TaxTMI 
TaxTMI 
TaxTMI 
2018 (12) TMI 278
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....s that the Notice issued by the AO u/s 153A is bad in law. Third technical issue raised by the assessee is this that the additions made in these assessment orders passed u/s 153A are not arising from the seized material and therefore, these additions are outside the scope of section 153A of the I. T. Act. There is no technical issue raised in A. Y. 2014 - 15. 3. First, we reproduce the grounds raised by the assessee in each year. These are as under:- a) A. Y. 2008 - 09, ITA 931/Bang/2017:- "1. The order of the learned Commissioner of Income Tax in so far it is against the appellant is opposed to law, weight of evidence, natural justice, probabilities, facts and circumstances of the Appellant's case. 2. The Appellant denies itself liable to be assessed on a total income arrived at by making the additions as confirmed by the CIT (A) as against the returned income of NIL under the facts and circumstances of the case. 3. Granting of correct amount of deduction under Section 1OAA of the Act. a) The authorities below erred in not granting correct deduction under section 10 AA of the Act. b) The CIT (A) ought to have specifically adjudicated the relevant ground in respect ....
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.... of the Act. The learned authorities below failed to appreciate that the scope of assessment in the proceedings under section 153A r.w.s 143(3) of the Act is restricted to the seized material if any and the present assessment order passed is contrary to the scheme of the Act and consequently the assessment order is liable to be annulled/ cancelled on the facts and circumstances of the case. 7. The assessing officer ought not to have made any changes to the return of income and the CIT(A) ought not to have sustained any part of the change made by the assessing officer on the facts and circumstance of the case. 8. Without prejudice to the right to seek waiver as per the parity of reasoning of the decision of the Hon'ble Apex Court in the case of Karanvir Singh 349 ITR 692, the Appellant denies itself liable to be charged to interest under section 234A, 234B and 234C of the Income Tax Act under the facts and circumstances of the case. 9. Without prejudice the levy of interest under section 234 A, 234B and 234C are bad in law as the period, rate, quantum and method of calculation adopted on which interest is levied are all not discernable and are wrong on the facts of the c....
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.... no valid search on the appellant on the facts and circumstance of the case. b) The learned authorities below have not demonstrated that the search initiated in the case of the appellant is valid and legal and consequently the order of assessment is exifacie bad in law as the mandatory conditions for initiating a search as contemplated under the provisions of section 132(1)(a), (b) & (c) of the Act did not exist and hence the order is required to be annulled on the facts and circumstance of the case. c) The learned authorities below failed to appreciate that a valid search is a sine qua non for making a valid assessment under section 153A of the Act and hence the assumption of jurisdiction under Section 153 A of the Act is bad in law and consequently the entire assessment requires to be cancelled. 5. Notice issued u/s 153A was bad in law: a) The authorities below failed to appreciate that the notice issued u/s 153A of the Act is bad in law on the ground that the notice does not indicate as to whether it is proposed to assess or reassess and is thus vague, consequently the assessment order passed on an invalid notice is bad in law on the facts and circumstances of the case. ....
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.... as against the returned income of Rs. NIL under the facts and circumstances of the case. 3. On addition of interest on Inter corporate Deposits (ICDs): a) The learned CIT (A) is not justified in confirming the order of the Assessing officer of an amount of Rs. 28,79,68,656/- as accrued interest on ICDs on the facts and circumstances of the case. b) The learned authorities below failed to appreciate that the non receivable interest on ICDs were shown as income in the books of accounts of the appellant and subsequently claimed as bad debt in the books of the appellant. c) The learned authorities below failed to appreciate that the accounting procedure of the appellant and the entries passed by the appellant in its books of accounts satisfy the conditions for claiming bad debts on the facts and circumstances of the case. d) The learned authorities below erred in observing that the procedure to claim bad debt is by disclosure in the profit and loss account by way of writing off a debt as an expenditure corresponding to an amount which has been already offered as an income in the same or earlier previous year and such observations are contrary to the plain language of the Inc....
