TaxTMI 
TaxTMI 
2016 (3) TMI 272
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.... 2. The department has raised the following grounds challenging the order of ld.Commissioner of Income Tax (Appeals):- '''2.2 The learned Commissioner of Income Tax (Appeals) ought to have appreciated the findings of the Assessing Officer, that the assessee's claim on the amount kept in cash collateral is not permissible as it is mere diversion of income by overriding title. 2.3 The learned Commissioner of Income Tax (Appeals) failed to note that this is a case where questionable details and particulars, relating to revenue recognition were furnished by the assessee and such details were so fundamental to the genuineness and bonafide of the claim that mere furnishing of those particulars made the claim vulnerable, entai....
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....has confirmed the order of the lower authorities. The ld. Assessing Officer issued notice for levy of penalty u/s.271(1)(c) of the Act. In the penalty proceedings, the assessee has submitted detailed explanations and furnished details of contract and complied with directions. 4. The ld. Assessing Officer alleged to levy penalty based on the system of accounting followed by the company in respect of loans provided for self help groups. The ld. Authorised Representative has explained that company has sold a portion of loans granted by its various self help groups to ICICI Bank on the basis of Bilateral Buy Out Basis. A per the terms and conditions of the buyout deal the assessee shall provide cash collateral for the amount equal to 2% of p....
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....covery is less than the actual loans granted, the assessee company has incurred bad debts in the year of appropriation of deposits by ICICI Bank and debited to Profit and Loss account and claimed deduction. The assessee has not filed second appeal against the order of the Commissioner of Income Tax (Appeals) passed u/Secs. 143(3) and 250 of the Act due to claim of Bad debts. The NBFC company has filed submissions duly supported by the Jurisdictional High Court decision. 6. As submitted the assessee has fixed deposits to cover the probable deficiency occurs to ICICI Bank in case of difference in realization of loans, which takes the characterises of retention money. Further, the assessee is following Auditing and accounting standards of t....
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.... order of the ld.CIT(A), the Revenue has filed an appeal before the Tribunal. 7. The ld. Departmental Representative has urged that the cash collateral is not permissible and treated as mere diversion of income overriding title and assessee has not furnished genuine details in respect of Revenue recognition and pleaded for set aside the order of the Commissioner of Income Tax (Appeals) and relied on the judicial decisions. 8. On the other hand, the ld. Authorised Representative of the assessee submitted that there is no concealment of income or furnishing of inaccurate particulars by assessee in the assessment proceedings or before appellate proceedings and there is no fresh evidence filed before the Commissioner of Income Tax (Appeal....
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....e decisions but amount kept in cash collected is not a prudent practice and it should be subjected to tax. In this case the money has been appropriated by ICICI Bank after collection and the assessee has claimed the deficiency in realization as Bad debts. The income of 2% was not considered in profit and loss account by assessee. We are of the opinion that these are incorrect treatment given by the assessee company and have no sanction of law and also not supported by any Accounting standard. The assessee claim is nothing but false claim and furnishing inaccurate particulars of income. The explanations given by the assessee cannot be considered as bonafide and assessee tried to conceal the income by misrepresenting the case by not bringing ....