TaxTMI 
TaxTMI 
2016 (3) TMI 1021
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....d raised by the Revenue reads as under: "On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in deleting the addition made u/s.69B on account of difference in valuation to the tune of Rs. 4,15,196/-." 3. Facts of the case, in brief, are that the assessee is a company engaged in the business of infrastructure construction, civil engineering and contractors etc.. It filed its original return of income for the impugned assessment year on 28-10-2005 declaring total income at Rs. 1,45,66,216/-. A search u/s.132 of the I.T. Act was carried out in this case on 23-10-2009. In response to notice u/s.153A the assessee filed its return of income on 05-08-2010 declaring NIL income. 4. During the course of assessment proceedings the AO noted that the assessee has acquired various properties. To know the investment in the said properties the AO made a reference u/s.142A to the DVO to determine the cost of the properties in the hands of the assessee as on the date of acquisition. The following chart indicates the value declared by the assessee and the value estimated by the DVO and the difference : Asst.Year Details of property Value declared ....
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....While doing so he held that the AO is entitled to and had correctly referred the property for valuation to the DVO u/s.142A. He, however, held that the addition has been made by the AO without rebutting the evidences putforth by the assessee in respect of its contentions that the DVO had adopted arbitrary methods for valuing the properties in question. The relevant observation of the CIT(A) at Para 16 of the order reads as under : "16. I have held in paragraph 12 that the report of the DVO under section 142A is only a piece of evidence which can be rebutted by the appellant in order to determine whether or not the report can be relied upon as the true and correct estimate of investments for the purpose of sections 69 or 69A or 69B of the Income-tax Act. The appellant has pointed out that the DVO has not compared the rates of property available in the same building and has relied on comparable rates in other buildings in the same vicinity to arrive at the valuations. The appellant has pointed out that in respect of flat no.7 a comparison with flat no.201 in the same building would show that the appellant has made payment of a higher amount than what is paid by other purchas....
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....by another purchaser at Flat No.201 in the same building. He accordingly submitted that the order of the CIT(A) being based on factual findings be upheld. 12. We have considered the rival arguments made by both the sides, perused the orders of the AO and CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the assessee during the impugned assessment year has purchased flat No.07 at Star tower, Khanapur Road, Belgaum for a consideration of Rs. 8,61,304/-. We find the AO on the basis of the valuation report submitted by the DVO valuing the property at Rs. 12,76,500/- made addition of Rs. 4,15,196/- being the difference u/s.69B of the I.T. Act. We find the Ld.CIT(A) deleted the addition on the ground that the price paid by the assessee in respect of flat no.07 is higher than what is paid by another purchaser in flat No.201 in the same building. Although this fact was brought to the notice of the AO he has not considered the same without assigning any reason. We find in the instant case the addition has been made by the AO mainly based on the valuation report of the DVO. The Hon'ble Delhi High Court in the ....
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....ted to cash payments." The appellant submits that no opportunity of the hearing was given by the AO with regard to these presumptions. 1.3 Ld. CIT(A) was not justified in concurring with the finding of the AO rejecting the evidence in the form of loose papers seized at the office premises of the appellant holding on mere ipse dixit that such evidence is fabricated. 1.4 Ld. CIT(A) erred in confirming the presumption made by AO in shifting the undisclosed in come to earlier years on the basis of evidence seized from a third party." 14. Facts of the case, in brief, are that the assessee company is in the business of construction and development of irrigation projects. A search action u/s.132 of the I.T. Act was conducted on 23-09-2009 in the case of Mahalakshmi Infra projects Ltd. ('MIPL' in short). During the course of search concrete evidences of speed money payments in Ghodzari project amounting to Rs. 4383.64 lakhs were found. Ghodzari project is an irrigation contract of Govt. of Maharashtra undertaken by the assessee and MIPL as Joint Venture partners. During search in the case of MIPL on 23-09-2009, evidences were seized proving the fact that 50% of said un....
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....cal director of the assessee company are only projected payments and not payments actually been made. Therefore, according to the AO, the only dispute in respect of unexplained payments relating to Ghodzhari project is the year of taxation and nature of payments. The AO analysed the year wise break up of speed money paid by MIPL and its J.V. Partner, B.T. Patil and sons in respect of Ghodzhari project as per the documents seized from Shri D.A. Bhat which is given at pages 4 to 18 of the assessment order. He also referred to the statement recorded u/s.132(4) of the I.T. Act from Shri D.A. Bhat on 24-09-2009 and noted the following conclusions as per para 8.7 of the assessment order (page 18): (i) Page Nos. 31, 28, 22 & 17 of bundle No.1 seized from residence of Shri D.A. Bhat are in fact documents of M/s. B.T. Patil & Sons Belgaum Construction Pvt. Ltd. These documents were sent to Shri D.A. Bhat for the purpose of reconciliation is very important in these matters related to cash payments. If not reconciled periodically, it may lead to misunderstandings between JV partners at a later date. (ii) Shri D.A. Bhat is a trusted and loyal employee of assessee company work....
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....o the assessee by its JV partner, Mahalaxmi Infraprojects Ltd. Therefore, since the excel file was prepared anticipating search, the assessing officer held the same to be self-serving and a fabricated document and without any evidentiary value. 19. The AO further noted that on the date of search statement u/s.132(4) was recorded from Shri R.D. Shinde, at his residence and evidences of payment of speed money were confronted to him. He admitted categorically that speed money payments were made. He also referred to the statement u/s.132(4) recorded from Shri Ajit R. Gurjar, Project Manager and Mr. B.T. Patil, Accountant of MIPL at the office premises of the assessee. When the evidences related to speed money found at office premises were placed before them both of them admitted that speed money payments were made. 20. The assessing officer further observed that though the unexplained expenses related to assessment years 2007-08, 2008- 09 and 2009-10 i.e. the year of taxation, the assessee had declared additional income of' 22,61,37,650/- in assessment year 2009-10 (Rs.9,31,00,000/-) and 2010-11 (Rs.13,30,32,650/-). Thus, since the issue in dispute was the year of taxation of....
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....of which share of the assessee company is Rs. 275.175 lakhs. He therefore asked the assessee to explain as to why the amount of Rs. 275.175 lakhs should not be added to the total income of the assessee. Similarly, he noted that for A.Y. 2008-09 the assessee's share comes to Rs. 1490.675 lakhs and Rs. 425.97 lakhs for A.Y. 2009-10. 24. It was submitted by the assessee that Shri D.A. Bhat, Technical Director of MIPL has retracted his statement u/s.132(4) of the I.T. Act by filing a letter dated 11-10-2009. Shri D.A. Bhat is only a technical man and is not acquainted with financial matters. The unexplained expenses seized from residence of Shri D.A. Bhat related only to projected expenses and not actually paid. Further, Shri R.D. Shinde in his statement recorded on 12-10-2009 in reply to Question No.23 had stated that as on the date of search the joint venture has received Rs. 98 crorees only in respect of Ghodzhari project and therefore payment of Rs. 43 crores is highly unreasonable. 25. However, the AO was not satisfied with the explanation given by the assessee. He observed that the Mahalaxmi-B.T. Patil, J.V. is formed for the purpose of Ghodzhari project and Koyna projects.....