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.... consequently the assessment order passed on an invalid notice is bad in law on the facts and circumstances of the case. b) The learned authorities below have not dealt in the respective order on the objection filed by the appellant in respect of assumption of jurisdiction u/s 153A and have also not provided the satisfaction note and reasons recorded for issue of notice u/s 153A of the Act and consequently an adverse inference may be drawn that the material does not exist and assessment order passed is bad in law on the facts and circumstances of the case. 7. Scope of assessment pursuant to notice issued under Section 153 A of the Act. The learned authorities below failed to appreciate that the scope of assessment in the proceedings under section 153A r.w.s 143(3) of the Act is restricted to the seized material if any and the present assessment order passed is contrary to the scheme of the Act and consequently the assessment order is liable to be annulled/ cancelled on the facts and circumstances of the case. 8. The assessing officer ought not to have made any changes to the return of income and the CIT(A) ought not to have sustained any part of the change made by the asses....
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....ncome in the same or earlier previous year and such observations are contrary to the plain language of the Income Tax Act which only contemplates writing off in the accounts and hence the addition requires to be deleted on the facts and circumstance of the case. e) Without prejudice, the said amount of Rs. 29,73,46,928/ - is not taxable as it is not real income of the appellant and consequently the addition made is liable to be deleted on the facts and circumstances of the case. 4. On Addition of Rs. 19,39,23,044/-: a) The learned authorities below failed to appreciate that it is normal in the gold business to incur loss of gold while dealing with various activities like Manufacturing, Inventory Management, Marketing, Import and Export. b) The learned authorities below erred in not accepting the explanation of the assessee without any reason. c) The learned authorities below failed to appreciate that the assessee had provided all the details as asked for by the assessing officer, as there were no further details asked by the assessing officer, the assessee had not provided further details, the assessing officer has erred in stating that the assessee had not offered any ex....
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....reciate that the notice issued u/ s 153A of the Act is bad in law on the ground that the notice does not indicate as to whether it is proposed to assess or reassess and is thus vague, consequently the assessment order passed on an invalid notice is bad in law on the facts and circumstances of the case. b) The learned authorities below have not dealt in the respective order on the objection filed by the appellant in respect of assumption of jurisdiction u/s 153A and have also not provided the satisfaction note and reasons recorded for issue of notice u/s 153A of the Act and consequently an adverse inference may be drawn that the material does not exist and assessment order passed is bad in law on the facts and circumstances of the case. 8. Scope of assessment pursuant to notice issued under Section 153 A of the Act. The learned authorities below failed to appreciate that the scope of assessment in the proceedings under section 153A r.w.s 143(3) of the Act is restricted to the seized material if any and the present assessment order passed is contrary to the scheme of the Act and consequently the assessment order is liable to be annulled/ cancelled on the facts and circumstances....
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....ugned addition in block assessment proceedings. 2) The learned CIT (A) ought to have followed the jurisdictional High Court judgments and refrained from upholding the impugned addition. 3) The learned CIT (A) ought to have appreciated that the later judgment of the Karnataka High Court would prevail over the earlier judgment and consequently he ought to have followed the later judgment in preference to the earlier judgment to justify the upholding of validity of the assessment. 4) The learned CIT (A) erred in upholding the book profit as determined by the AO for the purpose of Section 115JB of the Act. 5) The learned CIT (A) ought to have appreciated that the deduction under Section 10AA/ 10B of the Act cannot be included while computing the book profit for the purpose of Section 115JB of the Act and accordingly the computation of book profit as made by the AO is unsustainable. 6) The learned CIT (A) ought to have appreciated that the Writ Appeal filed by the Appellant challenging the validity of amendment is pending and consequently the impugned addition as made for the relevant year is unsustainable and accordingly liable to be deleted. 7) The learned CIT (A) is not j....
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....T (A) ought to have appreciated that the deduction under Section 10AA/ 10B of the Act cannot be included while computing the book profit for the purpose of Section 115JB of the Act and accordingly the computation of book profit as made by the AO is unsustainable. 6) The learned CIT (A) ought to have appreciated that the Writ Appeal filed by the Appellant challenging the validity of amendment is pending and consequently the impugned addition as made for the relevant year is unsustainable and accordingly liable to be deleted. 7) The learned CIT (A) is not justified in confirming the order of the AO of an amount of Rs. 45,02.26.725/- as accrued interest on ICD's on the facts and circumstances of the case. 8) The learned authorities below failed to appreciate that the nonreceivable interest on ICD's were shown as income in the books of accounts of the Appellant and subsequently claimed as bad debt in the books of the Appellant. 9) The learned authorities below failed to appreciate that the accounting procedure of the Appellant and the entries passed by the Appellant in its books of accounts satisfy the conditions for claiming bad debts on the facts and circumstances of ....
