TaxTMI 
TaxTMI 
2005 (6) TMI 232
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.... as declared by the assessee the assessment was completed at an income of Rs. 32,48,299/-. Thereafter, the assessee filed an application under section 154 and the Ld. Assessing Officer passed the order under section 154 on 23rd December, 1997 whereby the adjustments made were reduced to Rs. 38,20,539/-. Still aggrieved, the assessee filed appeal before the Ld. CIT(A). The Ld. CIT(A) deleted all the adjustments retained by the Ld. Assessing Officer as per his order under section 154. Aggrieved, the Revenue is in appeal before us. 3. The first ground in this appeal is directed against deletion of the adjustment of Rs. 33,58,722/-. Facts of the case in this respect are that the assessee claimed deduction of export duty amounting to Rs. 33,58,722/- on the ground that the assessee's appeal before the Hon'ble Supreme Court had been dismissed on 28th March, 1995. The Ld. Assessing Officer held the view that even if the judgment of Hon'ble Supreme Court had been delivered on 28th March, 1995 the liability of the assessee had accrued in the year to which it originally pertained to. The assessee was following the mercantile system of accounting. In fact, the assessee had made a ....
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....ima facie adjustment. 6. Lastly, the assessee claimed deduction of a sum of Rs. 67,840/- being prior period expenses. The Assessing Officer made the adjustment for the reasons only that the assessee was following mercantile system of accounting. In the order under section 154 the Assessing Officer stated that before regular assessment it was not possible to verify whether or not these expenses had been claimed in the earlier years as well. Thus, from the observations of the Assessing Officer himself in the order under section 154, it is clear that the expenditure was made without taking into consideration all the facts of the case. Such adjustment cannot be called prima facie adjustment. 7. In the result, we are satisfied that the CIT(A) rightly deleted the adjustments made by the Assessing Officer under section 143(1)(a) as not being in the nature of prima facie adjustments. Hence, Revenue's appeal in ITA No. 2360/Del/2000 is dismissed. 8. We now turn to Revenue's appeal in relation to the assessment order under section 143(3). The first ground relates to the addition of Rs. 20 lakhs made by the Assessing Officer under the provisions of section 68 of the Act. The facts ....
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....khs. He further argued that from the bank account of M/s. A.S. Engineering Works it was quite clear that account had been operated for the purposes of the assessee only. There were no other entries in that account except the dealings with the assessee. During the period relevant to assessment year 1995-96 the assessee had received payment Rs. 20 lakhs only. The sum of Rs. 15 lakhs had been received in the earlier assessment year for which proceedings under section 148 had been initiated. The Ld. DR argued that the Ld. CIT(A) was required to do finding of fact and he could not delete the addition because the Assessing Officer had assessed short-term capital gain as disclosed by the assessee. As far as payments received by cheque, the same did not establish that the transactions were genuine. The Ld. DR relied upon the judgments reported in ITO v. Diza Holdings (P.) Ltd. [2002] 120 Taxman 539 (Ker.)/121 CTR 120 (Cal.) in that respect. 10. The Ld. AR of the assessee argued that the Ld. Assessing Officer had no justification to make an assessment of the sum of Rs. 20 lakhs in spite of the fact that the sum of Rs. 20 lakhs had already been offered for assessment as income by the assess....
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....has jurisdiction as well as duty to correct all errors in the proceedings under appeal and to issue, if necessary, appropriate directions to the authority against whose decision the appeal is preferred. The same view has been taken by Hon'ble Calcutta High Court in the case of Sewduttroy Rambullav & Sons v. CIT [1993] 204 ITR 580. In the case of Smt. Prabhavati S. Shah v. CIT [1998] 231 ITR 1 (Bom.) Hon'ble Bombay High Court also have held the view that the CIT(A) is duty bound to carry out an inquiry. In the case of CIT v. Dalmia Cement Bharat Ltd. [1988] 36 Taxman 353 (Delhi), the Hon'ble Delhi High Court have held that the CIT(A)'s order without a positive finding on material available cannot be maintained. 13. In view of the position enunciated by the judgment of the Apex Court, Hon'ble Delhi High Court and various other High Courts in India, the legal position is quite clear that while deciding a ground of appeal taken by an assessee it is incumbent upon the CIT(A) to give a positive finding of fact. He cannot decide an appeal on the basis of the negative finding that the Assessing Officer has not inquired into the matter fully or that he has not properly ....
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....d on 28th March, 1995. The Assessing Officer, however, found that the bank guarantee of Rs. 77,66,537/- was encashed by the UP. Government on 17th July, 1995. The Ld. Assessing Officer found from the assessment order for assessment year 1984-85 and 1985-86 that the assessee had debited as expenditure Rs. 21,76,200/- and Rs. 11,12,396/- even though the amounts in question had not been paid by the assessee. The assessee claimed deduction of these amounts as liability accrued on account of Notification issued by Government of Uttar Pradesh levying duty on export of liquor from the State of Uttar Pradesh to other States and Union Territories in India. The assessee challenged legality and validity of imposition of such export duty before the Hon'ble Allahabad High Court. The matter was carried to the Tribunal and ITAT by its order in ITA No. 622/Del/1991 allowed the deduction as claimed by the assessee. Relying upon the aforesaid order of the Tribunal in the case of the assessee in relation to assessment year 1984-85 the Assessing Officer has held that the assessee is entitled to deduction under the provisions of section 43B in the year in which the amount was actually paid. Hence, ....
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.... this ground. 18. Ground of appeal No. 3 is directed against deletion of the addition of Rs. 2,38,883/- made by the Assessing Officer by way of disallowance of provision of interest on extra levy sugar price claimed by the assessee. The Assessing Officer found that extra levy sugar had been released to the assessee in the year 1979-80. The Hon'ble Allahabad High Court allowed the assessee to realize the excess levy price with the condition that the assessee would be liable to repay it with interest if the assessee's claim was not allowed in the Writ Petition. On these facts the Ld. Assessing Officer held that deduction of Rs. 2,38,883/- claimed by the assessee was a contingent liability. In any case the Assessing Officer found the matter has been finally decided upon in favour of the assessee. On assessee's appeal the Ld. CIT(A) held that the matter was covered by the order of the CIT(A) dated 7th November, 1991 in relation to assessment year 1985-86. Following the same he allowed the assessee deduction of the sum of Rs. 2,38,883/-. 19. During the course of hearing before us, the Ld. DR argued that in view of the fact that the matter has finally been decided in favour....