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Showing 61 to 80 of 1415 Records
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2023 (4) TMI 1356
Compliance by the Investigating Officer with the duties and responsibilities cast upon him by virtue of Chapter XII of Code of Criminal Procedure Code, 1973 - acquitting all the other coaccused in connection with the same crime - HELD THAT:- It is pertinent to note that the prosecution's case rests solely on circumstantial evidence, as none was found present at the scene of the incident - Further, it is also not the case of the prosecution that the present appellant had either used or shot the deceased with the gun allegedly recovered based on his statement (Ex. P15), which was purportedly made before the police officer (PW23) in the presence of independent witnesses namely, Naresh Mandal (PW6) and Avinash Tirki (PW7).
Nothing on the record suggests that the present appellant had conspired to commit the offence. At best, as shown from the testimony of this deponent, the present appellant has only concealed the relevant incriminating evidence/articles. The materials on record in no way establish that before the commission of the offence, the accused had any common purpose, object or intention of committing the crime, without the same being borne out of the records, the charge of criminal conspiracy and of common intention which is to be read with Section 302 of the Indian Penal Code, fails.
The present appellant cannot be convicted of criminal conspiracy under Section 120B, Indian Penal Code, 1860, solely for having concealed the location of the incriminating materials/ articles and, in the absence of any evidence establishing meeting of the minds. Given that all the other coaccused have been acquitted by the courts below, meaning they were innocent of the crime, the fundamental requirement of a criminal conspiracy is not met.
The Investigating Officer did not meet the obligations he was under. As it is noticed, numerous infirmities affected the conduct of the Investigation Officer calling into question, credibly, the investigation conducted by him or upon his directions.
The High Court, without appreciating the testimonies of the witnesses mentioned above in their true import and meaning, and without having any discussion concerning the complicity of the accused, in a perfunctory manner held the prosecution to have established the case, which is entirely circumstantial in nature, against the present appellant. Significantly, the High Court holds that the evidence reveals that “in all human probability the act must have been done by the accused” - the accused is directed to be set at liberty forthwith.
Application disposed off.
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2023 (4) TMI 1355
Validity of TP adjustment order as barred by limitation - HELD THAT:- TPO has passed the order on 30th January, 2014 which should have been passed on or before 29th January, 2014 and therefore, there is delay of one day in passing the transfer pricing order. Therefore, the adjustment proposed by TPO is barred by limitation.
As the transfer pricing adjustment are invalid, the assessee is not falling in the definition of ‘eligible assessee’ as per provision of Section 144C (15) of the Act as assessee is not a foreign company. Assessment order should have been passed on or before 31st March, 2014 but has been passed on 27th May, 2014. The final assessment order passed is also barred by limitation.
On identical facts and circumstances in Atos India Private Limited V[2023 (2) TMI 1112 - ITAT MUMBAI] wherein it has been held that when assessee does not remain eligible assessee there is no extension of time limit available for making order of TP to the learned Transfer Pricing Officer of further one year and therefore the final assessment order passed also becomes barred by limitation. Therefore we hold that the assessment order passed by AO is also barred by the limitation and hence, quashed. Assessee appeal is allowed.
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2023 (4) TMI 1354
Whether the High Court was right in taking the view that the Special Court could not have taken cognizance upon the chargesheet filed by the CBI based on further investigation having once already filed a closure report in the past and the same having been accepted by the court concerned at the relevant point of time?
HELD THAT:- Even after the final report is laid before the Magistrate and is accepted, it is permissible for the investigating agency to carry out further investigation in the case. In other words, there is no bar against conducting further investigation under Section 173(8) of the CrPC after the final report submitted under Section 173(2) of the CrPC has been accepted.
Prior to carrying out further investigation under Section 173(8) of the CrPC it is not necessary that the order accepting the final report should be reviewed, recalled or quashed.
Further investigation is merely a continuation of the earlier investigation, hence it cannot be said that the accused are being subjected to investigation twice over. Moreover, investigation cannot be put at par with prosecution and punishment so as to fall within the ambit of Clause (2) of Article 20 of the Constitution. The principle of double jeopardy would, therefore, not be applicable to further investigation.
