TaxTMI 
TaxTMI 
2019 (1) TMI 467
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....cumstances of the case, the CIT(A) has erred in law and on facts in deleting the disallowance of Rs. 1,55,96,815/- made by the Assessing Officer u/s. 80IC of the Income Tax Act, 1961. 4. On the facts and circumstances of the case, the CIT(A) has erred in law and on facts in allowing the additional deduction of Rs. 87,270/- in respect of scrap sales declared by assessee and Rs. 4,86,408/- in respect of addition on bogus purchase without appreciating the fact that the same were not claimed during the assessment proceedings. 5. The order of the CIT(A) is erroneous and is not tenable on facts and in law. Grounds raised in A.Y. 2006-07: 1. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in holding that the Assessing Officer was not justified in estimating speed money expenses at Rs. 97,16,000/-. 2. On the facts and circumstances of the case, the CIT(A) has erred in law and on facts in restricting the addition to Rs. 1,01,71,831/- out of additions of Rs. 1,23,49.264/- made by the A.O. on account of bogus purchase. 3. On the facts and circumstances of the case, the CIT(A) has erred in law and on fa....
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.... erroneous and is not tenable on facts and in law. 2. From the above grounds of appeal, it emerges out that most of the issues involved in all these appeals pertaining to same assessee, are common, the same were heard together and are being disposed of by the consolidated order for the sake of convenience and brevity. The ld. DR agreed that the decision on a particular issue shall apply mutatis mutandis to the common issues involved in each of these appeals. We take up the facts from appeal for the assessment year 2005-06. ITA No. 1530/Del/2012 (A.Y. 2005-06: 3. The brief facts of the case are that a search and seizure action u/s. 132 of the IT Act was carried out in Accurate Group of cases on 26.07.2006. Notice u/s. 153A was issued and served on the assessee on 26.03.2007 and other statutory notices were issued to the assessee from time to time. The assessee company is engaged in the business of manufacturing of transformers and trading of various items. The transformers manufactured by the assessee are mainly supplied to various state Electricity Boards. During the course of search proceedings, the assessee had disclosed the amount ofRs.31,00,000/- as undisclosed income ....
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....e assessee is making payments of such speed money out of books and the assessee did not provide the details of persons to whom such amounts were paid. From the utilization chart, it was noticed that the assessee has admitted a sum of Rs. 47,53,926/- towards the payment of bribe/speed money to various persons. It was also the submission of the assessee that the speed money/bribe as noted above of Rs. 47,53,926/- was paid out of the money shown to have been spent on bogus purchases and unaccounted scrap sales worth Rs. 4,86,408/- and Rs. 56,48,873/- respectively, totaling to Rs. 61,35,281/-. However, the Assessing Officer has calculated the payment of bribe/speed money to Rs. 72,50,000/- @ 0.75% of the turnover made of Rs. 96.67 crores against supply to various State Electricity Board. Therefore, the Assessing Officer made addition of difference amount of Rs. 11,14,719/- to the total income of the assessee. 6. The Assessing Officer also noted that the assessee has recorded various transactions on seized materials but was unable to explain each and every entry. In spite of repeated requests, the assessee did not produce books of account, bills and vouchers. Therefore, the Assessing....
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....e additional income. The ld. CIT(A) after considering the submissions of the assessee partly allowed the appeal of the assessee. Aggrieved, the Revenue is in appeal before the Tribunal. 10. The ld. DR relied on the order of the Assessing Officer and submitted that the ld. CIT(A) has accepted the appeal of the assessee only on the basis of submissions of assessee. The assessee was asked to produce books of account, bills and vouchers time and again , but he did not produce the same. The speed money/bribe paid by the assessee out of sale of scrap and from bogus purchase is not allowable as per section 37(1) of the IT Act. The ld. CIT(A) has allowed the deduction u/s. 80IC on the scrap sales of Rs. 87,270/- and bogus purchase of Rs. 4,86,408/- not eligible for deduction u/s. 80IC because it was not recorded in the books of account. The ld. CIT(A) has also committed a mistake while allowing deduction u/s. 80IC of Dehradun Unit and Haridwar Unit because the assessee had produced only the comparative statement and charged disproportionate expenses to the eligible and non-eligible units. He has accepted the submissions of the assessee only analyzing the data produced by the assessee wi....
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.... 19. The deletion of Rs. 3,00,000/- for AY 2004-05 as against the addition of Rs. 4,00,000/- disallowed by the AO claimed by the assessee on account of business expenses, was made by the AO again for non-furnishing the complete details like books of accounts, bills and vouchers, so as to verify the genuineness of the expenses. However, the ld. CIT (A) has restricted the addition to Rs. 1,00,000/- by taking into account the facts highlighted by AO 14 ITA Nos.1929 & 1930/Del./2012 during framing of assessment of the assessee u/s 143 (3) on 29.12.2006, the addition of Rs. 3,00,000/- was made on the admission of the assessee, and confirmed the remaining addition of Rs. 1,00,000/-. Keeping in view the fact that when, as per findings returned by the AO, addition of Rs. 3,00,000/- made in the assessment u/s 143 (3) was confirmed vide impugned order only remaining addition of Rs. 1,00,000/- was to be explained by the assessee who has not preferred to produce the account books supported with bills and vouchers to explain the genuineness of the expenses. So, we are of the considered view that this issue also requires to be sent back to the AO to decide afresh after providing an opportun....
