TaxTMI 
TaxTMI 
TaxTMI 
2016 (11) TMI 1143
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.... assessee is a sub-broker of M/s Caprilloy Polymers Pvt. Ltd., which is a member of National Stock Exchange and is engaged in the business of share broking. During the course of scrutiny assessment payment made to sub-broker was disallowed and penalty was levied u/s.271(1)(c) for the disallowance so made. The AO also did not accept short term capital gain of assessee amounting to Rs. 1,99,097/-. However, no penalty was levied for non-accepting short term capital gain. By the impugned order the CIT(A) confirmed the action of AO, against which assessee is in further appeal before us. 4. It was contended by ld. AR that there was no concealment of income or furnishing of inaccurate particulars so as to invoke penal provisions under section 271....
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....by the fact that no new facts were found nor any new line of enquiry was done by the AO during the set aside proceedings. He further contended that the A.O., without giving any weightage to the assessee's contentions and examining various documents submitted during the course of assessment proceedings, erred in making disallowance of sub-brokerage expense. As per ld. AR following are some of the noticeable facts which bring out the genuineness of the assessee's case that remains unconsidered by the learned AO: Clear business expediency for entering into the transaction. Confirmations of parties regarding provision of services. Bank Statements reflecting the payments. Normal trade practice of paying sub-brokerage. 5. On the othe....
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....iding reasonable opportunity of being heard to the appellant. The ground taken by the appellant is therefore partly allowed for statistical purpose." The findings of the Hon'ble ITAT recorded in paras 11 to 13, as mentioned in para 19 above, are reproduced as under :- " ... 11. We have carefully considered the submissions of the rival parties and perused the material available on record. We find that there is no dispute that the appellant has filed relevant documentary evidence to prove that the payment of sub-brokerage of Rs. 35 lacs was made by him to M/s Surasik Services Ltd. However, the same was denied by M/s Surasik Services Ltd. We further find that in support of its claim, the appellant has also filed relevant bank account sh....
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.... examined again by the learned AO before passing any judgment. However, it is evident that the learned AO had passed the order disregarding the directions of the Hon'ble ITAT and refused to analyze facts of the case in light of the appellate authorities, similar to the assessment proceedings. 7. Now, coming to the merit of the penalty, we found that the parties to whom the subbrokerage was paid were not associated to the assessee in any way, therefore, the possibility of any collusion by the assessee with the said parties to evade the payment of taxes has to be disregarded. Also, it would not be out of place to state that unless there is some benefit element involved or there is receipt of some substantial services, no prudent business....
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....Orissa [37 ITR 288]. Relevant extract the said judgement relied upon by the Supreme Court is reproduced as under: "This Court was concerned there with the encashment of high denomination notes. In that case some unexplained high denomination notes were treated as the undisclosed income of the appellant. This Court held that when a court of fact arrives at its decision by considering material which is irrelevant to the enquiry, or act on material, partly relevant and partly irrelevant, and it is impossible to say to what extent the mind of the court was affected by the irrelevant material used by it in arriving at its decision, a question of law arises, whether the finding of the court is not vitiated by reason of its having relied upon con....