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Showing 421 to 440 of 1327 Records
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2012 (11) TMI 913
Penalty imposed under Section 11AC of the Central Excise Act – alleged that assessee has clandestinely removed the finished goods – Held that:- Assessing Officer straightway proceeded to pass the order of imposition of penalty under Section 11AC of the Act of 1944 without recording any reasons and finding with respect to the intention of the assessee which entails the assessee for the penalty under Section 11AC of the Act of 1944 - violation must be with intent to evade payment of duty and that is the question of fact which alone could have been the foundational fact for imposition of penalty. Such finding is not recorded by the Assessing Officer nor an inference can be drawn from the reasons given in the order impugned of the Assessing Officer so as to draw inference that the action of the assessee was intentional – in favor of assessee
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2012 (11) TMI 912
Interest due to wrong availment of Cenvat Credit – Held that:- As decided in BILL FORGE PVT. LTD. Versus COMMISSIONER OF C. EX., BANGALORE [2011 (4) TMI 969 - KARNATAKA HIGH COURT] interest is compensatory in character and is imposed on an assessee who has withheld payment of any tax as and when it is due and payable.
The levy of interest is on the actual amount, which is withheld and the extent of delay in paying the tax from the due date. The interest cannot be claimed from the date of wrong availment of CENVAT credit and that the interest would be payable from the date CENVAT credit is taken or utilized wrongly. - in favour of assessee.
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2012 (11) TMI 911
Petitioner questioning vacant positions of CESTAT in Public Interest - Held that :- Appointment of President is already done - Interviews had been fixed for the post of Members (Technical)- Request for fixing date of interview for the post of Members (Technical) has been made - Post of Vice - resident proposed to be abolished - For appointment of Deputy Registrar proposal is forwarded to UPSC to fill the post within four months - Status report will be filed to the petitioner.
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2012 (11) TMI 910
Complete waiver of pre-deposit – CESTAT by a considered order, held prima facie case was satisfied that the entire payment was barred by time - They made it clear that the stay order will continue in force even after 180 days – Held that:- When complete waiver is granted, there is an obligation cast on the Tribunal to dispose of the appeal within 180 days - If the entire claim is barred by time and if the assessee is made to deposit the entire amount, certainly it would cause great hardship. - The proper course would be to remit the matter to the Tribunal with a direction to dispose of the appeal within four months from the date of receipt of copy of this order - Writ petition is rejected
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2012 (11) TMI 909
Whether adjudication is called for before raising demand of interest under Section 11AA of the Central Excise Act and also under Section 75 of the Finance Act, 1994 – Held that:- If duty is paid against demand with delay other than through adjustment of credit available, interest is automatic and it is a matter of voluntary payment of interest by the assessee or payment on demand by the adjudicating officer which does not require any adjudication except the arithmetical calculation for which no adjudication is called for
Adjudication is called for in this case, where additional excise duty demand was fully settled through adjustment of duty credit available - adjudicating authority directed to decide the matter through proper adjudication
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2012 (11) TMI 908
Determination of capacity - appellant wrote to the Department vide their letter dated 8-3-98 intimating that they have carried out certain changes in the parameters of their mill and the capacity should be accordingly re-determined - intimation was received in the office of Commissioner on 2-1-1998 since the capacity was required to be intimated to the Commissioner in his office for which the changed capacity will be available – Held that:- If the re-determination of capacity is on deeming basis then it should be effective from one month from a 8-3-1998. - in the present case the action was taken approximately after 7 months. - Therefore, the case law cited by the Department is not relevant to this case. The deeming effect should have been one month from the date of initial intimation by the appellant i.e. 8-3-1998 which we accordingly hold.
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2012 (11) TMI 907
Deduction u/s 54F - investment in old house property - dis-allowance on ground that assessee has not constructed the new residential building within the stipulated time and it is in semi finished condition - Held that:- Assessee having constructed the building and invested the capital gain, the assessee is entitled for deduction u/s. 54F if other conditions stipulated in Section 54F are satisfied.