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..../records such as consumption of fuel and manpower with reference to production, indirect expenses, books of account and vouchers to be submitted by the assessee, interest bearing funds employed in eligible units, investigation of discounts given in eligible and non-eligible units and all other relevant factors to deduce correct profit eligible for deduction u/s. 80IC. The assessee is directed to produce the books of account and supporting documents in respect to eligible and non-eligible units before the Assessing Officer so as to examine the claim u/s. 80IC of the Act. Needless to say, the assessee shall be given reasonable opportunity of being heard. Accordingly, ground No. 3 for the assessment year 2005-06 and ground No. 4 for A.Yrs. 2006-07 and 2007-08 are allowed for statistical purposes. 17. The next issue involved in this appeal for A.Y. 2005-06 pertains to allowing additional deduction of Rs. 87,270/- for bogus sales of scrap and Rs. 4,86,408/- in respect of bogus purchases admitted by the assessee itself. It is an admitted fact that the aforesaid amounts relate to bogus purchases and bogus sales, meaning thereby no actual purchase or sale took place or the assessee had ....
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....4/-, the details of which are given in the assessment order. The Assessing Officer accordingly, made addition of Rs. 1,56,50,479/- which was reduced to Rs. 1,23,49,264/- vide order u/s. 154 of the Act. 19. Before the ld. CIT(A), the assessee submitted that in the return of income filed in response to notice u/s 153A the assessee company has declared income of Rs. 52,43,035/- on account of excess purchases from certain parties. During the course of assessment proceedings, it was discovered that the year wise surrender made by the appellant on account of excess purchases was not correct. The figures of such excess purchases were not computed correctly. Owing to this omission, income was less declared in some of the years and at the same time excess income was declared in other year. The income was less declared in A.Y.2004-05, A.Y.2005-06 and A.Y. 2006-07 whereas it was excess declared in A.Y. 2007-08. This factual position was explained to the A.O. and it was stated that disallowance should be made on the basis of such actual and correct position. For the year under consideration the assessing officer computed the total excess purchases at Rs. 2,08,93,524/- and after reducing alr....
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....ound as per the seized material. The assessing officer has also not disputed the fact that there was actually no such income of Rs. 21,77,433/- as per the seized material. Once the assessing officer is making separate addition of Rs. 1,23,49,264/- on account of bogus purchases, the appellant should reasonably and in equity be entitled also to get credit of the already declared income for Rs. 21,77,433/-, which apparently is not linked with any specific document seized during the search. In view of these facts, the addition of Rs. 1,23,49,264/- made by the assessing officer (after the rectification effect) is restricted to Rs. 1,01,71,831/-. Thus the addition to the extent of Rs. 1,01,71,831/- is confirmed and the appellant gets relief of Rs. 21,77,433/-. These grounds of appeal are accordingly partly allowed." 20. Having gone through the aforesaid findings of the ld. CIT(A), we find that the conclusions reached by the ld. CIT(A) are based on factual position available on record and has reduced the amount of Rs. 1,23,49,264/- declared by the assessee as income under the head "others". There being no contrary material on record to discard the above conclusion reached by the ld. CI....
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....leted the addition of Rs. 17,12,565/- by confirming the remaining addition of Rs. 15,58,435/-. So, ground no.1 in AY 2003-04 is determined against the Revenue. Respectfully following the above decision of co-ordinate Bench and for want of any contrary material on record, ground No. 1 for assessment year 2007-08 deserves to be dismissed. 23. The next additional issue involved in ground No. 5 of appeal for A.Y. 2007-08 relates to deletion of addition of Rs. 1.75 crores by holding that the same was included twice for the purpose of computing the total income. The ld. CIT(A) has decided this issue in para 8.1 of the impugned order as under : finding on Ground of Appeal No. 9:- I have considered the submissions of the appellant. The rectification application filed by the appellant and the order passed u/s 154 by the assessing officer in this regard has also been gone through. It is seen that original return of Income was filed by the appellant on 13.09.2007 declaring income of Rs. 1,96,92,770/- calculated as under :- Net Profit as per P & L A/c 7,34,82,430 Add: Depreciation as per book 7 0,49,721 Less : Depreciation as per Income Tax Act 57,31,679 Gro....
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....lant is therefore legally and under equity entitled for exclusion of amount of Rs. 1,75,00,000/- from its income. It is not legally justified on part of revenue to take advantage of the ignorance of the assessee's understanding of legal provisions. The assessing officer is accordingly directed to exclude the amount of Rs. 1,75,00,000/- from the income of the appellant which has been included twice in the income of the appellant. This ground of appeal is allowed." 24. For want of any contrary material from the side of Revenue, we do not find any justification to interfere with these findings of the ld. ACIT(A) as no litigant can be taxed twice on the same amount. On perusal of the financial statements and notes on accounts, we find that the amount of Rs. 1.75 crores had already been considered as income in the original return of income. However, the said amount was again included in the revised computation given during the assessment proceedings by mistake. We, therefore, do not find any mistake in the conclusions reached by the ld. CIT(A) as above. Accordingly, ground No. 5 deserves to be dismissed. 25. The further additional issue raised by Revenue in ground No. 7 of appeal ....