There is nothing in the CrPC to suggest that the court is obliged to hear the accused while considering an application for further investigation under Section 173(8) of the CrPC.
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2023 (4) TMI 1353
Income from house property - Determination of annual letting value in respect of unsold residential units lying with the builder assessee - applicability of provisions of section 23 - HELD THAT:- In context of impugned AY 2014-15, we note that the Finance Act, 2017 introduced sub-section (5) to section 23 providing that where a property held as ‘stock in trade’ is not let out during the year, its annual value, after a period of one year or as revised to two years, shall be considered for the purposes of inclusion under the head `Income from House property’.
This amendment has been brought out w.e.f. 01-04-2018. Thus, this provision manifestly does not apply to the impugned AY 2014-15, therefore we are of the considered view that the impugned addition made and as sustained in the first appeal, is not called for, thus is directed to be deleted. Appeal of the assessee is allowed.
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2023 (4) TMI 1352
Unexplained share Capital and Share Premium - unexplained unsecured loan - onus to prove - HELD THAT:- We note that disputed unsecured loan and most of the loan has been repaid in subsequent year. Therefore, such loan should be treated genuine. Where department had accepted repayment of loan in subsequent year, no addition was to be made in current year on account of cash credit, as held in the case of CIT v. Ayachi Chandrashekhar Narsangji [2013 (12) TMI 372 - GUJARAT HIGH COURT]
AO made the addition was because some of the creditors did not turn up before him - Hon'ble Apex Court in the case of CIT v. Orissa Corpn. (P.) Ltd. [1986 (3) TMI 3 - SUPREME COURT] and Rohini Builders [2001 (3) TMI 9 - GUJARAT HIGH COURT] has held that onus of the assessee (in whose books of account credit appears) stands fully discharged if the identity of the creditor is established and actual receipt of money from such creditor is proved. In case, the AO is dissatisfied about the source of cash deposited in the bank accounts of the creditors, the proper course would be to assess such credit in the hands of the creditor (after making due enquiries from such creditor).
When a question as to the creditworthiness of a creditor is to be adjudicated and if the creditor is an Income-tax assessee, it is now well settled by the decision of Dataware (P.) Ltd [2011 (9) TMI 175 - CALCUTTA HIGH COURT] that the creditworthiness of the creditor cannot be disputed by the AO of the assessee but the AO of the creditor.
We also noted that assessee has submitted essential evidences before assessing officer, such as PAN number, address, income tax returns and audited financial statements of creditors and all transactions were through banking channel. We have also gone through the detailed findings of ld CIT(A) and noted that conclusion reached by ld CIT(A) in deleting the addition is acceptable.
Unexplained share capital - In the assessee’s case there is no material that the assessee company had collected on money which could be routed back in the investment. The assessee had discharged primary onus of providing the identity, genuineness and creditworthiness of the said shareholders. The assessee has also proved the source of the source. Our view is also fortified by the judgment of the Hon'ble High Court of Gujarat in the case of CIT v. Ranchhod Jivabhai Nakhava [2012 (5) TMI 186 - GUJARAT HIGH COURT].
Thus as all the share applicants are (i) income tax assessee's, (ii) they are filing their return of income, (iii) the share application form and allotment letter is available on record, (iv) the share application money was made by account payee cheques, (v) the details of the bank accounts belonging to the share applicants and their bank statements, (vi) in none of the transactions the AO found deposit in cash before issuing cheques to the assessee company, (vii) the applicants are having substantial creditworthiness which is represented by a capital and reserve as noted above. (viii). Source of the Source has been proved by the assessee. Decided in favour of assessee.
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2023 (4) TMI 1351
The High Court of Gujarat stayed the order passed by the respondent Board on 23.3.2023 due to it being signed by only one member, contrary to Section 220(1) of the Insolvency and Bankruptcy Code, 2016. The matter is returnable on 15.6.2023.
