TaxTMI 
TaxTMI 
2011 (4) TMI 512
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....he same was concluded on October 31, 1997. C) During the previous year relevant to the Assessment Year 1996-97, the appellant imported aluminium ingots/rods worth Rs.8,22,42,335/- from two Swiss Companies. Imports worth Rs.3,25,47,651/- were made from M/s. Gerald Metals, Switzerland and worth Rs.4,96,94,684/- from Euromin S.A., Geneva. Those imported goods were sold to an Indian Company, M/s. J.J.H. Industry Limited. D) Upon payment to the Swiss suppliers, their respective accounts were debited and upon a sale to M/s. J.J.H. Industries Ltd., the account of to M/s. J.J.H. Industries Ltd. was debited with corresponding credit to the revenue account. The account of the Swiss suppliers to which debits had been made upon payment for the imported goods should have been closed by transferring the same to the purchase account but in fact the account of Swiss suppliers were closed by transfer to the account of to M/s. J.J.H. Industries Ltd. under the head "Advances". The result was that in respect of the sale of the imported materials to M/s. J.J.H. Industries Ltd., the income stood accounted for but there was no debit to the purchase account by way of expenditure and in....
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....eof were to be reduced from the block of assets resulting in a lower claim for depreciation. In the original return filed for the Assessment Year 1996-97, though the appellant excluded the profit on the sale of the factory, the depreciation claim was not consequently reduced. I) Upon discovery of the aforesaid mistakes, on November 06, 1997, the appellant filed a revised return declaring a business loss of Rs.5,93,30,254/-. In the said revised return, the depreciation claim was reduced form Rs,1,70,47,101/- made in the original return to Rs.1,16,67,392/- and the sum of Rs.8,22,42,335/- which was not debited to the purchase account was reduced form the taxable income. J) In course of the assessment proceedings, the appellant, inter alia, submitted before the Assessing Officer all the material documents in order to show that the sum of Rs.8,22,42,335/- was not debited to the purchase account and as a result, the appellant's income had been overstated by the said amount in the original return. The appellant also submitted to the Assessing Officer the relevant and material documents in respect of the Silvassa factory shed. K) The Assessing Officer sought to have ....
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....yed in the Director's report. ii) In respect of the delayed provident fund contributions, the Commissioner of Income-tax (Appeals) held that the appellant was entitled to deduction in respect of contributions to the extent of Rs.3,55,156/- which were paid within the previous year though after the due date. iii) In respect of the treatment of the profit of Rs.2,57,42,014/- upon sale of the Silvassa factory shed, the Commissioner of Income-tax (Appeals) held that the appellant had not shown that the Silvassa factory shed was acquired for the purpose of making commercial production and was used to make trial production. She accordingly approved the action of the Assessing Officer. iv) In respect of the addition of Rs.100.38 lakh on account of alleged unexplained expenditure, the Commissioner of Income-tax (Appeals) held that the entire 301.446 MT of aluminum ingots valued at Rs.247.00 lakh represented unaccounted for purchases and not the sum of Rs.100.38 lakh worked out by the Assessing Officer. She, however, held that even if any addition was made on account of unexplained expenditure, the identical amount would have to be allowed as deduction as expend....
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....sale proceeds of the Silvassa factory shed were required to be reduced from the block of assets and no short term capital gains could be computed in respect of the said transfer and the purported findings of the Tribunal that the Silvassa factory shed was not put to use and upholding the assessment of the profits of Rs.2,57,42,014/- as short term capital gains are arbitrary, unreasonable and perverse? "iii) Whether on a true and proper interpretation of the provisions of Section 43B of the Income-tax Act, 1961 as amended, the Tribunal was justified in law in holding that the appellant was not entitled to deduction in respect of the Provident Fund contributions of Rs.3,55,156/- made during the previous ended March 31, 1996?" "iv)(a) Whether the Tribunal was justified in law in remanding the issue relating to alleged unexplained expenditure to the Assessing Officer and its purported findings in that behalf are arbitrary, unreasonable and perverse? (b) Whether and in any event, the Tribunal was justified in law in not deciding the appellant's contention that any addition on account of alleged unexplained expenditure was revenue neutral since the identical amount....
