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Showing 41 to 60 of 1719 Records
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2020 (1) TMI 1683
Insurance cover pertaining to goods hypothecated by the appellants with the first respondent under a cash credit facility - HELD THAT:- The terms and conditions of the new policy specifically excluded STFI perils and evidently there was a change in the obligations of the insurer. There was no renewal but the issuance of a new policy. The change in the location of the premises in the present case led to the issuance of a new policy. It was open to the insurer to specifically exclude STFI perils as a commercial decision. The appellants had knowledge of the exclusion of the STFI perils as they were provided with a copy of the policy and also received the refund of the premium. Having lodged no protest with the insurer during 2005-06 or in the renewed term of 2006-07, the insured cannot lay a claim that they had no knowledge that the STFI cover was excluded from the insurance cover. Nothing prevented the appellants from either approaching the insurer or any other insurance company for obtaining a policy that covered STFI perils.
There is no merit in the present appeal - Appeal dismissed.
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2020 (1) TMI 1682
Illegal attachment and withdrawal from bank account by respondents to recover the arrears of VAT dues of another company - recovery merely on the pretext that the proprietor of the petitioner was once an employee of M/s.Shree Ganesh Jewellery House Limited - HELD THAT:- Admittedly, petitioner’s proprietor had submitted another application under VAT Act for registration of the petitioner entity on 01-09-2009, which has been filed by 1st respondent himself showing that the proprietor of the petitioner is dealing with a separate entity and no longer with M/s.Shree Ganesh Jewellery House Limited - There is no material filed by 1st respondent to show that after the petitioner was released by M/s.Shree Ganesh Jewellery House Limited on 01-10-2013, he was associated in any way with the affairs of the said entity.
There is no question of lifting the corporate veil treating that the proprietor of petitioner entity and the assessee M/s.Shree Ganesh Jewellery House Limited as one and the same or as entities which are connected or related - Without any material linking the proprietor of the petitioner with M/s.Shree Ganesh Jewellery House Limited, the bank account of the petitioner cannot be attached by the 1st respondent and the sum of Rs.4,31,210/-, which belongs to the petitioner entity, cannot be adjusted towards the VAT dues of M/s.Shree Ganesh Jewellery House Limited. This action of 1st respondent is patently arbitrary, illegal and violative of Article 300-A of the Constitution of India.
The 1st respondent is directed to refund to the petitioner the sum of Rs.4,39,210/- with interest @ 9% p.a. from the date of such withdrawal till date of it’s payment. The respondent Nos.1 and 4 shall also pay costs of Rs.20,000/- to the petitioner within four (04) weeks - The writ petition is allowed.
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2020 (1) TMI 1681
Murder - Criminal conspiracy - burden to prove the guilt of the Accused persons beyond reasonable doubt - missing links in the circumstances put forward by the Prosecution - failure to complete the chain of circumstances by conclusively establishing that each and every circumstance unerringly pointed to the guilt of the Accused - HELD THAT:- The evidence of the hand writing expert (PW-34) establishes at the highest, that one of the Accused that is A-8, who had no enmity with the deceased, had made entries in and signed the admission register of the Malar Lodge Hotel. The evidence of PW-34, at best proves that A8 may have checked into Malar Lodge Hotel, Karaikudi on 21.6.1990, six months before the incident and nothing more. There could be numerous reasons for A8 to go to Karaikudi. The Prosecution has not been able to satisfactorily explain the gap of over six months between the incident and the date on which the alleged meeting took place at the Malar Lodge.
It is well settled that under the criminal jurisprudence prevalent in this country an Accused is presumed innocent, unless proved guilty beyond all reasonable doubt. As held by this Court in SHIVAJI SAHEBRAO BOBADE VERSUS STATE OF MAHARASHTRA [1973 (8) TMI 160 - SUPREME COURT], "Certainly, it is a primary principle that the Accused must be and not merely may be guilty before a court can convict and the mental distance between 'may be' and 'must be' is long and divides vague conjectures from sure conclusions." For conviction on the basis of circumstantial evidence, the circumstances from which the conclusion of guilt is to be drawn should fully be established. The circumstances should be conclusive. The circumstances established should definitely point to the guilt of the Accused, and not be explainable on any other hypothesis. The circumstances should exclude any other possible hypothesis except the one to be proved.
