relevant paragraphs of the complaint which have been extracted above that the complaint contains a sufficient description of (i) the nature of the partnership; (ii) the business which was being carried on; (iii) the role of each of the Accused in the conduct of the business and, specifically, in relation to the transactions which took place with the complainant. At every place in the averments, the Accused have been referred to in the plural sense. Besides this, the specific role of each of them in relation to the transactions arising out of the contract in question, which ultimately led to the dishonour of the cheques, has been elucidated.
The High Court proceeded on the basis that the first Accused was a company in which the other two Accused were directors. Section 141 undoubtedly uses the expression "company" so as to include a firm or association of persons. The fact that the first accused, in the present case, is a partnership firm of which the remaining two Accused are partners has been missed by the High Court.
The High Court was in error in quashing the criminal case against the first Respondent - Appeal allowed.
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2019 (4) TMI 1993
Disqualification of Directors - non-filing of return for 3 consecutive years - disqualification of petitioner for the reason that from November, 2016 the returns have not been filed - HELD THAT:- It is stated that even if the filing of returns of the 3 consecutive financial years i.e., 2014-2015, 2015-2016 & 2016- 2017 has been stated to have commenced from 2014, the application of issue has to be looked into.
There shall be stay of the impugned notice where by the petitioner has been declared disqualified as directed as Director under Section 164(2) of the Companies Act, 2013 - Application disposed off.
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2019 (4) TMI 1992
Penalty u/s 271(1)(c) - Defective notice u/s 274 - non specification of single charge - HELD THAT:- Taking into consideration the evidence on record, this Court finds, there is no specific order whether it was concealment of inaccurate particulars in view of the decisions in RELIANCE PETROPRODUCTS PVT. LTD. [2010 (3) TMI 80 - SUPREME COURT]and MANJUNATHA COTTON AND GINNING FACTORY [2013 (7) TMI 620 - KARNATAKA HIGH COURT]the issue is required to be answered against the judgment and order of the Tribunal whereby the Tribunal has dismissed the Appeal imposing penalty.
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2019 (4) TMI 1991
Applications for appointment to posts of clerical cadre (Clerk-III) in Public Sector Banks - appellant was disqualified from participating further in the selection process - appellant could not produce OBC certificate within the prescribed time - State within the meaning of Article 12 of the Constitution of India - scope of Banking Business - public duty or not - HELD THAT:- It is true that the Governor of the Reserve Bank of India and the Chairmen of certain Public Sector Banks along with the Joint Secretary, Banking Division, Ministry of Finance are members of the governing body of the Respondent-Institute. There is no dispute that the Respondent is not constituted under a statute. It is also not disputed that the Respondent does not receive any funds from the Government - This Court observed that such control should be particular to the body in question and must be pervasive. A control which is merely regulatory under the statute or otherwise would not make the body ‘State’ under Article 12. As there is no control by the Government over the Respondent in the manner mentioned above, there are no doubt that the Respondent cannot be said to be falling within the expression ‘State’ under Article 12 of the Constitution of India.
Whether the Writ Petition is maintainable against the Respondent on the ground that it discharges public duty? - HELD THAT:- This Court in Federal Bank case [2003 (9) TMI 707 - SUPREME COURT] held that a Writ Petition under Article 226 of the Constitution is not maintainable against a scheduled bank on the ground that the business of banking does not fall within the expression “public duty”. As the activity of the Respondent of conducting the selection process for appointment to the banks is voluntary in nature, it cannot be said that there is any public function discharged by the Respondent. There is no positive obligation, either statutory or otherwise on the Respondent to conduct the recruitment tests - the Respondent is not amenable to the Writ Jurisdiction under Article 32 or Article 226 of the Constitution of India.
There were four recruitments that were conducted after the year 2013 but that the Appellant did not participate in any of these recruitments. As he did not participate in any of said subsequent recruitments, the Appellant is not entitled to any relief - appeal dismissed.
