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Showing 81 to 100 of 1328 Records
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2014 (4) TMI 1250
Deduction u/s 80IA on the profits of the power generation unit - HELD THAT:- We are inclined to accept the submissions of assessee for the reason that the cost of steam is what is to be allocated between the power plant and the rice mill. There is no logic in segregating the cost into two parts and allocating the normal loss in the generation of steam at 50-50 and therefore allocating the husk expenses at 15.75% to the power generation plant and 84.25% to the rice mill. Once we come to our conclusion that 10% of the steam is utilized by the power generation plant, then all the cost i.e. attributable and relatable to the generation of steam has to be allocated only on that basis. The cost of steam cannot be segregated into that which is incurred up to a particular point and cost incurred after a particular point. This to our mind is not logical. Thus the allocation made by the assessee to our mind is justified. Hence, we allow this ground of the assessee.
On the issue of administrative expenses, the CIT has applied the decision of the Pune Bench of the Tribunal in the case of Khinvasara inwarsa Investment Pvt. Ltd. Vs. JCIT [2006 (6) TMI 198 - ITAT PUNE-A] while adjudicating the very same issue for the assessment year 2009-10. We direct the assessing officer to adopt the same for the impugned assessment year 2008-09 and allow this ground of the assessee
Allocation of husk @55% to the power plant as made by the assessing officer - HELD THAT:- This issue is covered in favour of the assessee and against the revenue as relying on CONTIMETERS ELECTRICALS PVT. LTD. [2008 (12) TMI 4 - HIGH COURT DELHI] and ACE MULTITAXES SYSTEMS PVT. LTD. [2009 (1) TMI 260 - KARNATAKA HIGH COURT]
Adoption of husk consumption rate - HELD THAT:- CIT(A) held that the assessing officer had not pointed out errors nor rejected the data as per the records maintained by the assessee, before taking up comparable cases such as M/s. Sudha Agro Oils and Gautam Solvents for coming to such conclusions. We find that this conclusion of the Ld. CIT(A) is as per law for the reason that no estimates can be made without rejection of the books of accounts and without pointing out errors in those books of accounts. When the assessee is maintaining detailed records of husk consumption, electricity production, etc., the assessing officer has to point out errors in these records, reject the same and then only go for comparable cases. As the assessing officer has not done the same, CIT(A) is right in his finding.
Non-maintenance of separate books of accounts for power generation business - AO was of the view that this would disentitle the assessee for making the claim u/s 80IA - HELD THAT:- It is pointed out that in the assessment year 2009-10 the assessing officer, on the very same set of facts, accepted that books of accounts maintained by the assessee on the ground that they fulfill the requirements of separate books of accounts as the purpose of having separate books of accounts, is to enable the assessing officer to ascertain the profits from power generation business. When this objective is fulfilled and when the assessing officer in the subsequent year holds so, we are of the considered opinion that the finding of the Ld. CIT(A), which is in consonance with circular no.1 of 13 dated 17.1.2013 issued by the CBDT requires to be upheld. Therefore, ground no.9 is dismissed.
No difference in technical specifications of the turbine used by the assessee and Sudha Agro, the learned Counsel submitted that the very method of generation of power by these two entities are different and cannot be compared. It was submitted that in the case of Sudha Agro out of 30 tonnes of steam, 10 tonnes is absorbed in the turbine and out of the balance, part of the steam is passed through condensation unit and the steam condensed to 20 tonnes only before being used in the rice mill. We are unable to comment on this factual differences brought out by assessee. As we have already taken a view that allocation of husk @10% is reasonable, suffice to say that consistent with the view taken on this issue for the earlier assessment year, we allow this ground of the assessee.
Disallowance u/s 40(a)(ia) - HELD THAT:- CIT(A) applied the decision of the Visakhapatnam special bench of the Tribunal in the case of Merilyn Shipping and Transport Vs. ACIT [2012 (4) TMI 290 - ITAT VISAKHAPATNAM] . This decision has since been suspended and the Hon’ble Kolkata High Court in the case of CIT Vs. Crescent Export Syndicate [2013 (5) TMI 510 - CALCUTTA HIGH COURT] held that the law laid down in the case of Merilyn Shipping and Transport (Supra) is not a good law. Further, it was held that the provisions of S.40(a)(ia) are applicable even when the expenditure is paid during the year and not payable as at the end of previous year.
