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2019 (11) TMI 205
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.... Rs. 2,69,66,400/-. 2. That the learned CIT(A) has thus erred both on facts and in law in partially confirming the following disallowances made to the income returned by the learned DCIT, Central Circle -20, New Delhi: (i) Rs. 12,24,329/- out of a disallowance made of Rs. 15,02,9771- on account of expenditure incurred in respect of commission and brokerage. The aforesaid disallowance has been made without appreciating that admittedly the assessee had not been granted a valid and proper opportunity by the DCIT and further the learned CIT(A) has erred in failing to appreciate, the burden which lay upon it stood discharged when, it filed necessary evidence in support of the claim that the aforesaid expenditure has genuinely been incurred for the purposes of business and thus there was no justification to uphold a disallowance of Rs. 12,24,329/-. The findings that the assessee had failed to establish the nature of expenditure by producing sufficient evidences is completely misconceived. (ii) Rs. 14,38,050/- out of a disallowance made of Rs. 1,19,94,194/-, under the head "commission and brokerage". The aforesaid disallowance effectively sustained by t....
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....therwise the learned CIT(A) has erred in enhancing the income by the aforesaid sum of Rs. 2,69,66,400/-, as the expenditure was allowable a business expenditure for the instant assessment year. 6. That the learned CIT(A) has erred in initiating proceedings u/s 271 (1 )(c) of the Act in respect of the aforesaid sum even after recording that the assessee had made wrong claim despite the fact otherwise too, no penalty was leviable, the initiation of proceedings is thus beyond jurisdiction. 7. That the learned CIT (A) has erred in upholding the levy of interest u/s 234B and 234D of the Act as no interest was leviable on the assessee. It is thus prayed that the addition made by the AO and sustained by the CIT (A) of sum aggregating to Rs. 32,58,554/- and the enhancement of income made by the CIT Appeals of Rs. 2,69,66,400/- be directed to be deleted." 3. Appellant, DCIT, Central Circle 20, New Delhi (hereinafter referred to as the 'Revenue') by filing the present appeal sought to set aside the impugned order dated 27.03.2014 passed by the Commissioner of Income - tax (Appeals)-XXXI, New Delhi qua the assessment year 2009-10 on the grounds inter alia that :-....
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....1,19,94,194/- on the ground that 24 parties to whom assessee stated to have paid the commission and brokerage have not responded or denied the transaction in response to the letter issued under section 133(6) of the Income-tax Act, 1961 (for short 'the Act'). It is also the case of the assessee that Rs. 14,38,050/- was the amount of expenditure incurred under the head 'commission and brokerage' out of disallowance of Rs. 1,19,94,194/- qua which sufficient evidence has been brought on record. AO also made addition of Rs. 83,50,13,891/- by way of making disallowance on account of unverifiable sundry creditors and thereby assessed the total income of the assessee at Rs. 197,57,99,900/-. 5. Assessee carried the matter by way of an appeal before the ld. CIT (A) who has partly allowed the appeal and has also enhanced the income of the assessee company to the tune of Rs. 2,69,66,400/-. Feeling aggrieved, the assessee as well as the Revenue has come up before the Tribunal by way of filing the present appeals. 6. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in th....
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....mitted ledger accounts of the parties from its books and bank statement showing payment and the AO in the remand report has categorically recorded that the payments are verifiable from the books. 12. With this background, we are of the considered view that first of all, the ld. CIT (A) was required to return finding if the expenditure are genuine and have been incurred for the purpose of business and then to record the finding that the payment has been made. Answers to both these questions have been given by the AO that payment to both the parties, namely, ABC Real Estate and Real Estate Opportunities & Investment on account of commission and brokerage has been proved from the books of account of the parties and from bank statement. So, merely on the ground that letter sent to the parties under section 133(6) of the Act by the AO remained unanswered and bills issued by the payees and details of transactions in respect of brokerage and commission payments have been made, the expenses cannot be disallowed. Moreover, assessee has given confirmation from both the aforesaid parties along with bank statement available at pages 373 to 376 of the paper book. Furthermore, the assessee ha....
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....he disallowance of Rs. 5,96,175/- made by the AO from sundry creditors of Rs. 75,85,28,462/-. Ld. AR for the assessee contended that the disallowed amount was payable to the auditor, M/s. I.M. Puri & Co. for auditing the accounts. Ld. CIT (A) sustained the addition on the ground that in response to the summon issued u/s 133(6), I.M. Puri & Co. stated that the summon has not yet been received by them and as such, they have not issued any bill. 17. When assessee has undisputedly maintaining its books of account on the basis of mercantile system of accounting and the amount in question is shown as opening balance in the books of assessee in the account of I.M. Puri & Co. and such expenses having been incurred in the preceding years had not been paid, was shown as outstanding to the creditor's account. In these circumstances, the addition could not be sustained as there is no evidence on record that such liability has ceased to exist. We have examined opening balance of the assessee, available at page 212 of the paper book, in the account of I.M. Puri & Com. wherein amount in question has been shown as opening balance in the account of I.M. Puri & Co. So, in these circumstances, we ....
