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Showing 81 to 100 of 1829 Records
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2017 (1) TMI 1752
Loss as a speculation loss - Loss as incurred on squaring off of erroneous trades executed on behalf of the clients and devolved on the appellant - allocation of expenses to the loss incurred on squaring off of erroneous trades - HELD THAT:- Looking at the turnover and assessee’s commission income, operational default by assessee’s huge staff cannot be held as unreasonable. The assessee’s total income is a loss and not a positive figure. The accounts are duly audited and follow the established rules and norms. The loss caused by operational default of the employees cannot be treated as loss on account of speculation activity of the assessee and such loss represents normal business exigencies. Such type of business exigencies cannot be assumed to be speculative activity so much to attract explanation to section 73.
Expenses incurred by the appellant relate to its normal broking activity - HELD THAT:- Since it is held that there no speculation activity carried on by the assessee consequently; there is no justification in disallowing the same expenditure assuming speculation activity. Besides assessee has demonstrated that expenditure disallowed represent institutional fees and other incidental expenses, which has not be factually disallowed by the authorities below. In view thereof, both the disallowances are deleted and the assessee’s grounds are allowed.
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2017 (1) TMI 1751
TDS u/s 194J - Addition u/s 40(a)(ia) - no TDS has been deduced on secondment charges under the head “Personnel cost” - HELD THAT:- As transaction charges paid by the assessee to the stock exchange constitute "fees for technical services" covered under section 194J of the Act and, therefore, the assessee was liable to deduct tax at source while crediting the transaction charges to the account of the stock exchange.
Since both the Revenue and the assessee were under the bona fide belief for nearly a decade that tax was not deductible at source on payment of transaction charges, no fault can be found with the assessee in not deducting the tax at source in the assessment year in question and consequently disallowance made by the Assessing Officer under section 40(a)(ia) of the Act in respect of the transaction charges cannot be sustained. We make it clear that we have arrived at the above conclusion in the peculiar facts of the present case, where both the Revenue and the assessee right from the insertion of section 194J in the year 1995 till 2005 proceeded on the footing that the assessee is not liable to deduct tax at source and in fact immediately after the assessment year in question, i.e., from the assessment year 2006-07 the assessee has been deducting tax at source while crediting the transaction charges to the account of the stock exchange.
We also find that the issue is covered by the decision of ITAT, Bangalore bench in the case of IDS Software Solutions (India) (P) Ltd. [2009 (1) TMI 363 - ITAT BANGALORE-A] wherein the facts discussed as regards to where the assessee entered into a secondment agreement‘ with a US Company and obtained the services of an employee and the question arose whether the reimbursement by the assessee to the US Company of the salary paid by the US Company was chargeable to tax as - fees for technical services.
As held that though the US Co was the employer in a legal sense but since the services of the employee had been seconded to the assessee and since the assessee was to reimburse the emoluments and it controlled the services of the employee, it was the assessee which for all practical purposes was the employer. Accordingly, the salary reimbursed to the US Co was not chargeable to tax. Though the person deputed by the US Co was a technical person, the consideration paid under the secondment agreement was not ―fees for technical services‖ because the fact that the seconded employee was responsible and subservient to the payer (assessee) and was required to also act as officer or authorized signatory or nominee of the assessee made it inconsistent with an agreement for providing technical services.
Compensation from customers - assessee was following mercantile system of accounting, and hence, the compensation receivable from the customers was required to be accounted on accrual basis - HELD THAT:- Assessee stated that this issue has already been remitted back to the file of AO in the immediate preceding year exactly on identical facts by Tribunal in assessee‘s own case [2014 (1) TMI 536 - ITAT MUMBAI] for Asst. Year 2008-09 and on similar line if the issue is remitted back to the file of the AO that will suffice the matter. On query from the bench, ld. Sr. DR has not objected to the stand of the assessee. Hence, we direct the AO to decide the issue in term of the principles laid down. This issue of revenue‘s appeal is allowed for statistical purposes.
