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Showing 381 to 400 of 1327 Records
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2012 (11) TMI 953
Grant of bail - criminal case - Prevention of Corruption Act – alleged that Commissioner and Superintendent of Central Excise were involved in obtaining illegal gratification by corrupt and illegal means from the businessmen – Held that:- there was a clear well-designed and planed conspiracy to conduct illegal raid on the business premises of Aggarwals. This conspiracy was hatched by all the accused persons/petitioners. There is prima facie evidence on record in the shape of statements of Mr. S.K. Singh that the raid was illegal and unauthorized. Though the transcript of taped conversation cannot be used as a substantive piece of evidence, but having seen the transcript of the conversation that took place between the accused persons/petitioners before and after the raid, it would be prima facie seen that it was all planned to extort money from Aggarwals under the fear of raid
The arrest of Srivastava would be nothing but extension of trap arrest. Prima facie Section 6A(2) was attracted and this being a non obstante section, provisions of sub-section (1) mandating approval of the Central Government were not applicable.
The petitioners A.K. Srivastava and Lallan Ojha are senior officers of the Central Excise Department. Most of the witnesses who have been cited by the prosecution are officials of their department and some of the officials cited as witnesses are their juniors and subordinates. It is every likelihood that in case they are released on bail, they would be able to influence the witnesses. This is presumably because of this apprehension that the prosecution has chosen to get the statements of two drivers and one Superintendent recorded under Section 164 Cr.PC before the Magistrate. The apprehension of CBI in this regard seems to be well founded in the given facts and position of these two petitioners.
The pleas that the petitioners are in custody for about three months now and the charge-sheet has been filed are also no ground to admit them on bail. - bail applications dismissed.
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2012 (11) TMI 952
Application for condonation of delay – appeal against the order of CESTAT - Held that:- the first order dismissing the appeal is only as a sequel to dismissing the application for condonation of delay in preferring the appeal and the appellant though had filed application seeking for condonation, that application was not prosecuted with diligence and therefore the Tribunal was left with no choice but to dismiss the application for condonation of delay and as a consequence dismissed the appeal and also the application for stay etc.
The order passed by the Tribunal is not per se one dismissing the main appeal for non prosecution but is only a dismissal of the appeal as a consequence of dismissal of the application for condonation of delay.
There was no valid or tenable appeal of the appellant which was an appeal which required or deserved attention under section 35C of the Act. It would have become a valid appeal only if the appellant should have succeeded in its efforts to get the delay in preferring the appeal condoned - appeal dismissed
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2012 (11) TMI 951
Writ petition - Central Excise Officer - scope of the word "or" in definition u/s 2(b) - jurisdiction – issue of show cause notice - proceedings for determining the liability under Section 11A – Held that:- In the present case, the issue which has been raised by the learned counsel for the petitioner is that Dr. Devender Singh, who was working as Additional Director General/Commissioner was not authorised to issue the show cause notice dated 01/10/2009, since he was not a Central Excise Officer because no notification having been issued and published in the Official Gazette as required under Rule 3(1) of the 2002, Rules. We have already considered the issue and held that Dr. Devender Singh, Additional Director General, Directorate General of Central Excise Intelligence having been authorised to act as a Commissioner, Central Excise was a Central Excise Officer, within the meaning of Section 2(b) of the Act, 1944 and was fully authorised to issue the show cause notice.
Present is not a case, where there is any lack of jurisdiction in the Commissioner in issuing the show cause notice. The submission of the learned counsel for the petitioner that prior permission of the adjudicating authority is required before issuing the show cause notice dated 01/10/2009 is without any substance.
Additional Director General/Commissioner, Central Excise had every jurisdiction to issue the show cause notice dated 01/10/2009 and no ground has been made out to quash the same.
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2012 (11) TMI 950
Exemption u/s 54F - Allegation of deferment of tax on LTCG - Capital gain arouse in AY 2006-07 - deposited in capital gain account scheme as on 30-10-2006 - offered to tax in AY 2009-10 - argument of Revenue is that assessee had no intention to construct a house in the one acre property. Land was agricultural in nature and assessee would have been aware that a residential construction was not possible in an agricultural property. - held that:- if the assessee had no intention to construct a house, he would not have got a plan prepared by an architect and submitted it to the local authority for approval along with a site plan. May be it true that due to Coastal Zone Regulations, no construction was possible in the said land. But we cannot say that assessee, when purchasing the land, was aware that on account of the Coastal Zone Regulation, he could not construct a residential house therein. Even Coastal Zone Regulations by itself does not deny the right of construction, but places a number of constraints for such construction. Having not obtained approval for the plan within three years, assessee had offered the same to Capital Gain Account Scheme in Assessment Year 2009-10.