In SHARAD BIRDHI CHAND SARDA VERSUS STATE OF MAHARASHTRA [1984 (7) TMI 401 - SUPREME COURT] the Supreme Court held that where there is no eye witness to the occurrence and the entire case is based upon circumstantial evidence, the normal principal is that the circumstances from which an inference of guilt is sought to be drawn must be cogently and firmly established; these circumstances should be of a definite tendency, unerringly pointing towards the guilt of the Accused; the circumstances taken cumulatively should form a chain so complete that there is no escape from the conclusion that in all human probability the crime was committed by the Accused and they should be incapable of any explanation or of any hypothesis other than or inconsistent with the guilt of the Accused.
It is well settled, suspicion however strong cannot substitute proof beyond reasonable doubt. Enmity as a result of property related disputes may give rise to suspicion. However, conviction can never be based on suspicion unless the prosecution clearly proves circumstances conclusively and all circumstances proved should only point to the guilt of the Accused. Possibility of any conclusion other than the conclusion of guilt of the Accused would vitiate a conviction.
The burden of proving an Accused guilty beyond all reasonable doubt lies on the prosecution. If upon analysis of evidence two views are possible, one which points to the guilt of the Accused and the other which is inconsistent with the guilt of the Accused, the latter must be preferred. Reversal of a judgment and order of conviction and acquittal of the Accused should not ordinarily be interfered with unless such reversal/acquittal is vitiated by perversity. In other words, the Court might reverse an order of acquittal if the Court finds that no person properly instructed in law could have upon analysis of the evidence on record found the Accused to be 'not guilty'.
The prosecution has miserably failed to establish the guilt of the Accused persons beyond reasonable doubt. There is a strong possibility that the motorcycle which the deceased were riding, might have been hit by an unknown vehicle, killing the deceased. The death may have been accidental. The High Court has rightly set aside the judgment and order of conviction of the Trial Court and acquitted the Accused.
There are no merit in the appeals - appeal dismissed.
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2020 (1) TMI 1680
Money Laundering - proceeds of crime - Burden to proof - conspiracy with other accused, prepared forged documents and records and thereby misused and abused his official position and not only caused financial loss to the Government - HELD THAT:- It is true that at present there may or may not be direct or indirect attempts to indulge the applicant in any process of activity connected with the proceeds of crime, there is no attempt on the part of the applicant to disclose the source of the large sums of money handled by him. There is no denying the fact that allegations have been made that the said money was the proceeds of crime and by depositing or investing the same in his wife's account and in the business of his wife and brother, the applicant has attempted to project the same as untainted money. The said allegations may be the subject matter of final outcome of the trial, but having been made, the burden of proof that the said money is not the proceeds of crime and, therefore, shifted to the applicant under Section 24 of the PML Act, 2002.
The applicant has filed Criminal Revision No. 1129/2018, coaccused Sh. Abrar Baig and Vinod Malewar have filed CRR Nos. 898/2018 and 816/2018 respectively, which are still pending consideration. Earlier, in Scheduled Offence, the present applicant was granted bail by this Court on 23.08.2019 and in the present bail application, the applicant is facing charge under the PML Act. Though, according to the medical documents, the applicant is suffering from serious physical ailment but no such document is there on record which could establish that he is suffering from any life threatening disease. He was granted temporary bail for 20 days by this Court for quality treatment of his disease.
Taking into consideration the entire circumstances of the case, judicial pronouncement of Supreme Court in Rohit (supra), gravity of offence and further considering the fact that the applicant is a Govt. Servant (In-charge Executive Engineer, Water Resources Department) and the manner in which the public money is alleged to have been laundered by the applicant, bail cannot be granted.
The application filed under Section 439 of the Code of Criminal Procedure is rejected.
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2020 (1) TMI 1679
Classification of services - Rent-a-Cab service or not - renting of buses to ONGC for transportation of staff by the appellant who is Gujarat State Road Transport Corporation - it was held that State Transport Corporation cannot be treated as Rent-a-Cab operator - HELD THAT:- Appeal admitted.
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2020 (1) TMI 1678
Valuation of imported goods - Sartorius brand of Electronic Balances - undervaluation - NIDB data of contemporaneous imports - It was held by CESTAT that There is no evidence brought on record by the Revenue that appellant has paid any amount over and above invoice price shown at the time of clearance of the impugned goods - HELD THAT:- There are no reason to interfere with the impugned order. The Civil Appeal is accordingly dismissed.
