Refund of excess duty paid - assessee did not opt for provisional assessment - Section 11B of Central Excise Act, 1944 - difference of opinion - HELD THAT:- Considering the fact that as there were divergent views of this Tribunal as well as High Court, in that circumstance, the matter is required to be referred to the Larger Bench of this Tribunal to decide the following issue:-
“Whether in case an assessee did not opt for provisional assessment, can an assessee claim refund of excess duty paid by them in terms of Section 11B of Central Excise Act, 1944 or not.”
The Registrar is directed to place the matter before the Hon’ble President for constitution of the Larger Bench to resolve this issue.
Seeking quashing of criminal proceeding under Sections 498-A, 323 IPC and 3/4 of the Dowry Prohibition Act - HELD THAT:- In the present case, on looking into the passport documents and immigration papers which have been brought on record before this Court by the accused-appellant. The said papers do indicate that on the date in question i.e. 27.08.2005 the accused-appellant was not in India. At no point of time either before the High Court or before this Court any dispute has been raised with regard to the said fact. The complainant had not made the appellant a party in the earlier complaint. In the subsequent FIR the grievance of the complainant is in respect of the incident alleged to have been taken place on 27.08.2005.
When it is not in dispute that on the said date i.e. 27.08.2005 the accused appellant was not in India, the document(s) evidencing the said fact which are public documents can and should be looked into. Looking into the passport papers and the immigration records, we find that the prosecution, if allowed to stand, would be a futile exercise and that the present was an appropriate case where the High Court ought to have exercised its power under Section 482 of the Criminal Procedure Code.
The order of the High Court is set aside and the impugned proceeding pending in the Court of Sub- Divisional Judicial Magistrate, Patna City, Khajekala arising from PS Case No.153/05 against the accused-appellant is quashed - appeal allowed.
Rejection of grant of approval u/s 35(1)(ii) - Expenditure on scientific research - character of the Trust and its objectives questioned - reliance on reference in the agreementto question character of the Trust and its objectives - HELD THAT:- Rule 5D of the Rules prescribes procedure for approval. The condition of scientific research being the sole object contained in such Rule cannot be implemented with rigidity. This condition does not form part of the main section.
The primary or the fundamental object of the Trust was to carry out research and development and extension work in the field of animal husbandry, livestock breeding and agriculture. Scientific research was thus the prime object of the Trust. Several objects enumerated in Clause 3 of the Memorandum were in furtherance of this main object. Some of the remaining objects noted above in second compartment, may not have the tinge of scientific research, nevertheless, have close connection and direct co-relation with primary object of scientific research.
CBDT erred in rejecting the application of the Trust for approval for several reasons. Firstly, as noted, right from the year 1965 till about the year 1996, all successive applications of the petitioner Trust for approval were granted. It is not the case of the respondents that objects of the Trust underwent any material changes. In absence of any such change, there had to be strong reasons for the authorities to take a different view while entertaining the petitioner's fresh application for approval, particularly, when for years together, the authorities themselves had granted such approval.
For close to 30 years based on the same objects the authorities granted the approval. Many years later they changed the opinion and believed that scientific research was not the sole object of the Trust. Further, the reasons, on which, the impugned order is passed are also not convincing. We are prepared to proceed on the basis that the requirement of the applicant having scientific research as a sole object as flowing from Rule 5D (1) of the Rules must be complied with.
The question is, did the petitioner breach such Rule? We have noted the various objects contained in the Memorandum of Association and we also noted that the scientific research was the main and primary object of the Trust. The rest of the objects were only consequential to such main object or in furtherance thereof. Such subsidiary objects would not shift the focus of the petitioner's prime object of scientific research. The requirement of Rule 5D(1) of the Rules thus stood satisfied.