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.... Bhat had retracted from his statement u/s.132(4) which according to him was given under tremendous mental tension and pressure the AO noted that the statement u/s.132(4) has immense evidentiary value. The retraction in the present case is neither immediate nor is corroborated with any evidence. Admission is a very important piece of evidence and brushing it aside whimsically would distort the whole purpose of the provisions. According to the AO in order to allow a withdrawal or a retraction of the same conclusively, there must be mitigating circumstances making out a case for such retraction, a fact which is completely absent in the facts and circumstances of the present case. To allow retraction without any cogent material would amount to making a mockery and travesty of the search and seizure operations. The assessee having estopped the Revenue by the admission cannot be allowed to go back on its "promise" held out by him. Relying on various decisions and holding that statement u/s.132(4) carries strong evidentiary value and observing that the statement of Shri D.A. Bhat is corroborated by independent evidences the AO made addition of Rs. 275.175/- lakhs to the total income of t....
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....dzari project are incorrect and unreliable? As discussed above, seized documents can never be half true. They are either fully true or fully untrue. Just because evidences relate to earlier years which may attract penalty and prosecution, same evidences which are accepted as true by the assessee cannot become unreliable. 10.6.11 In the light of the foregoing facts, the contention of the assessee that third party evidences cannot be used against him is hereby rejected. 11. Addition of unexplained expenses : 11.1. As discussed supra, there are irrefutable evidences to prove that the speed money payments have actually been made and they are not projected expenses. The strength of evidences found at the residence of Shri D.A.Bhat has been summed up at Para 8.7 above. The working of the year-wise speed money payments as per seized material is given at para 8.4 supra. 11.2. The year-wise allocation of assessee's share out of total speed money is tabulated as under: AY 2007-08 AY 2008-09 AY 2009-10 Total Total speed 550.35 2981.35 851.94 4383.64 money paid Lakhs Lakhs Lakhs Lakhs Assessee's ....
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....ri D. A. Bhat, correctness of which was acknowledged by him u/s.132 (4) cannot be underscored. 11.8 In the light of the foregoing discussion, unexplained expenses related to A.Y. 2007-08 amounting to Rs. 275.175 lakhs are hereby brought to tax." 28. Before CIT(A) it was argued that the assessee company and Mahalaxmi Infraprojects had formed a joint venture to acquire work from the Government of Maharashtra since they do not individually qualify. The assessee has its own technical and administrative management setup. Shri D A Bhat is a technical director of Mahalaxmi Infraprojects Ltd. and therefore there was no question of sharing information with him. Hence, Shri Bhat's statement and the documents seized from his possession are not reliable and has no evidentiary value. The assessing officer had failed to prove the correctness of statement made by the third party i.e. Shri D A Bhat. It was submitted that the assessing officer had merely presumed that pages no. 17, 22, 28 and 31 seized from Shri D A Bhat's residence belonged to the assessee. No evidence was brought on record to prove this fact. Further, the assessee was not confronted with these seized papers an....
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....e action of the AO by observing as under : "28. I have given careful consideration to the contentions of the appellant with reference to the facts of the case. The issue regarding unexplained expenses in Ghodzhari project was dealt with by me exhaustively in the case of Mahalaxmi Infraprojects Ltd. Vide my appellate order No. No.KOP/661 to 667/11-12 dated 30/10/2012 I had upheld the decision of the assessing officer in taxing unexplained expenses in assessment years 2007-08, 2008-09 and 2009-10 based on the loose papers found in the residence of Shri D A Bhat. I had also deleted the protective additions made in assessment years 2009-10 and 2010-11. The relevant portion of the above appellate order is reproduced hereunder :- 56. I have given careful consideration to the contentions of the appellant with reference to the facts of the case. This is a case where Shri D A Bhat, Director in appellant company, has retracted from the statement given earlier on 24/09/2009 and Shri Ravindra D Shinde, Managing Director/Promoter of the appellant firm has brushed aside the revelations made by Shri D A Bhat as also the documents pertaining to Ghodzhari project, executed by the ....
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.... 59. In the instant case the explanation given by Shri D. A. Bhat was retracted by him vide a letter written to the Addl. DIT (Inv.) on 11/10/2009. Shri D. A. Bhat is an employee Director of the appellant company. This letter is written just a day before the final statement of Shri Ravindra D. Shinde, Promoter and Managing Director of the appellant company, was recorded u/s.132(4) on 12/10/2009. In the letter dated 11/10/2009, Shri D. A. Bhat has intimated that the earlier admission made by him was on a mistaken understanding and misconception of facts. He also stated that he was under mental stress at the time of making the statement. However, what is of relevance is the fact that it is not the case of Shri D. A. Bhat that the statements were untrue, or involuntary; or were made under undue influence, pressure or coercion. 60. Logically the burden to prove the admission as ineffective is on the maker. Thus, on the failure of the maker to prove that earlier stated facts were wrong, his earlier statements are sufficient to conclude a matter. At this juncture, it must be noted that the statement to bind the maker must be voluntary and only if it appears to have been obt....
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....traction matters may be decided against him on the basis of initial statement itself. Generally, as compared to a subsequent statement whereby earlier admitted facts or positions are retracted, the first statement must be presumed to be more reliable for the reason that such was the statement which was recorded first in point of time and was made on the spot. Possibility of an afterthought or to concoct an explanation and fabricate the evidence in subsequent statement cannot be ruled out. A retraction to have any evidentiary value must preferably be in a statement not only denying the earlier stated facts but explaining the reasons for making a statement earlier and giving substituted facts in support of retraction. Total denial of what has been stated in the previous statement cannot be said to be effective and it shall at best be deemed merely as a plea of denial which may not be of much help. 62. The important aspect of the matter is that during the course of search Shri D. R. Bhat came with an explanation that amounts written in the papers and documents discovered from him were in the nature of speed money or gratuitous payments made for the purpose of acquiring the co....
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....sessing Officer with reference to the documents maintained by Shri D. A. Bhat. The assessing officer has elaborately and ably demonstrated, after a scrutiny of all the seized material at hand, the reasons for not accepting the explanation of Shri Ravindra D. Shinde. 63. As already mentioned, Shri D A Bhat is a trusted and loyal employee of the appellant company apart from being a close confidant of the Managing Director, Shri R D Shinde. It is apparent from the documents seized from his residence which pertained to the joint venture between the appellant company and B T Patil and Sons (hereinafter referred to as 'Bhat documents') that Shri Bhat was involved in the project since inception in more ways than just being responsible for technical matter. The fact that he used to maintain the account of unaccounted payments and was the appellant company's main interface with the joint venture partner B T Patil and Sons is apparent from the fact that B T Patil and Sons used to send the financial reconciliation statement to Shri Bhat on regular basis. The assessing officer has elaborately discussed the issue between pages no. 3 to 43 of the assessment order for the ass....
