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TaxTMI 
TaxTMI 
TaxTMI 
2014 (1) TMI 543
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.... the same as income of the assessee u/s 28(iv) of the income Tax Act, 1961. 2. The assessee in the present case is a partnership firm which is engaged in the business of clearing and forwarding. The return of income for the year under consideration was filed by it on 31-10-2006 declaring total income of Rs.5,13,990/-. In the balance sheet filed along with the said return, suspense account showing credit balance of Rs.1,05,56,849/- was reflected on the liability side as on 31-3-2006. The explanation offered by the assessee in this regard before the A.O. was that its books of account seized during the course of search operation conducted in A.Y. 1985-86 were not released and in the absence of the said books, the difference appearing in the t....
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....count balance by invoking the provisions of section 28(iv) of the Act. Before the ld. CIT(A), it was submitted on behalf of the assessee that the amount in question in suspense account was carried forward in the balance sheet right from 1-4-1985 and the same having no bearing or impact on the income of the assessee for the year under consideration, it could not be treated as its income for that year by invoking the provisions of section 28(iv) of the Act. It was contended that the issue of suspense account related to the period which was covered by order of Settlement Commission and the assessee having already paid the tax pursuant to the order of the Settlement Commission for the said period, there was no justification to add the suspense ....
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....his undischarged liability is yet alive and continuing. The same amount has been continuing as undischarged since 1986 and remains undischarged till. 31/03/2006, after a lapse of twenty years. With efflux of time, the character of the liability has changed and it is no longer payable. Appellant has not submitted any evidence to show that the claims whether these relate to unpaid expenses, loans or advances from clients / customers, still remain payable. The appellant's argument regarding interpretation of Section 4 of the IT Act is not tenable, as section 28(iv) specifically allows levy of income tax on income attributable to the value of any benefit or perquisite whether convertible into money or not arising from business of the exercise o....
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....difference which had remained un-reconciled due to seizure of the books of account by the Income Tax authorities during search which were not released. He invited our attention to the copy of the said audit report placed at page 82 of the assessee's paper book which contained such explanation. He also placed on record a copy of the assessment order passed by the A.O. u/s 143(3) of the Act in the case of the assessee for A.Y. 1990-91 to show that the suspense account was duly taken note of by the A.O. and only the difference amount added in the suspense account during that year was treated by the A.O. as income of the assessee. He reiterated that the suspense account balance pertained to A.Y. 1985-86 and since the said period was covered by ....
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....is observed that the impugned addition has been made by the A.O. and confirmed by the ld. CIT(A) to the income of the assessee on account of credit balance in the suspense account by treating the same as the income of the assessee u/s 28(iv) of the Act. As per the provisions of section 28(iv) of the Act, the value of any benefit or perquisite, whether convertible into money or not, arising from business or the exercise of a profession is chargeable to Income Tax under the head "profits and gains of business or profession" and as held by the Hon'ble Gujarat High Court in the case of CIT vs. Bhavnagar Bone and Fertiliser C. Ltd. reported in (1987) 166 ITR 316, there must be a nexus between the business of the assessee and the benefit which th....