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2023 (4) TMI 1350
Deduction claimed u/s 80P(2)(d) - interest income earned from deposits kept with Co-operative banks - HELD THAT:- We notice that this issue has been decided in favour of the assessee in the many cases, wherein it was held that the interest received from co-operative banks by a co-operative society is eligible for deduction u/s 80P(2)(d) of the Act. See KALIANDAS UDYOG BHAVAN PREMISES CO-OP SOCIETY LTD. [2018 (4) TMI 1678 - ITAT MUMBAI]. RENA SAHAKARI SAKHAR KARKHANA LTD. [2022 (1) TMI 419 - ITAT PUNE]
Thus assessee is entitled for deduction under section 80P(2)(d) of the Act in respect of interest income earned from the cooperative banks. Assessee appeal allowed.
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2023 (4) TMI 1349
Addition u/s 68 - assessee had failed to establish the identity, genuineness and creditworthiness of the share subscribers - HELD THAT:- As subsidiary companies were promoted by the parent company only for the purpose of expanding its business and the deals were purely commercial in nature. The main purpose or object of carrying business through subsidiaries was to mitigate the risk associated with a specific project and to create a distinct identity of the project.
It also results in operational efficiency and control. Since different projects were in partnership with different persons and the existing projects were matured and operational, so it became necessary to form Special Purpose Vehicles (SPVS) to undertake the new projects. Once the project was complete or during its continuation, it becomes easier to attract an investor which helps in arranging funds for the project.
It was not considered viable to keep the level of Authorized & Paid-up Share Capital at a very high level. If the Authorized Share Capital of the company is kept at a higher level, the company has to pay mammoth fees to ROC. So the company purposively kept the paid up capital base at a low level to save on unnecessary fees to ROC and also to save on servicing cost of the capital in future.
Assessee has further submitted that the CIT(A) had even called for remand report from the AO in respect of various details and the evidences submitted by the assessee.
CIT(A), thereafter, has passed a detailed order after considering the remand report and other evidences furnished by the assessee. CIT(A) has categorically held that the share subscriber company was a group company of the assessee and the transaction was done for business interest and further that the identity, creditworthiness and genuineness of the transaction was duly proved.
In the identical facts and circumstances, Anmol Stainless (P) Ltd. [2019 (8) TMI 834 - ITAT KOLKATA] has upheld the order of the Tribunal deleting the additions observing that where the share applicants had substantial creditworthiness and the investment has been made by the assessee’s own sister concern/group company having mostly common directors and thus establishing creditworthiness and genuineness of the transaction, the addition u/s 68 has rightly been deleted. Appeal of the Revenue stands dismissed.
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2023 (4) TMI 1348
Detention of goods - goods not accompanied by the E-Waybill - HELD THAT:- Reliance on the judgment of this Court in MAHALAXMI TRADERS VERSUS STATE OF U.P. AND 3 OTHERS [2018 (4) TMI 1976 - ALLAHABAD HIGH COURT] wherein the similar issue was decided by this Court holding that if the E-Waybill has been downloaded prior to the passing of the detention and seizure of the goods disclosing all the necessary formalities, no irregularity was found by this Court in the transaction and on the said ground, the seizure as well as the penalty order and the consequential proceedings were set aside.
There are no reason to defer the view taken by this Court in the case of the Mahalaxmi Traders. Thus, following the said judgment and on the ground that the E-Waybill was downloaded prior to the detention order, the writ petiton is allowed.
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2023 (4) TMI 1347
TDS u/s 194C or 194J - assessee had made payment of operation and maintenance charges and AMC charges - HELD THAT:- A perusal of the terms of contract shows that the services are primarily in the nature of greasing of bearings, spares repairs/replacement, repairs of major breakdowns, painting of equipment etc. Therefore, on perusal of the terms of the contract, the services, in our considered view are primarily are in the nature of operation and maintenance of windmills and per se no technical services are rendered so as to necessitate deduction of tax under section 194C and not under section 194J.
In the case of Bharat Forge Ltd [2013 (11) TMI 1263 - ITAT PUNE] ITAT held that payment towards windmill operation and maintenance attracts provisions of section 194C of the Act. In the case of Asian Heart Institute & Research Centre (P.) Ltd [2015 (10) TMI 2252 - ITAT MUMBAI] the ITAT held that payments in terms of the contract for annual maintenance of the medical equipment was liable to be subject to deduction of tax at source under section 194C - Decided in favour of assessee.
