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2015 (5) TMI 437

Income from under invoicing in respect of export transactions - unaccounted business and hundi loans - Held that:- Official Liquidator has filed written statement along with pursis as Exh. A. The said written statement is prepared by Chartered Accountant assisting the Official Liquidator. The parties do not dispute that income of ₹ 1.71 crore was included in the income of R.B.S.D. Export firm from the Assessment years 1950-51 to 1958-59. As the other assessee is not party before us and add .....

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dvantage of it. If this argument of assessee Private Limited company is accepted, it is nothing but allowing it to reap benefit of mischief played by it. If on account of its own mischief, it has sustained any loss, it cannot make a grievance for the same. However, it is settled that it cannot be permitted to take advantage of its own wrong. The revenue has corrected the wrong and has also demanded tax from the assessee Private Limited company to whom that income really belonged. Thus, the Expor .....

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Seventy one lacs only) was included in the income of M/s. R.B.S.D. (export firm) for assessment years 1950-51 to 1958-59; and 2. Whether on the facts and circumstances of the case, the Tribunal was justified in law in sustaining the addition of ₹ 1.71 crores (Rs. One crore Seventy one lacs only) as the income of assessee from under invoicing in respect of export transactions ? 2. Accordingly, we have heard Shri De, learned counsel for the applicant Official Liquidator as assessee company i .....

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ubmission is, assessee limited company i.e. R.B.S.D. (Private) Limited, Tumsar, could not have been taxed again for said sum of ₹ 1.71 crore. The assessee company has submitted that it amounts to double taxation. It needs to be noted that other assessee viz. Export firm is not party to these proceedings. The facts are not in dispute. In fact, I.T.A.T. while forwarding statement of claim on 15.03.1993 has in para 4 stated that Question No. 1 as reframed by High Court does not arise out of o .....

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ssessments of both assessee were reopened under Section 148 of the Income Tax Act. As niceties of under invoicing which have come on record are not in dispute, it is not necessary to go into those details. The Assessing Officer came to a conclusion that there was unaccounted business and there were also hundi loans from various parties at Rajasthan and transactions of ostensible loans from Bengal Investment Corporation, Calcutta, which were not genuine loans. He asked assessee to rebut the provi .....

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sed into service before this Court of ₹ 1,70,90,669/as determined by I.T.A.T. is, therefore, not correct. 6. As we have already stated above, the other assessee is not party before us and addition of amount of ₹ 1,70,90,669/to the income of Export firm and its assessment accordingly is not in dispute. We accordingly answer Question No. 1 in the affirmative. 7. The second question to be looked into is the important question. Assessee private limited company has submitted that as incom .....

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rtment to tax either the representative assessee or the beneficial owner of the income nor the parallel provisions of Income Tax Act, 1961, contemplated assessment of the same income both in the hands of the trustees and the beneficiaries, instances reveal that such double assessment was being carried out. This circular mentions that general principle is to charge income only once. Board has, therefore, clarified that in order to see that there is no loss of revenue, Income Tax Officer should ke .....

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income. Member of that HUF is not liable to pay any tax in respect of any sum which he receives as a member of that family out of the income of that family. If the said HUF has escaped assessment for any year, the ITO, subject to the conditions laid down in Section 34(1) of 1922 Act, can issue a notice calling upon it to submit a return of its income for that year and proceed to assess HUF in terms thereof. It is further found that there is no question of any election between an HUF and a member .....

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some mistake, such income was assessed to tax in the hands of the individual members (which should not have been done), the revenue has to make appropriate adjustments as otherwise assessment made in respect of that income on the HUF would be contrary to the provisions of the Act. The Hon'ble Apex Court has also observed that appropriate adjustments by revenue in such matter is not reopening of final orders of assessment but in reality, to arrive at the correct figure of tax payable by the H .....

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nce it was found that the income declared by the creditors did not belong to them, there was nothing to prevent the same being taxed in the hands of the assessee to which it actually belonged. 13. Traditional concept of double taxation is explained by the Hon'ble Apex court in the case of Commissioner of Income Tax vs. P.V.A.L. Kulandagan Chettiar, reported at (2004) 6 SCC 235. The Hon'ble Apex Court explains that to constitute double taxation, objectionable or prohibited, the two or mor .....

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. The Private Limited company has not pointed out any grievance made by the Export firm in this respect. 14. The amount which has gone to Export firm actually belonged to assessee i.e. Private Limited company. It has concealed that income and clandestinely made it over to export firm. Thus, its ownership over said amount of ₹ 1.71 Crore is not in dispute. The amount really belonged to it and, therefore, it was and is answerable and has to pay tax on it. It cannot be permitted to urge that .....

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