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....ears 2008-09, 200910, 2010-11, 2011-12,2012-13 and 2013-14. The Appellant humbly submits that there was no valid reason for the search which was conducted by the department pursuant to which the Assessment for seven years was done under section 153A r.w.s 143 (3) of the Act. The mandatory condition for initiating a search as contemplated under the provisions of section 132(1)(a), (b) & (c) of the Act did not exist. As per the provisions of section 132, it is required that there has to be a valid reason for the search to be conducted. The Department has not furnished any valid reason for conducting the search which infers that there has been no valid reason for conducting the search. The Appellant had made a detailed submission to the Commissioner of Income Tax (A), which has been brought out in the Appeal order but in spite of valid submission the learned Commissioner (A) has dismissed the contentions of the Appellant. We have made detailed submissions in the statement of facts and the grounds of appeal filed along with the Form of Appeal, we have also cited various judgments of the Honourable Courts in the statement of facts and the grounds of appeal. We humbly request your ....
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....013-14. The Appellant humbly submits that the additions made in the assessment order were not arising from the seized material. The learned assessing officer has failed to demonstrate that the additions made were arising from the seized material. It is a settled law that the existence of seized material is of paramount importance and an absolute necessity for making an assessment under section 153A. The learned Commissioner(A) has not appreciated the binding decision of the jurisdictional high court in relation to the search assessment and has dismissed the valid submissions of the Appellant. We have made detailed submissions in the statement of facts and the grounds of appeal filed along with the Form of Appeal, we have also cited various judgments of the Honourable Courts in the statement of facts and the grounds of appeal. We humbly request your Honour to consider these submissions. In view of the above submissions there was no scope for the assessment proceedings in view of the non existence of the seized material for the additions made in the assessment order. Hence the assessment proceedings and the assessments made are required to be considered bad at law and null an....
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....ccounting of interest on the inter corporate deposits was under the mercantile accounting system. The Appellant submitted that writing off of the non recoverable interest did not amount to adopting cash accounting system. The Appellant submitted detailed explanation along with all the relevant documents and ledger copies of the relevant accounts to the learned assessing officer. The learned assessing officer has acknowledged all the submissions of the Appellant in the assessment order but without furnishing any valid reasons has proceeded to add the written off interest to the income of the Appellant. The Appellant submitted detailed explanation to the learned Commissioner(A) along with all the relevant documents and account extracts. The learned Commissioner(A) appreciated and acknowledged the submission of the Appellant in the appeal order but dismissed the ground of the Appellant without citing any valid reasons. The Appellant submitted that the Appellant extended inter corporate deposits to various companies. Some of the companies to whom the appellant had extended the inter corporate deposits defaulted and refused to pay interest in spite of strong follow up and legal acti....
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....e in the net result. The learned Assessing officer and the CIT (A) without appreciating the submission of the Appellant observed that the procedure to claim bad debt is by disclosure in the profit and loss account by way of writing off a debt as an expenditure corresponding to an amount which has been already offered as an income in the same or an earlier previous year. They further observed that the appellant has failed to disclose the same in the profit and loss account, therefore it cannot be said that the appellant had offered the income in the said previous year or any earlier previous year. Therefore the appellants claim of bad debt is disallowed and the accrued interest is added to the income of the appellant. The learned Assessing officer and the CIT (A) failed to appreciate the detailed submission made by the Appellant and the appellants explanation and the documents produced by the Appellant in regard to the bad debts claimed by the Appellant. A plain reading of the provisions of section 36(1)(viii) clearly indicates that "the debt or part thereof which is written off as irrecoverable in the accounts of the assessee". That is precisely what the Appellant has done. T....