Disallowance u/s 14A r.w.r.8D(2)(ii) - assessee‘s suo-mottu disallowance being expenditure for earning the exempt income by the assessee - As submitted before us by the ld.AR that the bank charges were deducted by the banks for the various transactions/collections of money entered into in the ordinary course of business and in no way constituted the part of interest expenses as per the provisions of section 2(28A) - HELD THAT:- We are of the opinion that the interest for the purpose of working out the disallowance under section 2(28A) includes only interest on the money borrowed and any fees or charges paid on the said borrowings which is availed by the assessee and not bank charges which are charged by the bank for rendering various services like making payments and collection on behalf of the assessee relating to business of the assessee wholly and exclusively. We are therefore, not inclined to accept the findings of the ld. CIT(A) in para 6.3 of its order and accordingly set aside the order of the ld. CIT(A) as being wrong and contrary to law. The AO is directed to delete the disallowance.
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2017 (1) TMI 1750
Reopening of assessment u/s 147 - Reopening after expiry of a period of four years from the end of the relevant assessment year - assessee has not filed relevant details - HELD THAT:- Assessee admittedly filed the Profit & Loss account and other details which are required for completing the assessment. Therefore, it cannot be said that there was any negligence on the part of the assessee. Merely because the Assessing Officer could not examine the Profit & Loss account filed by the assessee in the course of regular assessment, that cannot be a reason to say that the assessee has not filed relevant details.
This Tribunal is of the considered opinion that when the assessee provided all the relevant details before the Assessing Officer and the Assessing Officer has also completed assessment under Section 143(3) of the Act, it cannot be said that there was any negligence on the part of the assessee. Therefore, reopening of assessment beyond the period of four years from the end of the relevant assessment year is outside the scope of Section 147 of the Act. In view of the above, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed. Appeal filed by the Revenue is dismissed.
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2017 (1) TMI 1749
Levy of service tax - clearing and forwarding agency - perform various duties like clearing cement unloading from railway, stacking storage, dispatch, realising sale proceeds, maintaining records, promoting the cement sales of the client and furnishing periodical records etc. - HELD THAT:- The respondent acting as C & F agent is liable for discharging service tax on the consideration received for such work. However, incidental to such work they were, in terms of contract, obliged to carry out certain other work. The expenses for the same were reimbursed on actual basis based on documentary evidence. Since these were reimbursed on actual basis, the impugned order held them as not to be considered for service tax purpose to tax the activity of C & F Agent.
The valuation and tax liability of C & F agent service has been a subject matter of dispute. The Tribunal in various decisions held that if the C & F agent is carrying out certain activities incidental and claims the expenses on actual basis, the same are not includible in the taxable consideration. These expenses may be like go-down rent, carting and shifting charges, transportation, maintenance of staff and other establishment for the client etc. Reference can be made to the decision of the Tribunal in the case of SANGAMITRA SERVICES AGENCY VERSUS COMMISSIONER OF C. EX., CHENNAI [2007 (7) TMI 33 - CESTAT, CHENNAI]. The Tribunal held that reimbursable expenditures towards freight, labour, electricity, telephone etc. are not includible.
Business auxiliary service relating to promotion of clients business - HELD THAT:- The overall commission received by the respondent is subjected to tax. We are not informed about any part of commission not being subjected to tax, to be covered under BAS. In the absence of such specific finding, we are not in a position to interfere with the impugned order.
Appeal dismissed - decided against Revenue.
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2017 (1) TMI 1748
Refund of service tax paid - services used for export of goods - agency charges - ground rent - weighment & wharfage charges - denial on the ground that these services are not specifically included in N/N. 17/2009-ST dated 6.7.2009 and also on the ground that appellant has failed to produce Chartered Accountant’s certificate required under the notification - HELD THAT:- The Tribunal has been consistently taking the view that various services rendered within the port are to be considered as port service which finds mention in the Notification No. 41/2007 dated 6.10.2007 as well as 17/2009 dated 6.7.2009 - Reliance can be placed in the case of M/S SRF LTD. VERSUS C.C.E., JAIPUR-I [2015 (9) TMI 1281 - CESTAT NEW DELHI] and M/S. SHIVAM EXPORTS, M/S. MECSHOT BLASTING EQUIPMENT (P) LTD. AND M/S. SHREE RAM INDUSTRIES VERSUS CCE JAIPUR [2016 (2) TMI 259 - CESTAT NEW DELHI] - the refund claims are allowed in respect of these services except GTA services.
