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Commissioner of Income Tax-1 Versus Akar Laminators Ltd.

2015 (3) TMI 721 - GUJARAT HIGH COURT

Disallowance of loss - Tribunal remanding the issue to the file of Assessing Officer without giving any independent finding and cogent reasons as to how the CIT (Appeals)'s finding were incorrect - Held that:- If the notice was issued calling upon the assessee to produce certain documents and the assessee failed to produce the document, the power by the AO was required to be exercised judiciously to examine and to find out to what extent, the disallowance could be made, but it could not be to th .....

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n disallowing the claim and such was not interfered in the appeal, if the Tribunal has exercised the discretion of remanding the matter in view of the reasons recorded herein above, such an exercise of discretion could not be said to be perverse. We do not find that any substantial question of law would arise on such a point. The attempt to rely upon the decision of this Court in case of Rajesh Babulal Damania (2000 (6) TMI 5 - GUJARAT High Court) is ill-founded, because in the said case, the CI .....

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le of Assessing Officer without giving any independent finding and cogent reasons as to how the CIT (Appeals)'s finding were incorrect - Held that:- Discretion exercised by the Tribunal cannot be said to be perverse, which may call for interference in the present appeal before us, which is limited to substantial questions of law. No substantial questions of law would arise as canvassed. - Decided against revenue.

Disallowance of claim, rebate and reversal of claims and claim of writin .....

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ribunal remanding the issue to the file of Assessing Officer - Held that:- The investments were made out of interest free funds and not borrowed funds and on the other hand, we find that ClT (A) has given finding that assessee does not have any surplus funds. In view of the contrary facts, we are of the view that the factual position needs to be re-examined. Tribunal found that the factual aspects including that of the availability of the free fund at the time of making investment was required t .....

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which has been relied upon for the Assessment Year 1999-2000, was carried before this Court [2011 (2) TMI 1349 - GUJARAT HIGH COURT] decided on 21.2.2011 and the said appeal has been dismissed, as no substantial question of law was found for consideration by this Court.- Decided against revenue. - Tax Appeal No. 142 of 2015 - Dated:- 3-3-2015 - Jayant Patel And S. H. Vora,JJ. For the Appellant : Mr Mauna M Bhatt, Adv. For the Respondent : None JUDGMENT (Per : Honourable Mr. Justice Jayant Patel .....

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the issue of disallowance of claim of revenue expenses of ₹ 3,10,49,616/- to the file of Assessing Officer without giving any independent finding and cogent reasons as to how the CIT (Appeals)'s finding were incorrect despite the Tribunal being the final fact finding authority? [C] Whether the Appellate Tribunal has substantially erred in disallowance of claim, rebate and reversal of claims of ₹ 3,92,66,819/- to the file of Assessing Officer without giving any independent finding .....

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e Appellate Tribunal has substantially erred in remitting the issue of disallowance of ₹ 2,25,73,649/- u/s 36(1)(iii) of the Act to the file of Assessing Officer without giving any independent finding and cogent reasons as to how the CIT (Appeals)'s finding were incorrect despite the Tribunal being the final fact finding authority? [F] Whether the Appellate Tribunal has substantially erred in remitting the issue of hire charges of ₹ 5,24,421/- to the file of Assessing Officer fol .....

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T (Appeals), the view of the AO was concurred, but the relevant aspect is that there was no examination of the material on record in appeal. The Tribunal recorded the finding at para 9, which reads as under: "9. We have heard the rival submissions and perused the material on record. We find that AO has noted that assessee was asked to justify the claim of loss, which assessee had failed to do. Further, assessee did not produce the books of accounts for examination by AO. We also find that e .....

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ubmission of the assessee and thereafter, decide the issue in accordance with law. Thus, this ground of assessee is allowed for statistical purposes." 4. The aforesaid shows that the Tribunal having found that the gross profit even as per their representative was 4.14%, it was required for the AO to verify and the matter is therefore, remanded to the AO. The Tribunal also found the fact that in absence of details, the entire gross profit could not have been disallowed by the AO and the Trib .....

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made and instead that, the Tribunal has given second innings to the assessee, which in her submission, was impermissible. She relied upon the decision of this Court in case of Rajesh Babulal Damania Vs. Commissioner of Income Tax reported at 251 ITR 541 (Guj) and therefore, she submitted that the appeal deserves consideration on the said question raised. 6. In our view, even if the notice was issued calling upon the assessee to produce certain documents and the assessee failed to produce the do .....

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ere is failure to consider the material by AO or in appeal by the CIT (Appeals). Had it been a case where some material was considered and a finding was recorded by AO, it may stand on different footing and different consideration. But when no material whatsoever was considered and just an adverse inference was drawn in disallowing the claim and such was not interfered in the appeal, if the Tribunal has exercised the discretion of remanding the matter in view of the reasons recorded herein above .....

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were made by this Court in the said decision. Such are not the fact situation in the present case since no material is examined neither by the AO nor by the CIT (Appeals). Hence, we do not find that substantial question, as canvassed, would arise for consideration in the present appeal. 8. On question B, it appears that the AO adopted the same approach as has been considered by us while considering question A. In the appeal before the CIT (Appeals), similar consequence has arisen for disallowan .....

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factual position. If the submission of ld. A.R. Is found correct, then the addition made be deleted. The assessee is also directed to submit all the required details before AO. In case, the assessee fails to furnish the required details, A.O. Is free to decide the matter on the basis of material on record. Thus, this ground of assessee is allowed for statistical purposes." 9. We find that considering the facts and circumstances, as observed by us while considering the question A, the discr .....

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he finding on para 24, which reads as under: "24, We have heard the rival submissions and perused the material on record. We find that A.O. while disallowing the claim has noted that assessee has failed to submit any details or justification about expenditure. We also find that ClT(A) has also noted that no details were submitted and whether amounts were ever offered as income or not. Before us, it is submitted that the issue is covered by the decision of Hon bIe Apex Court in the case of T .....

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atter on the basis of material available on record. Thus, this ground of assessee is allowed for statistical purposes." 11. The aforesaid shows that the Tribunal having found that the examination was required on the part of the AO to decide the issue in light of the decision of the Apex Court in case of TRF Limited (supra) and therefore, the discretion has been exercised for sending the matter back to the AO. Such an exercise of discretion cannot be said to be perverse. No substantial quest .....

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ure. We also find that ClT(A) has also noted that no details were submitted and whether amounts were ever offered as income or not. Before us, it is submitted that the issue is covered by the decision of Hon ble Apex Court in the case of TRF Ltd. (supra). Since the aforesaid submission was not made before lower authorities by the assessee, we feel that the issue needs reexamination. We, therefore, remit the issue back to the file of A.O. to decide the issue in the light of decision of Apex Court .....

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Court in case of TRF Limited (supra), the discretion has been exercised relegating the matter to the AO. We do not find that the exercise of discretion could be said as perverse. No substantial questions of law would arise as canvassed. 14. On question E, the AO disallowed the claim for deduction of interest. In the appeal before the CIT (Appeals), no interference was made to the approach of the AO. Whereas the Tribunal in the further appeal observed at para 34 as under: "34. We have heard .....

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