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....essment years 2007-08, 2008-09 and 2009-10 to the tune of Rs. 2191.82 lakhs (50% of total expenses of Rs. 4383.64 lakhs) and made a disclosure of additional income for the previous years relevant to assessment years 2009-10 and 2010-11 of Rs. 1801. 19 crores only. In view of the discussion above and the reasons mentioned in paragraphs 7.14 on pages 12- 13 of the assessment order for the assessment year 2010-11 (corresponding paragraph 7.7 for assessment years 2007-08, 2008- 09 and 2009-10), I hold that the assessing officer has correctly taken cognizance of the loose papers found in the residence of Shri D A Bhat and accordingly taxed the unexplained expenses in the assessment years 2007-08, 2008-09 and 2009-10. 64. Consequently, the protective additions of Rs. 3.20 crores in assessment years 2009-10 and Rs. 10.55 crores in 2010-11 stands deleted. The decision and the reasons given in the case of Mahalaxmi Infraprojects Ltd. will hold good in the instant case as well. Consequently, the additions made on protective basis of Rs. 5,05,03,000/- and Rs. 12,60,82,000/- in assessment years 2009- 10 and 2010-11, respectively, stands deleted since these amounts have been s....
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....hri B B Patil and the Director of Mahalaxmi Infraprojects Ltd, Shri R D Shinde have admitted to payment of speed money under section 132(4) on the strength of the papers found in the premises of Shri D A Bhat. However, for the purpose of allocating it to respective assessment years, both partners in the joint venture synced in unison and say that the amounts were payable or paid in the previous years relevant to assessment years 2009-10 and 2010-11. The assessing officer has dealt with all the contentions raised in this appellate proceeding between pages 3 to 41 of the assessment order for the assessment year 2007-08 (repeated in other assessment years) and I concur with the findings given therein. 30. The contention of the appellant that the assessing officer has not conducted any enquiries with the recipient of the unexplained expenditure can be, at best, described as an anecdote. Firstly, the appellant has not provided the full details including names and addresses of the persons who are the recipients of speed money. Secondly, I doubt even if these persons were contacted they would accept the receipt of the aforesaid amounts which is against public policy and which lie....
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.... which the appellant is a partner. Under these circumstances, I hold that the evidentiary value of the documents seized from the appellant's residence is inferior than the evidentiary value of the documents seized from the residence of one of the Directors of the joint venture of which the appellant is a partner. The evidences created by the appellant are unreliable and are meant to create confusion and obstruct the judicial process. 34. With these observations, I hold that the assessmg officer has rightly taxed the amounts of speed money in various assessment years as stated in paragraph 23 of this appellate order." 33. Aggrieved with such order of the CIT(A) the assessee is in appeal before us. 34. The Ld. Counsel for the assessee submitted that the assessee has disclosed a sum of Rs. 21,91,82,000/- as unexplained expenditure out of inflation of expenses as it was unable to reconcile the said expenditure incurred in A.Yrs. 2009 - 2010 and 2010 - 2011 on the basis of the excel file found in the assessee's premises during the course of search on 23-10-2009 and cash found and the statement of its Director Shri B. B. Patil. He submitted that the AO has assessed....
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....e since the same was not recorded in front of any witness. There is no signature of any witness to the said statement appended anywhere in the statement clearly demonstrates the same. Further the said statement has been retracted immediately within a gap of 18 days and the AO has failed to record any further statement of the said Shri D. A. Bhat after the retraction letter to prove that the earlier statement on 23/09/2009 was true. He submitted that Shri D. A. Bhat has retracted the said statement by his letter dated 11-10-2009 and subsequently also filed an Affidavit for the same. The said statement has been retracted on the ground that he was under mental tension and pressure due to search and the said statement was made on mistaken belief and hearsay basis. 37. Referring to the decision of the Pune Bench of the Tribunal in the case of Jyotichand Bhaichand reported in 139 ITD 10 (Pune) he submitted that the Tribunal in the said decision has held that a statement made under mistaken belief can be withdrawn. Further, no declaration regarding any income or year has been made in the said statement of Shri D. A. Bhat. He submitted that the Managing Director of MIL Shri Shinde in hi....
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....premises it would have destroyed all the evidence of unexplained expenditure rather than fabricating them as alleged by the AO. Further no cash would have been found nor it would have opened a bank account and deposit substantial cash in it. It is against all human probability. He submitted that even otherwise as per provisions of section292C of the Act it is settled proposition of law that when any document is found in course of search the same is presumed to be true unless it is proved otherwise by the person alleging it to be untrue. It is stated that the contents of the excel found in the computer at the premises being pages 1 to 17 forming annexure to the order of the AO are presumed to be true unless the AO proves it otherwise. 40. He submitted that the AO has miserably failed to discharge the onus cast upon him. Hence the contents of the excel file found at the assessee's premises are presumed to be true and consequentially the income has to be assessed in the year 2009 - 2010 and 2010 - 2011 as offered by the assessee. He submitted that even on the basis of the cash found in the assessee's premises and deposits in its bank account led credence to the evidence found i....
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....after considering the rival submissions made by both the sides upheld the action of the AO at para 97 of the order in ITA Nos. 2571 to 2577/PN/2012 and ITA Nos. 50 to 56/PN/2013 for A.Yrs. 2004-05 to 2010-11 order dated 09-12-2015. The relevant observation of the Tribunal reads as under : "97. We have considered the rival arguments made by both the sides, perused the orders of the AO and CIT(A) and the paper book filed on behalf of the assessee. We find in the instant case the AO made the addition on the ground that these loose papers indicate the dates of payments of various amounts as speed money paid to different persons date-wise with the names of the payers and the recipient. Based on the bifurcation of payments of alleged speed money at page 30 of the assessment order the AO taxed the amount of Rs. 2,75,17,500/- being 50% share of the assessee for the impugned assessment year. Similar additions were made in A.Y. 2008-09 at Rs. 1490.675 lakhs and Rs. 425.97 lakhs in A.Y. 2009-10 which has been upheld by the CIT(A). It is the contention of the Ld. Counsel for the assessee that notings on the loose papers are not about the payments actually made but these are projected ....
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....oning given by the CIT(A) we uphold the order of Ld.CIT(A) on this issue and the grounds raised by the assessee are dismissed." 45. Since a view has already been taken in the case of one of the Joint Venture partner, therefore, the same view has to be followed in the case of the other Joint Venture partner. Therefore, respectfully following the order of the Tribunal (to which both of us are parties) we uphold the order of the CIT(A) on this issue. Grounds raised by the assessee are accordingly dismissed. 46. The Ld. Counsel for the assessee did not press ground of appeal No.2 for which the Ld. Departmental Representative has no objection. Accordingly, this ground is dismissed as 'not pressed'. 47. Ground of appeal No.3 by the assessee reads as under : "3.0 Having allowed the deduction u/s 80IA(4)(i) in respect of profit earned by the assessee from development of infrastructure facilities, Ld. CIT(A) was not justified in rejecting such deduction in respect of interest income of Rs. 25,90,058 received from Bank Guarantee deposits provided to the project authorities, in respect of such projects." 48. Facts of the case, in brief, are that the assessee during the co....