Assessee here, having offered capital gains for tax in Assessment Year 2009-10 as stipulated in proviso-1 of section 54F of the Act, could not be saddled with the same liability for the impugned Assessment Year as well. Ld. CIT(A) was justified in directing the Assessing Officer to grant the assessee deduction under section 54F of the Act for impugned Assessment Year. - Decided in favor of assessee.
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2012 (11) TMI 949
Reopening of Assessment - Additional depreciation on machinery installed at milk chilling plant/processing centre, sales outlet, etc - Held that:- Although milk is required for the purpose of manufacturing of curd and ghee, standardised and pasteurised milk for the purpose of production of curd and ghee is a step removed from the business of production of curd and ghee. The curd and ghee could have been produced by the assessee from the milk without standardisation and pasteurisation. Usage of pasteurised condensed milk is not necessary for the purpose of production of ghee and curd. Because the assessee used the standardised and pasteurised milk, we cannot grant the additional depreciation on the plant and machinery which are used for the purpose of standardisation and pasteurisation of milk. Accordingly, even on merit we decide the issue against the assessee. The various case-law relied on by the assessee-company are delivered on their own context and cannot be applied to the facts of the present case. - decided against the assessee.
Levy of Interest - levy of interest u/s. 234B and 234C of the Act is consequential and mandatory in the nature - this ground is dismissed - Appeal of assessee is dismissed.
Allowability of foreign travel expenditure - held that:- , the assessee not furnished bifurcation of expenditure as related to business and pleasure trips - Being so, the CIT(A) directed the Assessing Officer to disallow 2/3 of expenditure. Before us also nothing has been furnished. However, the AR made as plea that the assessee could furnish details of foreign travel as relating to business trips as well as pleasure trips. - matter remitted back - appeal of assessee is partly allowed for statistical purposes.
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2012 (11) TMI 948
Initiation of Re-assessment proceedings u/s 147 - change of opinion - held that:- To bring a case within the ambit of change of opinion, it is essential that firstly, some opinion should be formed on a particular issue. Such an opinion can be formed only when assessment is taken up. In a case when no assessment has been framed, there can be no point to form an opinion on an issue concerning the assessment. - Decided against the assessee.
Principle of mutuality - The survey divulged that the assessee was also entering into transactions with non-members. - Loss of Mutuality - held that:- in a case of a non-mutual organization, a few transactions with the members do not convert its non-mutual status to mutual. In the like manner, the otherwise status of mutuality of an organization cannot be destroyed because of a few transaction with the non-members. What extent of participation by non-members destroys the otherwise mutual status of an organization or what extent of participation by members changes the otherwise status of non-mutuality depends on the consideration of the totality of facts and circumstances of each case.
The mere fact that a person at the time of resignation or retirement is not entitled to share in the reserves of the organization, would not damage the mutuality so long as the persons who are entitled to share such reserves continue to be the members as a class.
TDS u/s 234B where no TDS was deducted by the deductor - held that:- when the duty is cast on the payer to deduct tax at source, on failure of the payer to do so, no interest can be charged from the payee assessee u/s 234B. - Decided in favor of assessee.
Allocation of expend tire by Head office - application of section 40C - Estimation of income at 5% of the gross amount recovered from non-members - held that:- There can be no dispute about the fact that any amount received by way of reimbursement, not containing any element of profit, is not liable to tax. - if there is certain reimbursement of expenses as such, without there being any mark up included in such reimbursement, there cannot be any question of earning any income liable to tax from such reimbursement. - this principle is not applicable in the the instant case. - Not only the basis of allocation of expenses but also that of the revenue, as done by the HO is not known to the assessee. Under such circumstances, the contention that the assessee was only recovering costs from its non-members and there was no profit element in it, is not open for verification.