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2019 (4) TMI 1990
Disallowance of interest u/s 36(1)(iii) - assessee has submitted that the term loans were taken for specific purposes and the term loans taken for machinery were duly capitalized till the machinery was put to use. That there was no other borrowed funds with the assessee - HELD THAT:- The matter is required to be restored to the file of the Assessing officer to duly consider the aforesaid contention of the assessee, examine the details of the finances available with the assessee vis-a-vis amount capitalized by the assessee and decide the issue afresh in the light of the decision of the Hon'ble Supreme Court in the case of ‘CIT (LTU) Vs. Reliance Industries Ltd.’ [2019 (1) TMI 757 - SUPREME COURT] - The orders of the lower authorities are set aside and the matter is remanded to the Assessing officer to decide the issue afresh as per the observations made above.
Disallowance of expenditure - addition of the Diwali Expenses, Gardening expenses, Printing & Stationery and website promotion expenses on the ground that the same were not properly vouched - HELD THAT:- For nature of the expenditure i.e. as ‘Diwali expenses, gardening expenses, printing and stationary and website promotion expenditure’ incurred which are usually incurred in day to day business activity and also considering the smallness of the amount and further submissions of the assessee that most of the expenditure were paid through account payee cheques, we do not find any justification on the part of the lower authorities in making the disallowance in respect of the aforesaid expenditure - Appeal of the assessee is treated as allowed.
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2019 (4) TMI 1989
Disallowance of certain expenses on ad hoc basis - non rejection of books of account - HELD THAT:- The assessment was completed u/s 143(3) - AO nowhere has rejected the books of account. He simply held that most of the payments were in cash and assessee had submitted self-made vouchers therefore, he disallowed certain amounts out of the total expenditure. The Assessing Officer has not pointed out any vouchers or expenditure on which he had any doubt. The ad hoc disallowance, without pin pointing any error in the books of account, is not justified - Thus the issue of disallowance on ad hoc basis out of expenses is decided in favour of the assessee.
Deduction u/s 35AC - AO disallowed the claim of the assessee by holding that the assessee had debited the amount under the head charity and donation and had not claimed any deduction u/s 80G - HELD THAT:- The assessee had filed certified copies of receipt certified by the Assessing Officer. Similarly, the assessee had filed copy of Form-58A certified by the Assessing Officer which is in the prescribed form declaring therein the amount of total donation received including receipt from the assessee. We further find that vide Notification No. S.O. 1649(E), dated 12th July, 2010, the institution to whom donation was made was approved by National Committee for deduction u/s 35AC.
The certification by the Assessing Officer of these documents clearly demonstrates that these documents were filed before the Assessing Officer. As regards the observation of learned CIT(A) that these evidences were not enclosed along with the return of income, we find that Rule 12(2) of I.T. Rules, prohibited the assessee to file any report or receipt under any provision of the Act along with the return of income - Decided in favour of assessee.
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2019 (4) TMI 1988
Addition u/s. 68 - Onus to proof - unexplained cash credit in respect of share premium received by assessee - HELD THAT:- In view of the evidences furnished by the assessee, we are of the view that the assessee has discharged its onus of proving the identity, genuineness and creditworthiness of the creditors/shareholders and fulfilled the requirement of ingredients of section 68 - Thus, the addition made u/s. 68 of the Act which is purely based on the investigation reports and statements recorded from PKJ and whose statements were not provided to the assessee for rebuttal and no cross examination was provided to assessee and therefore is in violation of principles of natural justice.
No sort of enquiries were made by the AO to disprove the evidences furnished by the assessee. Assessing Officer accepted the subscription of share capital by the shareholders as genuine and no addition has been made in respect of the same. Assessing Officer treated only the share premium as unexplained cash credit. Having accepted the share capital as genuine the Assessing Officer cannot treat only the share premium as non-genuine and bring to tax as unexplained cash credit u/s. 68 of the Act. The addition cannot be sustained. Thus, we direct the Assessing Officer to delete the addition made u/s. 68 of the Act. - Decided against revenue.
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2019 (4) TMI 1987
Condonation of delay in filing application by one of the Operational Creditors of the Corporate Debtor - filing of claim before the due date prescribed for filing of claims - HELD THAT:- Although, the liquidator in the present case is correct in rejecting such time barred application for filing claim as he does not have any authority to entertain the same, however, section 42 comes to the rescue of a claimant when his/her claim is accepted/rejected by the Liquidator. The claimant can file an appeal before the Adjudicating Authority against such decision of the liquidator within fourteen days of the receipt of such decision.