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.... hearing both the sides, we find merit in the submission of the Ld. Counsel for the assessee that netting of interest should be allowed for computation of deduction u/s.80IA in the light of the ratio of the decision of Hon'ble Supreme Court in the case of ACG Associated Capitals Vs. CIT. We accordingly set aside the order of the CIT(A) and direct the AO to recompute the deduction u/s.80IA by netting the interest. Ground raised by the assessee is accordingly allowed. 54. Ground of appeal No.4 by the assessee being general in nature is dismissed. ITA No.452/PN/2013 (A.Y. 2007-08 (By Revenue) : 55. Ground of appeal No.1 by the Revenue reads as under : "1. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in deleting the addition made u/s.69B on account of difference in valuation to the tune of Rs. 56,676/-." 56. After hearing both the sides we find the AO made addition of Rs. 56,676/- being the difference between the value declared by the assessee and the value determined by the DVO in respect of purchase of Flat No.8 at Star Tower, Khanapur Road, Belgaum. In appeal the Ld.CIT(A) deleted the addition for which the Revenue is in appe....
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....05 2000-01 500.00 1255.43 1755.43 2001-02 500.00 1874.87 2374.87 2002-03 500.00 2242.53 2742.53 2003-04 500.00 1683.36 2183.36 2004-05 500.00 1041.37 1541.37 2005-06 500.00 1572.03 2072.03 2006-07 500.00 1889.88 2389.88 2007-08 500.00 2348.49 2818.49 2008-09 500.00 2578.11 3078.11 2009-10 500.00 2999.86 3499.86 2010-11 500.00 5265.83 5765.83 It was accordingly argued that no disallowance of proportionate interest on diversion of funds for non business purpose is called for. 61. Based on the arguments advanced by the assessee the CIT(A) deleted the addition by observing as under : "44. I have considered the submissions of the appellant. It is apparent from the assessment order that an opportunity of being heard on this disallowance was not given to the appellant. Hence, the addition appears to be made on an adhoc basis. The appellant has pointed out that advances were made to Sunil Construction and Ashok Chipre as far as back as 2001-02 and 2002-03. Hence, if there was a diversion of funds for non-business purposes, the same wou....
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....and in view of the detailed reasoning given by Ld.CIT(A) while deleting the addition and in absence of any contrary material brought to our notice by the Ld. Departmental Representative we do not find any infirmity in the order of Ld.CIT(A). Accordingly, we uphold the order of the CIT(A) on this issue. The ground raised by the revenue is accordingly dismissed. 64. Ground of appeal No.3 by the Revenue reads as under : "3. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in allowing deduction on account of proportionate interest on investment in non business activities of Rs. 11,20,935/-." 65. Facts of the case, in brief, are that the AO during the course of assessment proceedings noticed that the assessee had invested borrowed funds for acquiring equity shares of group companies and had also introduced capital in a firm wherein it was a partner. The Assessing Officer taking recourse to the provisions of section 14A of the Act inserted by Finance Act 2002 w.e.f. 11-05-2010 and noticing that the assessee had claimed deduction under section 36(1)(iii) in respect of interest paid on these borrowed funds held that the assessee had diverted ....
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....uch order of the CIT(A) the Revenue is in appeal before us. 69. After hearing both the sides we do not find any infirmity in the order of the CIT(A) who has deleted the addition based on the order of the Tribunal in assessee's own case for A.Yrs. 2003-04 to 2006-07. Since admittedly the own capital and free reserves of the assessee company are far more than the investment in group companies, therefore, respectfully following the order of the Tribunal in assessee's own case for A.Yrs. 2003-04 to 2006-07 and in absence of any contrary material brought to our notice against the order of CIT(A) we find no infirmity in the order of the CITA) deleting the disallowance made by the AO. Accordingly, the ground raised by the revenue is dismissed. 70. Ground of appeal No.4 by the Revenue reads as under : "4. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in allowing deduction on account of proportionate interest on advances for non business purposes of Rs. 18,83,125/-." 71. Facts of the case, in brief, are that the AO during the course of assessment proceedings noted that the assessee had, on the one hand, advanced certain sums admittedly f....
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....ee parties can be said to be out of assessee's own funds, hence, there was no necessity for invoking the provisions of section 36(1)(iii) for such disallowance. The action of the A.O was reversed and the view taken by the learned CIT(A) is hereby affirmed. This ground of the revenue is dismissed. Respectfully following the above decision of the Honourable ITAT, Pune, the addition made for the years under consideration also is deleted. This ground of appeal is therefore, allowed." 74. Aggrieved with such order of the CIT(A) the revenue is in appeal before us. 75. After hearing both the sides we do not find any infirmity in the order of the CIT(A). Admittedly the own capital and free reserves of the assessee company are far more than the advances given to various parties for non business purposes. Identical issue has already been decided by the Tribunal in assessee's own case for A.Yrs. 2003-04 to 2006-07 which has been followed by the CIT(A) while deleting the addition. Therefore, in absence of any contrary material brought to our notice by the Ld. Departmental Representative, we do not find any infirmity in the order of the CIT(A). Accordingly, we uphold the same....
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....n the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in allowing additional deduction u/s.80IA(4) of the additional deduction 80IA(4) of Rs. 2,80,04,066/-, which is the additional income declared during the course of search proceedings, on account of expenses from unexplained sources which attract provisions of S.69C of the I.T. Act which is not an income from the business undertaking referred in section 80IA(4)." 81. Facts of the case, in brief, are that the AO during the course of assessment proceedings noted that the assessee in the return of income has claimed deduction u/s.80IA of the Act amounting to Rs. 2,38,71,620/-. The AO asked the assessee to explain as to why the deduction u/s.80IA(4) should not be disallowed. It was submitted by the assessee that it has developed different infrastructural facilities in irrigation/water supply/hydro electric power generation projects during the impugned assessment year and the profit earned by it is eligible for deduction u/s.80IA(4). Relying on various decisions including the decision of Mumbai Bench of the Tribunal in the case of Patel Engineering Ltd. Vs. DCIT reported in 84 TTJ 646 it was submitted tha....
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....wer Generation & Irrigation 7 Koyna Hydro Power Project (for supply & erection of EOT Cranes & electrically operated hydraulic hoists etc.) Power Generation & Irrigation 84. It was explained that for developing the above infrastructure projects the assessee had invested in technical expertise, manpower, material and machinery. The assessee was responsible for risks involved in the process of development of infrastructure projects. Bank guarantees were provided by the assessee as security. Own funds and borrowed funds were utilized in development of these projects. Relying on the decision of the Jaipur Bench of the Tribunal in the case of Om Metals Infra projects Ltd. reported in (2009) 26 DTR (JP)(Trib) 359 and the decision in the case of ABG Heavy Industries Ltd. reported in 322 ITR 323 it was argued that the assessee is entitled to claim deduction u/s.80IA(4). 85. Further, the assessee during the course of appeal proceedings raised certain claim of deduction u/s.80IA(4) in respect of the additional income offered in return of income for A.Yrs. 2009-10 and 2010-11. It was contended that on the basis of the loose papers seized from its premises, i....
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....ion in the case of Goetze (India) Ltd. Vis CIT (2006) 284 ITR 323 (SC). I have gone through the submissions made by the appellant. In connection with the admissibility of the additional ground the Hon 'ble Bombay High Court has explained the decision given in the case of Jute Corporation of India Limited v. CIT [1991] 187 ITR 688 (SC) in CIT, Central-I v. Pruthvi Brokers & Shareholders (P.) Ltd. [2012] 23 taxmann.com 23 (Bombay) and held- (B) It is clear, therefore, that an assessee is entitled to raise not merely additional legal submissions before the appellate authorities, but is also entitled to raise additional claims before them. The appellate authorities have the discretion whether or not to permit such additional claims to be raised. It cannot, however, be said that they have no jurisdiction to consider the same. They have the jurisdiction to entertain the new claim. That they may choose not to exercise their jurisdiction in a given case is another matter. The exercise of discretion is entirely different from the existence of jurisdiction. 85. Thereafter, it referred to the observations of the Hon'ble Supreme Court on page 694 in the decision ....
