TaxTMI 
TaxTMI 
2013 (5) TMI 523
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....sessee company on 19.2.2008. Consequently notices u/s. 153A were issued in response to which assessee company filed returns of income admitting the following incomes:- Asst. Year Income/Loss returned (Rs.) Date of filing 2002-03 (80,47,622) 11.11.2009 2003-04 Nil 13.10.2009 2004-05 (58,68,359) 23.10.2009 2005-06 (55,20,344) 23.10.2009 2006-07 (17,06,505) 23.10.2009 2007-08 (37,96,646) 23.10.2009 2008-09 (13,29,373) 23.10.2009 4. During assessment proceedings, the Assessing Officer observed that assessee company claimed expenditure under various heads viz., consumption of material, workers' payment and benefits, rates and taxes, administrative expenses, fringe benefits etc., amounting to Rs. 42,56,521 for A.Y. 2002-03, Rs. 37,85,843 for A.Y. 2003-04, Rs. 96,14,871 for A.Y. 2004-05, Rs. 90,90,650 for A.Y. 2005-06, Rs. 54,76,196 for A.Y. 2006- 07, Rs. 29,30,087/- for A.Y. 2007-08 and Rs. 23,41,616 for A.Y. 2008-09. The Assessing Officer called for the details of the above expenditure with evidences. The Assessing Officer held that the onus to produce books of account and other documents lies entirely on the ....
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....llage, Qutbullapur Mandal for Rs. 13,98,000 which was shown as fixed asset in the balance sheet for the A.Y. 2001-02. However, in A.Y. 2002-03, the assessee company had transferred this asset from fixed assets to stock-in-trade and reflected the same under the head 'advances' in the balance sheet. Part of this land was sold in A.Y. 2003-04 @ Rs. 9,062/- per gunta and the profits earned were shown as business profits. The Assessing Officer held that as per the provisions of sec. 45(2) of IT Act, the profits arising from transfer by way of conversion by the owner of the capital asset into or its treatment by him as stock in trade of a business carried on by him shall be chargeable to income tax as his income of the previous year in which such stock in trade is sold or otherwise transferred by him and for the purpose of sec. 48, the fair market value of the asset on the date of such conversion shall be deemed to be the full value of the consideration received or accrued as a result of the transfer of the capital asset. The Assessing Officer put the above legal position to the assessee during assessment proceedings and asked the assessee as to why the capital gains should not be levied....
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....eveloped the land and constructed the houses on the land. Further Lahari Homes had also shown Rs. 9,75,000/- in its balance sheet, payable to the assessee towards cost of land. The Assessing Officer held that since Lahari Homes is a group concern of the assessee company, there is no basis for showing Rs. 9,75,000/ - and also held that there is no merit in the contention of the assessee that the MoU was not materialized. Therefore, basing on the MoU, the Assessing Officer worked out the taxable profits on sale of above mentioned land to Lahari Homes. The Assessing Officer adopted the rate of Rs. 2,584/- per square yard and arrived at Rs. 16,27,920/- as the value of the land. He also worked out the cost of construction adopting Rs. 1050/- per square foot and arrived at Rs. 65,10,000/-. Adding the cost of land and cost of construction, the total consideration to be received from Lahari Homes was arrived at Rs. 81,37,920/-. Reducing the cost of acquisition of Rs. 7,80,000/- from Rs. 81,37,920/-, the Assessing Officer arrived at the business profit of Rs. 3,57,920 for the A.Y. 2004-05 and added the same to the total income. 10. Further, the Assessing Officer noticed that assessee had....
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....6, Kondapur but not the land belonging to the assessee which is situated at Survey No. 167. The CIT(A) did not agree with the argument of the assessee about the property being retained with it. The assessee could not substantiate its contention with any corroborative evidence except filing the bank loan particulars in respect of mortgage of the properties for loan. In fact, on verification of such details, the CIT(A) noticed that the assessee mortgaged the property situated at survey Nos. 165, 166 and 167. Therefore, there is contradictory explanation forthcoming from the assessee about the exact property which is under subject matter of appeal. Property can be mortgaged to any financial institution even as a guarantor but not necessarily as owner of such property. Therefore the contention of the assessee that property has been mortgaged and obtained loan does not establish its contention beyond reasonable doubt. Further, in this case, the properly was mortgaged by M/s. Laharl Holiday Homes Ltd., which another group concern of assessee group but not the assessee as such. There are so many contradictions in the explanation of the assessee on this ground. In the absence of any rebutt....
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.... The CIT (A) verified some of the payments made to major creditors and found that subsequently payments were made to these creditors through Andhra Bank, State Bank of Hyderabad, etc. In fact, the Assessing Officer has taken the figures of sundry credit balances as at the end of March in each year comparing the same with immediate preceding year and the different amount was assessed as income of the assessee without examining the nature of such credit balances and the subsequent payments made by the assessee. In the A.Y. 2007-08, the sundry creditor balance is Rs. 3,86,45,687/- as on 31-3-2007 and the balance as on 31.3.2006 was at Rs. 49,67,513/- and difference of Rs. 3,36,78,174/- was assessed as income. In fact, there is a balance of Rs. 3.35 crores in the name of M/s. l.ahari Green Park, proprietary concern of Mr. G. Hari Babu, Managing Director of the company who is assessed with ACIT, Central Circle-1 and having running a/c with the assessee company. His case also was subjected to scrutiny assessment consequent to search. As per books of a/c of M/s. Lahari Green Park (Prop. Concern of Mr. G.Hari Babu, Managing Director), a sum of Rs. 5,44,13,974 (Dr.) was shown as amount outs....
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....es, transactions have taken place and in rest of the cases the same balances have been carried forward to subsequent years. The assessee has no explanation to offer about non-payment of these credit balances and they are not running accounts. The total at such credit balances comes to Rs. 20,93,729 for which the assessee has no explanation to offer. Therefore, the credit balances appearing in the books of the assessee are no longer to be repaid, since the liability to pay-back is ceased to exist, the same is required to be taken as income of the assessee. It is for the assessee to establish with necessary evidences to prove that the creditors are genuine and assessee is under the obligation to re-pay such liabilities. It is also a fact that these credit balances represent expenses allowed in the earlier years as deduction in the computation of business income. Therefore, in view of the above discussion, a sum of Rs. 30,05,195/- (20,93,729 + 9,11,466) is directed to be assessed as income and accordingly the addition to be restricted to Rs. 30,05,195/- as against Rs. 3,36,78,174/- in the A.Y. 2007-08. Against this, the assessee is in appeal before. 18. In our opinion, any credit a....
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....t he had given a demand draft for Rs. 50 lakhs bearing No. 125623 dated 21-1-2008 drawn on Citibank, Hyderabad towards share application money for allotment of 5 lakhs equity shares @ face value of Rs. 10/- each in M/s. Lahari Impex Pvt. Ltd. In the remand proceedings the Assessing Officer directed the assessee company to produce the said investor for further examination but the same could not be materialized on the ground that the alleged investor/creditor is an NRI, hence not produced before the Assessing Officer. The CIT(A) observed that the assessee filed a confirmation letter from Mr. Pavan Kumar from the residential address located at Khammam (Andhra Pradesh). However, he could not be produced on the ground that he is an NRI not available in India. At least he could have furnished the necessary confirmation from the said NRI to the effect that he is presently residing at so and so address, etc. In the appeal proceedings also, the assessee was asked to get the fresh confirmation from him about the investment in the company for the purpose of purchase of equity shares. No compliance from the assessee to the above query raised in the appeal proceedings. The said transaction is a....