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2023 (4) TMI 1346
Revision u/s 263 - as per CIT AO having allowed capital expenditure without properly examining the expenses in view of provisions of Sec. 13(8) - HELD THAT:- Section 13(8) of the Act states that the exclusion provided in section 11 or section 12 shall not be available to the assessee, if the first proviso to section 2(15) of the Act becomes applicable in case of such person. However, we observe that at the time when the 263 proceedings were initiated by the Principal CIT, the jurisdictional Gujarat High Court had already decided the issue in favour of the assessee and had held that assessee-society constituted under Gujarat Town Planning and Urban Development Act, 1976, to execute works in connection with supply of water, disposal of sewerage and provision of other services and amenities, could be said to be providing general public utility services within the meaning of section 2(15).
Further, subsequently the Supreme Court of India also affirmed/upheld the view of the jurisdictional Gujarat High Court in the aforesaid case.
Accordingly, the order passed by the AO cannot be held to be erroneous and prejudicial to the interest of Revenue. Accordingly, the 263 order passed by the ld. Principal CIT is dismissed. Decided in favour of assessee.
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2023 (4) TMI 1345
Revision u/s 263 - determination of correct head of income - As per CIT assessee being in the business of real estate, had closing stock of completed units, but no income therefrom had been returned in terms of deemed annual letting value (ALV) u/s 22 to be subjected to tax as Income from house property - assessee pointed out that the AO had rightly not invoked the provisions of section 22 on the unsold completed units of the assessee, since the units constituted stock-in-trade of the assessee and income if any from the same was assessable to tax under the head “Income from business and professions” and not under the head “Income from house property” HELD THAT:- The income from constructed units of the assessee held as stock-in- trade was not assessable under the head “income from house property” as held by the ld.Pr.CIT. See Neha Builders [2006 (8) TMI 105 - GUJARAT HIGH COURT].
As noted that even before the AO this issue was raised by the AO vide his notice issued u/s 142(1) specifically asking the assessee to show cause as to why notional income from house property u/s 22 should not be worked out and added to the income of the assessee for the impugned year.
There was no error in the order of the AO who had accepted the explanation of the assessee that no income from completed units was assessable under the head “income from house property” following the decision of jurisdictional High Court in the case of Neha Builders P. Ltd. (supra).
Appeal of the assessee is allowed.
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2023 (4) TMI 1344
Deduction claimed u/s 80P(2)(a)(i)/80P(2)(d) - Assessee is a credit cooperative society and provide credit facilities to its members - HELD THAT:- As relying on case of Navbharat Urban Cooperative Credit Society Ltd [2021 (12) TMI 780 - ITAT MUMBAI] held that interest earned from amount kept with bank is part of the business income of the assessee and income so derived is the profit and gains of business attributable to the activity of carrying of business of providing credit facilities to its members by a cooperative society and is liable to be deducted from the gross total income u/s 80P and also allowed the deduction u/s 80P(2)(a)(i) of the Act.
We have also perused the decision of Jaoli Taluka Sahkari Patpedhi Maryadit [2015 (9) TMI 170 - ITAT MUMBAI] and Gandhinglaj Taluka Patpedhi Ltd. [2015 (12) TMI 287 - ITAT MUMBAI] - Thus direct the A.O to allow the claim of deduction of the assessee u/s 80P(2)(a)(i) of the Act. Decided in favour of assessee.
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2023 (4) TMI 1343
Denial of Exemption u/s 10(22) denied - objects of the Trust include commercial activity - appellant's Trust was registered with the primary object to impart education - As decided by HC [2022 (12) TMI 401 - KARNATAKA HIGH COURT] stand taken by the assessee that contributions were received only from the students has been rightly rejected by the Assessing Officer - cash balance of Rs.1.30 Crores at the peak with petty cash being drawn on daily basis fortifies the view taken by the Assessing Officer that money was being utilized for some other purpose, no exception can be taken to the view taken by the AO and the ITAT as against assessee.
