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Showing 41 to 60 of 1271 Records
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2015 (6) TMI 1240
Recognition of income - Disallowance of retention money - HELD THAT:- As relying on own case [2015 (4) TMI 1344 - ITAT AHMEDABAD] set aside the orders of the authorities below and restore this issue to the file of the AO for reconsideration of the same in the light of the above decisions cited by the learned Counsel for the assessee. The AO shall also verify the details filed by the assessee on this issue and shall pass reasoned order in accordance with law by giving reasonable sufficient opportunity of being heard to the assessee.
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2015 (6) TMI 1239
Addition towards trade advance written off - as per AO claim of the assessee cannot be treated as debt arose during the regular course of business and the same cannot be allowed for deduction under section 36(1)(vii) - Whether outstanding from Century Wood Limited is, whether the advance is capital loss or business loss? - HELD THAT:- There is nothing on record that the assessee has received wood frame from Century Wood Limited. The assessee has also not explained the reasons for advancing various amounts in different dates when the assessee has not received any materials from Century Wood Limited. It is not the case of the assessee that the assessee is required the material.
Therefore, from the business necessity or business requirement, the advances were made. If it is so and if it business requirement, the assessee ought to have been purchased the materials from some other company. The assessee has not able to prove that the advances made by the assessee are for the purpose of business. The assessee itself noted in the ledger account that the amount was receivable from Century Wood Limited and interests were charged as on 31.03.2001 and the entire amount receivable as on 31.03.2001 was a loan. Once the assessee itself treated it as loan, now it cannot be said that it is a trade advance. The assessee has not able to produce any material to show that it is a trade advance - we hold that the claim of the assessee cannot be allowed as trade advance and the same was rightly treated by the Assessing Officer as capital loss, which was confirmed by the ld. CIT(A).
Alternative ground raised by the assessee that under section 37 of the Act it is a business loss - We find that the assessee is not in the business of money lending. The assessee also not able to explain as to why it has advanced various amounts in different dates and it has not able to correlate the amount given and the material i.e. wood frame the assessee wanted to purchase from Century Wood Limited. Under these circumstances of the case, we are of the opinion that it is not relating to the business of the assessee and it is only a capital loss. Accordingly, the alternative ground raised by the assessee is rejected.
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2015 (6) TMI 1238
Assessment u/s 153A r.w.s. 144 - Period of limitation - Validity of special audit u/s 142A - assessments made in the period specified u/s 153B - special audit was ordered by AO giving 45 days time for the assessee to get the books audited and furnish the audit report - when the said audit report was not furnished by the assessee, AO suo motu extended the period vide his letter dated 10.3.2008 by giving another 135 days time totalling to 180 days permitted maximum time under the statute - HELD THAT:- As considered the submissions of the ld. DR in regard to the nature of amendment to proviso to section 142(2C) of the Act. In our opinion, the said amendment relates to the suo motu powers of the AO in extending due dates in matters relating to special audit. We do not want to go into this issue of suo motu powers of the Assessing Officer as it becomes an academic exercise considering the submissions of the ld. Counsel relating to the ordering for special audit after the assessments have already time barred on 31.12.2007.
Therefore, on hearing both the parties and going through the chronology of the dates and the manner of computing time limitations in the form of charts furnished which are made part of this order, we are of the view that the direction of the Assessing Officer for special audit was served on the assessee on 25.1.2008 which must be considered for the purpose of computing the limitation of time in making assessment. In that case, the direction of the Assessing Officer was subsequent to the expiry of the due date for making assessment.
Also without prejudice, even if the date 25.1.2008 considered by the Assessing Officer as the date of service of the direction and not 28.1.2008 as considered by the CIT(A), is taken into account, still the assessments were not made in the period specified u/s 153B of the Act. Accordingly, from all these points of view, we are of the opinion that the assessments made by the Assessing Officer for all these five assessment years uniformly on 24.9.2008 are bad in law. Thus, this part of Ground No.2 in all the appeals are allowed in favour of the assessee.
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2015 (6) TMI 1237
Deduction u/s 80P(2)(a)(i) - assessee is a cooperative society engaged in providing credit facilities to its members - HELD THAT:- It is also undisputed that the assessee is not a cooperative bank - We find that in the present case the assessee has contended before the Assessing Officer that it deals only with its members and accepts deposits and gives loans only to its members. This has not been disputed by the AO - Accordingly in the background of above discussion and precedent, we do not find any infirmity in the order of learned CIT(Appeals). Accordingly, we uphold the same.