Rule 177 and 178 of Companies (Court) Rules, 1959 deal with the procedure on failure to prove the debt within the time fixed. As per Rule 177, if any creditor fails to file proof of his debt with the liquidator within the time specified in the advertisement referred to in Rule 148, such creditor may apply to the court for relief, and the court may, thereupon, adjudicate upon the debt or direct the liquidator to do so - As per Rule 178, any creditor who has not proved his debt before the declaration of any dividend or dividends shall be entitled to be paid out of any money for the time being in the hands of liquidator available for distribution of dividend, any dividend or dividends which he may have failed to receive before that money is applied to the payment of any future dividend or dividends, but he shall not be entitled to disturb the distribution of any dividend declared before his debt was proved by reason that he has not participated therein.
Because the liquidation proceedings are yet to be finalized in the present case, no prejudice will be caused if the claim of the applicant is adjudicated and admitted. The delay in submission of the claim by the Applicant deserves condonation - the delay in the submission of the claim in accordance with the provisions of code is condoned - application allowed.
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2019 (4) TMI 1986
Profiteering - proceeds of crime - scheduled offences - terrine to the prosecution unless and until culminated in conviction or not - principles of evidence - burden to prove - HELD THAT:- As the concept of basic law contemplating upon the principle of evidence act is found trembling on account of introduction of Section 24 whereunder, mere assertion of prosecution with regard to property being proceed of scheduled offence casts an obligation over opposite party to explain, otherwise, not only confiscation by the court in terms of Section 8(5) of the Act is permissible side by side liable to be convicted and sentenced as per section 4 of the Act and the obligation so thrust upon opposite party under Section 24 is to be seen in the background of presumption having under Section 22 of the Act relating thereto.
Apart from constitution of the special court, there also happens to be presence of another forum but only with regard to confiscation of propriety a proceed of the schedule offence the adjudicating authority (A.A.) Be it a judicial proceeding or proceeding before adjudicating authority the sole motto happens to be to confiscate the property by way of identifying the same to be proceed of the ill-gotten money not of scheduled offence in order to snatch out the proceed from the possession of the offenders, and acquisition through aforesaid means has been found punishable, being in contravention of law, under Section 4 of the Act.
The proper forum to proceed and adjudicate coupled with requirement thereof, has to be seen. As per Section 43 of the Act, there is constitution of special court properly identifiable to be the court of Sessions having entrusted with the power of cognizance under Section 44(b) of the Act and as per sub-section (d) of section 44 the procedure so prescribed for the court of Sessions under the Cr.P.C. is to be followed. Sub-section 2 Section 43 not only empowers the special Court to proceed with the prosecution under P.M.L.A. rather indicates the trial of scheduled offence, conjointly. The situation is found furthermore clarified after going through Section 44 whereunder (1)(a), (1)(c), (1)(d), whereunder, the lower court, where the matter relating to scheduled offence remains still pending, has to commit the case, so that trial be taken up by the Special Court and, the procedure to be followed during course thereof has also been properly laid down.
It is evident that the learned lower court had not considered the aspects, more particularly with regard to non following of the mandate of law, more particularly Section 43(2) of the Act - it is manifest that the trial of scheduled offence, having against the accused has to be conducted by the same court. It has got a purpose. Unless and until, there happens to be proper finding relating thereto, that means to say, the conviction or acquittal has bearing over the fate of whole exercise relating to confiscation, the aim and object of the Act, whereupon, the Act did not allow to run in isonatran the trial.
Matter is remitted back to the learned lower court to proceed afresh - Appeal allowed by way of remand.
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2019 (4) TMI 1985
Reconsideration of approved Resolution Plan - power to recall approved resolution plan - commercial decisions of CoC - section 30(6) read with section 31(1) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- It is a peculiar situation in the present case where a resolution applicant is before this Adjudicating Authority offering better value to the corporate debtor, but this Adjudicating Authority cannot send the approved resolution plan back to the CoC for reconsideration along with apparently better resolution plan on two counts firstly, the resolution applicant has come after the submission of the approved resolution plan to the Adjudicating Authority, and secondly, the CoC or RP has not sought any relief to recall the approved resolution plan and for allowing them to reconsider the approved resolution plan along with the new resolution plan offering better value.
