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

The Income-tax Officer Versus M/s Shri Hanuman Onion Trading Company

Unaccounted purchases - Held that:- Upon examination of the records the learned CIT(Appeals) has given a finding that the stock of red chillies lying with Best Cold Storage was out of the opening stock of the assessee and cannot be said to be an unaccounted purchase. Hence find that the above order of Learned CIT(Appeals) is cogent one and does not need any interference. - Decided in favour of the assessee - Interest free advances to Hanuman Tractors - Held that:- There is no infirmity in t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

evenue is directed against order of Learned CIT(Appeals)-I, Nagpur dated 29/7/2016 and pertains to assessment year 2008 - 09. The grounds of appeal read as under 1. On the facts and in the circumstances of the case, the Ld. CIT(Appeals) erred in deleting the addition of ₹ 30,87,940/- made by the Assessing Officer u/s 69 of the I.T. Act, 1961. 2. The Ld. CIT(Appeals) has erred in so deleting the addition of ₹ 30,87,940/- without appreciating the fact that despite sufficient opportunit .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

essee to Hanuman Tractor and two others were due to business expediency and merely because it was so stated to be by the assessee. 2. Apropos the first issue relating to deleting the addition of ₹ 30,87,940/-. The brief facts on this issue leading to the disallowance by the Assessing Officer are as under : The assessee is a firm consisting of five partners. The firm derives income from trading of onion, chillies and adat etc. During the course of assessment proceedings, on perusal of the b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

stored in its storage. The Best Cold Storage Pvt. Ltd. furnished the details of material belonging to the assessee stored in its storage which is reproduced in para 5.1 of the assessment order. The assessee submitted before the AO that the goods kept in the Best Cold Storage belong to the assessee, the agriculturist, and the buyers and suppliers of the chillies. The assessee further submitted that they mainly play a role of facilitator in respect of others goods since they have to provide servi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

his reply vide letter dtd. 24.10.2010 which is reproduced in para- 5.1 on pg.no.2 and 3 of the assessment order. The AO having not been satisfied with the explanation filed by the assessee issued another letter calling for details of stock kept with the said concern. The assessee filed another submission which is reproduced in para 5.2 of the assessment order. The assessee submitted before AO that the stock lying in storage was accounted in the books and is shown in stock as is verifiable from t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

AO the details of opening balance, purchases, sales and closing stock. The assessee pleaded before the AO that the stock lying in Best Cold Storage Pvt. Ltd. is out of the opening stock but the AO has discarded the contention of the assessee by stating that no evidence of opening stock kept with cold storage is furnished by the assessee. The AO therefore, treated the entire stock valued at ₹ 30,87,940/- kept in the Best Cold Storage as unexplained investment in stock purchased during the y .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sessing Officer. The learned CIT(Appeals) further observed that AO has not taken any steps to verify the submissions of the assessee. Accordingly the learned CIT(Appeals) deleted the addition. In this regard I may gainfully refer to the following observations of the Learned CIT(Appeals): 7.2 It is not disputed that 1934 bags each of 40 kg of red chillies were lying in the Best Cold Storage. The appellant has admitted the ownership of the stock and contended that out of the 1834 bags 594 bags of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