Disallowance made of certain expenditure - HELD THAT:- Assessee produced the details of payments made to the sundry creditors which were also produced before the AO. In almost all the cases some amount out of the purpose consideration was paid before March and the balance payable was paid in the month of April. AO neither disputed the fact of purchase of paddy nor pointed out any instances of either quantitative difference or rate difference. Test-check made by AO by recording sworn statements of three of the creditors also turned out in favour of the assessee. Under these circumstance AO is not correct in making an adhoc disallowance only because confirmation letters are not produced without finding any other discrepancy either in the purchases or in the names and addresses of the sundry creditors.
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2014 (4) TMI 1249
Entitlement for deduction u/s 80P(2)(a)(i) - whether the Assessee is hit by the provisions of Sec. 80P(4) which was introduced in the statute by the Finance Act, 2006 w.e.f. 1.4.2007? - HELD THAT:- Sec. 80P(2)(a)(i) it is apparent that if the co-operative society is engaged in carrying of business of banking or providing credit facilities to its members, the co-operative society is entitled for deduction on whole of the income relating to any one or more of such business. From the reading of Sec. 80P(4) it is apparent that this section denies deduction to a co-operative bank other than a primary agricultural credit society or primary co-operative agricultural and rural development bank. The provisions of Sec. 80P(4) were introduced in the statute by the Finance Act, 2006 w.e.f. 1.4.2007. The explanation to the section defines the co-operative bank and primary agricultural credit society to have the same meaning as assigned to them in Part-V of the Banking Regulation Act, 1949.
It is not the case of either of the parties that the Assessee is a primary co-operative agricultural and rural development bank. It is also not the claim of the Assessee that Assessee is a primary agricultural credit society. If we read both the sections, Sec. 80P(2)(a)(i) and Sec. 80P(4) together, we find that the provisions of Sec. 80P(4) mandates that the provisions of Sec. 80P will not apply to any co-operative bank other than a primary agricultural credit society or primary co-operative agricultural and rural development bank but as per the provisions of Sec. 80P(2)(a)(i), a co-operative society engaged in carrying on the business of banking or providing credit facilities to its members is entitled for deduction. Since the assessee is a primary co-operative bank, therefore in our opinion the assessee is hit by the provision of section 80P(4) and assessee will not be entitled for deduction u/s 80P(2)(a)(i).
As gone through the order of this tribunal for the assessment year 2006-07. We noted that this decision will not assist the assessee as there was no section 80P(4) there during the impugned assessment year. This section has been inserted w.e.f. 1.4.2007
Sec. 80P(2)(a)(i) it is apparent that if the co-operative society is engaged in carrying of business of banking or providing credit facilities to its members, the co-operative society is entitled for deduction on whole of the income relating to any one or more of such business.
From the reading of Sec. 80P(4) it is apparent that this section denies deduction to a co-operative bank other than a primary agricultural credit society or primary co-operative agricultural and rural development bank. The provisions of Sec. 80P(4) were introduced in the statute by the Finance Act, 2006 w.e.f. 1.4.2007. The explanation to the section defines the co-operative bank and primary agricultural credit society to have the same meaning as assigned to them in Part-V of the Banking Regulation Act, 1949. It is not the case of either of the parties that the Assessee is a primary co-operative agricultural and rural development bank. It is also not the claim of the Assessee that Assessee is a primary agricultural credit society.
If we read both the sections, Sec. 80P(2)(a)(i) and Sec. 80P(4) together, we find that the provisions of Sec. 80P(4) mandates that the provisions of Sec. 80P will not apply to any co-operative bank other than a primary agricultural credit society or primary co-operative agricultural and rural development bank but as per the provisions of Sec. 80P(2)(a)(i), a co-operative society engaged in carrying on the business of banking or providing credit facilities to its members is entitled for deduction. Since the assessee is a primary co-operative bank, therefore in our opinion the assessee is hit by the provision of section 80P(4) and assessee will not be entitled for deduction u/s 80P(2)(a)(i).