CBDT had, however, raised two additional contentions viz.that in the agreement entered with DSM New Business Development, the petitioner had described itself as an entity engaged in business of dairy farming - Mere reference in the agreement would not change the very character of the Trust and its objectives. The agreement is placed for our perusal. The parties entered into research agreement regarding study of effect of vitamin/mineral feed supplement on fertility and milk yield in dairy cows. Under such agreement DSM would provide certain information of confidential nature to ARDA upon ARDA agreeing to the confidentiality terms thereof. This was thus an agreement for carrying out research in connection with the animal feed and its effect on milk animal. Likewise, the observations and conclusions that the material produced by ARDA did not suggest any scientific research was also based on summary discussion. As noted, the request of ARDA for approval under section 35(1)(ii) of the Act was granted for the first time in 1965 and was revised from time to time for close to 30 years. CBDT had to have strong reasons to deny such approval for the future period. Appeal of assessee allowed.
Revision u/s 263 by CIT - Reopening of assessment u/s 147 - estimation of income on bogus purchases - assessee was saddled with estimated addition of 10% by AO - PCIT has held the assessment order to be erroneous and prejudicial to the interest of revenue primarily for two reasons. Firstly, due to non-consideration of the decision of hon’ble Supreme Court in case of N. K. Protein [2017 (1) TMI 1090 - SC ORDER] and secondly, due to lack of proper inquiry
HELD THAT:- As regards the second allegation of the PCIT, we are unable to agree with the same. The assessment order clearly reveals that the AO made necessary inquiry to find out genuineness of purchases.
As regards the allegation of non- consideration of the decision in case of N.K. Protein (supra), it is relevant to note, the said decision was rendered by the hon’ble apex court on 16.01.2017 which is much after the completion of assessment on 02.03.2016. Therefore, there is no occasion on the part of the Assessing Officer to consider the said decision. That being the case, the exercise of power under section 263 of the Act for non-consideration of the aforesaid decision of the hon’ble apex court is wholly misconceived.
In any case of the matter, the addition to be made on the basis of bogus purchase is a purely factual issue and varies from case to case depending upon the facts of each case. In case of N.K. Protein (supra) the facts involved clearly reveal that there was a search and seizure action carried out in case of N.K. Protein during which various incriminating material including blank cheque books in the name of different entities were found which conclusively proved that the assessee had not made any purchases. Thus, in the context of those facts 100% addition on account of bogus purchases was upheld. Whereas, in the case of the present assessee no such facts are involved.
In any case of the matter, when the assessee was able to link the purchases with corresponding sales, the logical conclusion which one can arrived at is, the assessee might not have purchased goods from the declared source but from some other parties. In that event, only the profit element embedded in the bogus purchases can be considered for addition.
Therefore, the decision of the Assessing Officer to restrict the addition to 10% of the bogus purchases is in tune with the consistent view of the tribunal and different high courts in similar nature of cases. The exercise of power u/s 263 in the facts of the present case is invalid. Accordingly, the impugned order passed by the leaned PCIT u/s 263 of the Act deserves to be quashed and order passed by the Assessing Officer is restored. Decided in favour of assessee.
Depreciation on goodwill - goodwill expanded at the time of amalgamation of the companies - claim denied as claim was fictitious and the goodwill has been accounted as a balancing factor in the hands of the assessee without acquisition of an intangible asset as contemplated under Section 32 of the Act - as decided by HC [2017 (10) TMI 373 - GUJARAT HIGH COURT] with respect to the claim of depreciation, the decision of Supreme Court in case of Smifs Securities Ltd. [2012 (8) TMI 713 - SUPREME COURT] would squarely apply. There is no material referred to by the Assessing Officer to hold that the claim of depreciation was fictitious.
Seeking grant of anticipatory bail - invocation of inherent power and jurisdiction of this Court under Section 439 (2) read with Section 482 Cr.P.C. - locus standi to file petition - HELD THAT:- Even if the issue of locus standi of the petitioner were to be kept aside, this Court finds no merit in the submissions of the petitioner attributing impropriety to the court of sessions in grant of relief to the second respondent by order dated 05.07.2018.
