TaxTMI 
TaxTMI 
2019 (5) TMI 693
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....at Mangalore. A search and seizure action under section 132 of the Income Tax Act, 1961 (in short 'the Act') was conducted at the premises of the assessee on 17.01.2008. Survey under section 133A of the Act was also conducted at the port premises of the assessee. In the course of the search, certain documents were found and seized; based on which the Managing Director of the assessee company was examined and he admitted and agreed to offer to tax undisclosed income of Rs. 1,74,72,000/-; comprising of Rs. 39,72,000/- for Assessment Year 2005-06 and Rs. 1,35,00,000/- for Assessment Year 2007-08. Subsequently, the assessee retracted the aforesaid admission / declaration of undisclosed income vide letter dated 15.04.2008, filed before the ADIT (Inv.), Mangalore. 2.2 After the conclusion of search operations, the Assessing Officer (AO) initiated assessment proceedings under section 153A of the Act for Assessment Years 2002-03 to 2007-08. Along with these assessment proceedings under section 153A of the Act, the AO also took up assessment proceedings for Assessment Year 2008-09. In the orders of assessment passed under section 153A r.w.s. 143(3) of the Act for Assessment Years 2002-03....
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....ed hereunder: Assessment Year 2003-04 1. The orders of the authorities below in so far as they are against the appellant re opposed to law, equity, weight of evidence, probabilities, facts and circumstances the case. 2. The learned CIT[A] is not justified under the facts and circumstances of the appellant as set out in Annexure-1 annexed, in sustaining a sum of Rs. 7,50,000/- as unexplained investment in the purchase of property from Sri Ajith Kumar Rai relying on the erroneous initial declaration u/s.132[4] of the Act, made by Sri Mohiuddin, which has been explained by Sri Mohiuddin as incorrect subsequently that no such payment has been made, which has been substantiated by the examination of Sri Ajith Kumar Rai by the learned A.O. himself at the back of the appellant and thus the addition is on the erroneous appreciation of facts and purely on suspicion and surmise and consequently deserves to be deleted. Grounds urged and not pressed before CIT(A) and again urged before the Hon'ble ITAT as additional grounds and application for their admission as additional grounds is separately filed. 3. The appellant denies itself liable to be ....
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....ding on the authorities below (vi) The learned A.O. has not discharged the burden of proving that there is a valid initiation of the search u/s.132[1][a], [b] Et [c] of the Act, its execution and its completion in accordance with law to render the proceedings valid and to assume jurisdiction to make an assessment u/s.153A of the Act even when challenged before him and consequently, an adverse inference ought to be drawn and the assessment requires to be annulled. 3. The authorities below are not justified in denying the appellant the copy of the warrant and the materials inducing the belief in the existence of the condition specified in Section 132[1][a], [b] and [c] of the Act to issue the warrant and the satisfaction note recorded therein under the facts and in the circumstances of the appellant's case especially in the light of the decision of the jurisdictional high court in the case of SOUTHERN HERBALS reported in 207 ITR 55 and consequently, the assessment is bad in law and liable to be annulled. 4. The learned A.O. has erred in law in holding the appellant is not entitled to question the validity of the search in the course of the assessment pr....
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.... on suspicion and surmise and consequently deserves to be deleted. 3. The learned CIT[A] is not justified under the facts and circumstances of the appellant as set out in Annexure-1 annexed, in sustaining a sum of Rs. 1,14,172/- as difference in credit balance under the facts and in the circumstances of the appellant's case and the same is not arising out of any seized materials and further the difference is due to error in accounting requiring rectification and not addition and consequently, the addition sustained requires to be deleted. 3. The learned CIT[A] is not justified under the facts and circumstances of the appellant as set out in Annexure-1 annexed, in sustaining a sum of Rs. 34,902/- as against a sum of Rs. 11,52,004/- made by the A.O. as bogus sundry creditors under the facts and in the circumstances of the appellant's case and the same is not arising, out of any seized materials and further the difference is due to error in accounting requiring rectification and not addition and consequently, the addition sustained by the learned CIT[A] requires to be deleted. 4.1 The addition is purely on suspicion and surmise, assumptions and presu....