Other objection of the AO that the amount of capital gain is invested in capital gain deposit scheme as prescribed u/s 54(2), assessee submitted that the assessee originally given advance to purchase the flat and it was not materialised. The assessee took back the advance and started construction of a building but the assessee's return of income was not accompanied by any evidence in support of this claim. Being so, AO is directed to examine the fact whether the amount so paid is for acquisition of flat or not and decide the issue in the light of the order of Tribunal in the case of Jagan Nath Singh Lodha (2004 (6) TMI 309 - ITAT JODHPUR) - Appeal of the assessee is partly allowed for statistical purposes
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2012 (11) TMI 906
Addition made on account of cessation of liability u/s 41(1) - non-filing of confirmations of Creditors by assessee - lapse of more than 3 years - no transaction - Revenue contended that right to recover the said amount has become barred by limitation, therefore, the provisions of Section 41(1) are invoked - Held that:- The assessee’s consistent stand has been that he had not made any entry in the profits and loss accounts during the year under appeal and there was no remission or cessation of liability during the year under appeal, this shows the intention of the assessee for making payments to these parties. Further, A.O. has not been able to demonstrate any cogent reason and has not brought any material on record to show that these liabilities have ceased in the year under appeal. Simply because assessee was not able to produce any confirmation regarding the creditors, the conclusion cannot be arrived that the liability has ceased to exist. Therefore, CIT(A) rightly deleted the addition - Decided in favor of assessee.
Dis-allowance of interest expenditure on borrowed funds on account of interest free advances being provided to other parties - assessee contended that it was having interest free fund of Rs.6.94 crores against interest free advance of Rs.1.06 crores and therefore, dis-allowance on interest was uncalled for. Held that:- Aforesaid contention of assessee requires verification at the end of the A.O. and for this purpose the matter is restored to the file of the A.O.
Dis-allowance u/s 40(a)(ia) - payment to labour contractor - seasonal business - assessee contended that assessee engaged labour on piecemeal basis without any type of written or oral contract - Held that:- Provision of section 40(a)(ia) could not be invoked where tax u/s 194C was not deducted from labour charges paid to labour sardars as there was no agreement between the assessee and the labour sardars to supply labour. CIT(A) rightly deleted the addition
Dis-allowance made on account of repairing and maintenance for want of bills - assessee contended before CIT(A) that the expenditure was fully supported by vouchers and supporting evidence was also available - Held that:- Amount that has been spent by self made vouchers is less than 10% of the total repair expenses incurred by the assessee during the year under appeal which appears to be quite reasonable as it is some times not possible to obtain bills for each and every expenditure incurred as repairing expenses are paid to different persons which may not have the bills with them. In light of aforesaid, CIT(A) rightly deleted the dis-allowance.
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2012 (11) TMI 905
Taxability of retention money - assessee contended that same cannot be treated as Revenue since retention money has not accrued to the assessee and same shall be realized only on satisfactory completion of the contract - Held that:- It is undisputed that assessee has not received any money out of the amount retained as retention money by the contractee, Therefore, CIT(A) was justified in holding that monies retained by the principal as per provisions of contracts as “retention money” can not be included in the total income - Decided against Revenue
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2012 (11) TMI 904
Deduction u/s 80-O - held that:- Supply of man power is one of the services rendered by the assessee and otherwise, mainly the assessee does the supply of comprehensive technical services for designing and development - assessee is entitled to relief as given by CIT (A) and is eligible for claiming deduction u/s. 80-O - ground raised by Revenue is dismissed.
Deduction u/s 40(a)(iii)- Employer-Employee relationship - salary payble outside India - held that:- Seconded personnel who is deputed by a foreign company to an Indian Companywere not employees of the assessee company foreign allowance paid to them by the assessee company cannot be considered as part of salary and so provisions of section 40(a)(iii) are not applicable as there is no Employer-Employee relation. overseas allowances is not chargeable under the head “Salary”. Therefore, section 40(a)(iii) does not apply. Similar view is also endorsed by the Hon’ble Kerala High Court in the case of [CIT vs. G. Eroppino Giovanni 1991 (7) TMI 36 - KERALA HIGH COURT] - CIT (A) is correct in holding that there is no employee-employer relationship so as to consider the disallowance under section 40(a)(iii) of the Act - impugned payments made cannot be taxed under the head “Salaries” - in favour of assessee and ground raised by Revenue is dismissed.