The power of this Bench to suo motu direct the CoC to consider the new resolution plan and reconsider the already approved resolution plan is confined by the scheme of the I and B Code and the interpretation of the same in the judgment of the hon'ble Supreme Court in K. SASHIDHAR VERSUS INDIAN OVERSEAS BANK & OTHERS [2019 (2) TMI 1043 - SUPREME COURT] the role of the Adjudicating Authority in matters challenging the decision of CoC, accepting or rejecting the resolution plan is limited to the grounds mentioned in section 30(2) and the purely commercial decisions of CoC cannot be adjudicated by the Adjudicating Authority as they are non-justiciable.
The successful resolution applicant shall obtain the required necessary approvals required under any law for the time being in force within a period of one year from the date of this order or within such period as provided for in such law, whichever is later - the resolution plan with modifications is approved - moratorium declared.
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2019 (4) TMI 1984
Dishonor of Cheque - insufficiency of funds - accused has failed to rebut the presumption - statutory presumption under Sections 118 and 139 of Negotiable Instruments Act ignored - HELD THAT:- The presumption under Section 139 of Negotiable Instruments Act is a rebuttal presumption and such rebuttal need not be beyond any reasonable doubt even preponderance of probability is sufficient. When the facts of the case is looked upon, whether the drawer of the cheque has rebutted the presumption with any degree of probability, it is found that except the reply notice and his oral evidence, there is no material to indicate that he and the complainant were in long association and he had trusted the complainant to the extent of leaving his belongings at his house including signed cheque leaves.
When the accused has initially denied the signature in the cheque, he should have at least placed some material to substantiate his defence - As far as the loss of cheque leaves, it is the case of the complainant that after 2011 election he and the complainant were fallen out. If it is so, the cheques should have been taken away by the complainant before the year 2011, whereas the cheque is dated 01.10.2012. Therefore, from May 2011 i.e., the general election till October 2012, the accused has not given any police complaint or directed the bank to stop the payment. Therefore, both the defence taken by the complainant is only an afterthought and mere denial.
Considering the length of time taken for disposal of this matter and the nature of the transaction and relationship between the complainant and the accused, this Court is of the view that the sentence imposed on the respondent is liable to be modified - the period of imprisonment imposed by the trial Court is modified from one year Simple Imprisonment to two months Simple Imprisonment. The compensation amount stands unaltered - Appeal allowed.
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2019 (4) TMI 1983
Money Laundering - properties acquired through tainted money - transplantation of kidney resorting to illegal means by forging the identity of the donor, fabricating documents, etc. - Offences under Sections 294(b), 406, 420, 465, 468, 471, 197, 419 & 506(ii) of IPC 1860 read with Section 19 of Transplantation of Human Organs Act, 1994 - HELD THAT:- Sub-section (5) of the Act, deals with the power of the Adjudicating Authority on the conclusion of a trial, to confiscate the property, and it has no relation to the case on hand. Attachment and confiscation are different. Attachment of the property has been confirmed by the Adjudicating Authority, as per the statutory provisions. Therefore in terms of Rules 8(3) & 8(4) of the above said Rules, physical possession of the attached property has to be taken. However, considering the difficulty expressed, the Appellate Tribunal, has passed a considered Order, dated 4.6.2015.
There is no ground to interfere with the Order - Appeal dismissed.
