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Shri Bhupendra C. Dalal Versus DCIT (OSD-II) Centrl Range-7, Mumbai

2017 (9) TMI 728 - ITAT MUMBAI

Penalty u/s 271(1)(c) - error in calculating the interest on F.D. - Held that:- We have seen that during the assessment proceedings the assessee has accepted the error in calculating the interest on F.D. and the difference of ₹ 94,530/- was added to the total income of the assessee. Further addition on account of interest income of ₹ 10,83,695/- was added by the AO only after verification from Bank of India, Stock Exchange Branch. We have further noted that the verification was carri .....

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appeal of the assessee is allowed. - ITA Nos. 6030 to 6035/Mum/2013 And ITA No. 1064/Mum/2016 - Dated:- 11-9-2017 - Shri P K Bansal, Vice President And Shri Pawan Singh, Judicial Member For The Appellant : Shri Vipul Joshi For The Respondent : Dr. P. Daniel ORDER Per Bench This group of seven appeals were directed against the order of the CIT(A) 40/52, Mumbai dated 24.017.2013/ 30.12.2014 for assessment years 1994-95 and 1998-99 to 2002-03. 2. Assessee has raised identical grounds of appeal. Th .....

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of the Income tax Act, 1961 (the act) by the Assessing Officer was bad in law and thereby erred in not directing to cancel the assessment completed. 2. The CIT (A) erred in facts and in law in confirming addition of ₹ 8,14,910/- in respect of interest accrued on advance to companies and ₹ 44,574/-being interest on FOR with Canara Bank. 3. The CIT(A) erred in facts and in law in confirming addition of ₹ 1,25,603/- in respect of credit entries appearing in bank account NO.2129 w .....

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accused in multi crore securities scam of 1992. Till due date of filing of return of income assessee has not filed the return of income. The AO issued notice to the assessee on 15th January, 1977. No response was made by the assessee. Therefore, the AO issued another notice to the assessee requiring to file it return of income and to furnish details thereof during the relevant assessment year. However, the assessee furnished certain details of interest earned during the year. Accordingly the AO .....

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all earlier years and that the addition cannot be made on accrual basis in the year under consideration. It was argued that on similar issue for A.Y. 2004-05 in ITA No. 6719/Mum/2007 by order dated 21.10.2008 the similar issue was restored to the file of AO. The AO, while giving effect to the order of the Tribunal, have concluded that the assessee was following cash system of accounting. The assessee has placed on record copy of the order of the Tribunal in ITA No. 6719/Mum/2007. The order came .....

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the ld AR for the assessee submits that the Assessee could not furnish any evidence before the Tribunal regarding following the cash system of accounting, in absence of which the appeal of the assessee was dismissed. 7. We have considered the rival submissions and have gone through the orders of the authorities below. We have seen that identical grounds of appeal were considered by the Coordinate Bench of the Tribunal for A.Y. 2004-05. The Tribunal passed the following order: - 4. We have peruse .....

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that the assessee could not produce any past record or assessment order to prove that it was following cash method of accounting. The assessee has however produced before us copy of computation of income for assessment year 1990-91 in which the method of accounting has been declared as cash. This material was not available before the authorities in the earlier years. Further, in the computation of income for the impugned assessment year, the assessee has clearly declared the method of accountin .....

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o hearing the assessee. Further, while giving effect to the order of the Tribunal the AO passed order under section 143(3) r.w.s. 254 dated 23rd November, 2009 for AY 2004-05. The AO while passing the assessment order has concluded that the assessee was following cash system of account in earlier years: - 4. Considering the above mentioned facts, it is accepted that the assessee has followed cash system of accounting in earlier years and that the additions cannot be made on accrual basis in the .....

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rposes. 9. Following the foregoing discussion the assessee s appeals in ITA No. 6031 to 6035/Mum/2013 are allowed with similar directions. In the result all appeals are allowed for statistical purposes. ITA No. 1064/Mum/2016 - A.Y. 2002-03 10. The assessee has raised the following grounds of appeal: - 1. The Learned Commissioner of Income Tax (Appeals)-52, Mumbai [CIT(A)] erred in confirming the penalty levied under section 271(1)(c) of the Income Tax Act, 1961 ( the Act ) in respect f interest .....

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facts of the case are that the assessment for the relevant year was completed on 30.03.2005 under section 143(3) of the Act. While completing the assessment the AO made addition on account of following additions: - i) Interest receivable from M/s. Asim Holding Pvt. Ltd. ₹ 90,870/- ii) Difference in interest on Fixed Deposit as disclosed in the return and actual amount received ₹ 94,530/- iii) Interest on F.D. with Bank of India, M.G. Road Branch ₹ 10,83,695/ 12. The assessee fi .....

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be evaded. 13. On appeal before the CIT(A) the penalty on addition of ₹ 90,870/- was deleted, however on other additions i.e on account of difference of interest of ₹ 94,350/- and interest on fixed deposit and ₹ 10,83,695/- on F.D. with Bank of India, M.G. Road Branch the penalty was sustained. Thus, further aggrieved the assessee has filed the present appeal before the Tribunal. 14. We have heard the learned A.R. of the Assessee and learned D.R. of Revenue and perused the mate .....

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n as required by the assessee for filing the return of income. The assessee in the computation of income filed along with the return of income had clearly pointed out the basis on which the return has been prepared and furnished. The assessee specifically invited the attention of the AO to the note to the computation of income that the assessee filed the return of income on the basis of the actual receive in the bank which fact was accepted by the AO while passing the assessment order. During th .....

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ia. The assessee gave his consent to tax the said interest. The assessee further during the course assessment proceedings contended that due to calculation mistake (typographical error) the interest on F.D. was referred as ₹ 3,06,222/- instead of ₹ 4,00,552/-. The addition on account of difference of ₹ 94,530/- and further addition on account of interest income of ₹ 10,83,695/- was in the income at the instance of the assessee. The learned A.R. argued that the assessee ne .....

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