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2015 (6) TMI 1236
Computation of capital gain - computing the value of the flat as beyond the value adopted by the Stamp Valuation Authorities - Whether CIT(A) is erred in restricting the addition of ₹ 70 lakhs made by the Assessing Officer as long term capital gains and not appreciating the facts that the stamp duty valuation at ₹ 30.03 Lakhs did not pertain to the valuation of the said two flats received by the assessee from the developer? - HELD THAT:- To file an appeal the power is not given to the AO but it is vested in the Commissioner of Income Tax to give authorisation to the AO to file an appeal which has to be done with utmost sincerity and with an open mind. In the instant case the appeal appears to have been filed in a routine fashion in as much as the AO has no basis for valuing each flat at ₹ 35 lakhs, which is more than double the value adopted by the Stamp Valuation authorities. Even as on date the valuation report has not been obtained from the DVO.
Under these circumstances it is difficult to fathom as to how a responsible officer such as Commissioner of Income Tax has approved the request of the AO to prefer an appeal against the order of the CIT(A). We take this opportunity to advice all the Commissioners not to grant authorisation in cases where there is no chance of winning an appeal. In fact we called for the record to verify as to the reasons given by the AO which might have prompted the learned Commissioner to give his authorisation. The record was not made available to us. Be that as it may, in the peculiar facts and circumstances of the case the AO has not made out any case under section 50C of the Act or under any other provisions of the Act to make an addition whereas the learned CIT(A) has given cogent reasons to delete the addition on both the counts. We, therefore, approve the order passed by the CIT(A) and dismiss the appeal filed by the Revenue.
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2015 (6) TMI 1235
CIT-A deciding the appeal exparte - Denial of natural justice - Unexplained deposits in the bank accounts - Addition applying the provisions of Section 69 - HELD THAT:- As per the order of the Ld. CIT(A), notice for hearing of the case was issued to the assessee on 26/09/2012, fixing the case for hearing on 07/11/2012. The notice issued on 26/09/2012 was received back as ‘unserved’ by the office of CIT(A) on 01/11/2012. Thus, it is clear that notice issued on 26/09/2012 was never served upon the assessee. CIT(A) should have issued another notice to the assessee informing him about the date of hearing. CIT(A) observed that on 01/11/12 she herself informed the assessee’s counsel Sh. Arvind Mehta about the date of hearing telephonically
In our opinion the said action of the Ld. CIT(A) is not proper and in accordance with law, and she has passed an exparte order on 09/11/2012 in a hurry. From the impugned order, it can safely be held that she has not afforded adequate opportunity of being heard to the assessee before deciding the appeal.
It is well settled law that a right of appeal wherever conferred includes a right of being afforded an opportunity of being heard, irrespective of the language conferring such right. That is a part and parcel of the principle of natural justice. Where an authority is required to act in a quasi-judicial capacity, it is imperative to give the appellant an adequate opportunity of being heard before deciding the appeal. Considering the entire facts and circumstances in the present case, we think it appropriate to set aside the order of Ld. CIT(A) in toto and remand the matter to the AO with a direction to decide the issues afresh on merits - Appeal of the assessee is allowed for statistical purposes.
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2015 (6) TMI 1234
Seeking grant of bail - allegation is that some miscreants under the leadership of the opposite party assaulted the companions of the prosecution witnesses including one Arvind Singh outside the court room immediately after closure of court proceedings of the said criminal case - HELD THAT:- The opposite party threatened the Investigating Officer of the case and led the miscreants to physically assault the companions of the de facto complainant and the prosecution witnesses outside the court room on 19th February, 2015 and thereby he violated the condition of bail imposed on him and also blatantly misused the liberty granted to him by the court. This is not a case where the State has prayed for cancellation of bail on the ground that the order is unjustified or illegal or perverse. This is a case where the State has prayed for cancellation of bail of the accused who misused the liberty and who violated the condition of bail and who misconducted himself after obtaining bail.