GTA Services - HELD THAT:- The appellant has submitted that they are in possession of documentary evidence regarding payment of service tax as well as to correlate such payment to the shipping bills under which the goods have been exported - matter remanded to the original adjudicating authority for verification of such claims.
Appeal allowed in part and part matter on remand.
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2017 (1) TMI 1747
Levy of penalty - service tax alongwith interest paid on being pointed out - services of foreign commission agents - reverse charge mechanism - HELD THAT:- In appellant own case of past periods M/S. RSWM LTD. VERSUS CCE, JAIPUR-II [2016 (11) TMI 1363 - CESTAT NEW DELHI] is similar issue, Tribunal has set aside the penalty u/s 80.
The penalties are set aside under Section 80 - Appeal allowed - decided in favor of appellant.
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2017 (1) TMI 1746
Interpretation of statute - effect of N/N. 50/2008-C.E.(N.T.), dated 31-12-2008 - Amendment in Rule 6(6) of CCR - retrospective or prospective? - clearances were made to SEZ developers prior to 31.12.2008 - HELD THAT:- The issue is no longer res Integra. In the case of THE COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX AND THE COMMISSIONER OF CENTRAL EXCISE VERSUS M/S FOSROC CHEMICALS (INDIA) PVT LTD AND OTHERS [2014 (9) TMI 633 - KARNATAKA HIGH COURT] it was held that amendment has to be construed as retrospective in nature and the benefit of Rule 6(6)(1) as amended in 2008 has to be extended to the goods cleared to a "developer" of a Special Economic Zone for their authorized operations.
Appeal dismissed - decided against Revenue.
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2017 (1) TMI 1745
Validity of Shipping Bills - allegation is that the goods were not in conformity to the required norms of finished leather - shipping bill filed in Delhi which is nearer to Kanpur whereas goods bought in Kanpur - HELD THAT:- The assessee-Respondents attempted to export “Leather of beige colour” along with certificate of Central Leather Institute (CLRI). Customs drew sample of the goods and sent it for testing to CLRI which certified that sample did not satisfy the norms and conditions laid down in the Public Notice No. 21/2009-14 dated 01.12.2009 on the ground that there was absence of finishing coat, without which the goods cannot be allowed to be exported in terms of the said order. On being asked as to how the earlier certificate did not raise this objection, CLRI clarified that sample tested earlier was not the same as the one sent by the Customs.
There are force in the submissions of the learned counsel as in the entire order there is no finding that the impugned leather was not finished leather or was semi-finished leather and the only finding is that does not satisfy the norms and conditions for the type of finished leather as declared. There is no other evidence to suggest any contumacious conduct or deliberate mis-declaration.
Appeal dismissed - decided against Revenue.
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2017 (1) TMI 1744
Suspension of a custom broker license - appellant’s argument is that the Commissioner of Customs, Delhi has failed to observe the time limits strictly prescribed under CBLR, 2013 - contravention of the provisions of CBLR, 2013 - HELD THAT:- It is seen from the records that Commissioner of Customs, Delhi received the intimation of irregularities issued by Additional Commissioner of Customs, SIIB on 28.06.2016. This may be considered as the date of receipt of Offence Report. Regulation 20(1) contemplates issue of Show Cause Notice to the customs broker by the Commissioner within a period of 90 days from the date of receipt of Offence Report. The issue of Show Cause Notice is to be followed within a period of 90 days by submission of Inquiry Report by Asst. Commissioner/Dy. Commissioner and ultimate passing of the order by the Commissioner within a period of 90 days from the date of submission of Inquiry report.
The order of the lower authority which was issued without adhering to the time schedule is liable to be set aside on these grounds - appeal allowed - decided in favor of appellant.
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2017 (1) TMI 1743
Refund of excess paid duty - allegation is that appellant had passed on the duty element to the buyers and hence, the refund claim was hit by the bar of unjust-enrichment - HELD THAT:- Refund to the tune of ₹ 10,76,917/- has arisen at the time of finalization of provisional assessment for the period April, 2009 to December, 2010 and February, 2010 to March, 2010. However, the refund of the said amount was not paid in cash to the appellant but was credited to the Consumer Welfare Fund established under Section 12 C of the Central Excise Act, 1944. The reason cited in the Impugned order is that the appellant has not been able to establish that incidence of duty was not passed on. The claim of the appellant is that the IC Engines cleared by the appellant to another sister concern have been used in the manufacture of ‘Agricultural Tractors’ which are exempted from payment of Excise Duty.