The question as to whether the court vested with the power to grant anticipatory bail in terms of Section 438 Cr.P.C. can exercise such jurisdiction against the backdrop of order of the court of cognizance issuing process is not res integra - A division bench of this court, as far back as in November, 1996 in PV. NARSIMHA RAO VERSUS STATE (CBI/SPE) [1998 (4) TMI 503 - SUPREME COURT] had answered a reference on precisely the same question of law contrary to what is being canvassed by the petitioner. Pertinent to note that in that case also the petitioner had come up to this Court for grant of anticipatory bail in the wake of summons issued by court of Magistrate against him. The division bench, answering the reference made by a learned single judge had, inter alia, observed that a person against whom accusations of cognizable and non-bailable offence have been made may apprehend arrest by the police or arrest even at the hands of the court. It was noted that the language used in Section 438 Cr.P.C. is clear and unambiguous namely "reason to believe that he may be arrested on accusation" - It was also noted that Section 438 (3) Cr.P.C. contemplates a situation where the arrest may be apprehended at the instance of the court and, thus, mandates that if such order of cognizance is passed and the Magistrate decides that a warrant should be issued at his instance, such warrant would have to be a bailable warrant in conformity with the direction of the court under Section 438 (1) Cr.P.C.
The rulings of the Supreme Court in Bharat Chaudhary & Anr. vs. State of Bihar & Anr. [2003 (10) TMI 692 - SUPREME COURT] and Ravindra Saxena vs. State of Rajasthan [2009 (12) TMI 1063 - SUPREME COURT] are sufficient to be quoted as illustration of the law being settled contrary to what is being argued by the petitioner.
The petition, thus, is found to be wholly devoid of substance - petition dismissed.
Application made u/s 197 rejected - respondents, on instructions, states that the respondents withdraw the impugned letter of rejection issued to the petitioner by the respondent No.1 and further that the petitioners application for issuance of the certificate in terms of section 197 would be decided afresh and a speaking order will be passed within a period of ten days from today - HELD THAT:- We issued the clarifications and to the following effect :
“While we allow withdrawal of these certificates and impugned in this Writ Petition with liberty to issue fresh certificates in accordance with law, we clarify that no functionary other than the officer referred to in the relevant statutory provision, namely Section 197 and the Rule 28AA of the Income Tax Rules, 1962 would be permitted to take over the jurisdiction or interfere in the exercise of the discretionary power envisaged by this statutory provision.”
This writ petition is also disposed of in the above terms. In the circumstances, there will be no order as to costs. We direct that until the petitioners application is disposed of by a speaking order in terms of the undertakings given to this Court, there shall be no recovery of the demand by resorting to coercive means.
TDS u/s 195 - addition u/s 40(a)(i) - assessee has paid in foreign currency, a sum as export commission, on which no tax was deducted at source - Scope of MFN clause available in the Protocol of Indo-Belgium DTAA - as submitted as per the Indo Belgium DTAA – Article 12, the payment related to the managerial services was categorized as “fees for technical services” and was taxable in the other contracting state - HELD THAT:- Though the CIT(A) noted that the definition of the term “fees for technical services” under the treaty between India and Belgium includes services of managerial nature, having regard to the MFN clause in the India-Belgium Treaty, the restrictive definition of the term “fee for technical services” in the India-UK Treaty can be applied and by following various decisions as referred hereinabove, CIT(A) held that the payment made to SG Exprover cannot be considered to partake of the nature of “fees for technical services” and allowed the ground raised by the assessee without obtaining any comments from the AO.
We direct the Assessing Officer to examine the MFN clause available in the Protocol of Indo-Belgium DTAA as to whether the same shall override the specific provisions laid down under Article 12 and decide the issue afresh in accordance with law. Thus, the ground raised by the Revenue is allowed for statistical purposes.
Cross objection - contention of the assessee is that the only service rendered by the SG Exprover is procurement of export orders for the assessee and the payments made to them are only commission for procurement of export orders and therefore, the ld. CIT(A) erroneously held that the services rendered by SG Exprover is managerial services - By considering the materials furnished by the assessee, it was the observation of the Assessing Officer that the services rendered by the assessee are in the nature of managerial services in view of the Article 12 of the Indo-Belgium DTAA and the ld. CIT(A) found considerable merits in the above observations. Thus, we find no infirmity in the order of the ld. CIT(A). Accordingly, the ground raised in the Cross Objection stands dismissed.