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....ct, the Supreme Court made it clear that the issue in the case was limited to the power of the assessing authority and that the judgment does not impinge on the power of the Tribunal under section 254. [Emphasis Supplied by me.] 86. Thus it is clarified that the decision in Goetze India (supra) was limited to the power of the assessing authority to entertain a claim for deduction otherwise than by a revised return and did not impinge on the powers of the appellate authorities. I have already referred to the decisions in Additional Commissioner of Income-tax v. Gurjargravures P. Ltd., [1978] 111 ITR 1 (SC), Jute Corporation of India Limited v. CIT [1991] 187 ITR 688 (SC), Amalgamated Electricity Company Limited v. Commissioner of Income-tax, [1974] 97 ITR 334 (Bom)(FB), and National Thermal Power Company Limited v. CIT [1998] 229 ITR 383 (SC) which clearly uphold the principal enunciated in the case of CIT v. Kanpur Coal Syndicate[1964] 53 ITR 225 (SC), in which the Hon'ble Supreme Court held as under- "If an appeal lies, Section 31 of the Act describes the powers of the Appellate Assistant Commissioner in such an appeal. Under Section 31(3)(a) in disposing of ....
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....ee is entitled to claim deduction from its income under section 80IB of the Act. The ratio of this decision applies unequivocally to the provisions of section 153A. Similarly, the Honourable Gujarat High Court in the case of Suman Paper and Boards Ltd. [2009] 314 ITR 119 has held that deduction under section 80IA is available in respect of undisclosed incomes also. Similarly, in the case of Medicor Laboratories Put. Ltd. ITA No. 402/ PN/ 2009, the Honourable Pune Tribunal has upheld the allowability of deduction under Chapter VI A in respect of all additions to the income made in assessment when there was no specific finding that income was required to be taxed under any head other than 'business income'. Hence, the additional claim is allowed. However, the assessing officer is directed to check the computation of the claim and then allow the same. 88. Regarding the claim of the appellant in respect of entitlement of deduction under section 801A(4) in respect of additional income offered for assessment years 2009-10 and 2010-11, I hold that the claim is untenable because there is no additional income of the appellant derived from business sources except to the exte....
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....tmental Representative submitted that the additional income so declared is on account of expenses from unexplained sources which attract provisions of section 69C. Therefore, the CIT(A) was not justified in allowing deduction u/s.80IA(4) on such additional income. He accordingly submitted that the order of the CIT(A) be reversed and that of the order of the AO be restored. 92. The Ld. Counsel for the assessee on the other hand heavily relied on the order of CITA) and the decision of Hon'ble Bombay High Court in the case of ABG Heavy Industries (Supra) and the decision of Pune Bench of the Tribunal in the case of Mahalakshmi Infra Projects Ltd.(Supra). He also relied on the decision of the Tribunal in assessee's own case for A.Y. 2001-02 vide ITA Nos. 1408/PN/2003 and 1409/PN/2003 order dated 28-02-2013 where Tribunal following the decision of Hon'ble Bombay High Court has allowed the claim of deduction u/s.80IA(4). He accordingly submitted that this being a covered matter in favour of the assessee, the grounds raised by the revenue should be dismissed. 93. We have considered the rival arguments made by both the sides, perused the orders of the AO and CIT(A) and the paper book....
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....ork itself and which clearly shows that the assessee on their own right are contractors and not just sub contractors as normally understood. The assessee is the contractor vis-a-vis the portion allotted to them and not only subcontractors, i.e. a direct party to the main agreement. The assessee has entered into a main agreement, in their own right, can claim the benefit of section 80IA. As the assessee being directly under contract to the concern for the work done and are also directly dealing with the Government on whose behalf the assessee are doing the work, they can be considered as main contractors alongwith PEC and are not simply sub contractors vis-a-vis the work undertaken by them. As such the assessee is otherwise fulfilling all the conditions they are entitled to deduction under the provisions of section 80IA. Similar view has been taken by ITAT Indore in the case of Ayush Ajay Construction Ltd. vs ITO 79 ITD 213, wherein the entire project was assigned by the party getting the tender to another company. In such circumstances the ITAT Indore, has held as under: "It is a settled position of law that that while construing the tax provisions besides determining the ....
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....here. If it was proved that, the assessee-company had obtained the status of a tenderer by virtue of a valid assignment, it should not be denied the benefit of deduction provided by the Central Government through introduction of sub-section (4A) of section 80 IA. The action of "A" and the assessee could only be termed as a valid tax planning which was permissible under the law. Therefore, the assessee had fulfilled the requirements provided in section 80IA (4A)(ii) for claiming deduction, and, therefore, the Assessing Officer should have allowed the deduction claimed by the assessee company. 13. It was further clarified on behalf of the assessee that with regards to Bhima Sina Link Tunnel project, the Original Agreement is between the owner and Joint Venture from consisting of the assessee company and M/s.Swapnali Constructions which was formed to Share the work in 60% & 40%. M/s.Swapnali Constructions expressed their inability to undertake the work and had transferred their share of 40% of work to the assessee company on Back to Back Agreement basis for a consideration vide agreement dated 28/04/97. Thus the assessee company had executed 100% of the work. It is further st....
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....gard to the projects in question for both the years. The matter is disposed off accordingly." 94. So far as ground of appeal No.6(b) is concerned, we find the same also stands decided in favour of the assessee by the decision of the Tribunal in the case of Mahalaxmi Infra Projects Ltd. vide ITA Nos.2571 to 2577/PN/2012 and ITA Nos. 50 to 56/PN/2013 for A.Yrs. 2004-05 to 2010-11. We find the Tribunal in the consolidated order dated 09-12-2015 (to which both of us are parties) has decided the issue in favour of the assessee by observing as under : "127. We have considered the rival arguments made by both the sides, perused the orders of the AO and CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the assessee, in the return filed in response to notice u/s.153A, had claimed deduction u/s.80IA(4) amounting to Rs. 7,88,92,588/-. During the course of assessment proceedings apart from reiterating the deduction u/s.80IA(4) as claimed in the original return the assessee also claimed deduction u/s.80IA(4) in respect of additional income so declared. We find the AO rejected the claim of deduction u/s.8....
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....sed was that the enterprise must start operating and maintaining the infrastructure facility on or after 1st April, 1995. The same requirement is embodies in sub-cl. (c) of sub-sec. (4) of the amended provisions of sec. 80-IA. On this basis, it was urged that since the assessee was not operating and maintaining the facility, he did not fulfil the condition. This submission is fallacious both in fact and in law. As a matter of fact, the Tribunal has entered a finding that the assessee was operating the facility and this finding has been confirmed earlier in this judgment. That the assessee was maintaining the facility is not in dispute. The facility was commenced after 1st April, 1995. Therefore, the requirement was met in fact. Moreover, as a matter of law, what the condition essentially means is that the infrastructure facility should have been operational after 1st April, 1995. After sec. 80-IA was amended by the Finance Act of 2001, the section applied to an enterprise carrying on the business of (i) developing; or (ii) operating and maintaining; or (iii) developing, operating and maintaining any infrastructure facility which fulfils certain conditions. Those conditions are : (i....