The issue whether unjust enrichment will be applicable for captive consumption has been decided by the Hon’ble Supreme Court India in case of SOLAR PESTICIDES PVT. LTD. VERSUS UNION OF INDIA [1991 (10) TMI 42 - HIGH COURT OF JUDICATURE AT BOMBAY]. The Apex Court has categorically held that the principle of unjust enrichment applies to cases of captive consumption also. The case which was with reference to Section 27 of the Customs Act, 1962 will be equally applicable to the Central Excise matters.
There is nothing on record which has been submitted by the appellant to rebut that the presumption that the duty incident has been passed on which is built into Section 11B of the Central Excise Act - Appeal dismissed.
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2017 (1) TMI 1742
CENVAT Credit - Capital goods - Cement - TOR Steel Bars - items are said to have been used in structural foundation to support the power plant - HELD THAT:- An identical issue came before the Division Bench of this Tribunal and was decided in M/S SHREE CEMENT LIMITED VERSUS CCE, JAIPUR [2017 (1) TMI 287 - CESTAT NEW DELHI] where it was held that cement and TOR steel cannot be considered as inputs which are used in the fabrication or manufacture of capital goods and credit cannot be allowed.
Credit cannot be allowed - appeal dismissed.
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2017 (1) TMI 1741
Valuation of imported goods - unbranded mobile phones - goods which were declared as unbranded mobile phones were found with the brand names of “Arise” and “Tiger” brands - enhancement of declared value - confiscation - redemption fine - penalty - HELD THAT:- The enhancement of value has not been challenged by the appellant and hence the same is not being discussed in this order. The case of Revenue is that the import goods have been declared as unbranded mobile phones; however the goods on examination were found to be mobile phone bearing the brand names of “Arise” and “Tiger”. Accordingly, the goods have been held to mis-declared and hence liable for confiscation under Section 111(m) of the Customs Act, 1962.
The goods received were with a brand name. To this extent mis-declaration stands established. However, we note that the mobile phones brands names of “Arise” and “Tiger” are not well known in the Indian market. These brand names are not even registered with Custom IBR Rules, 2007. The appellant has also submitted that these brand names are not even registered in China.
The redemption fine reduced from 8 lakhs to 1 lakh and the penalty from 2,12,623/- to ₹ 25,000/- - appeal allowed in part.
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2017 (1) TMI 1740
Revocation of CHA License - seeking to set aside forfeiture of the security deposit - only reason cited by the Commissioner to disregard the enquiry report of the Assistant Commissioner is that the appellant’s manager in his statement has admitted that they have failed to notice the discrepancy in the invoice and could did intimate the importer to file the correct documents - HELD THAT:- There are no case of abetment can be made out against the appellant for the undervaluation indulged by the importer. Any customs broker normally files the documents on the basis of what has been given to them by the importer. He cannot be expected to get them verified at the foreign exporter’s end. In the case laws relied upon by the appellant the Hon’ble High Court of Bombay in the case of COMMISSIONER OF CUSTOMS (GENERAL), MUMBAI VERSUS MD. SHIPPING AGENCY [2014 (2) TMI 624 - BOMBAY HIGH COURT] in similar circumstances, has held under Regulation 13(d) of CHALR the occasion to advice the importer would not arise because there was no occasion for the CHA to know or even suspect that the importer was not complying with the provisions of the Customs Act and / or advance license under which the goods were cleared. This is more so as delivery to a transporter for carriage of goods at the direction of the importer would not by itself resulted in non-compliance of the Customs Act.
There is no justification for forfeiting the security deposit as has been ordered in the impugned order - Appeal allowed - decided in favor of appellant.