Bogus LTCG on sale of shares -addition of the entire sale proceeds of the shares as income and rejected the claim of exemption made u/s 10(38)
HELD THAT:- No direct material was found to controvert the evidence filed by the assessee, in support of the genuineness of the transactions. The overwhelming evidence filed by the assessee remains unchallenged and uncontroverted. The entire conclusions drawn by the revenue authorities, are based on a common report of the Director of Investigation, Kolkata, which was general in nature and not specific to any assessee.
The assessee was not confronted with any statement or material alleged to be the basis of the report of the Investigation Wing of the department and which were the basis on which conclusion were drawn against the assessee. Copy of the report was also not given.
Under the circumstances, in a number of cases this bench of the Tribunal has consistently held that decision in all such cases should be based on evidence and not on generalisation, human probabilities, suspicion, conjectures and surmises.
Assessee submits that there is no surviving order of SEBI against the assessee or the company, the script of which was purchased and sold by the assessee. When there is no surviving adverse order of SEBI, disputing the claim of the assessee, the judgment of the Hon’ble Supreme Court [2018 (2) TMI 580 - SUPREME COURT] cannot be applied to the facts of this case. Consequently, the addition made u/s 69C is hereby deleted.
Addition in question is deleted and the appeal of the assessee is allowed.
Bogus LTCG on sale of shares -addition of the entire sale proceeds of the shares as income and rejected the claim of exemption made u/s 10(38)
HELD THAT:- No direct material was found to controvert the evidence filed by the assessee, in support of the genuineness of the transactions. The overwhelming evidence filed by the assessee remains unchallenged and uncontroverted. The entire conclusions drawn by the revenue authorities, are based on a common report of the Director of Investigation, Kolkata, which was general in nature and not specific to any assessee.
The assessee was not confronted with any statement or material alleged to be the basis of the report of the Investigation Wing of the department and which were the basis on which conclusion were drawn against the assessee. Copy of the report was also not given.
Under the circumstances, in a number of cases this bench of the Tribunal has consistently held that decision in all such cases should be based on evidence and not on generalisation, human probabilities, suspicion, conjectures and surmises.
Assessee submits that there is no surviving order of SEBI against the assessee or the company, the script of which was purchased and sold by the assessee. When there is no surviving adverse order of SEBI, disputing the claim of the assessee, the judgment of the Hon’ble Supreme Court [2018 (2) TMI 580 - SUPREME COURT] cannot be applied to the facts of this case. Consequently, the addition made u/s 69C is hereby deleted.
Addition in question is deleted and the appeal of the assessee is allowed.
Order of demotion was passed against Respondent No. 1 demoting him to the ex-cadre post of Executive Engineer - Single Judge of the High Court held that the Respondent No. 1's encadrement to the post of Executive Engineer was illegal - whether the promotion of Respondent No. 1 to the ex-cadre post of Executive Engineer, and encadrement thereof subsequently, is illegal? - whether the delay and laches will come in the way of Appellant No. 3 in challenging the order of promotion of Respondent No. 1? - whether the Government was right in conducting an inquiry when the writ petitions were pending before the Court and whether subsequent demotion of Respondent No. 1 to the ex-cadre post of Executive Engineer is illegal? - HELD THAT:- This ex-cadre post was created specially for Respondent No. 1, which was to remain till the regular promotion of Respondent No. 1 as Executive Engineer in the parent cadre. It was nothing but an act of favouritism. Pertinently, Respondent No. 1 was attached with the Chief Minister as an Officer on Special Duty at that time. It is also relevant to note that though Appellant Nos. 1 and 2 had already stood promoted as Executive Engineers (who were promoted in the year 2002), Appellant No. 3 was yet to be promoted. They were, thus, much senior to Respondent No. 1.