Sec 44C only talks of HO expenses, which mean executive and general administrative expenditure incurred by the assessee outside India including expenditure in respect of rent, rates, repairs etc. It is only the allocation of general and administrative expenses which is covered within the purview of section 44C. In the present case the basis of allocation of expenses is not known, but the basis of allocation of income is equally unknown at India level i.e. where neither the income side nor the expenditure side of the assessee's Income and expenditure account is fully capable of verification. It is in such circumstances that Rule 10 of Income-tax Rules, 1962 comes to the rescue of the Revenue for determination of income in the case of non-residents. It is this very rule which has been invoked by the Assessing Officer and also applied by the learned CIT(A) in estimating the income of the assessee - CIT(A) was more than justified in estimating the income at 5% of the gross receipts from non-members - In the result Revenue's appeal and assessee's cross objection stand dismissed.
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2012 (11) TMI 947
Registration u/s 12AA - charitable activity - genuineness of the activities of the assessee-society -Society receives application from the common citizen for various services on behalf of the departments of State Govt, forwards the same to the concerned department and deliver back the same to the citizen within a specified time frame. The Society is charging prescribed fee from the citizen for providing services. - Held that:- After going through the aforesaid balance sheets as well as Income & Expenditure accounts of the assessee for the last three yeas, we have not found any expenditure incurred by the Society on charitable as well as public utility work. Almost all the expenditure has been incurred by the Society on printing and stationery, salary to their employees, Bank expenditure, Computer repair, Audit fee, Electricity Bill, Telephone, Electric repair, traveling, misc. expenditure, postage etc.
Merely, mentioning about various objects in the nature of charitable activities in the Memorandum of Association, does not mean that the Society is doing any charitable activities for the general public utility and is entitled for registration under section 12AA of the Act. According to section 12AA of the Act, the Commissioner on receipt of application for registration of a trust or institution has to satisfy himself about the genuineness of activities of the trust or institution.
The activities of the assessee-society are not charitable in nature within the meaning of provisions of section 2(15) of the Act and it does not qualify to treat as charitable institution. Since the assessee has not established that its society is formed with objects of any charitable purpose, then the question of discussion of citations relied upon by the Society does not arise.
The present society is doing its business and charging huge fees from the public which is in addition to the prescribed fee of the Punjab Govt. Even otherwise, the fees charged by the present society is in addition to the burden forced upon the common-man. Because of this service has to be rendered by the Punjab Govt. free of cost to the public against the fee prescribed in the chart - Decided against the assessee.
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2012 (11) TMI 946
Selection of case for scrutiny - held that:- procedure for selection of cases for scrutiny for noncorporate assessees is for the cases for taking into scrutiny during the financial year 2005-06 and selection in the financial year 2005-06 can only be taken for the preceding years to financial year 2005-06. Therefore, the Ld. CIT(A) is not justified in deciding the issue following the said procedure which is not available during the impugned financial year 2005-06 relevant to the assessment year 2006-07. - Decided in favor of assessee.
Disallowance of Salary and Wages – genuineness of wages - Held that:- AO has treated the wages of one month as genuine and others as ingenuine. - In the absence of any explanation by the assessee, the authorities have to make best judgment assessment which should be honest and fair. - This view is fortified by the decision of the Hon’ble Supreme Court, in the case of Brij Bhushan Lal Praduman Kumar vs. CIT [1978 (10) TMI 2 - SUPREME COURT] Though arbitrariness cannot be avoided in such estimate, the same must not be capricious but should have a reasonable nexus to the available material and circumstances of the case - If the additions, as made by the AO are compared with the turnover of the assessee, the income of the assessee comes at 40.32% which is almost 4 to 5 times of the income shown in the past and also in the case of other contractors. Therefore, the assessment made by the AO is not based on the facts but an arbitrary assessment. - Deletion of addition by CIT(A) confirmed - Decided in favor of assessee.
Addition made on account of bogus purchases of materiaL – Held that:- the AO was not justified in making specific addition without giving any opportunity to the assessee - no infirmity in the order of CIT(A) in this regard - C.O. of the assessee, the same is supportive in nature and therefore, did not require any adjudication and the same is dismissed accordingly - In the result, the appeal of the Revenue is partly allowed and C.O. of the assessee is dismissed.