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2020 (1) TMI 1677
Addition of income - non discharge of liability with regard to the purchase by the appellant from M/s.Mars Export and added 16.5 Crores as additional income - Though the appellant has filed assessment, taking note of the discharge of the liability in respect of the property purchased assessment officer added 16.5 Crores as income - HELD THAT:- As brought to the notice of this Court that in assessee's own case [2018 (12) TMI 1595 - MADRAS HIGH COURT], this Court had set aside the common order passed by the Income Tax Appellate Tribunal and remanded the matter to the Tribunal.
Following above the order of the Appellate Tribunal is set aside and the matter is remanded back to the ITAT to consider the case afresh after hearing the parties along with other cases.
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2020 (1) TMI 1676
Maintainability of appeal - time limitation - HELD THAT:- As the appeal is barred by limitation having filed after about 210 days, there are no reason to interfere with the appeal.
The appeal is dismissed being not maintainable and barred by limitation - liberty given to the Appellant to move intervention application in the appeal, if any pending, against the impugned order dated 23rd April, 2019.
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2020 (1) TMI 1675
Exemption u/s 11 & 12 - deduction of corpus donations disallowed on the ground that audit report in Form 10B was not filed along with the return of income - assessee filed rectification petition u/s 154 and had enclosed audit report in Form 10B - AO rejected the same on the ground that, the audit report was not attached with the return of income - HELD THAT:- As per CBDT Circular vide No. 10[F.NO.197/55/2018-ITA-I] held the delay in filing of Form no. 10B for the AY 2016-17 should have been condoned by the AO or by the ld. CIT(A) and the benefit should have been granted to the assessee.
Thus we condone the delay in filing Form No. 10B and delete the addition made of corpus donations - Appeal of the assessee.
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2020 (1) TMI 1674
Dishonour of Cheque - validity of legal demand notice - demand has been made over and above the cheque amount - invocation of revisional jurisdiction of the Court of Sessions - HELD THAT:- Upon analyzing the provisions of the NI Act, it is clear that Section 138 of the Act spells out the ingredients of the offence as well as the conditions required to be fulfilled before initiating the prosecution - These ingredients and conditions are to be satisfied mainly on the basis of documentary evidence, keeping in mind the presumptions under Sections 118 and 139 of the NI Act and Section 27 of the General Clauses Act, 1897 as well as the provisions of Section 146 of the Act.
The provisions of Sections 142 to 147 lay down a Special Code for the trial of offences under the Chapter XVII of the N.I. Act. While considering the scope and ambit of the amended provisions of the Act, the Supreme Court in Mandvi Co. Op. Bank Ltd. v. Nimesh B. Thakore, [2010 (1) TMI 570 - SUPREME COURT], has held that the provisions of Sections 143, 144, 145 and 147 expressly depart from and override the provisions of the Cr.P.C., the main body of adjective law for criminal trials.
The parameters of the jurisdiction of the High Court, in exercising jurisdiction under Section 482 Cr.P.C., are now almost well-settled. Although it has wide amplitude, but a great deal of caution is also required in its exercise. The requirement is, the application of well known legal principles involved in each and every matter - the defence as raised by the petitioners in the petition requires evidence, which cannot be appreciated, evaluated or adjudged in the proceedings under Section 482 of Cr.P.C. The petitioners, therefore, cannot be allowed to take recourse to section 482 Cr.P.C. as a substitute for initiating second revision petition when there is nothing to show that there is serious miscarriage of justice or abuse of the process of law.
There are no flaw or infirmity in the proceedings pending before the Trial Court. However, the Trial Court shall certainly consider and deal with the contentions and the defence of the petitioners in accordance with law - appeal disposed off.