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2019 (4) TMI 1982
Transfer of proceedings to Special Court constituted for PMLA - Constitutional Validity of Section 45(1) of the PMLA - HELD THAT:- A reading of the Section 44 of the PMLA, makes it clear that only the offences punishable under the said Act and connected schedule offences alone are to be tried by the Special Court constituted for the said Act. The impugned proceedings, which are sought to be transferred from the CBI Court by the Petitioner/A1, are not under the PMLA, but under the provisions of IPC and the Prevention of Corruption Act, 1988, which are pending before the Additional Chief Metropolitan Magistrate, Egmore, Chennai - Admittedly, the Petitioner was prosecuted by the 1st Respondent/CBI for having committed serious bank frauds to the tune of ₹ 77.39 crores and accordingly, the charge sheet was filed under the provisions of IPC, namely, Section 420 of IPC. Mere filing of the private complaint to proceed against the Petitioner for the same serious bank frauds, on the basis of the materials collected by the 1st Respondent/CBI will not entitle the Petitioner to seek transfer the impugned proceedings initiated by the 1st Respondent/CBI to the Special Court constituted for the said Act to be tried jointly.
This Court is of the firm opinion that the cases, arising out of money laundering, pending before the other Courts other than the Special Court cannot be transferred and such a Court can only commit the cases to the Special Court on filling necessary application by the authority concerned, seeking permission to file the complaint under the Prevention of Money Laundering Act. Therefore, the question of transferring the impugned proceedings to the Special Court for Prevention of Money Laundering Act does not arise at all. Therefore, the relief sought for by the petitioners cannot be sustained, at this stage.
This Court is of the view that the cases, which are pending on the file of the CBI Court in connection with various offences, which were investigated in the year 2013, cannot be transferred to the Special Court for Prevention of Money Laundering as sought for by the Petitioner/A1. Consequently, this Court is not inclined to entertain the present Criminal Original Petition - Petition dismissed.
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2019 (4) TMI 1981
Gain on sale of land - nature of land sold - agricultural land or capital asset - Whether the land was classified in the revenue records as agricultural and whether it was subjected to payment or land revenue? - HELD THAT:- In the present case in hand, the assessee has obtained preliminary approval for conversion of agricultural land into non-agricultural purposes. However, neither the assessee nor the purchaser used the said land for non-agricultural purposes and the status of the asset remains in the Revenue records as ‘AGRICULTURAL LAND” as could be evidenced from the Encumbrance Certificate issued by the Registration Department for the period from 01.07.2007 to 01.03.2016.
The Information Officer, Dy. Block Development Officer, Sholavaram Panchayat Union vide his letter bearing No. N.K. No. 2272/2015/A-3 dated 27.07.2015, which was obtained under Right to Information Act – 2005, confirmed that the approval obtained by the assessee was valid for 3 years only, based on the file, District Fire Dept. License and Dist. Health Dept. approval has not been obtained and submitted and if NO action has been initiated to fulfil the terms and conditions of the approval, then the approval is considered to be lapsed. While conveying approval for conversion, the competent authority has imposed various conditions and one of the conditions at 7 is that “This concern should be accorded final sanction only after obtaining necessary approvals from the other Central and State Government Departments under the applicable laws and regulations”. Admittedly, the assessee has not obtained any approval as mandated in the preliminary approval.
Encumbrance Certificate issued by the Registration Department for the period from 01.07.2007 to 01.03.2016, the status of the land remains as agricultural land and moreover, the assessee has declared agricultural income from their agricultural lands. The Assessing Officer accepted the agricultural income declared by the assessee during regular assessment under section 143(3) of the Act, but, in the assessment under section 143(3) r.w.s. 263 of the Act, the Assessing Officer treated the same as income from other sources merely on the ground that the assessee has not produced any bills or vouchers either for sale of produce or for purchase of seeds etc. Even now also, it is not possible to obtain any pakka bill or vouchers for the sale of agricultural produce or purchase of seeds from surrounding farmers/villagers.
We find that most of the replies stated by the ld. DR are incorrect or not supported by any material and or against the valid documents of the State Revenue authorities. In our considered opinion and based on our observations on the replies filed by the ld. DR, it is not the case of the Department.
Thus we hold that the land sold by the assessees and purchased by M/s. Agility Logistics Pvt. Ltd. is in the nature of agricultural land and the sale of agricultural land no capital gain tax is warranted in all the assessees case. - Decided against revenue.