07. The appellant has furnished the movement details of red chilly as per paper book no. 1. The AR of the appellant in support of his contention has submitted the audit reports for the relevant financial year 2004-05 to 2008-09, giving the quantitative details of stock as under : Asstt. Year Stock in Quintals Opening Closing 2005-06 - 1839/484 2006-07 1839/484 2517/38 2007-08 2517/38 707/00 2008-09 707/00 336/64 On perusal of the audited accounts, it is seen that the opening sock of 707.00 quint .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d by the appellant that the stock kept in cold storage was reflected in the opening stock, coupled with the fact that the stock as per books was more than the stock reflected in the stock statement supplied by Best Cold Storage, the AO is not justified to add the value of this stock u/s 69 carried substantial force. 7.3 The ld. AO in para-3 of the assessment order has recorded a finding hat the books of account & other relevant documents have been audited as required under the provisions of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed before the AO that the stock kept with the Best Cold Storage is out of opening stock. However, the ld. AO has not conducted any sort of verification of opening and closing stock with reference to purchase and sales to ascertain the actual stock status of the appellant and compare the same with the stock lying with the The ld. AO has also not brought out a case as to how the stock lying with the Best Cold Storage is outside the books unless he had examined the purchases and sales of chillies w .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tive evidence in hand is directed to deleted. 4. Against above order Revenue is in appeal before the ITAT. 5. I have heard both the counsel and perused the records. I find that upon examination of the records the learned CIT(Appeals) has given a finding that the stock of red chillies lying with Best Cold Storage was out of the opening stock of the assessee and cannot be said to be an unaccounted purchase. Hence I find that the above order of Learned CIT(Appeals) is cogent one and does not need a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the assessee has debited interest of ₹ 3,91,572/- in the P&L a/c. The AO further found that the assessee has shown the debit balance of ₹ 23.20 lacs in the name of Hanuman Tractors, Nandura. This amount of loan to Hanuman Tractor is given free of interest. The AO further noted that there was debit balance of ₹ 1 lac each shown in the name of Sonal Agro Centre, Nandura and Venkatesh Traders, Nandura which is also free of interest. Thus, the AO found that the appellant has de .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eld as under : On careful examination of the material facts as emanated from the submissions of the AR of the appellant, it is seen that AR has mainly contended that the interest free advances to Hanuman Tractors of ₹ 23.20 lacs and ₹ 2 lacs to two other parties are given out of business expediency. The loan advanced to Hanuman Tractors as fee of interest is stated to be for its farm vehicle supply and service business. The appellant has further submitted that Sonal Agro and Venkates .....

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
  ↓     Latest Happenings     ↓  

Highlight: Notification regarding GST rate for branded cereal, pulses and flour

News: Notification regarding GST rate for branded cereal, pulses and flour

Highlight: Anti-dumping duty on import of bus/truck tyres from China

Highlight: Cabinet approves Extension of time period of the Scheme "Special Industry Initiative for J&K" (Sll J&K) - Udaan

Highlight: Non-payment of service tax - maintenance and repair charges - appellants had knowingly and deliberately shown the repair charges as job work charges to mislead about their taxability - demand confirmed.

Highlight: BAS - execution of the project of smart card for vehicle registration – implementing the SOC-VRC project - The fact that the Government has outsourced some part of the work and paid certain consideration for such outsourced work, does not make the activity subject to service tax.

Forum: Input tax credit

Forum: Cess paid instead of SGST

Forum: Excise duty credit on finished stock at additional place of business.

Circular: Amendments in Hand Book of Procedures 2015-20 –reg.

News: Cabinet approves Extension of time period of the Scheme "Special Industry Initiative for J&K" (Sll J&K) - Udaan

Highlight: Constitution of National Anti-profiteering Authority (NAA) under GST-reg. - Trade Notice

Highlight: Amendments in Hand Book of Procedures 2015-20 –reg. - Various amendments are made in Chapter-4 of Hand Book of Procedures 2015-2020.

Forum: GST rates on mobile recharge business

Circular: Constitution of National Anti-profiteering Authority (NAA) under GST-reg.

Forum: import purchase

Highlight: Sharing of expenses - BAS - promotion of business of group companies - sharing of expenditure for common facilities cannot be treated as service by one to another in such arrangement.

News: RBI Reference Rate for US $

Forum: 3B mistake

Article: Credit of unsold stock [Section 140(3)] - Actual Credit as well as Notional Credit - Part-I - GST Transitional provisions

Circular: Certain Clarifications sought on Construction Services provided in the Real Estate Sector – reg.

News: Anti-dumping duty on import of bus/truck tyres from China

News: Fast-track GST refund, else ₹ 65K cr may be stuck: Exporters

Highlight: It is open to the Settlement Commission to use best judgment in arrival of the figure. Nonetheless it has to explain the manner in which the best judgment figure has been arrived at by the Settlement Commission - HC

Highlight: Deemed dividend u/s 2(22)(e) - advances given to societies - in the absence of legal right of the assessee in the said society the amount advanced cannot be treated as deemed income.