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2012 (11) TMI 945
Protective assessment – Held that:- No demand shall arise in consequence to the protective assessment, i.e., until the substantive assessment survives. In fact, if the amount was withdrawn by the assessee on 28/11/1996, while the amount recovered from VR is on 27/11/1996 , the question of ownership of Rs. 39 lacs and odd apart, the same possibly explain the cash found in search with VR - assessee shall co-operate with the A.O. in the matter, who shall finalise the assessment in a time bound manner. That is to say, save or except where the appeal in the case of VR is pending before the Hon'ble High Court, within six months from the end of the month of the receipt of this order by the Revenue.
Determination and Adjudication - Held that:- Matter becoming infructuous in view of the finding of absence of jurisdiction- no merit in the Revenue’s challenge to the same inasmuch as there has been no decision of the said authority on merits - no infirmity in principle stands found in the impugned order, and which therefore stands endorsed to that extent - only order to which our attention was drawn, and which found on record, is dated 17/1/2005, so that the date mentioned has been considered to be on account of a mistake, and read as Rs.17/1/2005 in framing the present order - In the result, the Revenue’s appeal is dismissed.
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2012 (11) TMI 944
Best Judgement Assessment u/s 144 – Held that:- Assessee is a habitual defaulter, not disclosing his correct turnover, year after year, he can be subject to assessment under the verification procedure. But that would not in any manner entitle the Revenue to proceed de hors the material on record or arbitrarily. There are other provisions under the Act, which is a complete code in itself, which can be applied to bring the assessee’s undisclosed income – which though has to be assessed reasonably, to tax. No doubt, each year is a separate and independent year. However, the Revenue having not brought on record any material to show any distinguishing feature for the current year vis-à-vis a preceding year, at any stage, including before us, viz., the nature of the work done; the cost of materials; the price realized, etc., or even a non-consideration of any of the relevant materials by the tribunal while determining the facts for AY 2005-06 - no basis for adopting a different measure, both qua the net profit rate and the working capital component involved, i.e., other than the corresponding accepted rates for that year - In the result, the Revenue’s appeal is dismissed.
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2012 (11) TMI 943
Validity of Service of Notice in Block Assessment – held that:- Irregularity in proper service of notice which can be treated as curable under section 292B of the income tax act is only in the cases where the notice under section 143 (2) was issued properly and within the period of limitation and the assessee did not raise any objection regarding the service of the notice during the assessment proceedings and also participated in the assessment proceedings then at a later stage the assessee is precluded from raising such objection. Therefore, the provisions of section 292B are not applicable in the case where the Assessing Officer has not at all issued notice under section 143 (2) within the period as prescribed.
Requirement of section 143 (2) cannot be dispensed with as it is mandatory and therefore, the notice under section 143 (2) issued after the expiry of prescribed period is an uncurable defect and consequently, the block assessment is erroneous and not sustainable - block assessment in the case in hand is without jurisdiction and consequently, the same is set aside.
Undisclosed Income as per section 158 BB – Held that:- As Block assessment being invalid is set aside; therefore, no need to go into the merits of the issue of addition. Consequently the appeal filed by the revenue is liable to be dismissed - In the result appeal filed by the assessee is allowed whereas the appeal filed by the revenue is dismissed.
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2012 (11) TMI 942
Evasion of Payment of Taxes – Prorective Assessment – Setting Aside Revision order of CIT(A) - Whether Capital gains should be taxed as a whole in one assessment year 2007-08 or the capital gains should be bifurcated and assessed to tax for two assessment years 2007-08 and 2008-09 on sale of Property through Sale of shares when sale is a comprehensive business deal - held that:- Assets, rights and privileges of the property ultimately being transferred through the sale of shares would be taking a final shape only in the previous year relevant to the assessment year 2009-10. It is in anticipation of the fulfillment of all these efforts that the assessees have entered into an agreement with WET as a business proposition. The agreement is not an agreement for sale simplicitor. It is a comprehensive business deal. Entire land and property was transferred by CHD to WET in the previous year relevant to the assessment year 2007-08.