The bail granted to the opposite party in connection with Hastings Police Station Case No. 9 of 2014 dated 06.01.2014 under Sections 341/323 of the Indian Penal Code read with Section 3(1)(x) of the Scheduled Casters and Scheduled Tribes (Prevention of Atrocities) Act, 1989 is hereby cancelled with immediate effect. The opposite party is directed to surrender before the trial court within a period of three days from the date of this order in default, the trial court is at liberty to issue warrant of arrest for committing the opposite party to custody during the trial of the case.
Application disposed off.
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2015 (6) TMI 1233
Acquisition of suit property under notification dated 13.4.1964 - interference to the possession or not - principles of constructive res-judicata - principles of estoppels, acquiescence and waiver - time limitation - Whether the present suit by the BDA was barred on the doctrine of res judicata? - HELD THAT:- The defendant in the earlier proceedings was at best seeking to protect his possession, while claiming under a lease deed executed by the BDA. He was not competent to represent the lessor nor was in a position to remove any doubts created about the validity of the acquisition proceedings, whether the recommendation by the CITB was acted upon, withdrawn from the acquisition proceedings and whether the acquisition proceedings had been completed in all respects. The presumption on his part would naturally be that BDA had valid title in putting him in possession as a lessee. He was certainly not an agent of the BDA. It cannot hence be said that the present suit was between the same parties or anybody claiming under the earlier party. In so far as the BDA was concerned, the defendant in the earlier suit may have been claiming under it, the BDA was certainly not claiming under him. To place them on par as one having adequately represented the other, does not stand to reason or the law. The suit was not barred as being res judicata.
Whether the BDA was bound by the judgment and decree in OS. No. 554/1981? - HELD THAT:- It is significant that the trial court had arrived at a categorical finding that the BDA was not a necessary party to the suit. When it was BDA that could claim as the owner of the property and the defendant in the said suit was only a lessee in occupation with a limited right. The lessee was hardly competent to represent the BDA or the CITB, against whom the trial court was in effect granting relief in favour of the plaintiffs. Any such finding which had the effect of effacing the right, title and interest of the BDA, to the property in question, without the BDA being made a party to the suit, would not bind the BDA - The fact that two witnesses had appeared on behalf of the BDA to produce certain records pertaining to the suit schedule property, in the course of the suit, cannot be construed as being akin to the BDA having been privy to the proceedings and having been in a position to plead its case or contest the claim of the plaintiffs. Those witnesses were representing BDA for the limited purpose of producing records, pursuant to a witness summons. They were not even shown to be the authors of any of the documents so produced and marked.
Whether the judgment and decree in OS 554/1981 could not be challenged by the BDA, as not binding it? - HELD THAT:- The present suit having been filed immediately thereafter, was certainly maintainable. It may be that in a proceeding, as between parties who were before the apex court, even if erroneous findings have been arrived at and affirmed, such parties would not be in a position to re-open the matter on other and more relevant material, albeit neither considered or brought to the attention of the court. But that embargo would not apply to one who was not a party to the earlier proceeding and is in a position to demonstrate that there were legal impediments to the very maintainability of the suit, apart from demonstrating that he is the party actually affected. As is the BDA, in the present circumstances.
Whether the suit by the BDA was barred by limitation? - HELD THAT:- A contention that a cause of action arose to the BDA immediately on the BDA becoming aware of the controversy and claim raised by the plaintiffs in OS 554/1981, may not be an acceptable reason for the court below in having come to a conclusion that the BDA did have such knowledge and hence ought to have filed a suit immediately and that the suit filed in the year 2008 being barred by limitation is not tenable. A cause of action arose only when the judgment and decree became final and the possibility of the BDA being deprived of the property loomed large.
Whether the want of jurisdiction in the civil court, to test the validity of compulsory acquisition proceedings, was ever present to the mind of the trial court or the appellate courts in the earlier proceedings and the trial court in the present suit? - HELD THAT:- A decision which is not express and is not founded on reasons nor it proceeds on consideration of issue cannot be deemed to be a law declared to have a binding effect as is contemplated by Article 141. Uniformity and consistency are core of judicial discipline. But that which escapes in the judgment without any occasion is not ratio decidendi - Any declaration or conclusion arrived without application of mind or preceded without any reason cannot be deemed to be declaration of law or authority of a general nature binding as a precedent. Restraint in dissenting or overruling is for sake of stability and uniformity but rigidity beyond reasonable limits is mimical to the growth of law.