Highlight: When electrical installations are treated as plant and machinery the depreciation has to be allowed @ 25% as per provisions contained u/s 32

TMI Note: Capital Gain - transfer of right in the land or transfer of land itself - addition u/s 50C - Harassment to the honest tax payers

Highlight: Option to avail composition scheme under GST by electronically filing an intimation in FORM GST CMP-02 and FORM GST ITC-03 upto 30-9-2017 - See Rule 3(3A)

TMI Note: Does ICDS apply for the purposes of computing exemption u/s 11 to 13.

Highlight: Voluntary Reporting of Estimated Current Income and Advance Tax Liability - CBDT issues draft notification

TMI Note: Certain ICDS provisions are inconsistent with judicial precedents. Whether these judicial precedents would prevail over ICDS.

Highlight: Provisions of ICDS shall prevail w.e.f. AY 2017-18 to the transactional issues dealt therein over earlier judicial pronouncements.

Notification: Levy of anti dumping duty on New/unused pneumatic radial tyres with or without tubes and/or flap of rubber (including tubeless tyres) having normal rim dia code above 16 originating in, or exported from China PR

News: Voluntary Reporting of Estimated Current Income and Advance Tax Liability

TMI Note: In case of conflict between ICDS and other specific provisions of the Income-tax rules, 1962 governing taxation of income like rules 9A, 9B etc. of the Rules, which provisions shall prevail.

TMI Note: Does ICDS apply to computation of Minimum Alternate Tax (MAT) u/s 115JB of the Act or Alternate Minimum Tax (AMT) u/s 115JC of the Act.

TMI Note: Where a term has not been defined under ICDS, nor under the Act, but has different interpretations given to it by the courts in tax cases, and in ICAI Accounting Standards, which interpretation would prevail while interpreting ICDS.

TMI Note: Whether the provisions of ICDS apply to a non-resident who claims the benefit of a double taxation avoidance agreement (DTAA).

TMI Note: In case any of the ICDS provisions is contrary to a circular or press release issued by the CBDT, which would prevail over the other.

TMI Note: ICDS-I requires disclosure of significant accounting policies and other ICDS requires specific disclosures. Where is the taxpayer required to make such disclosures specified in ICDS.

Notification: Income Computation and Disclosure Standards (ICDS) - New ICDS to be effective from AY 2017-18

News: RBI Reference Rate for US $

Highlight: GST - Detention of goods under transport - discrepancy in documents - the statutory provisions provide a mechanism for adjudication following detention of goods including for the provisional release thereof pending adjudication - HC

Highlight: Reassessment - first few paragraphs of the assessment order dealt with objections and disposed of accordingly - Unfortunately, the manner in which the AO has decided the issue is wholly unsustainable in law - HC

Highlight: Business expenditure u/s 37 - liquidated damage - breach of contract terms - Expenditure was not incurred for any purpose which is an offence or which is prohibited by law - cannot be disallowed - HC

Highlight: Valuation - inclusion of reimbursement of expenses - managing participation of clients in certain mela, fairs, promotional activities etc. - They are liable to service tax on the gross amount received - They cannot restrict their tax liability to only agency commission

Highlight: TDS liability - ITAT confirmed the liability - We do not see how it is possible for us to uphold the order of the Tribunal and when it purports to decide two Appeals of the Revenue by single paragraph conclusion - HC

Highlight: Reopening of assessment - sufficiency of material available with the AO to form a belief that income chargeable to tax had escaped assessment - bogus purchases - seller refused to respond - notice would not be interfered with - HC

Highlight: Exemption u/s 11 - education activities - transport and hostel facilities surplus cannot be considered as business income of the assessee society

News: Draft Notification for insertion of new rule 39A in the Income-tax Rules, 1962 – comments and suggestions-reg.



|| 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