HELD THAT:- We are not inclined to interfere with the impugned judgment and order of the High Court. Special leave petitions are dismissed.
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2023 (4) TMI 1342
Revision u/s 263 - CIT(A) as held that claim of deduction made u/s 80P (2) (a) (i) or u/s 80P(2)(d) in respect of interest received from Co-operative Bank is not allowable - HELD THAT:- Assessee co-operative society is eligible for deduction u/s. 80P(2)(d) in respect of gross interest received from co-operative banks, without adjusting interest paid to said bank.
We are of the considered opinion, the assessment order passed by the AO is not an erroneous order, which does not require Revision u/s. 263. Therefore, we hereby quash the impugned Revision order passed by the PCIT u/s. 263 and restore the assessment order passed by the AO u/s. 143(3) of the Act. Thus the grounds raised by the Assessee are hereby allowed.
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2023 (4) TMI 1341
Revision u/s 263 - unexplained cash deposits - As per CIT while completing the assessment AO has not raised the issue of deposit of old bank notes for which no detailed enquiry had been conducted by the AO and AO has not called for the deposit receipt from the bank including the counterfoils and has not verified the cash deposited in the bank vis a via cash book, no cash flow statement has been filed by the assessee which could reflect the availability of cash with the assessee - HELD THAT:- Both the parties have not disputed the fact mentioned in the assessment proceeding about the act of the assessee in depositing a sum of Rs. 51.60 lac in the bank account during the period of demonetization. Out of the cash so deposited a sum of Rs. 16.80 lac was consisting of high value notes of Rs. 500 and Rs. 1000. The ld. PCIT in his order contended that the ld. AO has not properly addressed the issue while completing the assessment. Even the ld. DR did not place anything further to support the any specific error on the part of the assessee.
As perused the assessment order and the relevant submission on the issue that the assessee has given details in the assessment proceeding at four instance so as to support the fact that inquiry in relation to the generation of the cash by the assessee is verified by the ld. AO. It is also not disputed by the PCIT or ld. Sr. DR for the balance amount deposited in the demonetized period which is that out of 51.60 lacs but disputed only for an amount Rs. 16.80 lac being the demonetized currency. There is no evidence or material that has been observed by the PCIT from the details so placed on record by the assessee in the assessment proceeding to disbelieve the averments about the source of the said demonetized currency.
Merely the PCIT said that in his opinion the ld. AO has not properly addressed the issue. The observation so made is very general and routine without pinpointing any specific defect the action of the PCIT u/s. 263 is nothing but a review of the order of the ld. AO.
Merely, the ld. AO has not specifically written that he has verified the cash of demonetized currency will not hold the assessment erroneous or prejudicial to the interest of the assessee. Even we find that the assessee has submitted all the details to substantiate the deposit of the cash be it may the demonetized currency. When the source of total cash deposited during the demonetization period to the extent of Rs. 51.60 lac is examined and not disputed by the ld. PCIT, how the part of that cash consisting of Rs. 16.80 lac being the demonetized currency for which the PCIT contended that ld. AO has not the addressed issue is not the correct observation and by that observation the order of the ld. AO cannot be considered as erroneous or prejudicial to the interest of revenue and thereby invoking of the provision u/s. 263 is unwarranted. Assessee appeal allowed.
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2023 (4) TMI 1340
Unexplained cash credit u/s 68 r.w.s. 115BBE - cash deposited in bank out of business receipts - distinguish between the demonetized and non- demonetized currency - whether there is a reason provided by the assessee for the rise in sales in the months of October and November? - HELD THAT:- Cash deposit in bank on account of cash sales and cash realizations from debtors was a normal feature of the assessee's business and that the cash deposit figures of October, 2016 & November, 2016 were a little higher due to cyclic variations, mainly on account of festivals and marriage season in Northern India during that time.
As a result of higher cash sales & higher realizations from trade debtors in October 2016, the opening cash in hand as on 1st November 2016 was Rs. 75,65,401 and as on the morning of 9th November 2016, the opening cash in hand was Rs. 75,44,135, out of which, the assessee deposited Rs. 56,55,000 in two current bank accounts from 9th November, 2016 till 25th November, 2016 – Rs. 52.50 Lakh in demonetized currency notes of Rs. 500 & 1000, and the balance Rs. 4,05,000/- in non-demonetized currency/new currency.