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....epared in accordance with the mandatory rule 112[9] of the I.T.Rules enjoining preparation of such lists and further furnishing the same to each one of the assessees including the appellant, if the search were to have been considered as individually initiated against each one of the persons whose names are stated to have been specified in the warrant including the appellant; (v) That the assessment is also bad in law since the warrant is in the joint names of certain persons and not in their individual names and therefore, the assessee against whom the warrant is issued should be considered either as AOP or BOI consisting of such persons and such assessee entity alone could be considered as assessee or person against whom search proceedings are initiated and therefore, the provisions of Section 153A could be invoked only against AOP or BOI and not against the appellant, who is a member of such AOP/BOI to make a valid assessment in its separate status as either as company/individual/firm as the case may be having regard to the ratio of the Hon'ble Karnataka High Court, Circuit Bench, Gulbarga in ITA Nos.6005 Et 6006/2010, which is binding on the authorities below. ....
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....r the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs. Assessment Year 2005-06 1. The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case. 2. The learned CIT[A] is not justified under the facts and circumstances of the appellant as set out in Annexure-1 annexed, in sustaining a sum of Rs. 3,50,000/- as against a sum of Rs. 35,09,286/- made by the A.O. under explanation to section 37[1] in respect of tipper mamools as these expenses are not i i the nature of bribes and are in the nature of customary mamools payable to the crew of the trucks, who bring cargo for loading or unloading from the ships in the port yard. 2.1 The disallowance sustained is only out of suspicion and surmise, assumptions and presumptions, without an iota of evidence and requires to be deleted. Grou....
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....o make a valid assessment in its separate status as either as company/individual/firm as the case may be having regard to the ratio of the Hon'ble Karnataka High Court, Circuit Bench, Gulbarga in ITA Nos.6005 & 6006/2010, which is binding on the authorities below (vi) The learned A.O. has not discharged the burden of proving that there is a valid initiation of the search u/s.132[1][a], [b] ft [c] of the Act, its execution and its completion in accordance with law to render the proceedings valid and to assume jurisdiction to make an assessment u/s.153A of the Act even when challenged before him and consequently, an adverse inference ought to be drawn and the assessment requires to be annulled. 4. The authorities below are not justified in denying the appellant the copy of the arrant and the materials inducing the belief in the existence of the condition specified in Section 132[1][a], [b] and [c] of the Act to issue the warrant and the satisfaction note recorded therein under the facts and in the circumstances of the appellant's case especially in the light of the decision of the jurisdictional high court in the case of SOUTHERN HERBALS reported in 207 ITR ....
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...., who bring cargo for loading or unloading from the ships in the port yard. 2.1 The disallowance sustained is only out of suspicion and surmise, assumptions and presumptions, without an iota of evidence and requires to be deleted. Grounds urged and not pressed before CITrA1 and again urged before the Hon'ble ITAT as additional grounds and application for their admission as additional grounds is separately filed. 3. The appellant denies itself liable to be assessed u/s.153A rws 143[3] of the Act under the impugned order on the ground - (i) That the search initiated in the case of the appellant is illegal and ultra vires the provisions of Section 132[1][a], [b] and [c] of the Act; (ii) That the search is conducted not on the basis of any prior information or material inducing any belief but purely on the suspicion and therefore, the action u/s.132[1] is bad in law [224 ITR 19 (SC)] and consequent assessment U/S.153A is null and void-ab-initio on the parity of the ratio of the decision of the Hon'ble Supreme Court in the case of AJITH JAIN reported in 260 ITR 80. (iii) That the warrant issued in the joint names of the perso....