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2019 (4) TMI 1980
Unexplained credit u/s 68 - HELD THAT:- By filing copy of the bank statement of the assessee for the period from 01.04.2011 to 31.03.2012, the assessee prayed for deleting the addition made towards short term borrowings. Since the assessee has not furnished the bank statements and supporting evidence, the AO treated the same as unexplained credit and brought to tax u/s 68. We remit the matter back to the file of the AO to examine the details as furnished before the Tribunal and decide the issue in accordance with law by affording an opportunity of being heard to the assessee.
Disallowance of finance cost - HELD THAT:- We find force in assessee argument that as per loan agreement, the assessee is liable to pay interest @ 14.25% for the loan obtained from M/s. Great Meera Finlease Pvt. Ltd. and paid interest and moreover, the assessee has deducted TDS. We direct the Assessing Officer to verify bank account of the assessee as well as accounts of M/s. Great Meera Finlease Pvt. Ltd., loan agreement, etc. and decide the issue on merits.
Disallowance of other expenses - HELD THAT:- As assessee has submitted that the claim includes vessel handling expenses and the balance pertaining to various expenses such as travelling conveyances, labour charges, secretarial expenses, postage and courier, etc. - HELD THAT:- As the assessee has not filed any detailed supporting evidence for the above claim. Moreover, by considering the quantum of business of the assessee, the AO has allowed relief of 50% of the total claim and disallowed the balance amount in the absence of supporting evidences. The assessee has not filed any detailed statement of expenditure with supporting evidence before the Tribunal. We find no merits in the arguments of the ld. Counsel. 50% of the addition confirmed by the ld. CIT(A) stands sustained. Thus, the ground raised by the assessee stands dismissed.
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2019 (4) TMI 1979
Penalty u/s 221(1) - AO found that assessee has not remitted the tax outstanding - AR submitted that AO was not explained about the break-up of the dues, can the penalty be levied on total outstanding without restricting it to only tax dues - As argued no proper/reasonable opportunity to assessee - HELD THAT:- AO issued several notices, but, assessee has not availed the opportunity to explain the sufficient reasons for such pending taxes. AO levied penalty u/s 221(1) of the Act. Even before the CIT(A), assessee failed to make submission, even though, CIT(A) has given several opportunities.
Penalty cannot be levied without giving proper/reasonable opportunity to assessee. In this regard, assessee never made any representation before any authority, even though, tax authorities were considerate and given several opportunities to the assessee. Since, this issue is relating to penalty, we deem it fit to give one more opportunity to assessee. Therefore, we direct the AO to give a reasonable opportunity of being heard to the assessee and the assessee also directed to submit relevant information before the AO regarding the sufficient reasons as to why penalty u/s 221(1) cannot be levied. AO is directed to complete the proceedings as per law. - Decided in favour of assessee for statistical purposes.
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2019 (4) TMI 1978
Penalty u/s. 271G - non furnishing segmental profitability of AE transactions and non AE transactions - assessee had clearly failed in maintaining the documentation as required u/s. 92D(3) - profits split method adopted by the assessee to benchmark its international transaction - failure to comply with the provisions of Rule 10D(1) (d)(g)(h)(i)(j) & (m) of I.T. Rules, 1962 - HELD THAT:- When we go through the reasons given by the assessee for not complying with the provisions of Rule 10D(1), in light of industry specific, ie. diamond trading industry, we find that it was unable to ascertain the corresponding cost when the rough diamond has been cut and polished, it loses its individual identity and gets mixed in the lots purchased from AE as well as non AE. Therefore, considering the nature of trade, it is not possible for the assessee to prepare separate accounts for trading and manufacturing activities so as to compare its international transactions with its AE segment-wise.
Assessee has chosen profits split method in order to benchmark its international transactions with AE. We further noted that the department has accepted profits split method adopted by the assessee to benchmark its international transaction in the past and during the year under consideration as there is no adjustment is made u/s 92C - When there is no adjustment is made u/s 92CA in respect of international transactions with its AE, the AO was erred in levying penalty u/s 271G for not furnishing segmental profitability of AE transactions and non AE transactions even though the assessee has made out a case that it is difficult to furnish segment-wise P&L Account of AE segment and non AE segment considering the nature of industry and its complexity. Therefore, we are of the considered view that the AO was erred in levying penalty u/s 271G of the Income-tax Act, 1961. - Decided against revenue.
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