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.... Mohan Singh Nindrajog vs. CIT reported in 348 ITR 170. 22. When we examine para 5 of the impugned order at pages 175 to 177 passed by the ld. CIT (A), it is a fact on record that the ld. CIT (A) has himself admitted that, "the AO has omitted to disallow Rs. 2,69,66,400/- being 1/5th of Rs. 13,48,31,998/- incurred during the FY 2007-08 and claimed as deduction u/s 35D of the Act for the present year. During the appeal proceedings in the appellant's own case for AY 2008-09 same issued has been decided against the assessee vide order dated 15.10.2013." So, when the AO stated to have not considered the claim of the assessee obviously he had omitted to disallow the same. So, when the AO has not considered the claim made by the assessee, it does not become the subject matter of the appeal decided by the ld. CIT (A) vide impugned order. 23. Hon'ble Full Bench of Delhi High Court in case of CIT vs. Sardari Lal & Co. (supra) is very categoric on this issue that "whenever a question of taxability of income from a 'new source of income' arises, which had not been considered by the AO, the jurisdiction to deal with the same in appropriate cases may be dealt with u/s 147/148 of the Act, ....
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.... Officer applied his mind to the particular subjectmatter or the particular source of income with a view to its taxability or to its non-taxability and not to any incidental connection. In proceedings for the assessment for the assessment year 1952-53, the respondent claimed, on the basis of entries in the books of his Forbesganj branch, that he had borrowed three sums of Rs. 2,50,000, Rs. 1,50,000 and Rs. 30,000 from three parties. In considering the genuineness of these borrowings the Income-tax Officer noticed that the respondent had withdrawn at Calcutta on March 31, 1952, the sum of Rs. 5,30,000 from a Calcutta bank and had sent a sum of Rs. 5,85,000 to his Forbesganj branch in Bihar on the same day, to enable that branch to make payments including repayment of the sum of Rs, 2,50,000. The Income-tax Officer discussed the impossibility of the amount having reached Forbesganj in Bihar on the very same day. He therefore treated the entries in the books as not genuine and added to the assessable income the sums of Rs. 2,50,000, Rs. 1,50,000 and Rs. 30,000. When the assessee took the mailer in appeal, the Appellate Assistant Commissioner considered that the amount of Rs. ....
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....e led by the assessee during appellate proceedings before the ld. CIT (A) and issue of admission of additional evidence has never been challenged by the Revenue. So, when the ld. CIT (A) has deleted the addition on the basis of additional evidence led by the assessee which has not been challenged, the Revenue has no right to challenge the deletion. GROUND NO.1 32. Ground No.1 is general in nature and do not require any adjudication. GROUND NO.2 33. So far as addition of Rs. 64,05,84,000/- on account of disallowance of the interest paid on loans is concerned, the ld. CIT (A) has thrashed the issue in entirety by perusing the closing balance of the assessee at Rs. 459.77 crores whereas interest free loan was of Rs. 229.4 crores and the assessee company was having share capital and reserves of Rs. 759.93 crores and when the loan was given for business expediency of subsidiaries duly explained by the assessee and appreciated by the ld. CIT (A) that the amount paid during the year under assessment was Rs. 275.16 crores from internal accruals, the ld. CIT (A) has rightly deleted the addition by relying upon the decision rendered by Hon'ble Supreme Court in SA Builders 288 ITR....
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....s powers was required to conduct the enquiry himself or would have called the remand report before deleting such addition. Ld. CIT (A) rather harped upon the case laws without thrashing the facts of the case and deleted the addition, which order is not sustainable in the eyes of law. In view of the matter, we are of the considered view that the issue is required to be remanded back to AO to decide afresh after providing adequate opportunity of being heard to the assessee. Consequently, grounds no.3, 4 & 5 are determined in favour of the Revenue for statistical purposes. GROUNDS NO.6, 7 & 8 37. So far as additions of Rs. 4,11,814/-, Rs. 7,54,77,440/- and Rs. 75,85,28,462/- on account of unverified sundry creditors made by the AO and deleted by the ld. CIT (A), challenged vide grounds no.6, 7 & 8 are concerned, again on the ground that the assessee has failed to furnish complete information qua 11 sundry creditors and made addition of Rs. 4,11,814/-, made addition of Rs. 7,54,77,440/- again on account of non-confirmation by the 39 sundry creditors despite issuance of letter u/s 133 (6) which were received back with the remarks 'incomplete address' or addressee left the last ....