Also gone through the order of this tribunal for the assessment year 2006-07. We noted that this decision will not assist the assessee as there was no section 80P(4) there during the impugned assessment year. This section has been inserted w.e.f. 1.4.2007
Claim of the assessee u/s 80P(2)(a)(i) in respect of interest received by the assessee from Ratnakar Bank. We have already held that since the assessee is hit by the provisions of section 80P(4), therefore, the assessee is not entitled for the deduction u/s 80P(2)(a)(i). Accordingly, we dismiss the ground taken by the assessee in the C.O’s .
Appeals filed by the revenue are allowed.
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2014 (4) TMI 1248
Reopening of assessment u/s 147 - notice u/s 148 on expiry of four years from the end of relevant assessment year - exchange difference on PSCFC and PCFC loans - HELD THAT:- We notice that in the instant case for A.Y 2006-07, the very issue has been raised, though concluded not only in the earlier years, but also, in the original assessment on due scrutiny. In absence of any new tangible material available with the Assessing Officer, on the basis of which he could form his belief that income chargeable to tax has escaped assessment, it is not open to the AO to change his opinion by issuing the notice of re-assessment for the same being impermissible under the law.
Revenue could not point out as to in what manner, there has been a failure on the part of the assessee to disclose such material facts noted hereinabove. The reasons recorded itself also clearly indicates that from the verification of the record and on perusal of balance-sheet, details of exchange difference have been noted, leading to form a belief of escapement of income.
From the very material available and in wake of this discussion, we hold that the belief formed by the Assessing Officer is from the very record of the case, and therefore, the very assumption of the jurisdiction on the part of the AO in this case, where the notice had been issued on expiry of four years' period is not sustainable, and therefore, despite the contention on the part of the Revenue of availability of alternate remedy, the interference at this stage is necessary.
Notice of reopening deserves to be quashed and is hereby quashed therefor. We have recorded the objections raised by the petitioner for absence of deemed approval in accordance with law and though the same has been strongly resisted by the Revenue, if chosen not to opine of this aspect, as on the very first and vital ground, we have quashed the notice for reopening. - Decided in favour of assessee.
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2014 (4) TMI 1247
TDS u/s 195 - non-deduction of tax at source by the assessee on payment of overseas commission - HELD THAT:- Tribunal in DCIT Vs. M/s.Macmillan India Ltd. [2012 (3) TMI 639 - ITAT CHENNAI] shows that the identical issue in the case of the assessee has been decided by the Tribunal in favour of the assessee. Moreover, the Hon’ble Supreme Court of India in the case of GE Technology Centre P. Ltd. Vs. CIT [2010 (9) TMI 7 - SUPREME COURT] has held that mere remittance to non-residents does not automatically make the person liable to deduct tax at source. The duty to deduct tax at source arises only if remittance contains wholly or partly taxable income in India. In view of the well settled law and the facts of the case, the appeal of the Revenue is dismissed being devoid of merit.
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2014 (4) TMI 1246
Allowability of development expenses incurred on technical knowhow u/s 37 - payment made for providing knowhow to manufacture engines of specific parameters - allowability u/s 35AB - HELD THAT:- Appeal admitted on the following substantial questions of law:
(A) Whether on the facts and in the circumstances of the case and in law the Income Tax Appellate Tribunal was justified in allowing development expenses amounting to ₹ 8,93,56,131/which were incurred on technical knowhow under Section 37 of the Income Tax Act even though such expenditure was covered under Section 35AB of the Income Tax Act ?
(B) Whether on the facts and in the circumstances of the case and in law the Income Tax Appellate Tribunal was justified in remitting to the file of the Assessing Officer the issue concerning allow ability of development expenses amounting to ₹ 10,69,09,754/being payment made for providing knowhow to manufacture engines of specific parameters even though such expenditure is clearly for technical knowhow and was covered under Section 35AB of the Income Tax Act ?