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2020 (1) TMI 1673
Validity of Revision u/s 263 when original assessment itself passed u/s 147/143(3) was bad in law and ab-initio-void - reopening beyond period of four years with no approval of the Commissioner or authorities specified in Section 151(1) - assessee argued as AO desires to reopen after the expiry of a period of four years from the end of the relevant assessment year, he could have issued notice u/s 148 of the Act only after taking approval from either Pr. Chief Commissioner or Chief Commissioner or Pr. Commissioner or Commissioner - HELD THAT:- As per sub-Section (1) of Section 151, no notice could have been issued u/s 148 of the Act by an AO, after the expiry of four years from the end of relevant assessment year unless the Pr. Chief Commissioner or Chief Commissioner or Pr. Commissioner or Commissioner is satisfied, on the reasons recorded by such AO, that it is a fit case for issue of such notice
When the statute mandates the satisfaction of a particular functionary/authority for the exercise of a power, the satisfaction must be of that authority. So since the satisfaction/approval is not of any of the authorities given in sub-Section (1) of Section 151 of the Act, the notice issued by AO u/s 148 of the Act is without jurisdiction as a consequence the re-assessment framed by AO is null in the eyes of law and bad in law.
Since the re-assessment order itself is bad in law and is non-est in the eyes of law, since the AO could not have issued the notice intimating the reopening u/s 148 without the approval of the Commissioner or authorities specified in Section 151(1) of the Act, the AO does not have the jurisdiction to issue the notice u/s 148 of the Act. Therefore the AO’s order itself is without jurisdiction and is null in the eyes of law.
Thus impugned order of the Pr. CIT which is challenged before us is admittedly stemming from the order of the AO which we have already held to be null in the eyes of law. Therefore all consequential action on the basis of the order of AO is also null in the eyes of law. This is based on the legal maxim “Sublato Fundamento Credit Opus” meaning in case a foundation is removed, the super structure falls.
In Badrinath Vs. TamilNadu[2000 (9) TMI 1044 - SUPREME COURT] as held that once the basis of proceedings is gone all consequential order and acts would fall in the ground automatically which is applicable to judicial and quasi judicial proceedings. Decided in favour of assessee.
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2020 (1) TMI 1672
CENVAT Credit - Outward GTA Service - period January 2005 to June 2007 - HELD THAT:- Reliance placed in Circular No. 1065/4/2018-CX dated 08.06.2018 and the case of M/S ULTRATECH CEMENT LTD. VERSUS C.C.E. KUTCH (GANDHIDHAM) [2019 (2) TMI 1487 - CESTAT AHMEDABAD] and M/S SANGHI INDUSTRIES LTD. VERSUS C.C.E. KUTCH (GANDHIDHAM) [2019 (2) TMI 1488 - CESTAT AHMEDABAD] where it was held that The Appellants are eligible for the cenvat credit of service tax paid on outward freight.
The matter needs to be reconsidered afresh, considering the above judgment, Board Circular and facts of the present case - appeal allowed by way of remand to the Adjudicating Authority for passing a fresh Order.
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2020 (1) TMI 1671
Forfeiture of Gratuity - Moral turpitude - whether such an act, which was proved in a departmental enquiry by the petitioner would constitute an offence involving moral turpitude, justifying forfeiture of gratuity under Section 4(6)(b)(ii) of the Payment of Gratuity Act, 1972? - HELD THAT:- The standing orders obviously cannot be referred to find the definition of the expression “offence”. In the Code of Criminal Procedure, 1973, “offence” means any act or omission punishable by any law for the time being in force. The question is whether the findings rendered in departmental enquiry conducted by the petitioner (employer) would be enough to conclude that the act of the respondent No. 2, which stood proved and led to the termination of his service, constitutes an “offence” involving moral turpitude. The answer has to be in the negative, because whether an act constitutes an offence can be decided only by a Competent Court. This is because, whether the material on record and acts attributed to a person indicate the ingredients of an offence would have to be judged on the basis of proceedings under criminal jurisprudence.
The further question as to whether such an offence involves moral turpitude could perhaps be in the domain of a proceeding other than that under criminal jurisprudence, but what would constitute an offence, could certainly not be within the purview of departmental enquiry or any such enquiry by an employer.
A perusal of the judgment of the Hon’ble Supreme Court in the case of Union Bank of India and Others Vs. C.G. Ajay Babu and another [2018 (8) TMI 934 - SUPREME COURT] shows that in the opening paragraph the question framed for consideration was, whether forfeiture of gratuity under the Payment of Gratuity Act, 1972, is automatic on dismissal from service. In the process of deciding this specific question and upon hearing the counsel, the Hon’ble Supreme Court examined whether Section 4(6)(b)(ii) of the said Act would apply in the case before it and then laid down the law as quoted above - Hence, it becomes very clear that the Hon’ble Supreme Court did lay down its opinion regarding Section 4(6) (b)(ii) of the said Act, while deciding the specific question framed in the facts and circumstances of that case. Therefore, the said opinion of the Hon’ble Supreme Court is binding on this Court.