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....the warrant and the satisfaction note recorded therein under the facts and in the circumstances of the appellant's case especially in the light of the decision of the jurisdictional high court in the case of SOUTHERN HERBALS reported in 207 ITR 55 and consequently, the assessment is bad in law and liable to be annulled. 5. The learned A.O. has erred in law in holding the appellant is not entitled to question the validity of the search in the course of the assessment proceedings and failed to appreciate that the search proceedings u/s.132 are in aid of ultimate assessment and a statutory appeal is provided against such assessment and therefore the issue of validity of search is an adjudicatory and justiciable issue, which had to be adjudicated by the A.O. to assume jurisdiction to make a valid assessment. 6. The learned A.O. failed to appreciate that a valid search is a sine qua non for making a valid assessment u/s.153A of the Act on the parity of the ratio of the decision of the Hon'ble Supreme Court in the case of AJITH JAIN reported in 260 ITR 80. 7. The finding of the learned A.O. that the validity of search could not be questioned by relying ....
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.... their admission as additional grounds is separately filed. 4. The appellant denies itself liable to be assessed u/s.153A rws 143[3] of the Act under the impugned order on the ground - (i) That the search initiated in the case of the appellant is illegal and ultra vires the provisions of Section 132[1][a], [b] and [c] of the Act; (ii) That the search is conducted not on the basis of any prior information or material inducing any belief but purely on the suspicion and therefore, the action u/s.132[1] is bad in law [224 ITR 19 (SC)] and consequent assessment U/S.153A is null and void-ab-initio on the parity of the ratio of the decision of the Hon'ble Supreme Court in the case of AJITH JAIN reported in 260 ITR 80. (iii) That the warrant issued in the joint names of the persons said to have been specified in the warrant is bad in law to initiate search in the individual cases of the several persons whose names are specified in the warrant although a joint warrant had to be issued in all the names of the occupants of the premises to seize their records, if warranted, which does not mean that search is initiated against each one of the occupants; ....
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....in holding the appellant is not entitled to question the validity of the search in the course of the assessment proceedings and failed to appreciate that the search proceedings u/s.132 are in aid of ultimate assessment and a statutory appeal is provided against such assessment and therefore the issue of validity of search is an adjudicatory and justiciable issue, which had to be adjudicated by the A.O. to assume jurisdiction to make a valid assessment. 7. The learned A.O. failed to appreciate that a valid search is a sine qua non for making a valid assessment u/s.153A of the Act on the parity of the ratio of the decision of the Hon'ble Supreme Court in the case of AJITH JAIN reported in 260 ITR 80. 8. The finding of the learned A.O. that the validity of search could not be questioned by relying upon several decisions is erroneous and is contrary to the decision of the jurisdictional High Court in the case of RAMAIH REDDY reported in 339 ITR 210 and therefore, the assessment requires to be cancelled. 9. Without prejudice to the right to seek waiver with the Hon'ble CCIT/DG, the 33pellant denies itself liable to be charged to interest u/s.234A, 234B....
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....Without prejudice to the right to seek waiver with the Hon'ble CCIT/DG, the appellant denies itself liable to be charged to interest u/s. 234B and 234C of the Act, which under the facts and in the circumstances of the appellant's case deserves to be cancelled. 6. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs. Revenue's Appeals in ITA Nos. 818 to 822/Bang/2012 for Assessment Years 2004-05 to 2008-09 4.2 The grounds raised in Revenue's appeals before the Tribunal in these Assessment Years are extracted hereunder: Assessment Year 2004-05 1.1 The Ld. C.I.T. (Appeals) erred in deleting the speed money amounting to Rs. 45,00,000 through port laborers. 1.2 The Ld. C.I.T. (Appeals), failed to appreciate the fact that, the assessee has failed to prove that whole of such expenditure said to have been incurred in the interest of business expediency. 1.3 The Ld. C.I.T.(Appeals),....