Relief u/s 91(1)- held that:- Word “paid” in Sec.91(1) of the Act means constructive payment of tax and the onus is on the assessee to lead evidence that the taxes had in fact being paid in any country with which there is no agreement u/s 90 for avoidance of double taxation. Assessee made the payment of taxes in Kuwait and the dates and amounts of the said payments of taxes were made available before the CIT (A) - Original documents were also filed evidencing the same for relief in respect of the said taxes paid in Kuwait u/s 91(1) of the Act - assessee is entitled to said relief - ground raised by Revenue is dismissed.
Taxability of Income ie gain in foreign exchange fluctuation - “Business Income”vs “Income from Other Sources” - held that:- If Exchange fluctuation is on the export proceeds itself, then it has to be treated as gain in business and if the gains on exchange fluctuation occurs on the funds lying parked in EEFC account, then in that case, the case of [CIT vs Shah Originals 2010 (4) TMI 216 - BOMBAY HIGH COURT] is to be applied and treat that gain as income from other sources - ground raised stands covered by the said decision of the Tribunal in the assessee’s own case - In the result, appeal of the Revenue is allowed in part.
Condonation of delay of 1529 days in filing C.O. - held that:- Expalnation of assessee which revolves around the ‘oversight’ and assessee’s conference with his counsel after expiry of four years, in our opinion does not constitute ‘sufficient cause’ within the meaning of section 253(5) of the Act. It is not in the normal course that the assessee has not met his counsel for all these four years. As such there is no confirmation from the said Counsel by way of any affidavit that the assessee had impugned conference to advise for filing the impugned CO. In the present case, there is a negligence on part of the appellant and it is a case of absence of due diligence. Further also, the assessee has not demonstrated that it was beyond his control that the Cross Objection could not be filed before the expiry of the limitation period of 30 days specified in section 253(4) of the Act. Therefore, delay in filing the Cross Objection remains unexplained - no sufficient cause for condonation of delay of 1529 days - impugned application for condonation of delay by the Cross Objector, Respondent is dismissed - In the result, Revenue appeal is allowed in part and the Cross Objection is dismissed.
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2012 (11) TMI 903
Deduction u/s 10A, 10B - Setting off losses and unabsorbed Depreciation - Either in the case of non-STP units or in the case of the very same undertaking - held that:- Respectfully following the dictum laid down by the Hon'ble jurisdictional High Court in the case of [CIT vs Yokogawa India Ltd. 2011 (8) TMI 845 - KARNATAKA HIGH COURT] deduction u/s 10A/10B of the Act is to be calculated without setting off of the carried forward business loss of the assessee in respect of the earlier assessment years.
Invoking provisions of sec40a(i)- Payment of TDS u/s 195 - royalties or fees for technical services. - Telecom voice service received by non-resident on account of business connection mentioned in s. 9(1)(i) not having any permanent establishment in India - held that:- Payment made to a non-resident in respect of telecom voice services availed outside India cannot be termed as 'fees for technical services'. payer of the service could derive an enduring benefit and utilize the knowledge or know-how on his own in future without the aid of the service provider in other words, to fit into terminology 'making available', the technical knowledge, skills etc., must remain with the person receiving the service even after the particular contract comes to an end. It is not enough that the services offered are the product of intense technological effort and a lot of technical knowledge and experience of the service provider has gone into it. - The technical knowledge or skills of the provider should be imparted to and absorbed by the receiver so that the receiver can deploy similar technology or techniques in the future without depending upon the provider.
Payment for bandwidth would constitute neither royalties nor fees for technical services either under the Act or under the agreement for Avoidance of Double Taxation with USA. - the assessee had no obligation whatsoever to deduct tax at source when the payments made to Novatel and as such, no disallowance u/s 40(a)(i) of the Act was called for. - Decided in favor of assessee.
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2012 (11) TMI 902
Chargeability to Capital gain - Whether Land situated at Village Kharghar was a capital asset and enhanced compensation received is chargeable to tax - Held that:- Land in dispute is not an agricultural land as it is situated with in municipal limits within the meaning of section 2(14)(iii) as claimed by the assessee and is a capital asset - in favour of revenue.