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2017 (1) TMI 1739
Deduction allowable u/s 10A - treatment to expenditure reduced from the export turnover - HELD THAT:- Following the judgment in the case of M/s Tata Elxsi Ltd. [2011 (8) TMI 782 - KARNATAKA HIGH COURT] wherein as held by that the total turnover is sum total of export turnover and domestic turnover and therefore, if an amount is reduced from export turnover then the total turnover also automatically goes down by the same amount. We direct the AO that the expenses he has reduced from the export turnover should also be reduced from the total turnover for the purpose of computation of deduction allowable u/s 10A of the Act. These grounds are allowed in this manner.
Deduction u/s 10A - computed after setting off losses incurred by certain undertakings as against computing relief for each undertaking separately - HELD THAT:- Claim allowed by respectfully following the judgment of the Hon’ble High Court rendered in the case of M/s Yokogawa India Ltd [2016 (12) TMI 881 - SUPREME COURT] which has been approved by the Hon’ble Apex Court.
Whether interest income is assessed under the head “Income from business” or “Income from other sources” is not having any impact on the tax liability of the assessee in the present year, we hold that this issue is only of academic interest in the present year and we do not enter into this aspect in the present year and the same is left open for a decision in a later year where it will have an impact on the tax liability of the assessee.
Allowability of expenditure on purchase of computer software along with related hardware - HELD THAT:- Expenditure incurred on purchase of computer software along with related hardware is not allowable as revenue expenditure u/s 37 and only depreciation thereon is allowable as per the applicable rate but the income of the assessee should be considered after making this disallowance for the purpose of computing deduction allowable to the assessee u/s 10A of the IT Act because in our considered opinion, if an amount is not allowable on the basis of this dispute that it is capital expenditure and not revenue expenditure then it has to be accepted that the actual business income was the income assessed after making such disallowance and the same should be considered for the purpose of computing the deduction allowable u/s 10A of the IT Act, 1961.
Foreign tax credit - HELD THAT:- We restore the matter regarding granting of foreign tax credit to the assessee to the file of the AO for a fresh decision with the direction that if it is established by the assessee that an income was taxed in a foreign country and the same was also taxed in India and on such income, no exemption was claimed by the assessee in India then foreign tax paid in a foreign country should be considered for foreign tax credit as per law. The AO should pass necessary order as per law on this aspect after providing adequate opportunity of being heard to the assessee. The issue involved in ground no. 15 in respect of chargeability of interest is consequential in nature for which no separate adjudication is called for
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2017 (1) TMI 1738
Reopening of assessment u/s 147 - objections on the assumption of jurisdiction for reopening of assessee - HELD THAT:- We confirm the direction to the respondent to consider the objections on the assumption of jurisdiction after granting the Assessee an opportunity of personal hearing. Accordingly, the respondent is directed to pass a speaking order on the aspect of jurisdiction under Section 147 of the Act, within a period of four weeks from the date of receipt of a copy of this order. No costs.
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2017 (1) TMI 1737
Permission for withdrawal of present appeal with a view to file application under Section 129-B of The Customs Act, 1962 - HELD THAT:- Permission is granted.
Appeal is disposed of as withdrawn.
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2017 (1) TMI 1736
Reopening of proceedings pertaining to the dismissal of his suit for specific performance - allotment of the suit property - prayer made in the plaint filed by Makhija was for a declaration that the decree dated 4th October, 1999 passed in favour of Pushparani was obtained in a fraudulent manner and is void and not worthy of being executed - HELD THAT:- When there is an allegation of fraud by non-disclosure of necessary and relevant facts or concealment of material facts, it must be inquired into. It is only after evidence is led coupled with intent to deceive that a conclusion of fraud could be arrived at. A mere concealment or non-disclosure without intent to deceive or a bald allegation of fraud without proof and intent to deceive would not render a decree obtained by a party as fraudulent. To conclude in a blanket manner that in every case where relevant facts are not disclosed, the decree obtained would be fraudulent, is stretching the principle to a vanishing point.
What is fraud has been adequately discussed in MEGHMALA & ORS. VERSUS G. NARASIMHA REDDY & ORS. [2010 (8) TMI 922 - SUPREME COURT] - Unfortunately, this decision does not refer to earlier decisions where also there is an equally elaborate discussion on fraud. These two decisions are BHAURAO DAGDU PARALKAR VERSUS STATE OF MAHARASHTRA & ORS. [2005 (8) TMI 661 - SUPREME COURT] and STATE OF ORISSA AND ORS. VERSUS HARAPRIYA BISOI [2009 (4) TMI 1006 - SUPREME COURT].