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.... of the Hon'ble High Court assessee who only develops infrastructural facility (even as a contractor) but does not have an occasion to operate and maintain is also eligible for claim of deduction u/s 80-IA(4) of the Act. The Hon'ble High Court has been pleased to observe that qua such a person the condition stated in sub-section (c) of sec.80-IA(4)(i) has to be read harmoniously with the main provision under which deduction is available to an assessee, who develops; or operates and maintain; or develops, maintains and operates an infrastructural facility. In other words a developer who only develops (i.e., constructs) an infrastructural facility is not envisaged to operate and maintain such facility, cannot be accepted to fulfil the condition in clause (c) of sec. 80-IA(4) since it would be an impossibility. Therefore, in view of the construction placed by the Hon'ble Bombay High Court on the requirements of clause (c) of sec. 80-IA(4)(i) requiring it to be harmoniously read with the main sec. 80-IA(4), we do not find substance in the objection raised by the Revenue. We thus respectfully following the decision of the Hon'ble Bombay High Court on the issue in the case of CIT vs. ABG....
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....rival submissions. In this case, search u/s 132(1) of the Act was carried out on 18.12.2008. On the basis of the second proviso to section 153A(1) of the Act, which reads as under :- "Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this [sub-section] pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate." In the present case, the assessments which are pending on the date of initiation of search are for assessment years 2007-08 and 2008-09, and thus such assessments abate. Before us, the Ld. Counsel for the assessee conceded that assessments for assessment years 2003-04 and 2006-07 were not pending on the date of initiation of search and thus the same do not abate as per the aforesaid proviso to section 153A(1) of the Act. The aforesaid position is not disputed by the Revenue also. 10. In the above undisputed fact situation, now we may examine the scope of assessments to be made u/s 153A(1)(b) of the Act for the assessment years 2007-08 and 2008-09, which have aba....
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....he case of All Cargo Global Logistics Ltd. (supra), in so far as assessment years 2007-08 and 2008-09 are concerned, the Assessing officer retains the original jurisdiction as well as jurisdiction conferred on him u/s 153A of the Act. In this context, the preliminary issue is as to whether the scope of assessments u/s 153A(1)(b) of the Act for assessment years 2007-08 and 2008-09 can include consideration of assessee's plea to exclude income on account of retention money, considering the fact the returns of income filed by the assessee for assessment years 2007-08 and 2008-09 u/s 139(1) of the Act did not contain any such claim. In the assessments u/s 153A(1)(b) of the Act, assessee claimed that income on account of retention money be excluded in the years when the customers had withheld the retention money and instead tax it in the year of its actual receipt. No doubt, the said claim does not pertain to any incriminating material found in the course of search, so however, on account of the fact that the Assessing Officer retains his original jurisdiction as well in the assessments for the years 2007-08 and 2008-09 to be made u/s 153A(1)(b) of the Act, in our considered opinion....
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....nse to notice issued u/s 153A(1)(a) of the Act, but was submitted by way of a letter during the assessment proceedings and therefore following the decision of the Hon'ble Supreme Court in the case of Goetze (India) Ltd. vs. CIT, (2006) 284 ITR 323 (SC), the Assessing Officer was justified in not entertaining such a claim. 15. On this aspect, the learned counsel for the assessee pointed out that in the return of income submitted in response to notice u/s 153A(1)(a) of the Act, assessee had enclosed a Note dated 14.09.2009, a copy of which has been placed in the Paper Book at page 1 to 2, putting-forth its claim for excluding income on account of retention money, but in the computation of income no specific claim was made because the quantification of the claim could not be made in the limited time period allowed to file a return in response to notice u/s 153A(1)(a) of the Act. In the course of the subsequent assessment proceedings, assessee quantified the claim for the respective assessment years and also filed copies of the agreements with the customers which contained the relevant clauses permitting retention of a portion of the contract value. It is pointed out that ....
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....the assessment proceedings and not in the return of income. 18. We have carefully considered the rival submissions. The Hon'ble Supreme Court in the case of Goetze (India) Ltd. (supra) opined that a fresh claim of the assessee can be entertained at the time of assessment only if it is made by way of a revised return of income; and, the aforesaid proposition has been invoked by the income-tax authorities in the present case to deny assessee's claim for exclusion of income on account of retention money, a claim which was made during the assessment proceedings. 19. Factually speaking, we find that in terms of a communication dated 14.09.2009 filed along with the return of income filed in response to notice issued u/s 153A(1)(a) of the Act, assessee inter-alia, stated as under :- "The business of our company is to execute construction contracts. In respect of some of the contracts executed by the company there is a clause in the contract which entitles the customer to retain between 5% to 10% of contract value till the completion of defect liability period contained in the contract which is generally between 12 to 24 months after the completion of the....
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....Ostensibly, the assessee company made a claim for excluding income on account of retention money in the return of income itself, though the quantification was absent, and the actual quantification of such claim was made during the assessment proceedings; thus, substantively speaking it cannot be said that assessee made a new claim during assessment proceedings which was not made in the return of income. Considering the above fact situation, in our view, the CIT(A) erred in upholding the action of the Assessing Officer in refusing to entertain the impugned claim based on the judgement of the Hon'ble Supreme Court in the case of Goetze (India) Ltd. (supra). 21. In any case, the judgement of the Hon'ble Supreme Court in the case of Goetze (India) Ltd. (supra) does not impinge on the powers of appellate authorities to entertain a fresh claim which was hitherto not preferred by the assessee in the return of income, as explained by the Hon'ble Delhi High Court in the case of Jai Parabolic Springs Ltd. (supra). Accordingly, there was no impediment for the CIT(A) to have entertained the impugned claim especially when the required facts to adjudicate the controversy wer....
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....r of the assessee. 132. Now coming to the allowability of deduction u/s.80IA(4) on the additional income declared during the course of search is concerned we find the same issue has also to be decided in favour of the assessee. It is an admitted fact that the assessee company has debited non genuine expenditure in its books of account and generated cash, a fact which has been accepted by the AO in the assessment order. Therefore, the contention raised by the revenue in the grounds of appeal that the addition on account of expenses from unexplained sources attracts provisions of section 69C and therefore the assessee's income is not income from business of undertaking referred to in section 80IA(4) in our opinion is incorrect. The AO in the assessment order has accepted that the assessee company has debited non genuine expenditure in its books of account. Therefore, once the non genuine expenditure is disallowed correspondingly the business income of the assessee increased on account of disallowance of such expenditure. Therefore, in that event, the deduction u/s.80IA(4) has to increase correspondingly. The decisions relied on by the Ld. Counsel for the assessee on this iss....