As already held by CIT(A), only 50% shares of CHD were sold by the assessees to WET. Capital gains arising out of the transfer of balance shares have also been offered by the assessees for the following assessment year 2008-09. Therefore, in these circumstances it is not proper on the part of the Assessing Officer to treat that the entire transaction was complete in the previous year relevant to the assessment year 2007-08 itself. In the present case, there is no attempt to evade payment of taxes, as the assessee have already offered capital gains for taxation in two assessment years 2007-08 and 2008-09.” - there is no necessity of making protective assessments on that ground for the assessment year 2008-09 - revision orders passed by the CIT(A) have become infructuous - orders are therefore, set aside - In result, appeals filed by Revenue are dismissed and appeals filed by assessee is allowed.
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2012 (11) TMI 941
Exemption u/s10(23C)(iiiad) – Held that:- Assessee is carrying only the activity of education and training, even though other incidental objectives are mentioned in the trust deed. It is also not disputed that the assessee had been filing returns from assessment year 1991-92 onwards up to assessment year 2006- 07 and the claims made by the assessee u/s 10(23C)(iiiad) had been accepted by the department for assessment year 1996-97 u/s 143(3) of the Act. when the assessee has been granted exemption u/s 10(22) with the same objectives, the assessee has to be granted exemption u/s 10(23C)(iiiad) if the annual receipt is within the limit prescribed. further,if the assessee meets the requirement of imparting education which can be training of any nature and if only such activity is carried on, the institution should be held eligible for deduction u/s 10(23C)(iiiad) of the Act – there is no infirmity in the order of the first appellate authority in granting exemption u/s 10(23C)(iiiad) of the Act and same is confirmed.
Disallowance u/s 11(1)(a) - Application of Income outside India – Held that: - issue is only academic – not dealing with the same as already granted exemption u/s 10(23C)(iiiad) of the Act - In the result, the revenue’s appeal is dismissed.
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2012 (11) TMI 940
Ex-parte assessment made u/s.144 of the Income Tax Act - notice under section 142(1) of the Act – alleged that there was no compliance on behalf of the assessee to any of the notices issued by the AO – Held that:- Director of the Company was incharge of the company’s day to day affairs at Mumbai. The other directors were residing at Calcutta – he was diagnosed as suffering from cancer and, therefore, could not attend the proceedings before the AO. That is the reason why the final show cause notice dated 10/11/2008 was sent by the AO to the Kolkatta address of the other directors – said director ultimately died on 19/4/2010 and that was the time when the proceedings before CIT(A) had come up for hearing - direct the assessee to make proper compliance before the AO to enable the AO to decide the issue afresh - appeals allowed for statistical purposes
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2012 (11) TMI 939
Validity of initiation of reassessment proceedings – Held that:- There is no allegation by the Assessing Officer that income has escaped assessment by reasons of failure of the assessee to disclose material facts fully and truly. Since, reassessment proceedings were being initiated after expiry of 4 years from the end of assessment year, this was condition precedent for valid initiation of reassessment proceedings - reopening of assessment beyond the period of four years could not be sustained
Reopening on the ground of non deduction of TDS - Payments to foreign parties for licence to use of software - view taken by the Department that it is mandatory for the assessee to Deduct Tax at Source on such payments for licence to use software as they are in the nature “Royalty” - assesses has made payments to foreign parties for licence to use of software – Held that:- there could be no reassessment either on the basis of a subsequent decision of the Tribunal or on the Assessing Officer’s own interpretation. In either case, it would be a mere change of opinion, so that the notice was not valid.