Similarly, the assessee deposited Rs. 35,70,000 in the two bank accounts in the Month of December 2016 only in non-demonetized currency out of cash sales/realization from trade debtors in the months of November and December 2016. All these figures were duly established by the assessee by furnishing details of sales, purchases along with complete cash book and bank accounts as duly supported by the quantitative tally of stock in the tax audit report during the course of assessment proceedings and the Assessing officer had also accepted the trading results declared by the assessee as he could not point out any defect in the figures.
However, despite having accepted the books of account and the trading results, the Assessing Officer still took a detour from the well-established accounting and legal norms, by adding the cash (received by the assessee on account of realizations made from trade debtors and out of cash sales) deposited in the bank again to the income of the assessee as 'unexplained credits' under section 68 in total disregard of the fact that an amount cannot be considered twice in computing the income. Moreover, it was not understandable as to how the cash deposited out of realizations made from trade debtors and cash sales, both recorded in the books of account and, thereafter, deposited in bank accounts, can be treated as 'unexplained cash credit’ under section 68 of the Act. Thereby, the addition made u/s 68 in respect of unexplained cash credits is indeed illegal, bad in law and void-ab-initio as rightly alleged. The addition deserved to be knocked down on this ground itself.
It is a trite law that when the reliability of books is not in question and all the transactions including sales and purchases and the ensuing effect of this trading have been accepted, then the embedded facets flowing from the trading transitions -generation, retention & rotation of funds- can also not be doubted.
When the cash deposited in the bank is already recorded as part of sales or sales realizations and the same is not found to be incorrect, it is legally not permissible to add the same to the income of the assessee as unexplained cash credit u/s 68 for two reasons : firstly, it is not a credit, in the sense used in section 68, at all, what to talk of "unexplained credit", and, secondly, the action amounts to double addition (firstly as sales and secondly as unexplained cash credit) of the same amount in the hands of the assessee. AO did not state as to which details furnished by the assessee by way of additional evidence, were not available before him, i.e., the AO, during the assessment proceedings.
Assessee has shown to have furnished all the requisite documents and details, firstly before the AO in the reassessment proceedings, and then before the CIT(A). Further, the AO has wrongly observed that the assessee failed to supply the source of the cash deposits made in HDFC Bank during the assessment year, whereas the assessee has given complete details before both the authorities. Even in response to the Show Cause dated 04.12.2019, the assessee, vide submissions dated 09.12.2019, had given complete cash book and many other details, including the details of all the cash deposits made, against receipts from debtors and against cash sales. Likewise, the AO had wrongly observed that details were not provided by the assessee in response to the statutory notices, whereas without the response of the assessee, it was not possible for the AO to have accepted the cash deposits for the whole assessment year excluding the demonetization period. In fact, no defect was pointed out by the AO in the details furnished by the assessee, particularly when the Cash Book and the Sale Book clearly reflected the cash deposits in the bank which were covered in the audited financial statements of the assessee.
Therefore, from the above discussion, it is clearly evident that the ld. CIT (A) has gone wrong in confirming the addition wrongly made by the AO.
The order under appeal is, found to be a result of complete misreading and non-reading of material and cogent unrebutted documentary evidence brought on record before the AO and reiterated before the ld. CIT(A). The impugned order is, therefore, reversed and the addition confirmed by the ld. CIT (A) is cancelled - Decided in favour of assessee.
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2023 (4) TMI 1339
Penalty u/s 271(1)(c) - Disallowance of expenditure under the head Employees benefit expenses, depreciation, administrative as revenue expenditure as there was no sale during the year under consideration - HELD THAT:- When particulars provided by the assessee in the return of income are found to be correct except the allowability of the claim due to the provisions of law then the same cannot lead to the conclusion that the assessee has furnished inaccurate particular of income or concealment of particulars of income inviting the penalty u/s 271(1)(c) of the Act. A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. In the case in hand, the assessee has claimed the expenses by debiting in the profit and loss account but the Ld. AO did not accept the claim on the ground that due to no sale during the year expenses ought to have been capitalized would not ipso facto attract penalty u/s 271(1)(c).
