AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (11) TMI 796
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....the Income-tax Rules, 1962. 3. Brief facts are, the assessee a domestic company is engaged in the manufacture and sale of garments, fashion accessories, etc., under the brand name "Provogue". For the assessment year under dispute, the assessee had filed its original return of income on 30th September 2008, declaring total income of Rs. 19,92,41,080. Assessment in case of assessee was originally completed under section 143(3) of the Act vide order dated 11th May 2009, determining the total income at Rs. 20,60,70,360. Subsequently, pursuant to a search and seizure operation under section 132 of the Act, conducted in case of the assessee, the Assessing Officer initiated proceedings under section 153A of the Act. Ultimately, the Assessing Officer completed the assessment vide order dated 9th January 2014, making couple of additions which resulted in determination of total income at Rs. 21,17,25,100. One of the additions made by the Assessing Officer was an amount of Rs. 55,61,275 under section 14A r/w rule 8D towards expenditure incurred for earning exempt income. The assessee challenged the addition before the first appellate authority. 4. As far as the addition made on account ....
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....te of receipt of appeal order in Form no.36. Considering the above, we condone the delay of two days. The only effective ground raised by the Revenue reads as under:- "Whether On the facts and in the circumstances of the case and in law, the learned Commissioner (Appeals) was justified in holding that amount of forfeiture of share warrants is capital receipt and not revenue receipt, without appreciating the fact that if a receipt was of capital charecter, when received, its character changes when the amount becomes the assessee's own money because of limitation or by any other statutory or contractual right, as held by the Apex Court in the case of CIT v/s T.V. Sunderam Iyenger & Sons Ltd. (SC)" 8. Brief facts relating to this issue are, in the course of assessment proceedings, the Assessing Officer while verifying the Balance Sheet of the company for the relevant financial year found that the assessee has shown an amount of Rs. 2,09,82,015, towards forfeiture of share warrant without offering it as income, therefore, the Assessing Officer called upon the assessee to explain why the amount received by the assessee should not be treated as revenue receipt and made taxabl....
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....d perused the material available on record. We have also applied our mind to the decisions relied upon. As far as the factual aspect of the issue is concerned, there is no dispute that the assessee has issued share warrant against share application money received from various persons / entities. Notably, the share warrants were issued at a premium of Rs. 440 per share in accordance with SEBI guild lines and each warrant entitled the holder to exercise an option to subscribe to one equity share at a price of Rs. 450 per share. In the impugned financial year the applicants exercised their rights to convert the equity shares in respect of 4,33,733 warrants, whereas, the balance warrant totalling to 4,66,267 were forfeited. Thus, an amount of Rs. 2.09 crore representing such forfeited warrants were credited to the capital reserve account by the assessee. It is a fact on record that issuance of shares are not the business of the assessee, therefore, it cannot be said that the amount received towards share warrant is in regular course of assessee's business. Further, the assessee has not credited the amount received for forfeiture of share warrant to its Profit & Loss account. As per the....
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.... are not genuine as the concerned persons are only providing accommodation bills. He further found that in the course of search, the assessee accepted a part of the purchases to be bogus and to cover up such bogus purchase had offered income of Rs. 30,06,34,643, in the assessment year 2012-13. However, in respect of some other purchases assessee did not accept them to be bogus. The Assessing Officer, therefore, called upon the assessee to prove the purchases by producing documentary evidence. Though, the assessee claiming the purchases to be genuine produced some supporting evidence, however, the Assessing Officer was not convinced and held that neither the purchases made by the assessee nor sales effected out of those purchases are genuine. Though, to prove the genuineness of the purchases the assessee produced stock register, payment details, quantitative details of sales, however, the Assessing Officer did not find the submissions of the assessee convincing. He was of the view that though the assessee might have been able to establish the availability of goods and corresponding sales, but, possibly purchases were not made from the concerned parties but were from other sources on....
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....xplain why disallowance of expenditure attributable to exempt income should not be made in terms of rule 8D. Though, the assessee justified the disallowance made by it, however, the Assessing Officer noticing that the assessee's claim was not accepted in the original assessment completed under section 143(3) of the Act made a disallowance of Rs. 94,09,045, as was made in the original assessment. 22. Though, the assessee challenged the disallowance before the first appellate authority, however, learned Commissioner (Appeals) noticing that the disallowance under section 14A was a repetition of disallowance made in the original assessment did not accept assessee's claim. 23. We have heard rival contentions and perused the material available on record. It is the submission of the learned Authorised Representative that the addition having already been made in the original assessment, cannot be made again in the assessment order passed under section 153A of the Act. Further, he submitted, while deciding the appeal arising out of the original assessment order, the Tribunal has restored the issue of disallowance under section 14A of the Act to the Assessing Officer for fresh adjudica....