The trial court as may be seen from the tenor of the judgment and by the extensive reference to case law, has proceeded to place reliance on the same in affirming the findings arrived at earlier, as if it was a court exercising writ jurisdiction, in addressing the infirmities, if they could be so construed, in so far as the acquisition proceedings are concerned - The trial court has hence erred in placing reliance on the findings arrived at earlier and in not addressing the suit by the BDA in its proper perspective.
Appeal allowed - decided in favor of appellant.
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2015 (6) TMI 1232
Unexplained investment (in terms of excess stock of jewellery) - determination of the excess stock - whether the Learned CIT(Appeals) was justified in computing the undisclosed stock in the manner stated in its order? - HELD THAT:- The methodology adopted by the Learned CIT(Appeals) is correct for determining the value of the undisclosed stock and the computation done by the Assessing Officer to determine the value of undisclosed stock is not correct one. For the purpose of making addition on account of undisclosed stock, first the quantity/weight of such undisclosed stock has to be determined and then market value of this undisclosed stock is to be added as income. Accordingly, ground No. 2 of the appeal of the Revenue is rejected.
Valuation done by the approved valuer as on the date of search - HELD THAT:- On going through this letter and also the discrepancy pointed out by the Learned AR in the two valuations, there appears to be some differences in the valuation carried out on the date of search. The Learned CIT(Appeals) has considered this issue and has held that the departmental valuer had properly considered the quantity, rate of gold jewellery and other precious stones at the time of the search operation and valued it accordingly. On the basis of these findings, he has rejected the contention of the assessee regarding the defects in the valuation. Considering the overall facts and circumstances of the case and the fact that this valuation was done on the date of search, when stock was physically examined, we do not see any reason to deviate with the findings given by the Learned CIT(Appeals) on this issue. In result, ground Nos. 3 and 4 of the assessee's appeal are rejected.
Offering Undisclosed income for taxation - HELD THAT:- CIT(Appeals) was not correct in not giving credit of the jewellery acquired out of the income offered by Mr. Sanjiv Kumar Aggarwal and we thus direct the Assessing Officer to allow credit of the jewellery to the extent of 18,548.448 grams contributed by its director Mr. Sanjiv Kumar Aggarwal while computing the valuation of the undisclosed stock as on the date of the search.
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2015 (6) TMI 1231
Disallowance on account of labour charges, sundry creditors and transport charges - Non rejection of books of accounts - HELD THAT:- Disallowances have been made out of the profit and loss account on adhoc basis. But the AO has not rejected the books of account. Without invoking the provisions of section 145(3) of the Act and without pointing out any defect in the labour charges, purchases and transport charges claimed, the AO cannot make any addition on adhoc basis. CIT(A) has also not taken care of this aspect.
Without invoking the provisions of section 145(3) of the Act and without pointing out any defect in the books of account, no estimation of profit and no disallowance on account of expenses can be made and accordingly addition made by the AO are directed to be deleted. Accordingly the order of the ld. CIT(A) is also reversed to the extent of the additions so sustained. Grounds of assessee’s appeal are allowed
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2015 (6) TMI 1230
Deduction u/s 80P(2)(d) - Application of provisions 14A for computing the deduction under section 80P(2)(d) - CIT (Appeals) who after considering the provisions of section 14A of the Act as well as section 57 directed AO to compute the quantum of deduction admissible to the assessee un/s 80P(2)(d) by taking into consideration only the expenses incurred by way of commission /remuneration paid to the banker or any other person for realizing such dividend and expenditure incurred wholly and exclusively for earning of the dividend and interest income - assessee contended before the learned CIT (Appeals) that the provisions of section 14A of the Act could not be applied while computing the deduction under section 80P(2)(d) - CIT (Appeals) dismissed the appeal of the assessee being not maintainable against the appeal effect order passed by the AO - HELD THAT:- CIT (Appeals) has not issued any direction to the Assessing Officer for applying the provisions of section 14A - if the Assessing Officer has applied the provisions of section 14A of the Act as per the contention of the learned counsel for assessee, it should be considered as appeal effect given in defiance of the order of the CIT (Appeals). Thus the appeal effect order passed by the Assessing Officer is appealable and appeal lies against his order before the learned CIT (Appeals). The decisions relied upon by the learned counsel for assessee in the case of Bakelite Hylam Ltd . and in the case of Caltex Oil Refining (India) Ltd. [1992 (12) TMI 23 - BOMBAY HIGH COURT] clearly support the contention of learned counsel for assessee.