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....ng cash system of accounting. Further the CIT (A) states that we have not filed a letter from the auditor during the assessment or appellate proceedings. The Appellant appeared on several occasions and the CIT (A) had never sought for such a letter from the auditor. The CIT (A) has also stated that the said position was not stated during search proceedings which aspect has been adequately rebutted in the written submissions which are reproduced in the appellate order but CIT (A) has failed to take note of the same. Further CIT (A) adds that the assessing officer has stated that the procedure laid down under section 36(2) have not been complied with. This finding of the Assessing officer is incorrect and the CIT(A) ought to have examined the details filed and arrived at a conclusion as to the correctness of the finding of the officer. The CIT (A) has not done the same and thus the order suffers from violation of the principles of natural justice. The CIT (A) failed to appreciate that the appellant has written off the amount in its accounts and merely because the same has not been reflected in the profit and loss statement, cannot surmise that the make the write off was in ac....
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.... concluded that this method of writing the books was a cash accounting system and not mercantile accounting system. The learned AO further concluded that the Act did not permit an assessee to adopt two types of accounting systems and added back the written off interest. The learned AO was totally wrong in his conclusion because the Appellant had not adopted dual accounting system and all the accounts of the Appellant including the accounting of the accrued interest on ICD's were as per the mercantile accounting system. The learned AO added back the written off interest, which was never a part of the income of the Appellant. The Appellant submitted detailed reply to the learned AO along with all the relevant documents including the copies of the ledger of the interest account and the parties account which clearly established that the Appellant had correctly offered all the interest received and accrued to tax and had written off the interest which was not possible to be received. The learned AO instead of considering the submissions of the Appellant, reproduced the submissions in the assessment order and without any logic or reason proceeded to add back the non recoverable int....
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....mpany they were not able to find out the actual cause of the shortage, the fact remained that there was a shortage of 99.055 kilos of gold. Due to this the closing inventory was required to be valued at the actual physical stock available as it would not be proper to show inflated inventory especially in the light of the fact that the Appellant is a public company. Hence it was required that the closing inventory in the books was required to be reduced by Rs. 19,39,23,044. The inventory of 99.055 Kilos which was untraceable was about 0.047% (4.7 Paise in One Hundred Rupees) of the total gold transacted during the year. The loss could have been due to various reasons like loss in manufacturing, excess delivery made to clients, short delivery received from clients, regular pilferage or due to any other reason but the fact remained that there was a shortage. How can the Appellant value the inventory higher while there was shortage in inventory. Accounting prudence and good corporate governance requires to value the actual available inventory and not an inflated number and it was required that such shortage be publicly reported. The Appellant considered the actual available invento....
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....lenged the Amendment and the matter is pending in Writ Appeal before the Honorable Division Bench of the High Court of Karnataka. The Appellant calculated the book profit after considering the deduction available under Sec 10AA and 10B and informed the learned AO that the matter was pending before the Honorable Division Bench of the Karnataka High Court. The learned AO should have considered the request of the Appellant and refrained from calculating the book profit without considering the deduction available to the Appellant under Sec 10 AA and 10B. The learned AO did not accept the submission of the Appellant and proceeded with calculation of the book profit without allowing the eligible deduction under section 10AA and 10B. The Appellant preferred an appeal before the learned Commissioner(A) and made the submissions but the learned Commissioner(A) also did not consider the submissions of the Appellant and sustained the addition as made by the learned AO. The learned Commissioner(A) ought to have appreciated that the Writ Appeal filed by the Appellant challenging the validity of the amendment is pending and consequently the impugned addition as made for the relevant year was ....
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....irecting Search against the assessee or tax payer. The relevant portion of order is reproduced below: "10. Having heard the counsels for the parties, this court is satisfied that the present writ petitions deserve to be dismissed for the following reasons: (i)..... (ii)That even the law has been amended by insertion of the aforesaid Explanation by Parliament in Section 132 of the Act by the Finance Act, 2017 with retrospective effect from 1.4.1962. That Explanation also prohibits the Appellate Authorities to go into the reasons recorded by the concerned Income Tax Authority for directing Search against the assessee or tax payer. (iii) That this Amendment came after both, ITAT passed the order in the present case on 21.11.2014 as also the learned CIT(A) passed the impugned order on 11.2.2015. Nonetheless, retrospective effect of the said Amendment, will have its effect on the present case as well so long that the said Amendment holds the field. Therefore, the Appellate Authorities of the Department cannot be expected to go into the said question. It is only for the Constitutional Courts to examine the vires and validity of such Amendment and for that, a separate writ petitio....