Disallowance under section 40(a) of the Act – Held that:- Since the initiation of reassessment proceedings have been held to be invalid and the orders of reassessment have been annulled - it is not necessary to deal with the appeals of the revenue on merits - appeals dismissed
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2012 (11) TMI 938
Addition u/s 68 - creditworthiness of the parties who advanced the loans – Held that:- CIT(A) deleted the addition on the ground that genuineness is not doubted by the AO - it is not known as to why a housewife will take a loan from somebody or even from her brother, just in order to advance loan to the assessee and why she takes so much of risk when this investment is not safe - findings of the AO show that he has doubted the genuineness of the transactions, therefore, the observations of the CIT(A) that the AO has not doubted the genuineness of the transactions are not proper - CIT(A) without considering the issue properly, deleted the addition made by the AO – matter remanded to AO
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2012 (11) TMI 937
Penalty u/s 271(1)( c) – diversion/shifting of expenses of sister concern to the assessee - travelling expenses and business promotion expenses – Held that:- Expenditure disallowed represents the expenses debited by the assessee company in its account books with regard to the tours undertaken by the directors of the group companies of the assessee and it is an admitted fact that the disallowed expenses were not incurred by the assessee company for its business purposes - assessee could not explain any valid reason for debiting the expenses incurred by the directors of the other companies for the business purpose of the group companies and which do not relate to the business of the assessee company - assessee has not controverted the facts of payments of the expenses by credit card of the persons, who are not the director of the assessee company - it is a case of diversion/shifting of expenses of sister concern to the assessee with a view to reduce the tax liability. The act of the assessee in claiming the said expenditure shows dis-honest motive and therefore, attracts the penal provisions of sec. 271(1)( c) of the IT Act
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2012 (11) TMI 936
Levy of penalty u/s.271(1)(c) - bona fide mistake – Held that:- Penalty under section 271(1)(c) of the Income-tax Act, 1961, was imposed only when there was some element of deliberate default and not a mere mistake. The finding had been recorded on the facts that the furnishing of inaccurate particulars was simply a mistake and not a deliberate attempt to evade tax - simply because a mistake has been committed on the advise of the auditor, then such addition cannot lead to the action of imposition of penalty
Addition of dividend – Held that:- Normal dividend was exempt u/s. 10[34] and it is very much possible that dividend from the co-operative bank was also treated as normal dividend. This also seems to be a case of bona fide belief and in such circumstances penalty is not attracted - when assessee is making some claim on bona fide basis or under the wrong advise of the counsel then penalty cannot be levied - assessee’s appeal is allowed.
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2012 (11) TMI 935
Disallowance of warranty provision - The disallowance was made on the ground that the expenditure has not crystallized and hence provisions for performance guaranty amounted contingent liability. - held that:- Deduction allowed.
Addition u/s 68 - one-timepayment paid by the customer for initial start up of the contract - held that:- As such, the Assessing Officer’s decision of holding it as revenue receipt was not arrived at after examining the relevant documents and agreements in this regard. The orders of both the Assessing Officer and learned CIT(A) in this regard do not speak of the basic facts as to the nature of arrangement/agreement between the assessee and client and relevant facts regarding payment of Rs. 8 lakhs in this regard. - matter remanded back.
Liability of exchange loss – alleged that expenditure has not crystallized – Held that:- Foreign exchange loss is on the revenue items – assessee submits that this issue is covered in favour of the assessee by the decision of Woodward Governor India P. Ltd. (2009 (4) TMI 4 - SUPREME COURT ) – matter remanded to AO
Claim of interest u/s. 244A on the refund of taxes due – Held that:- First appellate authority has not dealt with this issue – matter remanded to AO
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2012 (11) TMI 934
Addition on account of unexplained cash deposit – Held that:- Partners of the assessee firm are also partners of the firm M/s Adarsh Octroi Services, Mumbai - amount of Rs.5,25,000/- each was withdrawn by Shri Rafique Shakur Shekhani and Shri Sayed Rasul Shaikh partners of the firm on 15.4.2005 from their partnership firm M/s M/s Adarsh Octroi Services, Mumbai as per copy of cash book filed and the same amount was deposited by both the partners with the assessee firm on the same date - Rs.2,500/- each was deposited by Shri Rafique Shakur Shekhani and Shri Sayed Rasul Shaikh on 23.2.2006 out of their previous withdrawals from the same firm - partners have proved the source of deposits and in the absence of any contrary material placed on record by the Revenue that there is no such corresponding withdrawals in the firm M/s M/s Adarsh Octroi Services or withdrawals made by the partners of the firm have been utilized for some other purpose and not for making deposits in the assessee’s firm - assessee is not required to prove the source of source – addition deleted
Unexplained cash deposits – Held that:- CIT(A) after examining the regular cash book maintained by the assessee wherein the relevant entries are duly recorded, has accepted the above deposits in the banks accounts - it is not the case of the Revenue that the entries recorded in the cash book are not genuine or the AO has rejected the accounts maintained by the assessee, we hold that the ld. CIT(A) was fully justified in deleting the addition
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