TaxTMI 
TaxTMI 
TaxTMI 
2016 (2) TMI 168
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....tion 2(22)(e) of the Income-tax Act, 1961 (in short 'the Act'). According to the Ld. counsel, the assessee is a shareholder and Director in M/s Adampur Distributors Pvt. Ltd., Chennai, having 99.98% shares. From the balance sheets, it is seen that M/s Mustafa Gold Mart, a proprietary concern of the assessee, was shown as creditor in the year ending 31.03.2009 to the extent of Rs. 1,28,32,146/-. During the financial year 2008-09, the assessee received approximately 2.92 Crores from Adampur Distributors Pvt. Ltd. After perusing the Profit & Loss account of the Adampur Distributors Pvt. Ltd., the Assessing Officer found that the total export sales was of Rs. 4,83,83,050/-. This sale constituted export of food products to the extent of Rs. 4.03 Crores and export of perishable goods to the extent of Rs. 62.33 Crores. The Assessing Officer further found that funds were transferred from M/s Adampur Distributors Pvt. Ltd. to M/s Mustafa Gold Mart on various dates. The Assessing Officer further found that transaction between M/s Mustafa Gold Mart, the proprietary concern of the assessee and M/s Adampur Distributors Pvt. Ltd. was not a business transaction and it was a loan and advan....
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.... considered the rival submissions on either side and perused the relevant material available on record. The Assessing Officer made addition under Section 2(22)(e) of the Act for the assessment years 2009-10 to 2011-12. In fact, for the assessment year 2009-10, a sum of Rs. 3,55,851/- was added under Section 2(22)(e) of the Act. Similarly, a sum of Rs. 68,46,548/- and Rs. 34,06,371/- were added for the assessment year 2010-11 and 2011-12 respectively. It is not in dispute that the assessee is holding 99.98% shares in M/s Adampur Distributors Pvt. Ltd. It is also not in dispute that the assessee received money from M/s Adampur Distributors Pvt. Ltd. The issue arises for consideration is whether the advance made by M/s Adampur Distributors Pvt. Ltd. is for business transaction or it is a loan or advance. The ledger extract of M/s Adampur Distributors Pvt. Ltd. clearly establishes that M/s Adampur Distributors Pvt. Ltd. purchased gold from M/s Mustafa Gold Mart, a proprietary concern of the assessee. It is also not in dispute that upto 2007-08, M/s Adampur Distributors Pvt. Ltd. engaged in the business of jewellery and later on, the business was diversified. To revive the gold jeweller....
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....Ishtiaq Ahmed and not to any other employees. The assessee could not explain the benefit derived on the payment of commission. In those circumstances, the Assessing Officer has rightly disallowed the payment of commission by applying the provisions of Section 40A(2)(b) of the Act. 9. On the contrary, Sh. N. Devanathan, the Ld.counsel for the assessee, submitted that the commission was paid to Shri Ishtiaq Ahmed for the service rendered by him. The recipient Shri Ishtiaq Ahmed disclosed the receipt of commission and paid taxes. In fact, the Assessing Officer accepted the income declared by Shri Ishtiaq Ahmed. Therefore, the Assessing Officer cannot take a contrary decision by disallowing the payment in the assessee's hand. According to the Ld. counsel, the payment of commission is not disputed. The question is whether it is excessive or unreasonable. According to the Ld. counsel, after payment of commission, the profit of the assessee has increased considerably and Shri Ishtiaq Ahmed created awareness about the genuine product of Mustafa Gold Mart. In other words, the fair dealings of Mustafa Gold Mart were propagated among the customers and therefore the general public had awarene....
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....t. The Assessing Officer found that the above credit was outstanding from the assessment year 2005- 06. There was no movement in the sundry credit for the last seven years. According to the Ld. D.R., the assessee has not filed any confirmation letter. The assessee explained before the Assessing Officer that all the credits are towards the purchase of gold from respective persons. The assessee has not furnished the address of the creditors. Since the credit was outstanding for more than 7 years, according to the Ld. D.R., the Assessing Officer found that the liability of the assessee ceased to exist. Therefore, according to the Ld. D.R., the credit of Rs. 5,61,53,855/- has to be treated as income of the assessee. 13. On the contrary, Sh. N. Devanathan, the Ld.counsel for the assessee, submitted that the sundry credit exists from assessment year 2005-06. In fact the credit was accepted for the assessment year 2005-06 and no addition was made. Since the Assessing Officer admitted that the sundry credit existed from assessment year 2005-06, no addition can be made for the assessment year under consideration. According to the Ld. counsel, if at all any addition can be made, it has to b....