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....uring activity. The salaries paid by the assessee, it has not been disputed, relate to the manufacturing activity. The disallowance of the Provident Fund/ ESIC payments has been made because of the statutory provisions - Section 43B in the case of the employer's contribution and Section 36(v) read with Section 2(24)(x) in the case of the employee's contribution which has been deemed to be the income of the assessee. The plain consequence of the disallowance and the add back that has been made by the Assessing Officer is an increase in the business profits of the assessee. The contention of the Revenue that in computing the deduction under Section 10A the addition made on account of the disallowance of the Provident Fund / ESIC payments ought to be ignored cannot be accepted. No statutory provision to that effect having been made, the plain consequence of the disallowance made by the Assessing Officer must follow. The second question shall accordingly stand answered against the Revenue and in favour of the assessee." 134. Similarly, the Hon'ble Bombay High Court in the case of CIT Vs. Sheth Developers (P) Ltd. vide ITA No.3724/2010 order dated 27-07- 2012 has held a....
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....t was unaware that deduction under Section 80IB would be available in respect of respondent's housing projects. The CIT(A) by order dated 17/8/2004 found on facts that the respondent was entitled to benefit of Section 80IB of the said Act. Further, CIT(A) held that in terms of clause (a) of the explanation to Section 158(BB)(1) of the said Act provides that undisclosed income for the block period is to be computed after applying the relevant provisions of the said Act. This would include the provisions of Chapter VIA of the said Act. Section 80IB is a part of Chapter VIA of the said Act. On examination of the evidence the CIT(A) held that the respondent was entitled to the benefit of Section 80IB of the said Act and directed the Assessing officer to recompute the tax payable for the block period 1/4/1995 to 21/2/2002 under Section 158BB of the said Act after giving the benefit of Section 80IB of the said Act. (c) On appeal by the revenue the Tribunal by order dated 12/10/2009 upheld the order of the CIT(A).On merits, the Tribunal held that the benefit of deduction under Section 80IB of the said Act would be available in respect of undisclosed income which is being offered ....
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....come arising from profits and gains of business or profession and the same was accepted by the department. It was further submitted that the Tribunal was correct in holding that in view of the retrospective amendment to the Explanation to Section 158BB(1) of the said Act, the deduction under Section 80IBof the said Act (which is admittedly a part of Chapter VIB of the said Act) is to be allowed for determining the undisclosed income under Chapter XIVB of the said Act. 9. Before considering the rival submissions, it would be convenient to reproduce the amended Explanation to sub section (1) of Section 158BB of the said Act which reads as under: "Explanation- For the purposes of determination of undisclosed income- (a) the total income or loss of each previous year shall, for the purpose of aggregation, be taken as the total income or loss computed in accordance with the provisions of [this Act] without giving effect to set off brought forward losses under Chapter-VI or unabsorbed depreciation under sub-section (2) of Section 32; [Provided that in computing deductions under Chapter VI-A for the purposes of the said aggregation, effect shall be give....
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....sessing Officer. In the present case undisclosed income found in the form of cash was explained as having been acquired while carrying on business as a builder and this explanation was accepted by the Assessing officer by having assessed the undisclosed income for the block period as income from profits and gains of business or profession. Therefore, the reliance by the revenue upon the decision of the Gujrat High Court in the matter of Fakir Mohmed Haji Hasan (supra) is not correct as the facts of that case are completely distinguishable from the present facts. In the present case, no question of application of section 68,69 and 69A, 69B and 69C of the said Act arises as the same has not been invoked by the Department. It is an admitted position between the parties as reflected even in the order the Assessing officer that undisclosed income was in fact received by the respondent in the course of carrying out its business activities as a builder. The same was returned by the respondent as income arising from profits and gains of business or profession and the same was accepted by the department unlike in the matter of Fakir Mohmad Haji Hasan (supra). 12. In view of the abo....
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.... of search and subsequently declared in the return filed in response to notice u/s 153A(1)(a) of the Act. In the result, appeal of the assessee for assessment year 2008-09 is allowed." 136. In view of the above decisions cited (Supra) , the assessee, in our opinion is also entitled to deduction u/s.80IA(4) on the additional income. In this view of the matter and in view of the detailed reasoning given by the CIT(A) on this issue we find no infirmity in his order. Accordingly, the same is upheld. However, as per the additional ground raised by the assessee, there seems to be some calculation error while computing the deduction u/s.80IA(4). We, therefore, direct the AO to recompute the correct deduction as per law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The ground raised by the Revenue is accordingly dismissed." 95. Since the facts of the instant case are identical to the facts in the case of Mahalakshmi Infra Projects Ltd. (Supra), therefore, following the decision of the Tribunal in the case of Mahalakshmi Infra Projects Ltd. (Supra), we uphold the order of the CIT(A) on this issue. The grounds raised by the Revenue a....
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....d by the assessee have been dismissed. Following the same reasonings the above grounds by the assessee are dismissed. 99. The Ld. Counsel for the assessee did not press ground of appeal No.2 for which the Ld. Departmental Representative has no objection. Accordingly, this ground is dismissed as 'not pressed'. 100. Ground of appeal No.3 by the assessee reads as under : "Having allowed the deduction u/s.80IA(4) in respect of profit earned by the assessee form development of infrastructure facilities, CIT(A) was not justified in rejecting such deduction in respect of interest income of Rs. 25,90,058/- received from Bank Guarantee deposits given to the project authorities, in respect of such projects. 101. After hearing both the sides, we find the above ground is identical to ground of appeal No.3 in ITA No.228/PN/2013. We have already decided the issue and the ground raised by the assessee has been partly allowed for statistical purposes. Following similar reasonings, this ground by the assessee is allowed for statistical purposes. 102. Ground of appeal No.4 by the assessee reads as under : "Ld.CIT(A) not justified in confirming the addition of Rs. 8,17,5....
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....ce of dates against the entries shown in these papers it was not possible for them to verify the entries with the entries in the books of account. Hence, it was put that theoretical entries could pertain to a period even prior to 01/04/2002. ii. Expenses on pages 4 and 5 on projects were not actually incurred. iii. The appellant does not concur with the notings on loose papers and diaries from Shri D.A. Bhat's residence. iv. Page No. 7 is an estimation of cost which do not have any final implication. 98. I have gone through the contents of pages no. 1 to 5 and 7 of the seized material. Page no. 1 is a summary of payments made to various persons, the total of which is Rs. 3.35 lakhs. Page no. 2 is again a summary of payments made to various persons aggregating to Rs. 2.95 lakhs. Page no. 3 shows various expenses incurred on hotel, gold purchases, plywood purchase, mobile bills of Naveen, Dynapac list etc., which aggregate to Rs. 12,94,772/-. Page no. 4 contains details of expenses incurred by both Mahalaxmi Construction Corporation Ltd. and B T Patil and Sons and the receivable position as on 11/07/2007. The contents on page no. 5 arc details of v....
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.... of the case and in law, the Ld.CIT(A) erred in allowing deduction on account of proportionate interest on investment in non business activities of Rs. 8,125/-." 112. After hearing both the sides we find the above ground raised by the revenue is identical to ground of appeal No.3 in ITA No.452/PN/2013 filed by the revenue. We have already decided the issue and the ground raised by the revenue has been dismissed. Following the same reasoning the above ground by the revenue is dismissed. 113. Ground of appeal No.3 by the Revenue reads as under : "3. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in allowing addition on account of proportionate interest on advances for non business purposes of Rs. 10,67,853/-." 114. After hearing both the sides we find the above ground raised by the revenue is identical to ground of appeal No.4 in ITA No.452/PN/2013 filed by the revenue. We have already decided the issue and the ground raised by the revenue has been dismissed. Following the same reasoning this ground by the revene is dismissed. 115. Ground of appeal No.4 by the Revenue reads as under : "4. On the facts and in the circums....
