TMI Blog2019 (11) TMI 744X X X X Extracts X X X X X X X X Extracts X X X X ..... ne this entire inter connected issue as per law within three effective opportunities of hearing. This interconnected issue is taken as accepted for statistical purposes. Disallowance of expenditure only in the lower appellate proceedings - HELD THAT:- DR fails to rebut the clinching fact that the impugned addition is based on estimation only than any lack of nexus with the assessee s trading activity in various commodities. The fact also remains that the assessee has also not been able to prove the same by way of cogent supportive evidence. We therefore deem it appropriate to restore the impugned disallowance to a lump sum amount of ₹1 lac only with a rider that same shall not be treated as a precedent in any other assessment year. Claim brought forward losses sought to be set off involving sum(s) each carried forward from earlier years and disallowed in the course of assessment as well as in the lower appellate proceedings - HELD THAT:- Both the learned representatives are ad idem on the instant issue requires afresh factual verification / reconciliation of all necessary details qua the brought forward losses carried forward from earlier assessment years. We th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vely involving proceedings u/s 147 r.w.s. in first AY and u/s 143(3) of the Income Tax Act, 1961; in short the Act respectively. Heard both the parties. Case file(s) perused. 2. It emerges during the course of hearing that assessee s instant four cases involve identical / inter-connected issues. His multi folded substantive ground raised in all these assessment years challenge correctness of lower authorities action making various disallowance(s) / addition(s). Most prominent of the said disallowance(s) / addition(s) relate to alleged embezzlement of funds relating to ICIC bank loans followed by interest accrued and paid thereupon. Act of these schemes treated as unexplained income and not allowable as expenditure. These head(s) comprise of assessment year-wise figures of embezzled funds amounting to ₹79,85,25,428/- and ₹77,86,25,900/- interest income on bank fixed deposit (FD in short) of ₹193,48,849/- in first assessment year ( 2006-07 ), embezzlement of ₹41,15,86,858/-, retail warehouse receipt of ( ₹27,60,38,657 /-), treated as unexplained since derived from loan funds, FDs of ₹138,87,859/- and interest / ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Narayanpur Agro Tech ₹ 82,58,600/- Dakshin Damodar Rice Mill Pvt. Ltd. ₹ 25,59,02,465.87/- Dakshin Damodar Cold Storage Pvt. Ltd. ₹ 25,91,27,429.88/- Total ₹ 77,86,25,900/- However, you have failed torepay such amount due to the bank in accordance with the terms of agreements drawn with them. Therefore, such amount of ₹ 77,86,25,900/- would be your income within the scope of sec.2(24) read with sec. 28(iv) of the IT Act,1961. You are given an opportunity to explain why such amounts as stated above should not be considered as your income for the Assessment Year 2006-2007. Besides it is seen that you have shown FD TDS etc. Of ₹ 10,75,85,213/- during the assessment year and you are asked to explain the source of the same. Apart from that as per the statements of various banks it is seen that the interests paid by the banks against the FD TDRs are o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nected issue is taken as accepted for statistical purposes. 4. We now come to remaining substantive grounds in these four assessment year(s). Learned counsel is fair enough in making it clear that the assessee does not press for its former two substantive grounds pleading lack of opportunity of hearing and validity of sec. 148 proceedings in AY 2006-07 in ITA No.89/Kol/2015. We therefore decline these two grounds as not pressed. 5. The assessee s next substantive ground in assessment year 2006-07 is that the CIT(A) has erred in law and on facts in restricting the Assessing Officer s action disallowing its expenditure of ₹8,21,119/- to ₹7,33,184/- only in the lower appellate proceedings. Learned departmental representative fails to rebut the clinching fact that the impugned addition is based on estimation only than any lack of nexus with the assessee s trading activity in various commodities. The fact also remains that the assessee has also not been able to prove the same by way of cogent supportive evidence. We therefore deem it appropriate to restore the impugned disallowance to a lump sum amount of ₹1 lac only with a rider that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallow the sum in issue @ 3% on estimation basis. We find in these peculiar backdrop neither the Assessing Officer nor the CIT(A) have taken into consideration the assessee s line of potato trading business wherein such a disallowance would result in very high profit ratio. We deem it appropriate in this backdrop that lump sum addition of ₹10 lac would meet the ends of justice with a rider that same shall not be treated as a precedent in any assessment year. The assessee s lead appeal for assessment year 2006-07 ITA No.899/Kol/2015 is partly allowed in above terms. 10. We now advert to assessee s second appeal ITA No.1259/Kol/2015 ( assessment year 2007-08 ). Its first substantive ground is declined being general in nature. His other grounds raise the issues of brought forward losses disallowance (supra) and corresponding addition of embezzled funds ICIC bank, interest received, FD investment coupled with interest and finance charges etc. already stand adjudicated in the preceding paragraphs. We therefore accept this instant appeal ( ITA No.1259/Kol/2015 ) partly for statistical purposes in foregoing terms. 11. Next comes assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