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....sted for more than 7 years, the liability cannot cease automatically. Time for legal suit to recover the amount may be barred under the provisions of Limitation Act, however, the right of the creditor to recover the amount still exists by other modes. In other words, what is barred is filing civil suit to recover the money but the other means are not barred at all. Moreover, the liability is shown in the year under consideration also. Therefore, the assessee accepted liability during the year under consideration. When the assessee accepted the liability, the period of limitation gets extended. In those circumstances, there is no question of any cessation of liability. It is not the case of the Revenue that the creditors waived the amount due to them. In those circumstances, the CIT(Appeals) has rightly deleted the addition. This Tribunal do not find any reason to interfere with the order of the lower authority. According, the order of the CIT(Appeals) is confirmed. 17. Now coming to the appeal in the case of Shri Ishtiaq Ahmed in I.T.A. No.1680/Mds/2013, the first ground of appeal is with regard to addition made on account of unexplained jewellery to the extent of Rs. 21.49 lakhs.....
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....e. It is a customary practice in this part of the country to present gold jewellery to the girl child by the respective parents during her marriage. The quantity of gold jewellery depends upon the status of the assessee in the society. The assessee, being a businessman, commands respect in the locality where he resides. Therefore, naturally the parents of the girl would give gold jewellery as Sthreedhan property. This is a customary practice which prevails in the country. The Assessing Officer disbelieves the contention of the assessee only on the ground that no documentary evidence was found. It is not known what kind of document can be produced when the girl's parents gifted gold ornaments to her daughter. If it is immovable property like land, then registration of document is compulsory. In the case of property like gold jewellery, it is only the statement of the individual that has to be relied upon. Other than this, this Tribunal is of the considered opinion that the assessee would not be able to produce any documentary evidence to establish that the parents of the assessee's wife presented the gold jewellery to her daughter at the time of marriage. The customary practice that....
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....sessee employed casual labourers. The assessee could obtain the self-made vouchers from such kind of persons. Therefore, the CIT(Appeals) found that disallowance of 20% of the expenditure would meet the ends of justice. In the absence of any proper vouchers, according to the Ld. counsel, the CIT(Appeals) restricted the disallowance to 20% of the expenses incurred. Therefore, the Revenue cannot have any grievance at all. 24. We have considered the rival submissions on either side and perused the relevant material available on record. The assessee claims that he was employed as commission agent to publicize the product of M/s Mustafa Gold Mart. The assessee claims that he promoted the business by making advertisement in various part of the city by using loud speakers on the vehicle. As rightly pointed out by the Ld. D.R., no proper vouchers were maintained by the assessee. In the absence of proper vouchers, the CIT(A) has restricted the disallowance to 20% claimed by the assessee. This Tribunal is of the considered opinion that the CIT(Appeals) has rightly restricted the claim to 20% by taking into consideration the material facts available on record. Therefore, this Tribunal do not....
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.... The next ground of appeal, which is common in all the appeals, i.e. of Shri Mustaq Ahmed and Shri Ishtiaq Ahmed, is with regard to charging of interest under Section 234B of the Act. 30. Sh. A.B. Koli, the Ld. Departmental Representative, submitted that interest has to be charged from the date of filing the return under Section 139(1) of the Act in the regular course. The CIT(Appeals) treating the return filed in response to the notice issued under Section 153A of the Act, directed the Assessing Officer to compute the interest from the date of return filed consequent to the notice issued under Section 153A of the Act. According to the Ld. D.R., regular assessment means the assessment made under Section 143(3) of the Act, therefore, the original return filed under Section 139(1) of the Act has to be considered for the purpose of levy of interest under Section 234B of the Act. 31. On the contrary, Sh. N. Devanathan, the Ld.counsel for the assessee, submitted that after filing of return consequent to the notice issued under Section 153A of the Act, the return filed by the assessee has to be treated as if the return was filed under Section 139(1) of the Act. Hence, the return has to....