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2014 (4) TMI 1245
Penalty u/s 271(1)(c) - undue deduction under section 35(2AB) in the return of income even though it did not receive the requisite certificate in the Form 3CD from the prescribed authority - penalty proceedings as distinct and separate from the quantum proceedings - HELD THAT:- No indulgence is necessary in the reasonings arrived at by both the CIT(Appeals) and the Tribunal who have rightly held that this is not a question of furnishing inaccurate particulars or concealing income.
In the scrutiny assessment under section 143(3) of the Act, respondent withdrew such claim since it had failed in such challenge before the CIT(Appeals) by then. On a bona fide belief that the letters issued by Ministry of Science and Technology were valid for it to claim deduction under section 35(2AB), if expenses incurred genuinely had been claimed in the return, rejecting the claim may not result into penalty proceedings nor would the withdrawal of claim in scrutiny proceedings in the aforementioned background can be said to be concealment. - Decided against revenue
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2014 (4) TMI 1244
Issuance of necessary directions for clubbing the FIRs filed by some of the respondents together with the FIR filed by the Punjab National Bank - Issuance of necessary directions for treating all the FIRs as a single FIR - principal contention of the applicant is that the applicants did not approach the member banks of the consortium individually for the purpose of obtaining the sanction of the credit facilities.
HELD THAT:- There can be no manner of doubt that in respect of the same set of facts, there can be only one FIR. A second report even if lodged cannot be registered as FIR, particularly when offence has already been registered. It would at the most amount to information being communicated to the police during investigation. In the present case, the FIRs indeed disclose the existence of a conspiracy and the representations being made to the consortium. According to the respondents, each individual works contract, therefore, amounted to individual action of cheating of the concerned member banks of the consortium. We had called for the case diaries of the offences which have been registered and we find that in some of the cases, the investigation is complete. At this stage, it would certainly be a premature exercise to determine if the cheating of all the member banks was pursuant to only one conspiracy and, therefore, there should be only one FIR or the cheating of the individual banks is an individual offence which can be investigated by the police.
The existence of smaller conspiracies pursuant to the larger conspiracy and the inducement of the individual member banks of the consortium to give credit facility would be a matter which would require to be investigated by the police. At this stage, no straitjacket formula can be evolved for determining if it was a single transaction or there were multiple different other transactions whereby the member banks of the consortium were cheated.
As per the procedure of the consortium banking, a core committee was formed and representations, if any, were made to the core committee. The core committee was constituted of the members of the consortium banks. Thus any representation which was made by the applicants to the core committee was a representation which was made to the individual banks of the consortium. The core committee was, in fact, acting for and on behalf of the members of the consortium. It cannot, therefore, be said that the representation was made to the core committee only and was not a representation which was made to the members of the consortium.
Since the representations were made to the core committee which was acting on behalf of each individual bank and, therefore, even if no representation was made to the individual banks, yet it amounted to a representation, though made to the core committee, as a representation made to the individual banks. Even if, therefore, at this stage, it is concluded that there was only one larger conspiracy without there being any smaller conspiracies, yet by virtue of the individual works contract, the individual banks were cheated to the extent of the credit facility offered by them, which would, therefore, amount to a distinct and a separate offence, though individual representation was not made to the member banks individually.
The investigation in respect of all the FIRs is not complete. The case diaries of certain FIRs have been produced before us for our perusal. However, since the charge-sheet has not been filed, according to us, it would be wholly inappropriate to make any reference to the investigation which has been carried out and particularly to the material which has been collected during investigation - it is clear that all the banks have been cheated and have been induced to give financial assistance to the applicants.
Though there is a single conspiracy, yet the act of individually cheating the member banks without there being actually an individual representation would constitute a separate offence and the respondents-banks, therefore, would be justified in lodging individual FIRs. The applicants therefore, are not entitled to the reliefs which the applicants have prayed for in this application.
Application dismissed.
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2014 (4) TMI 1243
Jurisdiction - Section 27 of the Right to Information Act, 2005 - HELD THAT:- It is trite that an executive instruction if in violation of a statutory rule or a regulation must yield to the statutory rule or regulation.
The demand by the respondents from the petitioner to pay fee in sum of ₹ 500/- per subject/answer book copy whereof is sought is not sustainable.
Appeal disposed off.