The liability to tax on capital gain would arise in respect of only those capital assets in the acquisition of which, an element of cost is either actually present or is capable of being reckoned and not in respect of those assets in the acquisition of which, the element of cost is altogether inconceivable. - CIT v. B.C. Srinivasa Setty [1981 (2) TMI 1 - SUPREME COURT]
As the land in question was not having cost because the same was allotted to father of the assessee being refugee from Pakistan by Government of India at relevant point of time which is not in dispute. So the land in question was acquired by father of the assessee free of cost. Therefore, there is no question of capital gain on transfer of such land and enhanced compensation reeived is not chargeable to tax - in favour of assessee.
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2012 (11) TMI 901
Return of Income u/s 153 – Whether ROI filed in response to notice u/s 148 is a voluntary return if it filed before the expiry of the time limit u/s 153 – Held that:- Even if the return has been filed within the time prescribed u/s 153 is not a voluntary return. Explanation to Sec.148 makes it clear that nothing contained in the first proviso or the second proviso shall apply to any return which has been furnished on or after the 1st day of October, 2005 in response to a notice served under this section. Therefore, the assessee cannot say that the return filed was voluntary return as it was filed before the expiry of the time limit as specified in section 153. In favour of revenue
Penalty u/s 271(1)(c) - Difference in income as TDS statement and ROI u/s 153 – Concealment of income – Assessee filed return u/s 153 in response to notice u/s 148 – AO made addition on said amount & levy penalty u/s 271(1)(c) – Assessee contended that it was not deliberate concealment and it was on account of oversight – Held that:- The plea of the assessee that error was on account of oversight is not tenable. The assessee had filed return of income in pursuance to notice issued u/s 148 and claimed benefit of TDS on the commission earned. The assessee has shown in his ROI, the exact amount of TDS whereas he has shown Rs. 5,00,000/- less in the commission earned. This cannot be said to be an inadvertent or a bonafide mistake. It is clearly a deliberate attempt on the part of the assessee to conceal the income. Issue decides in favour of revenue
Since the assessee had filed return for the first time, it would be too harsh to impose penalty on the entire amount of tax. We, therefore, reduce the penalty only to be levied on the income escaped i.e. Rs.5,00,000/- the amount not shown in the return of income. Ground of assessee partly allowed
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2012 (11) TMI 900
Validity of Order u/s 263 - Taxability of Foreign Exchange Fluctuation Reserve - CIT found that this issue was not reflected in the assessment order by AO - Order passed by the AO as far as the issue is concerned, is erroneous and prejudicial to the interests of the Revenue – Held that:- It is necessary, to examine the components of the assets and holdings re-stated by the assessee in terms of Indian rupee so as to see whether any revenue item is re-stated and if so, whether the gains would be eligible to tax. AO has not at all discussed anything in his order on this important issue. Therefore, it is not possible to hold at present that whether the AO had in fact examined this aspect of the case. Hence, the assessment order is erroneous and prejudicial to the interests of the Revenue as far as the addition to the foreign currency fluctuation reserve account is concerned. Appeal decides in favour of revenue
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2012 (11) TMI 899
Addition on account of opening as cash in hand – Assessee contended that the same is represented out of income earned prior to the block period - This is reflected in the cash flow statement filed by the assessee – Held that:- The assessee comes from an affluent family. She has her own properties and businesses at different places. She has different sources of income including agricultural income. In these circumstances it is not possible to hold that the assessee could not have an amount of Rs. 60,000/- as opening cash capital in her hands. The assessee has offered a plausible explanation that the amount was appropriated from her past income. This explanation is just and reasonable, which has been allowed.