There is no substance in the present writ petition and accordingly, it is dismissed.
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2020 (1) TMI 1670
Seeking a declaration that the mandate of the Arbitrator appointed by the respondent be terminated and an Arbitrator be appointed by this Court in accordance with the provisions of the Act - eligibility of the "Company" referred to in the Arbitration Clause between the parties, to unilaterally appoint a Sole Arbitrator to adjudicate the disputes between the parties.
The principle contention of the petitioner is that in view of the recent judgment of the Supreme Court in the case of Perkins [2019 (11) TMI 1154 - SUPREME COURT], the 'Company' as provided in the Arbitration Clause between the parties herein cannot unilaterally appoint an Arbitrator.
HELD THAT:- This Court finds merit in the contention of the petitioner. Supreme court in the case of Perkins [2019 (11) TMI 1154 - SUPREME COURT] was concerned with an Arbitration Clause wherein the CMD of the respondent was designated to appoint a Sole Arbitrator. Supreme Court after examining the said clause held that there could be two categories of cases, one where the Managing Director himself is made as an Arbitrator with an additional power to appoint any other person as an Arbitrator and the second where the Managing Director is not to act as an Arbitrator himself but is empowered to appoint any other person of his choice or discretion as an Arbitrator.
The Supreme Court in the case of Perkins [2019 (11) TMI 1154 - SUPREME COURT] thus relying on the rationale of the decision in TRF Limited [2017 (7) TMI 1288 - SUPREME COURT] observed that if the test is the interest of the Appointing Authority in the outcome of the dispute then similar ineligibility would always arise even in the second category of cases. It was observed that if the interest that the authority has in the outcome of the dispute is taken to be the basis for possibility of bias, it will always be present irrespective of whether the matter stands under the first or the second category of cases. The Supreme Court also significantly noted that they were conscious that if such a deduction was drawn from the decision in TRF Limited, in all cases with similar clauses, a party to the agreement would be disentitled to make a unilateral appointment.
Following the ratio of the judgment in the case of Perkins, it is clear that a unilateral appointment by an authority which is interested in the outcome or decision of the dispute is impermissible in law. The Arbitration Clause in the present case empowers the company to appoint a Sole Arbitrator. It can hardly be disputed that the 'Company' acting through its Board of Directors will have an interest in the outcome of the dispute. In the opinion of this Court, the clause is directly hit by the law laid down in the case of Perkins and the petition deserves to be allowed.
The Arbitration Clause empowering the 'Company' to appoint the Sole Arbitrator in the present case would be vitiated in the light of the law laid down by the Supreme Court in the case of Perkins. As a corollary to that, the ineligibility of the Company would translate and percolate to the Arbitrator appointed by the Company and thus the Arbitrator presently conducting the arbitration proceedings is declared to be ineligible to act as an Arbitrator - Since the present Arbitrator has become de jure unable to perform her functions as an Arbitrator, the mandate of the present Arbitrator is terminated, substituting by another Arbitrator.
Petition allowed.
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2020 (1) TMI 1669
Revision u/s 263 by CIT - Estimation of income on bogus purchases - AO added 3% as possible profit on the alleged purchases over and above the GP rate 4.63% shown by the assessee - HELD THAT:- It is a settled position in law that provisions of sec. 263 of the Act do not permit substituting one opinion by another opinion. Therefore, the order of C.I.T. cannot be sustained on the principle of ‘erroneous’ nature of the order of the A.O., as it is not erroneous. Further, in the instant case, to reiterate, there was no allegation by the Ld. revenue authorities that the evidences produced were fictitious or invented, thus accepted the authenticity of the same. Such an order cannot be called erroneous and prejudicial to interests of revenue only because the A.O. made the assessment without discussing such details therein, as held by the Coordinate Bench of ITAT Kolkata in the case of Chroma Business Ltd. vs. DCIT [2003 (10) TMI 256 - ITAT CALCUTTA-C]
The assessee produced all necessary details of purchases, sales, audited books of account, quantity details as mentioned above. The assessee books of accounts were audited by Chartered Accountant. Quantity details were given in respect of opening stock, purchases, sales, closing stock
AO did estimate and further added 3% as possible profit on the alleged purchases over and above the GP rate 4.63% shown by the assessee in the audited books of account. The quantity details shown by assessee in the audit report reflects sales quantity 4,64,632 Kg and corresponding purchases 4,30,650 Kg. No discrepancy was found between purchase shown by assessee and the sales declared. Purchase cannot be rejected without disturbing the sales. Recognized principle of accountancy and tax jurisprudence hold that no sales can take place without purchase.