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....) Ltd. v. CIT reported in 229 ITR 534 (1998), the Hon'ble Supreme Court has clearly stated that any payment for infraction of law cannot be allowed. 2. The Ld.CIT(A) erred in law in deleting the disallowance of Rs. 31,59,286/- made u/s. 37(1) of the I.T.Act as the expenditure incurred towards tipper mamool by the assessee was prohibited by law and opposed to public policy. 3. That on the facts and circumstances of the case and in law, the Ld. CIT(Appeals) erred in deleting the addition made as unexplained expenditure of Rs. 59,67,500/-. 4. For these and such other grounds that may be urged at the time of hearing the orders of Ld. CIT(A) may be set aside and that of assessing officer may be restored. Assessment Year 2006-07 1.1 The Ld. C.I.T. (Appeals) erred in deleting the speed money amounting to Rs. 4,67,17,395/-. 1.2 The Ld. C.I.T. (Appeals), failed to appreciate the fact that, the assessee has failed to prove that whole of such expenditure said to have been incurred in the interest of business expediency. 1.3 The Ld. C.I.T.(Appeals), failed to appreciate the fact that, the assessee has failed to prove that the p....
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....ot be allowed. 2. The Ld.CIT(Appeals) failed appreciate the fact that the declaration made by the assessee Rs. 1,35,00,000 u/s 132(4) of the I T Act was voluntary and binding on the assessee. The Ld.CIT(Appeals) is erred by linking the speed money issue to the voluntary declaration made by the assessee during the search. 3. The Ld.CIT(Appeals) has made factual error by stating that Rs. 40,79,000 added protectively as unexplained investment of the assessee has been substantially confirmed by the CIT(A) in the case of Shri Mohiuddin. But fact is that in the case of shri Mohiuddin also, same income is added protectively. The 0T(A) in the case of Shri Mohiuddin has dismissed his appeal but not stated that the same has to be substantially assessed in his hands.(The income is substantially assessed in the hands of Smt.Shahnaz Mohiuddin and her appeal is pending before CIT(A)-V1,Bangalore.) 4. The Ld.CIT(A) erred in law in deleting the disallowance of expenses Rs. 3,10,000/- made u/s.40(a)(ia) of the I.T.Act. 5. The Ld.CIT(A) erred in law in deleting the disallowance of Rs. 68,70,956/-made u/s.37(1) of the I.T.Act as the expenditure incurred towards tip....
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....e addition made as unexplained expenditure u/s 69C of Rs, 3,00,000. 6. For these and such other grounds that may be urged at the time of hearing the orders of Ld. C.I.T (A) may be set aside and that of assessing officer may be restored. Ground Nos.3 to 6 and Additional Grounds for Assessment Year 2003-04 Assessee's appeals Ground Nos. 6 to 10 and Additional Grounds for Assessment Year 2004-05 Ground Nos. 3 to 7 and Additional Grounds for Assessment Year 2005-06 Ground Nos. 3 to 7 and Additional Grounds for Assessment Year 2006-07 Ground Nos. 4 to 8 and Additional Grounds for Assessment Year 2007-08 5.1 At the outset of the hearings, the learned AR for the assessee submitted at the Bar before the Bench that the assessee is not pressing ground Nos. 3 to 6 and additional grounds raised in its appeal for Assessment Year 2003-04; Ground Nos. 6 to 10 and Additional Grounds raised in its appeal for Assessment Year 2004-05; ground nos. 3 to 7 and additional grounds raised in its appeals for Assessment Years 2005-06 and 2006-07 and ground Nos. 4 to 8 and additional grounds for Assessment Year 2007-08. In view of the assessee not pressing the aforesaid grounds i....