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2014 (4) TMI 1242
Eligibilty for deduction u/s 36(1)(vii) and 36(1)(viia) - benefit of deduction of provision for bad and doubtful debts u/s 36(1)(viia) - HELD THAT:- Hon’ble Supreme Court in the case of Catholic Syrian Bank vs. CIT [2012 (2) TMI 262 - SUPREME COURT OF INDIA] wherein it was held that provision of ss. 36(1)(vii) and 36(1)(viia) are distinct and independent items of deduction and operate in their respective fields.
It was held that proviso to section 36(1)(vii) operates only in cases falling under Cl. (viia) to limit the deduction to the extent of difference between the debt or part thereof writtenoff in the previous year and the credit balance in the provision for bad and doubtful debts made under clause (viia). It was held that the scheduled and non scheduled commercial banks are entitled to full benefit of write off or irrecoverable debts u/s 36(1)(vii) in addition to the benefit of deduction of provision for bad and doubtful debts u/s 36(1)(viia) - Appeal of the assessee treated as allowed for statistical purpose.
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2014 (4) TMI 1241
Reopening of assessment based upon the opinion of the DVO - addition of the difference of amount as disclosed by the assessee and the amount estimated by the DVO - non independent application of mind by AO - HELD THAT:- AO had not any other information or reason to believe that the income disclosed by the assessee had escaped assessment except the report of the DVO. The reopening was made merely on the basis of estimation of investment made by the DVO. The Hon'ble Supreme Court in the case of ACIT Vs. Dhariya Construction Company [2010 (2) TMI 612 - SUPREME COURT OF INDIA] has held that the opinion of the DVO per se is not an information for the purpose of reopening of assessment u/s 147.Such a reopening which is based on merely upon the opinion of the DVO was held to be bad in law.
Neither any information nor any such material was in possession of the Assessing Officer from which it could have been gathered that the income of the assessee has escaped assessment nor the Assessing Officer rejected the books of account of the assessee. The addition was made only on the basis of information / estimation of the DVO, which per se, is not an information for the purpose of reopening of assessment u/s 147 - Decided in favour of assessee
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2014 (4) TMI 1240
Rent-a-cab service - transportation services - transportation of papers/answer sheets, examiners – agreement terms indicating vehicle itself not given for operation under ownership and management of client - payments made for operating trips to various places. - Non filing of ST-3 returns - levy of penalty - Held that:- Issue notice.
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2014 (4) TMI 1239
Disallowing loss incurred on account of revaluing the outstanding forward contract entered with Banks - Losses on account of outstanding / open foreign exchange forward contracts - Business loss or Notional loss - HELD THAT:- The assessee has demonstrated that forward contract of foreign exchange were entered into by it in regard to its activity of import and export of diamonds. If such is the position then the issue will be covered in favour of the assessee by the aforementioned decisions which have been relied upon by AR. See ACIT CIRCLE–16(3), MUMBAI VERSUS M/S. S. RAJIV & CO. [2015 (5) TMI 38 - ITAT MUMBAI].
Accordingly, we hold that CIT(A) has erred in sustaining the disallowance and the addition sustained by him is deleted. The ground raised by the assessee is allowed.
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2014 (4) TMI 1238
Admission of additional ground - Order of assessment framed on a non-existing entity - scheme of amalgamation conceived - TP adjustment - HELD THAT:- It is an admitted position before us that the additional ground as admitted above was not agitated before the DRP. Thus, we find that the matter has neither been agitated nor decided by the DRP. Therefore, we find that the appellate process will be short circuited if the matter is decided for the first time by us. Both the counsel fairly agreed that the matter may be restored to the file of the DRP to hear the assessee in the matter and decide, as per law. The matter is restored to the file of the DRP to hear the assessee on this matter and decide, as per law.