AO has passed order consciously after applying his mind after conducting the enquiry and added further 3% on bogus purchase over and above GP rate 4.63% declared by the assessee inclusive of the said purchase.
Thus we are of the view that revisionary jurisdiction exercised by the Ld. Pr. C.I.T. u/s. 263 of the Act was not in tune with the facts and evidences on record duly explained to the Ld. A.O. and verified by him and that being so the order passed u/s. 263 of the Act on such erroneous stand is liable to be quashed as per law - Decided in favour of assessee.
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2020 (1) TMI 1668
Employee Stock Option Scheme Compensation - disallowance u/s 37(1) - AO disallowed the above expenditure holding that above expenditure is not a revenue expenditure, it is not an actual expenditure incurred by the assessee company, Sebi guidelines are not the prerogative for determining the eligibility or otherwise often item for income tax purposes, the shares were the capital of the assessee company and loss to the capital can be considered as a capital loss and not revenue expenditure - CIT(A) deleted addition - HELD THAT:- CIT(A) correctly allowed the claim of the assessee as following the decision in assessee’s own case by his predecessor [2015 (8) TMI 319 - ITAT DELHI], [2016 (6) TMI 1481 - ITAT DELHI] and [2019 (1) TMI 1401 - ITAT DELHI] and following the decision of the honourable mother High Court in case of PVP ventures Ltd [2012 (7) TMI 696 - MADRAS HIGH COURT] which held that such a liability is an ascertained liabilities and the issue is squarely covered by the decision of the coordinate bench in case of Biocon Ltd. [2013 (8) TMI 629 - ITAT BANGALORE] Decided against revenue.
Disallowance u/s 14A - as per CIT(A) as assessee has computed the disallowance in revised return only taking those investments which had earned exempt income during the year. He found same to be in order and restricted the disallowance to that extent - HELD THAT:- On careful consideration of the order of the learned CIT(A), it is noted that he has held that only those investments on which dividend income is received during the year should be considered for the purpose of working out average investment for computation of disallowance under rule 8D in accordance with section 14 A of the act. The above view has been upheld in case of ACB India Ltd [2015 (4) TMI 224 - DELHI HIGH COURT] In view of this we do not find any infirmity in the order of the learned CIT – A accordingly, ground number two of the appeal is dismissed.
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2020 (1) TMI 1667
Issue of the Non-Convertible Debentures (NCDs) without complying with the listing provisions - Liability of directors - 'officer in default' - As decided by tribunal in the absence of any document to show that any director was specified as per Clauses (a) to (c) of Section 5 of the Companies Act or any valid document to show that any person was authorized by the Board of Directors, the appellant cannot escape the liability as per Clause (g) of Section 5 of the Companies Act - HELD THAT:- We find no ground to interfere with the impugned order(s) passed by the Tribunal. These appeals are, accordingly, dismissed.
Pending application(s), if any, shall stand disposed of.
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2020 (1) TMI 1666
Validity of reopening of assessment u/s 147 - reasons to believe - Borrowed satisfaction - AO received information from ITO(hq.) (tech) O/o Pr. Commissioner of Income Tax-1 Jalandhar - whether on the basis of the reasons recorded by the AO to reopen the assessment it can be said that AO on the basis of whatever material before it, had reasons which he had indicated in his “reasons recorded” which warrant holding a belief that income chargeable to tax has escaped assessment? - HELD THAT:- The reasons recorded by AO to reopen has to be evaluated on a stand-alone basis and no addition/extrapolation can be made or assumed while adjudicating the legal issue of AO’s usurpation of jurisdiction u/s. 147 of the Act. From the reasons already set out above and from the gist of the reasons recorded by the AO, we understand that the AO received information from ITO(hq.) (tech) O/o Pr. Commissioner of Income Tax-1 Jalandhar. After getting the information from the ITO(hq.) (tech) O/o Pr. Commissioner of Income Tax-1 Jalandhar, the AO should apply his mind and to examine based on this information that income has escaped assessment. In this case AO has not applied his mind and it is a borrowed satisfaction only.