CIT (Appeals) was, therefore, not justified in holding that no appeal lies against the appeal effect order passed wrongly under section 250/154 of the Act by the Assessing Officer. The appeal effect order passed by the Assessing Officer in contravention of the order of the learned CIT (Appeals) is appealable order and appeal lies against the order of the Assessing Officer before the learned CIT (Appeals). The order of the learned CIT (Appeals) is thus set aside and consequently the matter in issue is restored to the file of the learned CIT (Appeals), Panchkula with direction to redecide the appeal of the assessee on merits - Appeal of the assessee is allowed for statistical purposes.
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2015 (6) TMI 1229
Correct head of income - income from business and profession or income from house property - assessee received licence fee from leased out flats - HELD THAT:- Assessee is a partnership firm engaged in the business of development activities since its inception.
All the units, leased outs, were developed by the assessee itself and only small portion of the total units were leased out on lease and licence basis, which were held as stock in trade. Let out the premises on lease and licence basis is the ancillary business of development and the rent constitute a small percentage of total revenue/income earned by the assessee. These units were subsequently sold out and in between (when remained to be unsold) were commercially exploited/utilized. Subsequent to sale of such units, the assessee offered the income as business income.
In the present appeal, the units were leased out for temporary period for commercial utilization of the unsold units. Clause-14 of the lease and licence agreement clearly demonstrate the commercial intention of the assessee because the clause provides that the assessee shall have the right to sale the leased premises without any objection for the lessee except that lease and licence agreement shall continue for the balance period.
Holding that mere entry of the object clause showing a particular object would not be the determinative factor to arrive at a conclusion whether the income is to be treated as income from business and such question would depend upon the circumstances of each case i.e. whether a particular business is letting or not.
Income derived from property would be termed as ‘income from property’ but if the property is held as stock in trade, then the said property would become or part take the character of stock and thus any income derived therefrom would be income from business and not income from property. If business of the assessee is to construct the property and sale it or to construct and let out the same then that would be the business income.
Disallowances of expenses which were arrived at pro rata basis - AO observed that income from leasing of properties is assessed under the head income from house property and thus part of expenses incurred in creating/building, the stock cannot be allowed as business expenditure - HELD THAT:- The assessee duly submitted the details of expenses along with names and addresses of the vendors. The ld. Commissioner of Income Tax (Appeals) found that the assessee transferred some amounts to profit and loss account and balance in WIP account. The assessee also filed statement showing the total area developed was divided into sold area and leased area and stock in hand. It was found by the CIT(Appeals) almost 94% of the income was derived from sale of flats and the remaining through rentals. Even the assessee bifurcated total expenses so incurred by it into revenue expenses and that leased to be capitalized.
CIT(Appeals) and the Revenue has not brought any contrary material in their support, we find no infirmity in the conclusion drawn by the ld. CIT(Appeals). Even otherwise, while disposing of the aforesaid ground whether business income or income from house property, since we have affirmed the decision of the ld. CIT (Appeals), following the latest decision from Hon’ble Apex Court, we affirm the stand of the ld. CIT (Appeals). Thus, this ground of the Revenues is also dismissed.
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2015 (6) TMI 1228
Jurisdiction - Refusal to pass an order of temporary injunction - impugned order passed by a chairman and a member - within jurisdiction and coram non-judice or not - Section 83(4) of the Waqf Act 1995 - HELD THAT:- The legislatures were conscious of the eventuality that the filling of the vacancy may take some time and there cannot be a moratorium or keeping the Board defunct until the vacancy is filled. The aforesaid Section clearly reflects the legislative intent that the defect in the Constitution or vacancy shall not invalidate any act or the proceedings and the Board of Auqaf. The like provision has not made in relation to an act or proceedings before the Waqf Tribunal at the time of enactment of the said Act as the said Tribunal was composed of one member - In absence of similar provision, the intention of the legislature is manifest that the authority which derives power from a statute are required to discharge strictly inconformity therewith. The Tribunal not validly constituted passes any order or entertain any proceeding is acting without jurisdiction and such actions are nullity.