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2014 (4) TMI 1237
Denial of exemption u/s 80P(2)(a)(i) on interest income earned on investments made with the banks - HELD THAT:- In the instant case there is no dispute to the fact that the society is a credit cooperative society authorised by the registrar of cooperative societies for accepting deposits and lending money to its members as per license granted by the registrar of cooperative societies and the main object of the society is to provide credit facility to members who can be any person of the society. We find the Pune Bench of the Tribunal in the case of Mahavir Nagari Sahakari Pat Sanstha Ltd. [2000 (2) TMI 234 - ITAT PUNE] has held that the credit society which is carrying on the business of banking activity and providing credit facility to its members is eligible for deduction u/s.80P(2)(a)(i). Case followed M/S. THE TOTGARS´ COOPERATIVE SALE SOCIETY LIMITED VERSUS INCOME TAX OFFICER. KARNATAKA [2010 (2) TMI 3 - SUPREME COURT] - Decided in favour of assessee.
Cross-appeal of revenue relates to the decision of the CIT(A) in holding that the interest income earned from the investments made with other co-operative banks is eligible for the exemption u/s 80P(2)(d) - HELD THAT:- Provisions of section 80P(2)(d) of the Act which reads as follows :-
“(d) in respect of any income by way of interest or dividends derived by the co-operative society from its investments with any other co-operative society, the whole of such income;” - Thus Decision of the CIT(A) to allow exemption u/s 80P(2)(d) of the Act is expressly in accordance with the provisions of clause (d) of subsection (2) of section 80P of the Act and no infirmity on the same has been pointed out by the learned Departmental Representative before us. Accordingly, we hereby affirm the order of the CIT(A) and the Revenue fails in its cross-appeal.
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2014 (4) TMI 1236
Disallowance of interest - HELD THAT:- As the issue involved in the present appeals of the assessee as well as all the material facts relevant thereto are similar to the case of Shri Hitesh S. Mehta [2013 (10) TMI 1065 - ITAT MUMBAI] decided by the Tribunal, the ld. Representatives of both the sides have agreed that the issue involved in the present case relating to disallowance of interest expenditure should also be sent back to the ld. CIT(A). Accordingly, we set aside the impugned orders of the CIT(A) confirming the disallowance made by the A.O. on account of interest expenditure and remit the matter back to him for deciding the same afresh.
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2014 (4) TMI 1235
Treatment of income declared by the assessee during the survey proceedings u/s 133A - income from other sources OR business income claimed by the assessee - HELD THAT:- In the absence of any evidence brought by the authorities below to disprove/disbelieve the claim of the assessee treating the impugned receipt under the head 'business income', the authorities below are not justified in treating the same under the head 'income from other sources'.
D.R. could not bring before us any contrary fact or case law which may justify departure from the above finding of the Tribunal given in the case of other partner of the firm namely Mr. Hansat Maneklal Savani [2013 (12) TMI 1364 - ITAT MUMBAI]. So respectfully following the same, for the sake of consistency, this issue is allowed in favour of the assessee and the income declared by the assessee during the course of survey is directed to be treated under the head ‘Business income’ as has been claimed by the assessee.
Disallowance of interest paid by the assessee to the firm in which he has been a partner - HELD THAT:- The partners are entitled to interest on the credit balance in the capital account, as prescribed u/s 40(b)(iv) of the I.T. Act 1961 @ 12%. The partners are also liable to pay interest on the debit balance in capital account on similar basis. It is further submitted that the liability to pay interest arises out of contractual obligation. The perusal of the copy of the Firm's assessment order for Asst. Year 2008-09 available at Paper Book Page 30 reveals that in the case of the firm M/s. MSN Enterprises the said interest has been assessed as income of the firm. Having considered the rival submissions, reasoning of the lower authorities and material on record, we are of the considered view that the claim of the assessee is emanating out of contractual obligation and is in consonance with the provisions of law.
D.R. could not bring before us any contrary fact or case law which may justify departure from the above finding of the Tribunal given in the case of other partner of the firm namely Mr. Hansat Maneklal Savani. So respectfully following the same, for the sake of consistency, this issue is allowed in favour of the assessee.
