2010 (4) TMI 98
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....ITAT was correct in law in holding that CIT had illegally assumed jurisdiction u/s 263 of the Income Tax Act? B) Whether the ITAT was correct in law in holding that interest income of Rs17,01,974/- is eligible for deduction u/S 80 HHC of the Act? C) Whether the ITAT was correct in law in holding that interest of Rs18,53,916/- paid to the Bank was not to be disallowed on the ground that the assessee had diverted its funds to M/s Damas Jewels? D) Whether the ITAT was correct in law in holding that the finding of the CIT on account of addition for excess stock amounting to Rs9,59,425/- and on account of shortage of stock amounting to Rs88,26,126/- is not sustainable?" 2. Question 'B' was common to several other appeals. The said question w....
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.... the assessee pointed out that there may have been mutual loan transactions but, the interest payable by the assessee was much greater than the interest due from Lal Jewels and, therefore, there could be no disallowance on this count. The learned counsel for the assessee respondent drew our attention to paragraphs 5, 7 and 8 of the impugned order to indicate the stand taken by the respondent assessee before the Tribunal. It was pointed out that the assessee had a business relationship with Damas Jewels inasmuch as the assessee purchased pure gold from the said concern and also got jewellery fabricated from Damas Jewels against payment for making charges. The learned counsel drew our attention to the fact that a copy of the ledger accounts o....
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.... party. The Tribunal observed that the business relationship between the said assessee and the parties was not disputed or doubted and the fact that the advances had been made in the course of business was borne out from the record. Thus, the Tribunal on the basis of the facts determined by it came to the conclusion that there was no ground for the disallowance of the interest amount. We are of the view that the findings of the Tribunal are pure findings of fact. The Tribunal has examined the accounts of the parties in detail and the same had been placed before the Tribunal as mentioned above at pages 142-156 of the paper book before the Tribunal. The learned counsel for the Revenue sought to support the decision of the Commissioner by taki....
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....n-disclosed income of the assessee and, therefore, the same was to be added to the assessable income of the assessee in question. 7. The Income Tax Appellate Tribunal noted that the difference in the closing stock, which has been indicated by the Commissioner of Income Tax, arose on account of two circumstances. The first circumstance being that the assessee had shown the closing stock in respect of the assessment year 1997-98 as Rs. 8,12,000/-. However, the Commissioner of Income Tax, for the assessment year 1997-98, had reduced the closing stock to Rs.41,43,150/- and consequently there was a difference in the opening stock pertaining to the assessment year 1998-99. The second difference arose because the rate adopted for the valuation of....
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....ales to the extent of Rs.36,41,22,261.98 in the Profit and Loss Account for the period ended on 31.03.1998 and the details of the sales also clearly included the sale of silver worth Rs.1,41,77,590/-. Consequently, the Tribunal held that the observation of the Commissioner that there was no sale of the purchased silver in the year in question was without any basis. The Tribunal also noted that the closing stock of Rs. 40,48,860/- as disclosed by the assessee in respect of the assessment year 1997-98 had not been accepted by the Commissioner of Income Tax, however, the view taken by the Commissioner of Income Tax for the said assessment year 1997-98 had been rejected by the Tribunal and, consequently, the addition was found to be unwarranted....