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....gs, the Assessing Officer on verifying the tax audit report found that the assessee has not paid employee's contribution to P.F. and ESIC within the due date prescribed under Explanation to section 36(1)(va) of the Act. Accordingly, he disallowed assessee's claim of deduction for an amount of Rs. 6,22,416. Assessee challenged the disallowance before the first appellate authority. 29. The learned Commissioner (Appeals) having found that the assessee has paid employee's contribution to PF/ESIC before the due date of filing of return of income under section 139(1) of the Act, allowed the deduction claimed after following the decision of the Hon'ble Jurisdictional High Court in CIT v/s Hindustan Organic Chemicals Ltd., 366 ITR 001 (Bom.). 30. We have heard rival contentions and perused the material available on record. There is no dispute that the assessee has paid employee's contribution to PF/ESIC dues within the due date of return of income as provided under section 139(1) of the Act. That being the case, the ratio laid down by the Hon'ble Jurisdictional High Court in Hindustan Organic Chemicals Ltd. (supra) squarely applies to the fact of the present case. Accordingly....
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....(Appeals). Ground raised is dismissed. 43. In ground no.2, the Revenue has challenged the decision of the learned Commissioner (Appeals) in allowing assessee's claim of deduction under section 80IC of the Act. 44. Brief facts are, as stated earlier, the assessee is engaged in manufacturing of garments and accessories. For the purpose of its manufacturing activity it has set-up two units, one at Daman and other at Baddi in Himachal Pradesh. Besides, the manufacturing units, the assessee has several distribution centres located at different places in India including Daman and Baddi. In the course of assessment proceedings, the Assessing Officer found that in the computation of income, the assessee has claimed deduction under section 80IB of the Act in respect of Daman Unit and section 80IC in respect of Baddi Unit. He further found that in the course of a survey conducted under section 133A of the Act at Baddi a statement was recorded from one Rajesh Bahadur Singh, Production Manager of the company, wherein, he allegedly stated that readymade garments were transferred from Daman Unit to Baddi Unit. The Assessing Officer, therefore, called upon the assessee to explain whether wh....
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.... by the assessee under section 80IC is in respect of the goods manufacturing at Baddi Unit. He further submitted, simply relying upon the statement recorded from the Production Manager during the survey under section 133A of the Act which has no evidentiary value, the deduction claimed by the assessee cannot be disallowed. In support of such contention, he relied upon the decision of the Hon'ble Jurisdictional High Court in CIT v/s S. Khader Khan Sons, [2013] 352 ITR 480 (Bom.). 48. We have heard rival contentions and perused the material available on record. On a reading of the impugned assessment order, it becomes clear that the Assessing Officer has disallowed assessee's claim of deduction under section 80IC of the Act in respect of Baddi Unit by relying upon the statement recorded during survey under section 133A from one Rajesh Bahadur Singh stated to be the Production Manager of the company. On a reading of the relevant extract from the statement of Rajesh Bahadur Singh, which is reproduced in Para-53 fo the assessment order it is evident that he has simply stated that in the relevant previous year Baddi has received 92,389 pieces of readymade garment from Daman and ot....
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....arned Commissioner (Appeals) observed that only on the basis of such statement taken in course of survey and without any other cogent evidence to suggest that the deduction claimed under section 80IC of the Act relates to the readymade garments transferred from Daman Unit assessee's claim cannot be denied. It is further relevant to note, the learned Commissioner (Appeals) also observed that the delivery challan impounded in the course of survey evidencing transfer of readymade garment from Daman Unit to Baddi Unit was reconciled through the inward register to demonstrate that claim of deduction under section 80IC of the Act was not in respect of readymade garments from Daman unit. Thus, from the observations made by the learned Commissioner (Appeals) it is noticed that through evidence brought on record, the assessee was able to demonstrate that the deduction claimed under section 80IC was in respect of readymade garments manufactured at Baddi Unit and not on stock transfer from Daman Unit. The aforesaid factual finding of the first appellate authority has not been controverted by the Learned Departmental Representative by bringing before us any cogent evidence. Therefore, we are u....