There is no doubt that Makhija had an opportunity to prove the allegation of fraud when he filed an application under Order XLI Rule 27 of the Code of Civil Procedure. However, he missed that opportunity right up to this Court. Makhija took a second shot at alleging fraud and filing another suit against Pushparani. However, the evidence that he relied upon was very thin and could not even be considered as secondary evidence. Accordingly both the Trial Court as well as the High Court rejected the allegation of fraud by not accepting the evidence put forward by Makhija to allege that fraud had been committed by Pushparani when she obtained the decree dated 4th October, 1999.
Fraud not having been proved but merely alleged, there are no reason to differ with the judgment and order passed by the High Court and the Trial Court.
The appeal is dismissed with costs quantified at ₹ 50,000/-.
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2017 (1) TMI 1735
Violation of prescribed method u/s. 145A in respect of the valuation of stock - upward adjustment made by the CIT-A invoking the provisions of section 43B - A.O. noticed that the assessee has included Excise Duty of ₹ 15,97,851/- to the value of closing stock in view of the provisions of section 145A of the act instead of balance of Excise Duty of ₹ 21,76,920/- available as on 31.03.2009 - HELD THAT:- CIT(A) has travelled beyond the grievance before him and invoked the provisions of section 43B of the Act and directed the A.O. to consider the disallowance . In our considered opinion, this amounts to enhancement. We also find that this act of the First Appellate Authority is without notice and in contravention to the provisions of section 251(2) of the Act. In our considered view, any enhancement without notice and made in contravention to the provisions of section 251(2) of the Act violates the mandatory provisions of the act and cannot be upheld. We, therefore, set aside the findings of the ld. CIT(A) to this extent, the addition stands deleted and the observations of the ld. CIT(A) qua the enhancement is struck down.
Disallowance of insurance expenses on account of short adjustment of prepaid insurance expenses - HELD THAT:- It is true that the assessee has incurred insurance premium of ₹ 39,416/- during the year under consideration. It is also true that the entire insurance premium does not pertain to the year under consideration but amount of ₹ 13,533/- is attributable to the next financial year. It would not be out of place to refer to the observations made by the Hon’ble High Court of Bombay in the case of Nagri Mills Co Ltd. [1957 (9) TMI 30 - BOMBAY HIGH COURT ] - Since the tax effect would be neutral, we do not find any merit in the impugned disallowance in the light of the afore-stated observations of the Hon’ble High Court of Bombay. We set aside the findings of the ld. CIT(A) and direct the A.O. to delete the addition.
Addition u/s 69C - Estimating expenditure on installation of certain assets @ 7% of the value of asset - AO noticed that the assessee has not debited any expense relating to the installation and/or labour charges and that such plant and machineries cannot be installed without incurring any expenditure, hence estimated 10% of the total additions and made an addition u/s. 69C - HELD THAT:- The burden is on the revenue to prove that the assessee has actually incurred some expenditure which is not explained. We find that the revenue authorities have not brought any evidence on record to show that the assessee actually incurred some expenditure in the installation of the Plant and Machineries. We also find that the revenue authorities did not make any enquiry from the suppliers of the plant and machineries when complete bills /invoices were before them. In our considered opinion, the entire addition has been made on presumption and, therefore such addition cannot be sustained.
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2017 (1) TMI 1734
Computation of deduction u/s. 10A - exclusion of expenditure on travelling and communication from the total turnover as well as the export turnover - HELD THAT:- There should be uniformity in the ingredients of both the numerator and the denominator of the formula, Section 10-A is a beneficial section. It is intended to provide incentives to promote exports. If the export turnover in the numerator is to be arrived at after excluding certain expenses, the same should also be excluded in computing the export turnover as a component of total turnover in the denominator. See TATA ELXSI LTD.[2011 (8) TMI 782 - KARNATAKA HIGH COURT].
TP Adjustment - comparable selection - HELD THAT:- Assessee is a captive service provider engaged in the business of developing, testing, customizing and maintaining high quality software for its Associated Enterprises (AE) thus companies functionally dissimilar with that of assessee need to be deselected.