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....time of search and he admitted that a sum of Rs. 10,72,500/- as noted in the aforesaid seized material was paid by way of cash, which was agreed to be offered as undisclosed income. Later, under the letter dated 15/04/2008, Shri Mohiuddin, retracted the aforesaid disclosure and it was contended before the A.O. that an abandoned ledger of Indian Shipping Agency that was used to make certain jottings and notings, which were all not accurate. The A.O. rejected the said contention by observing that the cheque payments made as noted in the seized materials were tallying with the sale deed under which the assessee purchased the property from Ajith Kumar Rai. Hence, the learned A.O. held that the cash payments noted therein would have to be considered as true and invoked the provisions of section 292C of the Act. [d] The assessee contended before the learned C1T[A] that the notings made in page [61] of the seized material A/HML/18 were not accurate and that the Assessing Officer had summoned Ajith Kumar Rai, in course of assessment proceedings and had examined him. Copy of the statement of Ajith Kumar Rao, is placed at pages 83 to 88 of the Paper book. [e] It wa....
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....anding Counsel, the AO has reproduced the relevant noting made in the ledger account, which shows payments made both in cheque as well as cash. The payments made by cheque are found recorded in the books of account, whereas the cash payments are not recorded therein. He referred to the admission of the Managing Director (M.D) of the assessee at the time of search vide statement under section 132(4) of the Act dated 18.01.2018 and contended that the subsequent retraction by the assessee on 15.04.2008 was not based on any evidence to show that there were no cash payments made. The learned Standing Counsel submitted that in view of the above, the additions were rightly made and the CIT(A) has correctly sustained the said additions. 7.3.1 We have considered the rival submissions / contentions put forth and perused the material on record. In the course of search proceedings, a ledger belonging to Indian Shipping Agencies Pvt. Ltd., was found wherein several transactions were recorded on various pages thereof. Page 61 of the said ledger contained the account of Shri Ajit Kumar Shetty (Rai) in which there were recorded several payments made on different dates; both by cash and chequ....
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....D. of the assessee has stated that there was no consideration paid over and above the consideration mentioned in the registered sale deed and the cash advance noted in the seized ledger were returned by the recipient after cheques were given, but no noting of the cash returned were made in the seized material. Considering the factual matrix of the case, as discussed above, we are of the considered view that no addition could be made in respect of the so-called cash payments outside the books of account as unexplained investment. The contentions of Shri Ajit Kumar Rai (Shetty), that no cash payment was received by him from the assessee cannot be brushed aside lightly and his averments have not been controverted by the authorities below. No material has been brought on record to disbelieve / discredit Shri Ajit Kumar Rai's (Shetty) claim; which supports the stand of the assessee that no cash payment was made as stated at the time of search. Therefore, making any addition on the basis of the assessee's statement at the time of search by ignoring the assessee's subsequent explanation / rebuttal, which is corroborated by the statement of Shri Ajit Kumar Rai (Shetty), is clearly not just....
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....ain the difference of Rs. 1,14,172/- in creditor's balances, we find no reason to interfere with or deviate from the action of the CIT(A) in sustaining the aforesaid disallowance. Consequently, ground No.2 of assessee's appeal for Assessment Year 2004-05 is dismissed. 9. Ground No.5 and 5.1 (Assessment appeal for Assessment Year 2004-05) Ground No.2 and 2.1 (Assessee's appeal for Assessment Years 2005-06 to 2008-09) Tipper Mamools Ground No.2 (Revenue's appeal for Assessment Years 2004-05 and 2005-06) Ground No.3 (Revenue's appeals for Assessment Year 2006-07) Ground No.5 (Revenue's appeals for Assessment Year 2007-08) Ground No.4 (Revenue's appeals for Assessment Year 2008-09) 9.1 In these grounds in the assesse's appeal (supra) for Assessment Years 2004- 05 to 2008-09, the assessee challenges the CIT(A)'s action in partly sustaining the disallowance of expenses claimed as Tipper Mamools. Revenue is also in appeal on this issue, and in the grounds raised (supra) for Assessment Years 2004-05 to 2008-09, against the relief granted by the CIT(A). The addition sustained by the learned CIT(A) challenged by the assessee are Rs. 2,00,000/- (ground Nos.5 and 5.1) f....