Admittedly, the impugned order is passed by the Tribunal consisting of a Chairman and one member when the statute mandates that the composition of the Tribunal shall be of three persons one of which should act as a chairman and others as a members thereof. The impugned order per se is a nullity and suffers from coram non-judice. This Court, therefore, finds that the impugned order passed by the Tribunal suffers from incurable infirmities and illegalities and, therefore, cannot be sustained. The order impugned is thus set aside.
The State is directed to constitute the Tribunal strictly inconformity with sub-Section 4 of Section 83 of the Waqf Act 1985 within six months from the date of the communication of this order - The revisional application is thus disposed of.
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2015 (6) TMI 1227
Deduction u/s 80IB in respect of scrap sale - determination of gains derived from the industrial undertaking for the purpose of computing deduction - HELD THAT:- The issue is covered in favour of the assessee by the decision in the case of Sadhu Forging Ltd. [2011 (6) TMI 9 - DELHI HIGH COURT] wherein held receipts from sale of scrap being part and parcel of the activity and being proximate thereto would also be within the ambit of gains derived from the industrial undertaking for the purpose of computing deduction under section 80- IB - Thus we direct the AO to compute the deduction u/s 80IB after taking into account the scrap sales. - Decided in favour of the assessee.
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2015 (6) TMI 1226
Depreciation on non compete fee at 25% - Depreciation on intangible assets - According to the ld. DR, the non-compete fee paid by the assessee is a restricted one and it does not necessarily confer any exclusive right to carry on the primary activity of the assessee - assessee submitted that the assessee entered into non-compete agreement and acquired a commercial right - HELD THAT:- This Tribunal is of the considered opinion that when the assessee entered into an agreement to restrict the other party for using the trade mark, copyrights etc., it was a composite commercial right acquired by the assessee as found in Pentasoft Technologies Ltd. [2013 (11) TMI 1057 - MADRAS HIGH COURT] . Therefore, the assessee is entitled for depreciation in non-compete fee paid - Decided against revenue.
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2015 (6) TMI 1225
Appointment in the post of teacher - Vidya Upasak Yojna - case of petitioners is that the respondents have not counted the services rendered by the petitioners from their initial date of appointment towards pension and increments - HELD THAT:- The petitioners have been appointed before 15.5.2003 and are entitled to pension under the Central Civil Services (Pension) Rules, 1972. There is no merit in the contention of Mr. P.M. Negi, learned Deputy Advocate General that the appointments of the petitioners would be reckoned from the date of their regularization/absorption on 31.10.2007 and 22.11.2007. There is not even a single day break in the service of the petitioners and they have fulfilled all the conditions stipulated in the Vidya Upasak Yojna as well as in their appointments letters. Respondent-State is a welfare State. The services rendered by the petitioners from the years 2000 to 2007 cannot be obliterated or rendered otiose.
Petitioners were not entitled to the regular pay scale at par with regularly appointees but they are entitled at least to count this period from the years 2000 to 2007 towards annual increments as well as qualifying service for pension. Action of the respondents of not counting the period from 2000 to 2007 for the purpose of pensionary benefits and annual increments is violative of Articles 14 and 16 of the Constitution of India. It is made clear that the petitioners are entitled to count this period towards pensionary benefits as well as annual increments.
The period from 2000 to 31.10.2007 and 22.11.2007, respectively shall be counted as qualifying service for the purpose of pension under the Central Civil Service (Pension) Rules, 1972. This period shall also be counted for the purpose of annual increments - Petition allowed.
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2015 (6) TMI 1224
Reduction of share capital - Sections 100 to 104 of the Companies Act, 1956 (read with Rule 46 of the Companies (Court) Rules, 1959 - HELD THAT:- This Court is of the opinion that there can be no legally sustainable objection for approving the reduction of share capital in terms of Article 57 of the Articles of Association, which enables the company to reduce the share capital, more so, when the reduced share capital is resulting in repaying the share value to the shareholders at a premium of ₹ 11.50ps per share.
The Company Petition is allowed by approving the reduction of share capital of the petitioner company as per the form of Minute proposed to be registered - Application allowed.