Addition on account of commission income – Assessee has not maintain books & estimated income by way of commission at 10% of the annual turnover – AO after allowing an expenditure of 40%, treated 60% as commission income of the assessee – Held that:- Non-maintenance of accounts is not so crucial, because the total turnover is always available. The AO has to compute the undisclosed income falling within the block period. He does not estimate or appraise the undisclosed income. Therefore, this addition made by the AO, purely on estimate basis, cannot be sustained in law. Hence deleted In favour of assessee
Addition on account of sale proceeds of thorn trees as undisclosed income – AO treated it as incidental income - the assessee has credited a sum of Rs. 20,000/- each year as income from sale of thorn trees but the same was not offered for taxation – Held that:- The assessee as a real estate developer has been developing properties by incurring expenditure. It is in the course of that developing that thorn trees were removed and they were sold for nominal amounts. The sale of thorn trees is not a regular activity of the assessee and the income therefrom does not constitute an independent source of income. As a matter of fact, it goes to reduce the expenses of the assessee in developing the land. Hence no justification in treating the amount as undisclosed income. In favour of assessee
Disallowance of depreciation – Air Conditioner – Held that:- The air conditioner was installed at the residence of the assessee and, therefore, the same cannot be considered as a business asset and therefore depreciation should be disallowed. We agree with the argument of the Revenue and this disallowance of Rs. 8,750/- is confirmed. In favour of revenue
Income from property – Assessee has a guest house due to litigation, the property could not be registered in the name of the assessee – AO argues that the assessee has been running the guest house since 1993-94 and income therefrom has been returned so also the assessee has not maintained any books of account – Held that:- As the guest house property was not fully operational, there cannot be a case that the assessee was earning regular income by way of its commercial operation. The argument of the assessee that the operation of the guest house was only on a nominal level is to be accepted. Therefore, naturally, the receipts also would be very nominal. Anyhow, the assessee has to keep the property in a good condition. Therefore, it is necessary to see that whatever income the assessee had received from the operation of the guest house was in fact spent for the upkeep and maintenance of the guest house property. Therefore, it is obvious that the assessee had not received any taxable income from the said property. Delete the addition. In favour of assessee
Addition on account of unexplained creditors/investment - A set of loans received from 42 persons - The amount of loan ranged from Rs. 16,000/- to Rs. 4 lakhs - The assessee could produce some creditors and could not produce the remaining creditors - AO found that many of the creditors did not have enough creditworthiness so as to advance amounts to the assessee – Held that:- As regarding big amounts from creditors, the assessee has proved the genuineness upto a reasonable level. The details of particulars were available with the department even before the search and even in the course of such. Therefore, unless they are rebutted with strong evidence, the genuineness of the credits cannot be doubted by citing general deficiencies in the conduct of the assessee. Hence addition deleted. In favour of assessee
Addition on account of bogus claim of agricultural income – AO’s ground was that no evidence of doing agricultural operations was furnished by the assessee – Assessee has not incurred any expense in relation to such income – Held that:- When the assessee is having agricultural property and offering agricultural income, the normal presumption is that the assessee is carrying on agricultural operations. It is to be seen that the assessee has offered net agricultural income on an estimate basis. Therefore, it is obvious that no separate expenditure account would be reflected in the particulars filed by the assessee. Hence delete the addition. In favour of assessee.