As relying on judgment of Reliance Petroproducts Pvt. Ltd.[2010 (3) TMI 80 - SUPREME COURT] as well as Praveen B. Gada (HUF) [2011 (2) TMI 1106 - MADHYA PRADESH HIGH COURT] the penalty levied by AO u/s 271(1)(c) of the Act by treating the expenditure as capital is not justified and the same is deleted. Appeal of the assessee is allowed.
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2023 (4) TMI 1338
Addition u/s 69A - unexplained money based on credit entries in the bank account - HELD THAT:- In the facts of the present appeal, undisputedly, the assessee is a non-resident, hence, is not obliged to maintain any books of account in India, as the only source of income of the assessee in India is from interest on bank accounts and interest on income tax refund. Therefore, one of the conditions of section 69A is not satisfied. Even assuming that the bank statements are to be treated as books of account of the assessee, still, section 69A would not be applicable as the transactions are duly recorded in the bank statements. Thus, in our view the provisions of section 69A would not be applicable. Therefore, the addition made invoking the provisions of section 69A of the Act is unsustainable.
Also we are convinced that the source of each credit entry appearing in the respective NRO/NRE bank accounts in India stands properly explained by the assessee. When the assessee has furnished additional evidences having crucial bearing on determination of the dispute, learned Commissioner (Appeals) should have examined them properly without rejecting them on flimsy ground.
Considering the close proximity of the aforesaid withdrawal and the cash deposits, in our view, assessee’s explanation that the cash deposit was made out of the earlier cash withdrawal is acceptable. The addition made u/s 69A of the Act is unsustainable on merits as well. Assessee appeal allowed.
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2023 (4) TMI 1337
Estimation of commission income - assessee submitted that the AO has not brought anything on record, including comparable evidences to prove that the commission income earned by the assessee is @8% - CIT(A) made addition of commission income @ 1% of total receipts in bank account - HELD THAT:- We observe that in the instant facts, despite ample opportunities, the assessee has not been able to furnish any details of parties from whom such deposits have been received, the modus operandi as to how commission income is earned by the assessee, the details of the parties from whom commission income has been received and has simply relied on judicial precedents in support of his contention that the commission income should be restricted to 0.1% to 0.15% of the total deposits/ credits in the bank account. We observe that the assessee is not maintaining any books of accounts and has no supporting documents/evidence to prove that he is earning commission income and if so, at what rate the same is being earned.
In the instant facts, we observe that the assessee has submitted that it has earned commission income, however, no details regarding the commission income earned by the assessee was furnished to the Department during the course of assessment or appellate proceedings.
As held in various judicial precedents highlighted above, if the assessee is submitting that he is liable to be taxed only on the commission income so earned, then the onus is on the assessee to provide the basis as to how such commission income has been arrived at and also to provide list of beneficiaries and other details so that whether the correct amount of “commission income” has been offered to tax may be verified by the Department.
As assessee has not maintained any books of accounts, has not maintained cash book and bank book, he has not submitted any details of parties from whom the commission income has been earned, the assessee has not given any supporting documents to corroborate the correct rate at which commission income may be computed and the assessee has also not provided details/ list of parties who have made deposits to the tune of 158 crores in the bank accounts held by the assessee. The assessee has not come up with any details to substantiate its stand that the commission income may be restricted to 0.1% to 0.15%. Accordingly, looking into the instant facts, in the interests of justice, it would be reasonable to restrict the net commission income @0.25% of the total deposits in the bank account held by the assessee. In the result, ground number 1 of the assessee’s appeal is partly allowed.
Addition on account of cash deposit in the bank account - HELD THAT:- We find force in the argument of the assessee that if the commission income has been separately determined on a percentage basis of the cash deposits appearing in the account of the assessee, then the aforesaid deposit of ₹ 3,21,730/- may be considered as part of income of ₹ 4,55,650/- declared by the assessee in it’s return of income. Accordingly, this addition is hereby directed to be deleted.
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9911796707