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....itioned u/s.132A, requiring him to furnish the return within a prescribed period for each of the Assessment years involved with the search proceedings. The clause also stipulates that the return of income to be furnished in response to such notice under clause (a) were to be considered as Return required to be furnished u/s.139. 2.3 Under clause (b) of section 153A, the AO shall assess or re-assess the total income of six assessment years once the return is filed in response to clause (a). 2.4 The provisions of these two clauses are distinct and separate and one will not overlap one another. In view of this clear and distinct provisions of both clause (a) & (b), there is no need for the Assessing Officer to specify whether the notice being issued u/s.153A is to "assess" or "reassess" the total income, since such exercise has to be carried out under clause (b) only after the return is filed under clause (a). 2.5 In view of the above provisions of section 153A enshrined in clauses (a) and (b), the AO assumes jurisdiction to "assess" or "reassess" only after the return is filed. If the return is not filed, AO cannot assume jurisdiction to assess or reassess the total income. In ....
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....d by the Assessing Officer by issue of notice to reopen the assessment under Section 148 has also been excluded in a case covered by Section 153A. The time-limit prescribed for completion of an assessment or reassessment by Section 153 has also been done away with in a case covered by Section 153A. With all the stops having been pulled out, the Assessing Officer under Section 153A has been entrusted with the duty of bringing to tax the total income of an assessee whose case is covered bySection 153A, by even making reassessments without any fetters, if need be. Therefore, it is clear even if an assessment order is passed under Section 143(1) or 143(3) of the Act, the Assessing Officer is empowered to reopen those proceedings and reassess the total income taking note of the undisclosed income, if any, unearthed during the search. After such reopening of the assessment, the Assessing Officer is empowered to assess or reassess the total income of the aforesaid years. The condition precedent for application of Section 153A is there should be a search under Section 132. Initiation of proceedings under Section 153A is not dependent on any undisclosed income being unearthed during such se....
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....the case of Lancy Constructions has not changed the position as the former decision has not been considered in latter decision. Hence, the decision in the case of Canara Housing Development Company (supra) holds good in the facts of the present assessee's case. 3.5 In view of this legal position, relying on the decision of the Hon'ble jurisdictional High Court in the case of Canara Housing Development Company (supra), it is respectfully prayed that the assessee's ground on the scope of assessment u/s.153A may be rejected. 4. Addition of Interest on ICDs (in A.Y. 2009-10, 2010-11 , 2011-12, 2013-14 & 2014-15): This issue was examined by the AO and addition was made in A.Y. 2009-10, 2010-11 , 2011-12, 2013-14 & 2014-15. The CIT(A) upheld the addition in all the years after thoroughly analyzing the method of accounting followed by the appellant. Therefore, I rely upon the CIT(A) order in all the years. 5. Loss of Gold (A.Y. 2011-12) :- This issue was examined by the AO and the addition was made. The CIT(A) upheld the addition in Para 9 (on page 52) of CIT(A) order after thoroughly analyzing the issue. In this connection, reliance is placed on the Orders of the CI....
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....ections noted above. 8. In Para 5 of the assessment order for A. Y. 2009 - 10 also, it had been noted by the AO that for this year, the assessment order u/s 143 (3) was passed on 30.12.2011 determining a total income of Rs. 125,40,29,393/- as against nil income declared in the return of income and against this assessment order, appeal is filed by the assessee before CIT (A) which was pending. In this year also, there is only one issue raised by the assessee on merit being addition on account of interest on ICD apart from three technical objections noted above. 9. Similarly, In Para 5 of the assessment order for A. Y. 2010 - 11 also, it had been noted by the AO that for this year, assessment order u/s 143 (3) was passed on 03.07.2012 determining a total income of Rs. 181,88,48,635/- as against nil income declared in the return of income and against this assessment order, appeal is filed by the assessee before CIT (A) which was pending. In this year, the assessee has raised two issues on merit. First issue on merit is about calculation of exemption u/s 10AA. The second issue raised on merit in this year is about addition on account of interest on ICD apart from three technical obje....
