TaxTMI 
TaxTMI 
2015 (12) TMI 624
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.... Chandigarh Bench "A", Chandigarh (hereinafter referred to as "the Tribunal") in ITA No. 506/CHD/2011 for the assessment year 2007- 08, claiming the following substantial questions of law:- I. Whether under the facts and circumstances of the case, while arriving at the chargeable income u/s 29 of the Act, once the claim of the appellant as 'business' of accommodation entries is accepted, then the 'charge' has to be computed in accordance with the 'integrated scheme of taxation' of Income Tax Act, 1961? II. Whether under the facts and circumstances of the case, while arriving at the chargeable income attributable to the 'accommodation entries business', can there be calculation and computatio....
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....ction 143(3) of the Act at an amount of Rs. 6,02,04,380/- by making additions on account of unexplained income and the household expenses. Feeling aggrieved, the assessee filed an appeal on 25.1.2010 (Annexure A-6) before the Commissioner of Income Tax (Appeals) [for brevity "the CIT(A)"]. The CIT(A) vide order dated 4.3.2011 (Annexure A-7) dismissed the appeal. Still dissatisfied, the assessee filed an appeal before the Tribunal who vide order dated 20.3.2014 (Annexure A- 8) partly allowed the appeal. Hence, the present appeal by the assessee. 4. Learned counsel for the assessee relied upon the judgment of the Apex Court in T.A. Quereshi (Dr.) v. Commissioner of Income Tax, Bhopal (2007) 2 SCC 759 to submit that the appellant was ....
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.... The expenditure must not be capital in nature." 14. Explanation to sub-section (1) was inserted by the Finance (No.2) Act, 1998 with retrospective effect from 1.4.1962, which reads thus:- "Explanation.- For the removal of doubts, it is hereby declared that any expenditure incurred by an assessee for any purpose which is an offence or which is prohibited by law shall not be deemed to have been incurred for the purposes of business or profession and no deduction or allowance shall be made in respect of such expenditure." 15. The purpose for incorporation of this Explanation had been explained by CBDT in circular No. 772 dated 23.12.1998 (1999) 235 ITR (st.) 35 as under:- "20. Disallowance of illegal expens....
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....ssessee as they are prior to insertion of Explanation to sub section (1) of Section 37 of the Act. Reference may also be made to the Apex Court Judgment in Dr. T.A. Quereshi's case (supra) on which reliance has been placed by the learned counsel for the assessee. The Hon'ble Supreme Court in that case was seized of the matter where heroin forming part of the stock of the assessee's trade was confiscated by the State authorities and the assessee claimed the same to be an allowable deduction. The Hon'ble Supreme Court held that seizure and confiscation of such stock in trade has to be allowed as a business loss and Explanation to Section 37 has nothing to do as that was not a case of business expenditure. Since the present cas....