We note that reasons recorded by AO are only on the basis of information from the ITO(hq.) (tech) O/o Pr. Commissioner of Income Tax-1 Jalandhar. Based on this information the AO ought to have conducted further enquiry to examine whether there is tangible material which suggests that income has escaped assessment, which he has not done, therefore based of the borrowed satisfaction he has reopened the assessment. The reasons should be recorded standalone basis and not on the basis of borrowed satisfaction.
It is clearly evident from the reasons recorded by the Assessing Officer that there was actually no reason for him to have formed a belief about the escapement of any income of the assessee from the assessment, but the assessment was reopened by him to verify or to conduct further enquiry or to examine certain particulars furnished by the assessee in the return of income.
We note that the information given by the ITO(hq.) (tech) O/o Pr. Commissioner, can only be a basis to ignite/trigger “reason to suspect” for which reopening cannot be made for further examination to be carried out by him in order to strengthen the suspicion to an extent which can form the belief in his mind that income chargeable to tax has escaped assessment. No quantification of income escaping assessment has been spelt out by the AO in the reasons recorded for justifying reopening u/s. 147 of the Act. It has to be kept in mind that merely on an allegations leveled by the ITO(hq.) (tech) O/o Pr. Commissioner, can only raise suspicion in the mind of the AO which is not the sufficient/requirement of law for reopening of assessment. The ‘reasons to believe’ is not synonymous to ‘reason to suspect’.
‘Reason to suspect’ based on an information can trigger an enquiry to find out whether there is any substance or material to substantiate that there is merit in the information adduced by the ITO(hq.) (tech) O/o Pr. Commissioner, and thereafter the AO has to take an independent decision to re-open or not. And the AO should not act on dictate of any other authority (like in this case information given by the ITO(hq.) (tech) O/o Pr. Commissioner), because then it would be borrowed satisfaction.
AO failed to quantify the escapement of income in the reasons recorded. The AO is a quasi judicial authority empowered to reopen the completed assessment only in a given case wherein there is reason to believe escapement of chargeable income to tax which is the jurisdictional fact and sine qua non to assume jurisdiction to reopen a completed assessment. It must be kept in mind that reasons to believe postulates foundation based on information and belief based on reason. Even if there is foundation based on information there must be some reason warrant holding the belief that income chargeable to tax has escaped assessment.
Thus we find that the reasons recorded by the AO to justify reopening the assessment u/s. 147 fails and, therefore, the very assumption of jurisdiction to reassess the assessee fails and therefore, we quash the reopening and consequent reassessment order framed by him. Appeal of assessee allowed.
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2020 (1) TMI 1665
Addition u/s 68 - disallowance of losses to be bogus since involving alleged client code modification made by the broker - HELD THAT:- As decided in KUNDAN INVESTMENT LTD. [2003 (3) TMI 62 - CALCUTTA HIGH COURT] impugned loss claimed by assessee is genuine loss in the above facts and circumstances of the case and therefore eligible for deduction.
The impugned unexplained cash credit addition is not sustainable in the facts of the present case. The same is directed to be deleted. Decided in favour of assessee.
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2020 (1) TMI 1664
Assessment of trust - exemption u/s 11 - Claim for accumulation of income rejected - Form-10 had not been furnished along with the return but was filed during the course of the assessment proceedings - as decided by HC [2013 (1) TMI 317 - DELHI HIGH COURT] while reopening of an assessment cannot be asked for by the assessee on the ground that he had not furnished the Form-10 during the original assessment proceedings, this does not mean that when the revenue re-opens the assessment by invoking Section 147 the assessee would be remediless and would be barred from furnishing Form-10 during those assessment proceedings, question answered in favour of the assessee - HELD THAT:- Learned counsel for the appellant, on instructions, issued by the Department of Revenue, Ministry of Finance vide F. No.390/Misc./116/2017-JC dated 22.08.2019, seeks permission to withdraw this appeal along with pending applications therein due to low tax effect.
Permission granted, subject to just exceptions.
The appeal and pending applications are dismissed as withdrawn, leaving question of law open.
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9911796707