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....p; 5) Commissioner of Income-Tax, Madras Vs. V. MR. P. Firm, Muar & Otr., reported in (1965) 56 ITR Page 67; 6) Omar Salay Mohamed Sait Vs. Commissioner of Income-tax, Madras, reported in (1959) 37 ITR Page 151; 7) Commissioner of Income-tax Vs. Bharat General Reinsurance, reported in (1971) 81 ITR Page 303; 8) Commissioner of Income-tax Vs. Alom Extrusions Ltd., reported in (2009) 319 ITR Page 306; 9) Sutlej Cotton Mills Ltd. Vs. Commissioner of Income-tax, West Bengal, reported in (1979) 116 ITR Page 1; 10) Commissioner of Income-tax, Madras Vs. Shivakami Co. P. Ltd., reported in (1986) 159 ITR 71. Mr. Shome, the learned Senior Advocate appearing on behalf of the Revenue, has, on the other hand, has opposed the aforesaid contention of Mr. Khaitan and has substantially relied upon the reasons given by the Tribunal below and according to Mr. Shome, those findings of the Tribunal being basically findings of fact, there is no scope of any interference in this appeal under Section 260A of the Act. In support of his contention, Mr. Shome relies upon the following decisions: 1) Mohd. Ibrahim Aximulla Vs. Commissioner of Income-tax, reported in (1981) 131 I....
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.... not be rectified. In our opinion, even if we assume for the sake of argument that it was a case of deliberate and fictitious entry, it is the duty of the Income-tax authority to find out the real nature of the transaction behind the said entry and to pass appropriate order of assessment in accordance with law. Merely because an assessee has made a wrong or even fictitious entry in the accounts, such fact cannot be a ground for accepting such wrong or fictitious entry. In the case before us, the assessee itself has come up with revised return and thus, it is the duty of the Assessing authority to pass necessary order on the basis of the materials on record. It is well-known that the doctrine of estoppel is not applicable against the statute. If a particular income is not taxable under the Income-tax Act, it cannot be taxed on the basis of estoppel or any other equitable doctrine. Equity is out of place in tax law; a particular income is either liable to tax under the taxing statute or it is not. If it is not, the Income Tax Officer has no power to impose tax on the said income (Commissioner of Income Tax, Madras Vs. V. MR. P. Firm Muar = AIR 1965 SC 1216). In the case bef....
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....evenue and cannot have any application to the facts of the present case where the assessee asserts less income in its revised return by specifically pointing out its mistake in the original return. In such a case, it is the duty of the Assessing authority to deal with the case of mistake alleged in the revised return on merit. The decisions cited by Mr. Shome, therefore, do not help his client in any way. We, thus, find that the Tribunal below erred in law in accepting the views of the Assessing Officer and the CIT (Appeals) on the question. In such circumstances, in our opinion, it is a fit case where the matter should be sent back on remand to the Assessing Officer for deciding the real nature of transaction after giving an opportunity to the assessee to prove their case and the Assessing Officer should arrive at a definite finding as to the outcome of the transaction on the basis of the materials on record based on revised return. The next question is whether in the present case, the Tribunal was justified in refusing depreciation in respect of the building of the factory of the assessee at Silvasa. We are not at all disputing the submission of Mr. ....
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....duction in the premises. In support of its claim that trial commercial production was carried out in the Silvassa premise the appellant could have produced to the assessing officer the copies of invoices of raw materials and consumables delivered at Silvassa and their relevant freight bills, copies of pay roll evidencing engagement of workers, copies of electricity bills and excise licence etc. In the case of plant and machinery copies of purchase invoices and when they were borrowed from the Calcutta factory of the appellant, copies of carrier's bills, transit papers could have been placed on record. Some of the production during the trial run must have met the saleable quality in which case, such production must have been entered in the stock register and specified excise register. The production of copies of such registers would have strengthened the appellant's case. The saleable production must have been sold or despatched to Calcutta factory of the appellant would have assisted its cause better by production before the assessing officer the copies of sale invoices, carrier's bills and statutory transit documents as the case might be. Then, there are payments of rates and taxe....
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....lant for its sale as short term capital gain of the appellant and adding the sum of its total income." It appears that the learned Tribunal has affirmed the aforesaid finding of fact. The aforesaid find is based on consideration of all the materials on record and any reasonable individual having regard to Section 3 of the Evidence Act would accept such finding as reasonable. We are unable to describe the said finding as one based on no evidence nor can we brand the same as a perverse finding of fact justifying interference in this appeal. The aforesaid question is thus decided against the assessee. As regards the third question formulated by the Division Bench on the question of interpretation of Section 43B of the Act as regards the claim of deduction of Rs.3,55,156/- in respect of Provident Fund contributions, we find that the said question is now covered by the decision of the Supreme Court in the case of Commissioner of Income-Tax Vs. Alom Extrusions Ltd., reported in (2009) 319 ITR 306 where the Supreme Court held that the omission of the second proviso to Section 43B of the Act by Finance Act, 2003 operated retrospectively from April 1, 1988 an....