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2017 (1) TMI 1733
Admission of additional evidence - tribunal's power to admit additional evidence - Unexplained cash deposit addition - HELD THAT:- Clearly, the assessee has not furnished any explanation with regard to the nature and source of the cash deposits in his two bank accounts as well as that introduced in business.
There was no dearth of opportunity with the assessee for producing the evidence, which it presses for admission before us vide application dated March 22, 2016. Rather, the very fact of its availability all through itself raises several questions, if not doubts, in the matter.
A mere mention of the sale of property, if the reference thereto before the ld. CIT(A) is taken into account, without anything further, much less substantiated, cannot be in law regarded as an 'explanation', and was accordingly not considered by him. The aspect of 'any other substantial cause' stands also explained by the higher courts as in terms of the requirement by the tribunal for pronouncing its order in a satisfactory manner.
The admission, as explained, is not to provide further innings or with a view to fill up the gaps in its case by a party and strengthen its case. We, accordingly, have no hesitation to hold that there is no requirement for the said 'evidence', even the credibility of which is suspect. The assessee's application or plea in this regard, i.e., admission of additional evidence, is accordingly rejected. Yes, of course, there is the quantitative aspect inasmuch as both the authorities have arrived at a different amount of the addition, resulting in cross appeals. The same though is independent of the evidence under reference.
On merits bald statement before the first appellate authority can hardly be considered as an explanation. The provisions of section 69/69A stand rightly invoked by the Revenue.
Quantum of the addition - We find the basis of a peak amount, as adopted by the ld. CIT(A), as reasonable. AO has himself allowed the assessee credit for ₹ 1 lac (out of ₹ 2.35 lacs withdrawn) against deposits in the SBI account, as well as for ₹ 0.10 lac withdrawn from PNB a/c, so that it is not that he was not alive to the same. The balance ₹ 1.35 lac stands withdrawn from the capital account on 31/3/2011, i.e., the last date of the year. The utilization of the same as well as of that withdrawn earlier (₹ 1.0 lac) in the books of the firm is to be seen before credit against the same could be allowed - With regard to the credit of ₹ 21.93 lacs in respect of cash credit in the assessee's capital account, ostensibly against 'journal entries' 'allowed' by the ld. CIT(A), we observe that the Revenue is rightly aggrieved (per Ground 2.3 of it's appeal) inasmuch as no opportunity to examine and, where so, meet and/or rebut has been provided to the AO. Further, who are the creditors; their capacity; the genuineness of the transactions, which aspects remain obscure or over-looked. In fact, it does not appear that the ld. CIT(A) has 'allowed' credit, or else the aggregate of cash deposits (as considered by him) would not amount to ₹ 103.07 lacs, i.e., as against ₹ 118.90 lacs by the AO, or at a difference of ₹ 15.83 lacs.
Decision - Even as we confirm the addition in principle, the matter with regard to its quantification, being inchoate, clearly requires determination, to be decided after due verification, of course after allowing proper opportunity of hearing to the assessee. We direct accordingly. This decides the assessee's appeal and Gd. 2.3 of the Revenues' appeal.
CIT(A) allowed relief to the assessee on the basis of a sales reconciliation - Revenue is aggrieved by it's admission, claimed to be in violation of Rule 46A - HELD THAT:- Only by virtue of it's payment that deduction in its respect obtains, i.e., u/s. 37(1) r/w. s. 43B, and the same gets in effect excluded in computing the assessee's income. This is rather further subject to the same representing a liability, as otherwise the question of its deduction does not arise. The payment is to be made during the relevant year, except where the liability arises for the current year, in which case it could be made up to the due date of filing the return u/s. 139(1) for that year. Then, again, we observe a difference of ₹ 4,23,517/- (in the reconciliation) in the account labour charges', qua which there is no claim by the assessee or even finding by the ld. CIT(A), though gets 'deleted' in pursuance of his order. The matter requires being examined by the AO, who shall adjudicate in accordance with law by issuing definite findings of fact and after allowing the assessee an opportunity to state and prove his case. We decide accordingly. In the result the assessee's appeal is partly allowed for statistical purposes, while the Revenue's appeal is partly allowed
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