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....ised on merit is about calculation of exemption u/s 10AA. These objections on merit are in addition to three technical objections noted above. 12. For A. Y. 2013 - 14 also, the details of earlier assessment order, if any, is not available in the assessment order passed u/s 153A but in Para 2 of this assessment order also, this is noted that return of income was filed on 29.09.2013 declaring total income of Rs. 114,07,52,370/- and as per pages 5 & 6 of the assessment order, total income was computed on this basis that business income as per assessee's computation of income was Rs. 489,51,41,984/- and after allowing deduction u/s 10AA - SEZ as per re working of Rs. 341,98,44,394/- and after adding Rs. 43,72,04,622/- on account of ICD Interest, , net business income was computed at Rs. 362,24,24,409/-. Income from house property is stated to be of Rs. 11,40,973/- and in this manner, total income for this year is determined at Rs. 362,35,65,382/-. The AO also allowed deduction of Rs. 78,22,24,217/- u/s 80IC and in this manner, net taxable income was determined at Rs. 284,13,41,165/-. Book Profit u/s 115JB was determined at Rs. 489,61,55,048/- after adding Rs. 345,01,73,711/- being SEZ....
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....ble Karnataka High Court as noted above, we decline to interfere in the order of CIT (A) on this issue,. Accordingly, this technical aspect is decided against the assessee. 16. The second technical issue raised by the assessee is this that the Notice issued by the AO u/s 153A is bad in law. In the written submissions filed on behalf of the assessee as reproduced above, this is the submission that notice issued u/s 153A is bad in law because it is not specified in the notice as to whether it is for assessing or reassessing the income of the assessee. As per the submissions of the learned DR of the revenue as reproduced above, the notice to be issued is to ask the assessee to file return of income for the relevant six years as per clause (a) of sub section (1) of section 153A and the question of assessment or reassessment is as per clause (b) of sub section (1) of section 153A and hence, both these clauses are separate and should not be mixed. 17. We have considered the rival submissions and in our considered opinion, as per clause (a) of sub section (1) of section 153A, at the stage of issue of notice u/s 153A, the only requirement is to ask the assessee to file return of income f....
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....ment of Hon'ble Karnataka High Court rendered in the case of CIT vs. Lancy Constructions (Supra) is not applicable in the present case. Learned DR of the revenue has placed reliance on another judgment of Hon'ble Karnataka High Court rendered in the case of Canara Housing Development Company vs.CIT as reported in 274 CTR 122. Although in this case, the dispute before Hon'ble Karnataka High Court was this that whether, CIT can invoke revisionary powers u/s 263 in respect of original assessment order passed by the AO in those cases, where, the AO has subsequently passed order u/s 153A. In this case also, incriminating material was found as noted in Para 2 of this judgment. This was held in this case that once the assessment is validly reopened, the AO has to take into account three types of income to complete the assessment or reassessment as the case may be. These three types of income are 1) income disclosed in the return of income, 2) Undisclosed income found during the search and 3) any other income which is not disclosed in the earlier return and not unearthed during the search. In our considered opinion, if incriminating material is found in course of search, in the assessment ....
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....in gold price as prevalent on 31st March 2010 in the case of all outstanding provisional imports and due to this change in accounting policy the profit for the year has been understated by Rs. 31,93,21,126. Making charges income is recognized on dispatch of goods. Interest on bank deposits and other interest bearing loans are accounted on accrual basis. However during the year the management has changed the accounting policy with regard to accounting of interest income on interest bearing loans other than bank deposits to cash basis due to which the profit for the year has been has been understated by Rs. 14,82,02,244/- Dividend income on investments is accounted for when the right to receive the payment is established." 21. From the above, it is seen that as per the assessee itself, the management in the present year has changed the accounting policy with regard to accounting of interest income on interest bearing loans other than bank deposits and the changed system is cash basis and due to this, the profit for the year ending as on 31.03.2010 has been stated to be underreported by Rs. 14,82,02,244/-. Hence it is seen that the assessee itself has admitted in annual report that....