Within three months of the aforesaid promotion of Respondent No. 1 in ex-cadre post, Respondent No. 1 was given regular promotion in the cadre. The manner in which it was done again shows that undue favour was accorded to him. The Selection Board meeting for encadrement of ex-cadre post held by Respondent No. 1 was held on July 27, 2005. Minutes of these meeting are placed on record. It is recorded that probable vacancies in the year 2004 as assessed by the Department are thirteen, which are inclusive of existing vacancy due to the retirement of one officer and twelve vacancies that occurred due to the promotion of twelve Executive Engineers to the rank of Superintending Engineers (Civil) during the year ending December 31, 2004.
The findings of the learned Single Judge to the effect that encadrement of Respondent No. 1 to the post of Executive Engineer was illegal not only on the ground that he was ineligible for consideration, as he had put in only three years of service, but also for the reason that there were only ten vacancies and not thirteen and, therefore, Respondent No. 1 could not be promoted at all, are without blemish.
Whether the order of the learned Single Judge warranted interference thereby denying the relief to the Appellants on the ground that their writ petition suffered from delays and laches? - HELD THAT:- It was virtually a case of fraud, at least on three counts. First, by creating ex-cadre post of Executive Engineer only for Respondent No. 1 and giving him that post when he was much junior to many others. Second, encadrement of Respondent No. 1 as Executive Engineer by showing that there were thirteen posts when, in fact, there were only ten posts of Executive Engineer on that date. This was done obviously with the purpose of accommodating him. Third, the promotion was given when Respondent No. 1 was not even eligible as per Rules as he had not put in minimum service of five years. Fraud vitiates every action and cannot be kept under the carpet on the ground that the action challenged was belated, more so when there is a reasonable explanation for such delay.
The impugned judgment dated August 07, 2015 of the Division Bench of the High Court is set aside - appeal allowed.
Refund of education cess and higher education cess in terms of Notification No. 56/2002-CE dt. 14.11.2002 - HELD THAT:- The issue has been decided by the Hon’ble Apex Court in the case of M/S. SRD NUTRIENTS PRIVATE LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE GUWAHATI [2017 (11) TMI 655 - SUPREME COURT] where it was held that The appellants were entitled to refund of Education Cess and Higher Education Cess which was paid along with excise duty once the excise duty itself was exempted from levy.
As the issue has been settled by the Hon’ble Apex Court in the case of SRD Nutrients Pvt Ltd, therefore the appellant is entitled to take the refund of education cess and higher education cess in terms of Notification No. 56/2002-CE dt. 14.11.2002 - appeal allowed.
Resumption of the Industrial Plot No. 306, Industrial Area, Phase-II, Panchkula allotted to M/s. Shiva Dairy & Oil Mills - whether such concurrent findings recorded by the Authorities and also by the High Court suffer from any serious infirmity warranting interference by this Court? - HELD THAT:- The allotment of Industrial Plot No. 306, Industrial Area, Phase-II, Panchkula in 1984 to Rabinder Nath was in his capacity as Managing Director of M/s. Shiva Dairy & Oil Mills. The plot was thus allotted to the partnership firm. The Appellants have not been able to show as to how they stepped into the shoes of the partnership firm, apart from the mere fact that they are legal heirs of Rabinder Nath. As discussed earlier, at the time of making application for allotment of industrial plot, the applicant has to clearly disclose all the facts regarding the type of industry to be started, licence if necessary under law, project report, estimated cost of project, details regarding time required in completing the project, details of employees required, source of fund etc. The project so submitted is then approved by the competent authority after considering its viability. The applicants are then issued letter of intent/provisional allotment letter with condition to complete the other formalities within the stipulated period of time and after completion of formalities, regular allotment letter is issued in favour of the applicant.
The court can interfere with the revocation of resumption of land only if the executive has not carried out its duty or acted in violation of the procedure. Clause (11) of the terms and conditions of allotment clearly stipulates that in the event of breach of any of the conditions of transfer, the Estate Officer may resume the land in accordance with the provisions of Section 17 of the HUDA Act, 1977 - The order of resumption of the plot is as per the terms and conditions of the allotment order and the High Court rightly refused to interfere with the order of the Revisional authority. The Appellants having failed before all the forums including the High Court and also the Revisional authority, there are no serious infirmity or illegality in the order of resumption of the plot and therefore, this appeal is liable to be dismissed.