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....essee are legitimate business expenses. With regard to the AO's remand report pointing out the break-up of expenses, he submitted that the total expenditure claimed was disallowed by the AO as there was no supporting evidence given by the assessee and in remand proceedings, the vouchers were examined afresh and a report was rendered for the limited purpose of ascertaining the expenses that related to payments made to government officials. According to the learned Standing Counsel, the assessee had not discharged the burden of proving that these expenses were incurred for the purposes of its business and therefore the disallowances made by the AO from out of Tipper Mamool expenses claimed ought to be restored. 9.4.1 We have heard and considered the rival contentions and perused the material on record. The facts of the matter, as emanate from an appraisal of the record before us, is that in the course of assessment proceedings, the AO noticed that the assessee had claimed expenditure under the head 'Tipper Mamools' in respect of the transportation business carried on by the assessee. The AO noted that the assessee had produced vouchers in respect of these expenses claimed and some....
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....adhoc additions for various years to take care of any such payments to government officials. Having considered the rival contentions, the impugned orders of the CIT(A) and the AO's remand report dated 01.11.2010; we find that substantial part of the addition / disallowance made out of the expenditure claimed on tipper mamools represents legitimate business expenditure like hotel bills, port pass, crew / driver's batta, labour charges, etc. Some notations with regard to the expenses bearing the CISF, Customs, NMPT, etc., are also found in the vouchers and this is explained to be expenditure incurred at that station and not payments of illegal gratification to government officials. In the factual matrix of the case on this issue, as discussed above, we are of the view that the aforesaid explanations put forth by the assessee are plausible and not farfetched. Revenue has not doubted that the assessee had to make payments to truck drivers and truck crews for incurring wayside expenses and certain reimbursement of expenses incurred by these transportation crews have been claimed. No proof has been brought on record by the AO to establish that the references to expenses incurred by trans....
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....8. In this book unloading charges through JCBs were recorded. At the time of search one Sri H.Asif, Cashier of the assessee company was examined and he stated that the unloading charges were collected at Rs. 180 for a Ten wheeler truck and Rs. 100 for a Six wheeler truck and these were not recorded in the main cash book of the assessee. [c] In course of assessment proceedings it was explained to the A.O. that these machine hire charges were collected and distributed amongst the workers, who share the collections with the truck drivers, machine operators, etc. The said explanation of the assessee was rejected by the A.O. stating that the assessee did not give any corroborative evidence to support the said plea. Reliance was placed on the statement of Asif and the failure of Sri A.Mohiuddin, the Managing Director of the assessee company, to correct the erroneous statement at the time of search. The learned CIT[A] confirmed the addition stating that no evidence was furnished by the assessee. [d] It is submitted that the authorities below ought to have appreciated that small sums of Rs. 100 and Rs. 160 per vehicle collected at the time of unloading was not th....
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....e A.O. The addition of Rs. 18,70,440/- is confirmed." 10.4.2 As rightly submitted by the learned Standing Counsel, we are also of the view that the assessee has not been able to adduce any evidence in support of the explanation and claim put forth; that the amounts collected towards machinery hire charges as per the seized materials found at the time of search did not belong to it and it was used for distribution amongst the staff and other members of the gang / crew that was carrying out the work. It is also seen that the AO and CIT(A) have relied on the statement of Shri Asif, the assessee's employee, given at the time of search that this shows that these amounts were being collected and recorded as such in the seized materials. Considering the fact that the material found shows the collection of cash, which was not recorded in the assessee's books of account, we are of the considered view that the addition made on this account is justified. In this view of the matter, we find no reason to interfere with the order of the CIT(A) on this issue and consequently dismiss the ground Nos. 3.1 to 3.3 raised by the assessee for Assessment Years 2007-08 and 2008-09. 11. Ground No.4 -....
