Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

RAVIKIRAN CERAMICS PVT LTD Versus PR. COMMISSIONER OF INCOME TAX (CENTRAL)

2016 (2) TMI 352 - GUJARAT HIGH COURT

Addition u/s 69C - Held that:- When the Assessing Officer and the Commissioner concurrently found that there was unexplained expenditure and source of such income was not satisfactorily explained, section 69C of the Act would certainly be applicable. - Decided against assessee

Additional depreciation for installation of windmills - Held that:- The assessee would be entitled to such depreciation as may be available in term of section 32 of the Act.- Decided against revenue - SPECIAL CI .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ort) and confirmed by the Commissioner in revision petitions filed by the assessee under section 264 of the Act. In Special Civil Application No.17162/2015, additional question of additional depreciation for installation of windmills also arise. 2. Facts may be recorded from Special Civil Application No. 17147/2015. The petitioner assessee is a registered company. For the assessment year 20072008, the Assessing Officer framed assessment under order dated 28.3.2013 under section 143(3) read with .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

admitted by the officers of the assessee. It was sought to be contended that by inflating the bills and invoices, the assessee have generated cash which were utilised for the purpose of such payments of commission. The Assessing Officer found that the unaccounted expenditure was established and concluded that the assessee failed to disclose the source of such expenditure. He therefore, had applied section 69C of the Act for making additions. 3. The assessee filed revision petitions before the C .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e company, as long as the source of such expenditure was reflected in the accounts of the company and thus was satisfactorily explained, section 69C of the Act would simply not apply. 5. On the other hand, learned counsel Shri Bhatt for the Revenue drew my attention to the detail discussions in the order of assessment as well as revisional order to contend that on facts, the Revenue authorities when concurrently found that there was unaccounted expenditure and source of such expenditure was unex .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

income of the assessee for such financial year. Proviso to section 69(C) of the Act provides that notwithstanding anything contained in any other provision of this Act, such unexplained expenditure which is deemed to be the income of the assessee shall not be allowed as a deduction under any head of income. Application of section 69C therefore, requires incurring of expenditure for which he offered no explanation about the source or the explanation which he has offered is not found satisfactory .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e director Shri Ashokbhai and Shri Nitinbhai after generating such income in the name of commission payable to the said individuals, may have retained such amount for themselves was also accounted for. In either case, in the opinion of the Assessing Officer, it amounted to outflow for the company and would partake the character of unexplained expenditure. In this background, the assessee owed a duty to explain the source of such expenditure. We may recall the explanation of the assessee was that .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

gard, it is pertinent to mention that as per the provision of section 69C of the Income Tax Act, 1961 the primary onus to prove that there was an expenditure the source of which is apparently not explained is on the Revenue. However, in this case, where there is evidence found during the course of search suggesting payment of commission being an unaccounted expenditure, the onus is on the assessee, as per the provisions of section 69C, to come up with an explanation which is cogent and satisfact .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ture in the name of payment of commission has been explained satisfactorily. In this regard, there is one more aspect which requires consideration which is that Shri Rameshbhai in letter No.4 dated 31.05.2010 has accepted, that the company was under invoicing the bills of M/s. Anchor till two years back and he was keeping the unaccounted income in this regard. The relevant portion of the said correspondence is reproduced below : In the year 1986 I had my rights over the Agency of Gujarat, which .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t Agency. On the Technical base, you got share of 40% to 45% in the Partnership and in the line of Electrical Ceramics, because of the guidance of Pujya Bhai and further, since the responsibility of sales rested upon me, and hence, the right over the Agency of Western India was and is mine. If you shall not give me back my right, then I shall feel bad and I shall regret for the same. When you asked for the Gujarat Agency, at that time it was decided to under invoice for Anchor and hence, the cas .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ou think is proper according to you. 3.16 It is evident from the above that the company was not only inflating its expenses or debiting bogus expenses but was also suppressing its receipts by way of under invoicing and in the light of this categorical admission of Shri Ashokbhai even the source does not remain revenue neutral as claimed by the assessee. 8. These observations and conclusions of the Assessing Officer were substantially confirmed by the CIT (Appeals) in the revisional order. We do .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sidered by the CIT(Appeals) in the revision petition. Disallowance was confirmed on the ground that such depreciation was not allowable to assessee who was engaged in generation and distribution of power, since such explanation was included in section 32 of the Act only with effect from 1.4.2013. In this context, counsel for the assessee correctly pointed out that Division Bench of this Court in case of Commissioner of IncometaxI v. Diaminies & Chemicals Ltd. reported in (2014) 42 taxmann.co .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

₹ 1,17,98,030/by observing that as the assessee is not in the business of generation and distribution of power, the assessee shall not be entitled to deduction under Section 32(1)(iia) of the Income Tax Act of ₹ 1,17,98,030/. The said addition has been deleted by the CIT(A) relying upon the decisions of the Madras High Court in the case of VTM Ltd (Supra) and in the case of Hi Tech Arai Ltd. (Supra). In both the aforesaid decisions, the Madras High Court had an occasion to consider .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version