LTCG - Exemption u/s 54F - house was habitable or not? - As per the AO the expenses were held to be made to make the house ‘luxurious’ and ‘comfortable’ hence the expenditure did not come in the ambit of Section 54F - whether the house was habitable at the time of purchase or it genuinely required repairing or remodeling to make it habitable? - HELD THAT:- It is pertinent to note that there is an observation of the Assessing Officer that the house was habitable and given for rent for 7 months. But the Assessing Officer has only gone through the spot verification conducted by sub-registrar that the property was habitable. We find that an identical issue come up before in case of Rahana Siraj vs. CIT [2015 (1) TMI 1421 - KARNATAKA HIGH COURT] which was relied by the Ld. AR.
In light of the above decision, the claim of the assessee u/s 54F of the Act is just and proper. Decided in favour of assessee.
Benami transactions - provisional attachment orders - procedure the authorities have adopted in passing the impugned provisional attachment order - HELD THAT:- Section 5 and Section 27, as can see, deal with confiscation. We are afraid, it is premature for this Court to examine the issue on the principles of confiscation. What has so far been effected is only a provisional attachment. And it was u/s 24(4)(b)(i) of the Act. Even otherwise, a judicial or quasi-judicial authority has inherent power to preserve all that affects the lis or adjudication: to maintain status quo until the dispute is dissolved or resolved. Here, in fact, the Ext. P3 order of provisional attachment has statutory backing under Section 24(4)(b) of the Act.
Petitioner's grievance concerns the authority's alleged violation of Section 5 or its inapplicability - Section 5 speaks of confiscation of any property, suspected to be Benami property. First, the authorities have not yet determined whether the property is Benami; second, Section 5 concerns confiscation, but the proceedings are at a preliminary stage--provisional attachment.
We have, not yet reached the stage of confiscation. Indeed, it takes an elaborate procedure of hearing and adjudication for the authorities to confiscate any property. Must, then, hold that even Section 27 concerns only with confiscation and vesting of benami property. And we have not reached that stage, yet.
No merit in the writ petition. We however, clarify that as the writ petition was dismissed on the premise it is premature, it does not affect the petitioner's right to approach the adjudicating authority, that is the 3rd respondent or any other competent authority, to put forward its defence, and prosecute the matter.
Seeking provisional release of seized goods upon furnishing bank guarantee - HELD THAT:- Report received from CRCL, New Delhi by the authority cannot be a ground for not releasing the goods provisionally and same is subject matter of the petition.
If the goods are not released, as directed in order dated 17.09.2018, the Assistant Commissioner, Custom House, Hazira, Surat shall remain personally present in the court on the next date of hearing.
Murder - case of circumstantial evidence - theory of last seen - last seen theory establishes the presence of the Appellant with the deceased at night - HELD THAT:- Normally this Court Under Article 136 of the Constitution, would be reluctant in appeal to interfere with the concurrent findings of two courts by reappreciating the facts and evidence. But in an appropriate case, if this Court finds that there has been erroneous consideration and appreciation of facts and evidence, leading to miscarriage of justice, this Court is duty bound to ensure that ultimately justice prevails. It is a well established principle of criminal jurisprudence that several Accused may go free, but an innocent person should not be punished.
The essentials of circumstantial evidence stand well established by precedents and we do not consider it necessary to reiterate the same and burden the order unnecessarily. Suffice it to observe that in a case of circumstantial evidence the prosecution is required to establish the continuity in the links of the chain of circumstances, so as to lead to the only and inescapable conclusion of the Accused being the assailant, inconsistent or incompatible with the possibility of any other hypothesis compatible with the innocence of the Accused. Mere invocation of the last seen theory, sans the facts and evidence in a case, will not suffice to shift the onus upon the Accused Under Section 106 of the Evidence Act, 1872 unless the prosecution first establishes a prima facie case. If the links in the chain of circumstances itself are not complete, and the prosecution is unable to establish a prima facie case, leaving open the possibility that the occurrence may have taken place in some other manner, the onus will not shift to the Accused, and the benefit of doubt will have to be given.