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....rs over finance & administration is independent. 1.2 Ld. CIT(A) also erred in upholding the AO's baseless assertion in para 10.4.2 " Page No's 31, 28, 22, & 17 of bundles no.1 seized from residence of Shri. D.A. Bhat are infact documents of M/s B.T.Patil & Sons Belgaum Construction Pvt. Ltd. These documents were sent to Shri D.A. Bhat for the purpose of reconciliation as per periodical reconciliation is very important in these matters related to cash payments." The appellant submits that no opportunity of the hearing was given by the AO with regard to these presumptions. 1.3 Ld. CIT(A) was not justified in concurring with the finding of the AO rejecting the evidence in the form of loose papers seized at the office premises of the appellant holding on mere ipse dixit that such evidence is fabricated. 1.4 Ld. CIT(A) erred in confirming the presumption made by AO in shifting the undisclosed in come to earlier years on the basis of evidence seized from a third party." 121. After hearing both the sides we find the above grounds are identical to grounds of appeal No. 1 to 1.4 in ITA No.228/PN/2013 for A.Y. 2007-08. We have already decided the issue a....
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....ovisions of section 153A(1). It was submitted that since the return of income was filed within the time limit specified in the notice issued u/s.153A(1)(a), therefore, the same is deemed to have been filed u/s.139(1) of the Act and therefore the assessee is not liable to pay interest u/s.234A of the I.T. Act. 129. However, the CIT(A) was not satisfied with the explanation given by the assessee and held that the assessee is liable to pay interest u/s.234A by observing as under : "102. The contention of the appellant cannot be entertained. There is nothing in section 153A or section 139 which allows the assessing officer to extend the time limit for filing of income-tax returns during the regular course. If the contention of the appellant is accepted then, even if the appellant had not filed a return of income for any of the six years contemplated under sections l53A or 153C, the time limit for filing of return of income for all those years would be automatically extended and the same would have to be considered as return filed under section 139 and therefore, all natural consequence under the Act, including the provisions of carry forward and set off of various types of ....
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....rest from the expiry of due date prescribed u/s.139(1). We find the above issue has been decided in favour of the assessee by the Chennai Bench of the Tribunal in the case of ACIT Vs. V.N. Devadoss (Supra). We find the Tribunal has observed as under : "45. The second common issue raised in all these appeals is regarding levy of interest under section 234A. The case of the Revenue is that the Commissioner of Income tax(Appeals) has erred in directing the Assessing Officer to charge interest under section 234A from the date of expiry of the notice period given in the notices under section 153A without noting that charging of interest under section 234A is compensatory and that as per the provisions of section 80AC, the assessees ought to have filed returns of income within the due date under section 139(1) and hence the provisions of section 234A(1) is applicable. It is also the case of the Revenue that the Commissioner of Income-tax(Appeals) has failed to note that the order of the Income-tax Appellate Tribunal, B-Bench, Chennai in the case of Dr. V.Jayakumar vs. ACIT, Circle I, Madurai, in ITA Nos.520 to 529(Mds)/2010 is not applicable to these cases since the facts are di....
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....se and in law, the Ld.CIT(A) erred in allowing deduction on account of proportionate interest on diversion of funds for non business purposes of Rs. 10,33,466/- 137. After hearing both the sides we find the above ground raised by the revenue is identical to ground of appeal No.2 in ITA No.452/PN/2013 filed by the revenue. We have already decided the issue and the ground raised by the revenue has been dismissed. Following the same reasoning this ground by the revenue is dismissed. 138. Ground of appeal No. 2 by the revenue reads as under : "2. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in allowing addition on account of proportionate interest on advances for non business purposes of Rs. 7,83,462/-." 139. After hearing both the sides we find the above ground raised by the revenue is identical to ground of appeal No.4 in ITA No.452/PN/2013 filed by the revenue. We have already decided the issue and the ground raised by the revenue has been dismissed. Following the same reasoning this ground by the revenue is dismissed. 140. Ground of appeal No. 3 by the revenue reads as under : "3. On the facts and in the circumstanc....
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....basis of papers seized from it's own premises during the course of search conducted on 23-10-2009 1.1 Ld. CIT(A) ought to have appreciated the fact that the Joint Venture/consortium agreement between appellant & it's partner M/s Mahalakshmi Infra-projects Limited was on work sharing basis & not on joint execution basis and as such the control & management of the partners over finance & administration is independent. 1.2 Ld. CIT(A) also erred in upholding the AO's baseless assertion in para 10.4.2 " Page No's 31, 28, 22, & 17 of bundles no.1 seized from residence of Shri. D.A. Bhat are infact documents of M/s B.T.Patil & Sons Belgaum Construction Pvt. Ltd. These documents were sent to Shri D.A. Bhat for the purpose of reconciliation as per periodical reconciliation is very important in these matters related to cash payments." The appellant submits that no opportunity of the hearing was given by the AO with regard to these presumptions. 1.3 Ld. CIT(A) was not justified in concurring with the finding of the AO rejecting the evidence in the form of loose papers seized at the office premises of the appellant holding on mere ipse dixit that such....
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....e and in law, the Ld.CIT(A) erred in deleting the addition made u/s.69B on account of difference in valuation to the tune of Rs. 26,02,596/-." 154. After hearing both the sides we find the above ground raised by the revenue is identical to ground of appeal No.1 in ITA No.451/PN/2013 filed by the revenue. We have already decided the issue and the ground raised by the revenue has been dismissed. Following the same reasoning this ground by the revenue is dismissed. 155. Ground of appeal No.2 by the revenue reads as under : "2. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in allowing deduction on account of proportionate interest on diversion of funds for non business purposes of Rs. 10,33,466/-." 156. After hearing both the sides we find the above ground raised by the revenue is identical to ground of appeal No.2 in ITA No.452/PN/2013 filed by the revenue. We have already decided the issue and the ground raised by the revenue has been dismissed. Following the same reasoning this ground by the revenue is dismissed. 157. Ground of appeal No.3 by the Revenue reads as under : "3. On the facts and in the circumstances of th....
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....lected in the source and application statement while working undisclosed income of Rs. 21,91,82,000/- in its hands. It was pointed out that the AO had already taxed the entire Ghodzari Project expenses and taxing cash found had resulted in double addition of the said amount. 164. Based on the arguments advanced by the assessee the Ld.CIT(A) restored the issue to the file of the AO with certain directions which read as under : "38. I have considered the submission of the appellant. The assessing officer has made this addition on the ground that since the speed money payments were already made and the assessee has not made any declaration of an amount over and above the money already expensed out, the source of Rs. 4,95,00,000/- found in the course of search and seizure was unexplained. In appellate proceedings, the assessee has given a chart showing the source and application of money while working out the disclosure of undisclosed income of Rs. 21.91 crores. The assessee has tried to imply that sufficient amount of cash was available on the working given by him which was sufficient to explain the existence of Rs. 4.95 crores found at its premises as well as in the bank.....