TaxTMI 
TaxTMI 
TaxTMI 
2015 (1) TMI 785
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....e proceedings, the first appellate authority noticed from the Annual report (Note no.16) that the assessee has not offered the income (Investment advisory fees) due from M/s India Value Investment Ltd on the reasoning that there exists a dispute between the assessee and the above said party and hence no credit has been taken for the fees. The Note no.16 stated that the aggregate amount due for the financial years 2005-06 to 2008-09 was GBP 14,78,484. The Ld CIT(A) noticed that the assessing officer did not examine this income at the time of completing the assessment, which has resulted in under assessment. Hence the Ld CIT(A), vide his order sheet noting dated 06.11.2013, asked the assessee to provide the details relating to this Investment Advisory fees receivable, the complete breakup and why it should not be added to its income. Though the assessee stated that the above said amount of GBP 14,78,484 relates to the assessment years 2006-07 to 2009-10, yet it failed to furnish the break up details. The Ld CIT(A) also asked the AO to produce the return of income filed by the assessee for AY 2007-08 to 2008-09. But the AO expressed his inability to produce the same, as the assessee h....
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....(SC) (b) CIT Vs. Sardari Lal & Co. (IT Ref. No.227 of 1979 dt. Sep. 7, 2001)(Delhi).(251 ITR 864) The Ld A.R submitted that the income due from M/s India Value Investment Ltd is a new source of income of the assessee, which was not subject matter of consideration by the assessing officer. Accordingly he submitted that the Ld CIT(A) was not entitled to enhance income by considering a new source of income. Accordingly he contended that the enhancement made by Ld CIT(A) is not in accordance with the law and the same is liable to be deleted. 5. In response to this contention, the Ld D.R submitted that the Ld CIT(A) has placed reliance on the following case laws in order to support his action of enhancement:- (a) CIT Vs. Nirbheram Daluram (224 ITR 610)(SC) (b) Jute Corporation of India Vs. CIT (187 ITR 688)(SC) (c) CIT Vs. Kanpur Coal Syndicate (53 ITR 229)(SC). 6. We have carefully considered the decision rendered by Hon'ble Supreme Court in the case of Raj Bahadur Hardutroty Motilal Chamaria (supra). Following observations made by Hon'ble Apex Court are relevant:- "As we have already stated, it is not open to the Appellate Assistant Commissioner to travel outside the record, i....
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....eady noticed that the Ld CIT(A) noticed about the non-offering of income of the income receivable from M/s India Value Investment Ltd from the notes attached to the annual accounts. For the sake of convenience, we extract below the Note no.16 attached to the Annual accounts of the year under consideration:- "16. Investment Advisory Fees of GBP 14,78,484 for the financial year 2005-06 to 2008-09 is receivable from one of the offshore fund "India Value Investment Limited" (INVIL) as per the investment advisory mandate of the Company. This amount has been disputed by the fund & matter is under discussion, accordingly no credit has been taken for the fees." Thus, it can be seen that the income due from M/s India value investment fund also relates to "Investment Advisory fees", which source has been considered by the assessing officer while completing the assessment of the year under consideration. 10. At this juncture, we prefer to give an illustration in order to understand the issue relating to "source of income". Let us presume that an assessee, say M/s XYZ sells goods to five parties viz., A, B, C, D and E. There should not be any dispute that the source of income of M/s XYZ is ....
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....ivalent of GBP 12,14,022 as its income in assessment year 2010-11. The Ld A.R further submitted that the assessee has reached the settlement with M/s India Value Investment Ltd only on 09.04.2009 and hence the relevant income has accrued to the assessee only on the above said date and hence it is assessable only in assessment year 2010-11. Accordingly the Ld A.R submitted that the action of the Ld CIT(A) in enhancing the income by the rupee equivalent of GBP 14,78,484/- in AY 2009-10, not only results in double assessment of same income but also results in assessment of income not accrued to the assessee. In the alternative, The Ld A.R submitted that the assessee has duly offered the same in assessment year 2010-11 and hence the Ld CIT(A) was not justified in assessing the same in assessment year 2009-10. Accordingly he submitted that the addition made by Ld CIT(A) is liable to be deleted. The Ld A.R further submitted that the assessee has been disclosing the amount due from M/s India Value Investment Ltd in its annual accounts every year since the assessment years 2006-07 onwards and hence the Ld CIT(A) was not correct in law in presuming that the aggregate amount due was assessab....