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.... is a matter of record that all 3 vendors viz., Mrs. Bitty D'souza, Mrs. Philomena D'souza and Mrs. Agnes D'souza have been examined by the AO and in their statements recorded on 20.07.2009 have denied receipt of any amount in excess of the consideration mentioned in the registered sale deed. In similar circumstances, in Assessment Years 2003-04 and 2004-05, while dealing with ground No.2 raised by the assessee in those Assessment Years on the issue of unexplained investment in property (supra), we had taken the view that the assessee's contention that no cash was paid for purchase of property, as noted in the seized material, stands corroborated by the statements recorded by the AO from the vendor. In the present instance too the three vendors, in their statements before the AO, have denied receipt of consideration over and above the consideration mentioned in the registered sale deed. The aforesaid statements of these vendors (copies placed at pages 89 to 97 of paper book) cannot be brushed aside lightly and their statements have neither been discredited nor any material brought on record by the authorities below to controvert their statements. In this factual matrix of the case,....
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....2005-06 (supra). It was contended that the aforesaid decision of the Tribunal for Assessment Year 2005-06 in the assesse's own case was not applicable since it was rendered before the search action conducted in the case on hand and that then there was no detailed examination made of the facts with regard to the genuineness of the payments; as has been done in these assessments pursuant to search conducted in the assessee's case. In the light of the above, it was prayed that the decision of the CIT(A) on this issue be reversed. 12.3 Per contra, the learned AR for the assessee supported the impugned orders of the CIT(A) on this issue and placed reliance upon the order of the Co-ordinate Bench of this Tribunal in the assessee's own case for Assessment Year 2005-06 in ITA No.1209/Bang/2009 dated 30.06.2010. The learned AR further submitted that the similar issue of speed money payments was decided in favour of the assessee Co-ordinate Benches of this Tribunal in the assessee's own case in ITA No.1120/Bang/2016 vide order dated 26.07.2013 for Assessment Year 2009-10 and in ITA No.1439/Bang/2014 vide order dated 08.05.2015 for Assessment Year 2010-1. The learned AR drew the attention ....
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....a), the speed money disallowed by the AO in regular assessment proceedings was deleted by the CIT(A) in the assessee's own case for Assessment Years 2005-06, 2009-10 and 2010-11, which was upheld by the orders of Co-ordinate Benches of this Tribunal for Assessment Years 2005-06, 2009-10 and 2010-11 (supra). In this factual and legal matrix of the case, as discussed above, we are of the view and hold that the CIT(A) was justified in deleting the disallowance of speed money on the ground that it was paid to port labourers who are employees of New Mangalore Port Trust. 12.5.1 We now have to consider the objections raised by the learned Standing Counsel with regard to the genuineness of the expenditure on the ground that the vouchers did not bear the signature of all the persons to whom the payments were made and that some of the port labourers examined at the time of search had denied the receipt of the speed money. We find that, on this aspect, the learned CIT(A) passed an order under section 250(4) of the Act on 18.03.2011 and had called for a remand report on this issue of Speed Money payments from the AO; with the following directions: (i) Ascertain the practice and th....
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....ers maintained toprove the speed money payment to the port labourers do not contain the signature of individual/each labourer, but common vouchers are maintained for a Group of labourers where signature of one labourer only is put who is claimed to have put the signature representing other labourers. Regarding the genuineness of these signatures and other issues, the same have been elaborately discussed in the assessment orders u/s 153A while disallowing the expenses under this head." 12.5.3 Considering the aforesaid findings and the AO's remand report, the CIT held that the assessee has followed the established the practice for payment of speed money prevalent at New Mangalore Port Trust in accordance with the rates fixed in the agreement with the labour unions. The CIT(A) did not give much importance to the denial of certain labourers for having received speed monies; which was termed as understandable. For these reasons, the CIT(A) deleted the disallowances made by the AO in the impugned orders of assessment; which we have carefully examined and find no cause for interference therein or deviation therefrom. Considering the AO's remand report and the enquiries made at the rele....