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....rs. 23. In our considered opinion, before holding that the assessee is adopting cash system of accounting in respect of interest income on ICDs as stated by the assessee in the Annual reports of two years i.e. Accounting year ended on 31.03.2011 & 31.03.2012, it has to be ascertained that the interest income has really accrued by applying real income theory as approved by Hon'ble apex court in the case of State Bank of Travancore vs. CIT as reported in 158 ITR 102. In this case, it was held that the concept of reality of the income and the actuality of the situation are relevant factors which go to the making up of the accrual of income but once accrual takes place and income accrues, the same cannot be defeated by any theory of real income. The concept of real income may have to be given precedence in computation of income in a particular case but accrued income cannot be waived as not having accrued to the assessee. In this case, the issue was decided against the assessee and in favour of the revenue because of the facts of that case. As per the facts of that case, it was seen that the assessee neither decided to treat interest income on sticky advances as bad debt nor claim....
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.... irrecoverable after accrual of the income than the same has to be brought to tax in the year of accrual and the assessee may claim deduction as per law u/s 36 (1) (vii) in any year afterwards by writing of the same in its books. 24. The next issue on merit is regarding calculation of exemption u/s. 10AA of IT Act. Regarding this issue, this is the submission of the assessee before us that this issue is relevant for four Assessment Years i.e. 2008-09, 2010-11, 2011-12 & 2012-13. It has been submitted that the AO has reworked the claim of the assessee regarding exemption u/s. 10AA of IT Act on the basis of various additions made by the AO. He submitted that against some of these additions due to which the assessee's claim for exemption u/s. 10AA of IT Act was reduced, relief was allowed by CIT(A) and such relief has become final because no appeal has been filed by revenue against that order of CIT(A) in any of these years. But ld. CIT(A) has not directed the AO to rework the eligible deduction u/s. 10AA of IT Act after considering the relief allowed by CIT(A). In this regard, we find that in Assessment Year 2008-09, the AO has made addition of Rs. 3871.30 Crores u/s. 68 on account ....
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....anation on this issue. The ld. DR of revenue supported the order of AO and CIT(A). 27. We have considered the rival submissions. We find that on page no. 52 of his order, the ld. CIT(A) has stated that as per the AO, the assessee has not been able to substantiate the loss of 99.055 Kgs. of gold. As per ld. CIT(A), he states that the claim of the assessee is not acceptable because 99.055 Kgs. of gold is not a small amount which can just vanish but he has not considered this aspect that this quantity of gold loss of 99.055 Kgs. is only 0.047% of the total gold transaction of the assessee in the present year.Moreover there was a search conducted in the case of the assessee and in spite of that, the revenue could not find out any material to show that the assessee is having any excess gold stock or that there was any evidence found in respect of any unaccounted sale of gold or gold items. Regarding this that the loss of gold could not be substantiated by bringing evidence on record, in our considered opinion, if the assessee is having any evidence in respect of loss of gold, the assessee will not allow such loss to happen. In our considered opinion, in the facts of present case, this ....
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....details and analysed the stand of the assessee that it has declared in it's return of income that it has not included the profit of the SEZ while calculating the book profit for the purpose of calculation of MAT because it is contrary to the scheme of SEZ and it has challenged the constitutional validity of the respective amendment to the Finance Act, 2011 in the Honorable High Court of Karnataka. The assessee has made this declaration in it's return of income as well as before the AO and also before me. I have also analysed the stand taken by the AO with regard to the stand of the assessee not being acceptable in the light of the amendment to the Finance Act. It is true that the Honorable High Court of Karnataka has not passed any final orders in this matter, hence the stand of the assessee in this matter cannot be accepted. This ground of appeal is hence DISMISSED." 29. From the above Para reproduced from the order of CIT(A), it is seen that the recomputation of book profit u/s. 115JB has been done by the AO in view of proviso to sub-section(6) of section 115JB which has been inserted in the statute book by Finance Act, 2011 w.e.f. 01.04.2012. On this issue, this is ....