Unfortunately neither Trial Court nor the High Court considered it necessary to take notice of, much less discuss or observe with regard to the aforesaid defence by the Appellant Under Section 313 Code of Criminal Procedure to either accept or reject it. The defence taken cannot be said to be irrelevant, illogical or fanciful in the entirety of the facts and the nature of other evidence available as discussed hereinbefore. The complete non-consideration thereof has clearly caused prejudice to the Appellant.
The entirety of the discussion, in the facts and circumstances of the case, the nature of evidence available coupled with the manner of its consideration, leaves us satisfied that the links in the chain of circumstances in a case of circumstantial evidence, cannot be said to have been established leading to the inescapable conclusion that the Appellant was the assailant of the deceased, incompatible with any possibility of innocence of the Appellant. The possibility that the occurrence may have taken place in some other manner cannot be completely ruled out. The Appellant is therefore held entitled to acquittal on the benefit of doubt.
The acquittal is ordered - the Appellant is released from custody forthwith, unless wanted in any other case - appeal allowed.
Income surrendered in survey proceedings - Addition for undisclosed income out of entries in loose papers found on survey - during the course of survey proceedings both the partners were out of station and survey proceedings were represented by brother of one of the partner, in their absence and his statement was recorded by the Department to know sources of various discrepancies found on survey - HELD THAT:- From the records it can be seen that the assessee firm surrendered the income under the head “Loose papers found and impounded on survey” and included both in the trading and profit & loss account for the year ended on 31.03.2010 and computation of total income for the A.Y. 2010- 11 under the head “profits and gains of business”. The assessee also explained each of the loose papers before the AO but the AO as well as the CIT(A) ignored the explanation offered by the assessee. Therefore, we are of the opinion that both the CIT(A) as well as Assessing Officer are not correct in making this addition. The order of the CIT(A) is set aside.
Disallowance out of remuneration paid to partners - computation of book profit for the purpose of admissibility of remuneration u/s 40(b)(v) - HELD THAT:- The assessee firm had no other source of income except income from trading of marbles, granite, tiles etc. during the year under consideration as is appearing from the audited financial statement and audit report for the concerned year. Besides that on survey proceedings no documents were found by the Revenue Authorities which revealed that the assessee firm was involved in other business activities as well. Therefore, we are of the opinion that the CIT(A) as well as Assessing Officer both are not correct in restricting the remuneration of the partners.
The Supreme Court of India in 2018 (10) TMI 2013 case granted leave for Civil Appeal No. 13071 of 2017 after condoning the delay. The respondent did not appear.
Unexplained cash deposits in bank - assessee is a LIC Agent - HELD THAT:- Where the assessee deposits cash amount to the bank account and failed to submit proper explanation to substantiate the amounts deposited by him then, the Revenue authorities have valid powers to pick up the issue for taxation purposes. At the same time, it is a well-accepted principle of tax jurisprudence that in such cases when the assessee is regularly depositing and withdrawing amounts to the alleged bank account for the purpose of his business or profession activity then, entire amount of deposit cannot be treated as income in the hands of the assessee keeping aside the amounts of withdrawal during the year.
In the present case, assessee is a LIC Agent, who is claiming that he received cash amounts as premium from his clients and he deposited the same to the bank account and further made payment to LIC on the instructions of his clients. From the copy of bank account available it is also clear that the assessee is depositing cash and also making payments to LIC and other entities.
In this situation, the entire cash deposits cannot be treated as income of the assessee and only peak amount credited to the bank of the assessee, can be treated as income in the hands of the assessee. Therefore, alternative prayer of the assessee is allowed and AO is directed to make the addition of peak amount to the returned income of the assessee on account of cash deposits to his bank account. Decided partly in favour of assessee.
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