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....IT(A) in the appellate order passed in the case of M/s. Indian Shipping Agencies Pvt. Ltd., had examined the various additions made on merits and had recorded categorical findings that the entries in the seized materials were duly recorded in the books of account of various group concerns of the assessee. The learned AR submits that in view of the above, the CIT(A)'s finding in the case of M/s. Indian Shipping Agencies Pvt. Ltd., rendered after examining the books of account of various group concerns was correctly relied upon by the CIT(A) in the case on hand for deleting the additions. It was also submitted by the learned AR that no further appeals were filed by Revenue against the orders of the CIT(A) in the case of M/s. Indian Shipping Agencies Pvt. Ltd., and therefore the matter had attained finality. In this regard, the learned AR took us through the impugned appellate orders of the CIT(A) to point out the findings recorded in respect of each item of addition made in the case of M/s. Indian Shipping Agencies Pvt. Ltd., on substantive basis. 13.4 We have considered the rival submissions / contentions and perused the material on record. In the course of search, a ledger be....
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....r of the Act Ground No.4 (Revenue's appeal Assessment Year 2007-08) Ground No.3 (Revenue's appeal for Assessment Year 2008-09 14.1 In ground No.2 for Assessment Year 2006-07, Revenue has challenged the CIT(A)'s action in deleting the disallowance of Rs. 44,430/- made by the AO on account of short deduction of TDS on the payments to labour contractors. Similarly, Revenue has also raised ground No.4 for Assessment Year 2007-08 and ground No.3 for Assessment Year 2008-09 in respect of deletion of disallowances under section 40(1)(ia) of the Act, amounting to Rs. 3,10,000/- and Rs. 50,969/- respectively, in respect of short deduction of TDS on payments made to contractors. 14.2 On this issue, the learned Standing Counsel for Revenue relied on the finding rendered by the AO in the orders of assessment for Assessment Years 2006-07 to 2008-09, while the learned AR for the assessee supported the orders of the CIT(A) in the impugned orders. 14.3 After having heard and considered the rival contentions / submissions and the material on record, we find that the CIT(A) had rightly deleted these disallowances made under section 40(a)(ia) of the Act, holding ....
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....d that there was any cash payment made and that the Accountant had wrongly mentioned the "Land Cost" as "land Cash". The AO noted both the aforesaid statements recorded from the M.D, but relied upon the initial statement given on the date of search while making the addition of Rs. 40,79,000/-, after noting that the registration of Rs. 4,27,255/- was paid by cheque. The learned Standing Counsel further submitted that the property was purchased in the name of Shri Mohiuddin and Smt. Shahanaz Mohiuddin and the additions were only made protectively in the hands of the assessee. It was contended that the CIT(A) was not justified in deleting the addition without ascertaining the fate of the substantive addition. 15.3 Per contra, the learned Counsel for the assessee relied upon the finding rendered by the CIT(A) in the impugned order to submit that there is no material on record to connect the aforesaid investment made to the assessee. According to the learned AR, the said property was not purchased by the assessee or from out of the funds of the assessee and therefore, there was no justification to make any addition at all; either on substantive or protective basis. 15.4 We have co....
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....t. Similarly, cash payments were also made to M/s. Divya Enterprises on various dates amounting to Rs. 8,69,000/-, and vouchers recording these payments were found at the time of search; which again were not recorded in the regular books of account. It is submitted that in the course of assessment proceedings, the assessee took the stand that the payments through debit vouchers were made to individual labouerrs engaged by these two contractors; i.e., M/s. S. S. Associates and M/s. Divya Enterprises and Vouchers in support were produced before the AO. The AO, however, rejected the same because the seized vouchers were prepared in the names of M/s. S. S. Associates and M/s. Divya Enterprises. In that view of the matter, the AO invoked the provisions of section 40(a)(ia) of the Act to make the disallowances since no TDS has been made on the payments made. 16.2.2 The learned Standing Counsel submitted that the CIT(A) had deleted the disallowances made under section 40(a)(ia) of the Act by recording a finding that the vouchers for payments were produced and each payment made was less than Rs. 20,000/-. It is contended that the CIT(A) erred in accepting the claim of the assessee that ....