Addition on account of undisclosed income – Assessee receive certain sums from a firm where assessee is a partner - AO added this amount to the assessee’s undisclosed income on the ground that no evidence was produced – Held that:- As rightly argued by the assessee, the disallowance could at best be applicable to the firm and not to the assessee. It is for the firm to prove the nature of income, whether agricultural income or not, in its hands. Firm and the assessee are different persons. Therefore, if there is a doubt in the source, it is for the firm to explain it. There is no justification in making an addition of in the hands of the assessee. It is accordingly deleted. In favour of assessee
Addition on account of gifts received from relatives – AO made addition for want of evidence – Held that:- This matter has been discussed in detail by the Tribunal in its earlier order. The situation has not so far improved by the arguments of the assessee. Therefore, we find that the addition is justified. It is accordingly confirmed. In favour of revenue
Capital Gain – On sale of small agricultural plot – AO rejected the claim for want of evidence – Assessee contended that land was agricultural in nature and therefore there cannot be levy of capital gains - Held that:- Since no evidence produced by assessee. Addition confirms. In favour of revenue
Addition on account of undisclosed income – Cash in hand found during search u/s 132 – AO added same as undisclosed income - Held that:- In view of the total financial inflow and outflow of the assessee during the block period, it is very absurd to presume that the assessee could not have an amount of Rs. 30,000/- in her hands out of legitimate source of income. Therefore, we delete this addition of Rs. 30,000/-. In favour of assessee
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2012 (11) TMI 898
Validity of re-assessment proceedings on the basis of audit objection – under valuation of stock of rough diamonds and stock of cut and polished diamonds – average method of valuation - Held that:- If the closing stock is disturbed then corresponding adjustment has to be made to the opening stock - closing stock balance of this year becomes the opening stock balance of next year and therefore it becomes revenue neutral. Since the method followed by the assessee is an accepted method of valuation of closing stock and since the Revenue in the past as well as subsequent year has accepted the method followed by the assessee without disturbing the method of valuation of closing stock of rough diamonds and cut and polished diamonds and since the A.O. has not made corresponding adjustments for valuing the opening stock of rough diamonds and cut and polished diamonds, therefore average method of valuation followed by the A.O. in the instant case is erroneous and not in accordance with law - assessee succeeds on merit as per ground of appeal No. 2, the first ground of appeal challenging the validity of reassessment proceedings on account of audit objection becomes academic in nature – in favor of assessee
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2012 (11) TMI 897
Payment of ESI, PF u/s 43B - held that:- Revenue has to accept the payment of ESI, PF etc., paid by the assessee and give the deductions of that amount in favour of the assesses as claimed by it in its return - appeal dismissed.
Decision in CIT v. Alom Extrusions Ltd. [2009 (11) TMI 27 - SUPREME COURT] followed.
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2012 (11) TMI 896
Whether in the case of Government securities, interest accrues on day to day basis or only on the coupon dates – Held that:- Interest accrues only on the specified coupon dates and not on day to day basis - in favour of the assessee
Disallowance of loss on unmatured foreign exchange contracts – Held that:- If the date of maturity of the contract falls within the same financial year then the difference between the exchange rate as prevailing on the balance sheet date and contracted rate is an allowable deduction - forward foreign exchange contract creates a continuing binding obligation on the date of contract against the assessee to fulfill the same on the date of maturity and it is in the nature of hedging contract because it is a contract entered into against possible financial losses - where a forward contract is entered into by the assessee to sell the foreign currency at an agreed price at a future date falling beyond the last date of accounting period, the loss is incurred to the assessee on account of evaluation of the contract on the last date of the accounting period i.e. before the date of maturity of the forward contract - loss on unmatured foreign exchange contract have to be allowed as deduction
Disallowance u/s. 43B of interest accrued but not due on subordinated debts – Held that:- Interest can only be allowable when the same is actually paid and not merely because the same is due as per the method of accounting adopted by the assessee - Assessee cannot on the one hand say that interest liability has accrued under the mercantile system of accounting and on the other hand say that for the purposes of Sec. 43B(d) of the Act, the interest is not payable - in favour of the Revenue
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2012 (11) TMI 895
Validity of Reassessment proceedings - reason to believe – additions on account of unexplained share capital - assessee had accepted the accommodation entries in the garb of share capital – Held that:- the reasons which persuaded the AO to reopen the reassessment proceedings and on the basis of which additions were made were not found valid or justifiable as those additions were deleted by the Tribunal.
Since the grounds for reopening the reassessment do not exist any longer and no additions were ultimately made on that account, the additions in respect of other items which were not part of "reasons to believe" cannot be made. - Decided in favor of assessee.
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2012 (11) TMI 894
Loss on Trading of Shares - Speculation Loss or not - Whether explanation to Section 73 of the Income Tax Act, 1961 in the facts and circumstances of this case has been applied properly by all the authorities below or not? - held that:- All the authorities below had concurrently found that major portion of the gross total income of the assessee consist mainly on income not in relation to the granting of loans and advances but consisting of the purchase and sales of shares of other companies. Even fund and income generation theories both have been considered by all authorities below. All the authorities below have held that it is not an income from any other source but from purchase and sale of shares consequently loss of same nature and as such explanation has been applied rightly. When the fact is clear, law automatically follows. - Decided against the assessee.
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