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2014 (4) TMI 1234
Exemption u/s 80P(2)(a)(i) on interest income as earned on the fixed deposits fro banks - income declared by the assessee was directly attributable to investments made with non-members, namely, banks - assessee before us is a Co-operative Society registered under the Maharashtra Co-operative Societies Act, 1960 - Held that:- As decided in ITO WARD-1(4), NASHIK VERSUS NIPHAD NAGARI SAHAKARI PATSANSTHA LTD. [2015 (1) TMI 1004 - ITAT PUNE] the society is a credit cooperative society authorised by the registrar of cooperative societies for accepting deposits and lending money to its members as per license granted by the registrar of cooperative societies and the main object of the society is to provide credit facility to members who can be any person of the society. A credit society which is carrying on the business of banking activity and providing credit facility to its members is eligible for deduction u/s.80P(2)(a)(i). - Decided in favour of assessee.
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2014 (4) TMI 1233
Penalty levied u/s. 271(1)(c) - assessee had filed his revised return of income voluntarily declaring the capital gain accrued to him from the sale of agricultural land measuring about 1 acre at Kalapatty village - Reopening of assessment - Held that:- One cannot simply presume, the assessee had filed the revised return only after he came to know about the survey proceedings in the premises of the Shri Chinnasamy Selvaraj. There is no categorical finding on this aspect also by the AO, which CIT (A) had clearly observed in his order.
The concept of presumption or an after-thought by the assessee cannot be plainly inferred only by considering the chronological events of the fact without looking at the root of the basic facts. There is also no finding by the Ld. Assessing Officer on the fact that the relevant asset was located within 8 Kilometers radius from the municipal limit of Coimbatore town, which the assessee had himself voluntarily admitted.
It is worthwhile to mention here that under normal circumstances one does not always realize the location of his assets with respect to its distance from the municipal limit of a particular city.
In the present case the asset is located beyond the municipal limit of Coimbatore city; though within 8 Kilometers from the radius of such prescribed limit. Therefore, there is a possibility of bona fide misconception by the assessee on the issue. However, when the assessee realized his folly, he earnestly computed his tax liability under the head capital gain and voluntarily filed the revised return of income promptly along with proof of payment of tax.
AO after obtaining the relevant information from the revised return, treated the return of income as lodged, however acted upon the return filed by the assessee by accepting the income declared in the revised return subsequent to issuance of notice U/s. 148 and on receipt of the reply from the assessee to treat the revised return as return filed in response to notice U/s 148 and further proceeded to levy penalty. But this is not a case suitable for levy of penalty u/s. 271(1)(c) because, the entire addition has resulted from the voluntary disclosure by the assessee, though omitted to be disclosed while filing the original return of income due to bonafide reasons. - Decided in favour of the assessee.
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2014 (4) TMI 1232
Disallowance of 2/3rd of expenses on medicines - estimation of income - this claim of expenditure is an afterthought though entire suppressed turnover could not be considered as income and expenses on such turnover are to be allowed - Held that:- In the present case, the AO accepted that there is existence of undisclosed expenditure in the form of medicines and given credit at 1/3rd of that expenditure and rejected 2/3rd of the same. In these circumstances, the AO only doubted the quantum of expenditure. We have gone through the details of suppressed expenditure. We have also gone through the net profit rate as per original and revised return of income.
When we compare the original rate of net profit with revised rate of net profit, the revised rate of net profit is very high. From that we can infer that even after considering the suppressed expenditure, the net profit is very high which is higher than the normal net profit in this line of business. The average net profit for the last four years is worked out at 23.02%. Being so, in our opinion, to settle the dispute it is appropriate to consider the average net profit to work out the income of these assessment years which is below the average rate. Thus, for A.Ys. 2006-07 and 2007-08, income is to be estimated at 22.02% of the gross receipts and there is no change in the A.Ys. 2008-09 and 2009-10 as the declared rate of net profit is higher than the average net profit rate. Accordingly, we are of the opinion that entire gross receipts cannot be considered as income of the assessee.
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2014 (4) TMI 1231
Rejection of books of accounts - estimation of profits - determination of profits in the business of wines - Held that:- In similar matters, the Coordinate Benches of the Tribunal have been consistently directing adoption of rate of 5% of the purchase value or stock put to use whichever is more.
As decided in ITO, Warangal vs. Shri P. Ramaiah and others [2013 (12) TMI 1001 - ITAT HYDERABAD] income of the assessees in the line of liquor business has to be estimated at 5% cost of sales made by them - decided against revenue
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9911796707