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2015 (6) TMI 1223
Dishonor of Cheque - offence punishable u/s 138 of N.I. Act - dispute has been amicably resolved between the parties - HELD THAT:- Taking into consideration the fact that the dispute between the parties has been amicably settled, the offence stands compounded. Accordingly, this application is allowed.
The order dated 4.1.2014 passed in Criminal Case No. 972 of 2011 by the learned Additional chief Metropolitan Magistrate, NI Act, Court No. 28, Ahmedabad and order dated 22.5.2015 passed in Criminal Appeal No. 36 of 2014 by the learned Additional Sessions Court, City Civil and Sessions Court, Court No. 23, Ahmedabad are hereby ordered to be quashed and set aside.
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2015 (6) TMI 1222
Net profit estimation - Failure on the part of the assessee to include the net profit of the post survey period - CIT- A deleted the addition - HELD THAT:- Assessing Officer has not disturbed the trading results declared by the assessee and he has simply proved that profit after 7.9.2006 to 31.3.2007 as per books was ₹ 10,75,832/- in addition to surrendered income. In our opinion, the Assessing Officer has rightly added this amount to the income of the assessee - CIT(A) has made general observations and has not bothered to verify the survey folder to see whether any incriminating material was found or not and simply allowed the relief by observing that books of account and discrepancies were not discussed during the survey. In our opinion, this cannot be the reason for giving relief without referring to the statement recorded during survey which clearly shows that incriminating material was found. Therefore, we set aside the order of Ld. CIT(A) and restore that of Assessing Officer.
Disallowance of the interest on debit balance of the partners - as per CIT-A proportionate interest has to be disallowed. He further observed that such interest has to be worked out after considering the credit balance also. He further observed that proportionate profit should also be credited - HELD THAT:- CIT(A) has rightly observed that interest cannot be calculated merely on the basis of debit entries. The Ld. CIT(A) has recalculated the interest after considering the various credit entries in the partners account and also proportionate profit. We are satisfied with this conclusion and, therefore, uphold the order of Ld. CIT(A).
Addition u/s 68 - unsecured loans from various persons - CIT-A deleted the addition - onus to prove - HELD THAT:- Onus was on the assessee to prove the creditworthiness of the depositor which has not been discharged. AO after having pointed out that cash was deposited before giving loans to the assessee by almost all depositors, still the CIT(A) did not scrutinize the bank account or bothered to ask the assessee to present these creditors and allowed the relief which, in our opinion, is not correct. As we have discussed only few accounts above, while giving example but we have perused the bank account of all the parties and we find merit in one case i.e in the case of Jatinder Shah from whom loan of ₹ 1 lakh was taken. In that case a sum of ₹ 68,645/- is stated to have been received from M/s D.K Brothers, Dhuri and only an amount of ₹ 31,500/- was deposited, therefore, creditworthiness in this case can be said to have been proved. In the light of the above discussion we confirm the order of Ld. CIT(A) for deleting the addition only in the case of Shri Jitender Shah for ₹ 1 lakh. His order for deleting credits in the name of other nine parties to the extent of ₹ 24 lakhs is set aside and the order of the Assessing Officer is restored to this extent.
Disallowance of interest paid on unsecured loans - HELD THAT:- We find that Ground No.3 has been adjudicated by us whereby loan of ₹ 1 lakh has been accepted by us from Shri Jatinder Shah and other loans have been found to be non-genuine. The interest on account of loan of Shri Jatinder Shah is of ₹ 11,570/- only, therefore, we set aside the order of Ld. CIT(A) and confirm the disallowance of interest amounting to ₹ 1,64,340/- (₹ 1,75,910 – ₹ 11,570 ), therefore, this ground is partly allowed.
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2015 (6) TMI 1221
Correct head of income - interest on short term deposits - Addition by AO treating the same as income from other sources - capital receipt or income from other sources - HELD THAT:- As decided in assessee's own case [2014 (6) TMI 1050 - ITAT CHANDIGARH] no merit in the plea of the assessee that the interest earned by the assessee is to be infused as share capital and/or to be returned to the Principals who had had advanced the loans to the assessee as the assessee has failed to bring on record any evidence to establish its claim. Merely because the money in future would be utilized for capital expenditure does not make the receipts as capital receipts in the hands of the assessee. - Decided against assessee.
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9911796707
