TaxTMI 
TaxTMI 
2019 (12) TMI 31
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.... these grounds accordingly. All other grounds are argumentative in nature, hence, need no adjudication. 3. To dispose of these grounds of appeal, we refer to the facts from the case of Elem Investments Pvt. Ltd. in ITA No. 621/Hyd/2015. 4. Brief facts of the case are that the assessee company filed its return of income for the AY 2003-04 on 28/11/2003 declaring total income of Rs. 17,00,030/-. Subsequently, the case was selected for scrutiny and following the due procedure, the assessment was completed u/s 143(3) of the Act on 06/03/2006 disallowing part of expenditure incurred towards service charges determining the total income at Rs. 32,00,033/-. 4.1 Based on the confessional statement made by the Chairman of M/s Satyam Computer Services Ltd. Sri B. Ramalinga Raju on 7th January, 2009 in his letter sent to the Board of Directors (with a copy marked to SEBI) that the books of accounts of SCSL have been fudged for the last several years to manipulate the book results and the revenues and profits were manipulated by falsification of accounts for the last several years, the AO reopened the assessment of the assessee by issuing notice u/s 148, as the assessee company was inc....
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....ed concerns. The assessee company is one such investment company. As per the return of income and its enclosed annual reports for the F.Y. 2002-03, The directors and the share holders of the company are relatives and employees of Sri B Ramalinga Raju. Sri B Suryanarayana Raju brother of B Ramalinga Raju who is the main share holder is the main person controlling the affairs of the company. It is further observed that monies have originated from the family members by way of sale of shares by this company and have been transferred in a circuitous and complex manner through the front companies with an intention to prevent the revenue and the regulatory agencies to trace the antecedents and to mask the actual sources of money and the consequent generation of income from these transactions. The proceeds have thus found its way into investments and in creation of assets in the shape of large tracts of land. There is further information that some of the funds advanced to M/s SCSL have not been recorded in the books of SCSL at the behest of Sri B Ramalinga Raju and that certain transactions entered in the books of SCSL are not recorded in the accounts of the group companies. The b....
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....7,531/-. The assessee returned income of Rs. 17,00,033/-. The assessment was completed uls 143(3) on 06.03.2006, determining the total income at Rs. 32,00,030/-. It was seen from computation of income statement that the assessee computed income Rs. 17000300 and claimed exemption of dividend income. Income from other sources (Interest income) was not computed separately. As per explanation to sec.73 and explanation to sec.28 the expenditure incurred by the assessee from trading of shares was to be computed separately and the same cannot be allowed to be set off against "income from other sources"-interest income. As such, income from other sources works out to Rs. 22, 72,574/-. The incorrect computation of income and set off of expenditure against "Income from other sources" resulted in under assessment of income of Rs. 22, 72,574/-. I have, thus, reason to believe that there is failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment for A. Y. 2003-04 and also that it resulted in escapement of income chargeable to tax to the tune of atleast Rs. 5,16,828/-, given the volume of the transactions as stated above, ....
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.... relied on the following cases: 1. CIT Vs. Jet Airways (I) Ltd. [2011] 331 ITR 236 (Bom.) 2. Ranbaxy Laboratories Ltd. Vs. CIT, [2011] 336 ITR 136 (Del.) 3. ACIT Vs. Major Deepak Mehta, [2012] 344 ITR 641 (Chattisgarh) 4. CIT Vs. Mohmed Juned Dadani, [2013] 355 ITR 172. 8. The ld. DR, on the other hand relied on the orders of revenue authorities. He also relied on the following cases: 1. Greater Mohali Area Development Authority Vs. DCIT, [2018] 93 Taxmann.com 441 ( P&H) 2. Innovative Foods Ltd. Vs. Union of India, [2018] 96 Taxmann.com 250 (Kerala) 3. Instant Holdings Ltd., Vs. DCIT, [2014] 44 Taxmann.com 386 (Mum.) 4. DCIT Vs. Tivoli Investment and Trading Co. (P) Ltd., [2014] 49 Taxmann.com 479 (Mum.) 9. We considered the rival submissions and perused the material on record as well as gone through the orders of revenue authorities. Also gone through the case law relied upon by both the counsels. The issue for our consideration before us is whether reopening of assessment made by the AO is in accordance with law or not. On perusal of the reasons recorded by the AO for reopening of assessment (cited supr....
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....income and taxable income, it is very difficult to bifurcate. According to AO, as there is no regular income and only interest income was shown as taxable income, it is clear that the expenditure incurred is mainly towards earning the exempted income only. Hence, the AO disallowed the expenditure of Rs. 3,08,059/- corresponding to exempted income as non allowable expenditure as per section 14A of the Act. 10.2 The CIT(A) restricted the disallowance to Rs. 50,000/- as against the addition of Rs. 3,08,059/-, by giving a relief to the assessee of Rs. 2,58,059/-. 10.3 After considering the rival submissions and material on record, we find no infirmity in the decision of the CIT(A) in restricting the disallowance to Rs. 50,000/- and accordingly, we uphold the order of CIT(A) on this issue and dismiss the ground raised by the assessee. 11. Similar ground u/s 14A was raised by the assessee in ITA No. 626/Hyd/2015. The CIT(A) has restricted the disallowance to Rs. 50,000/- as against the disallowance of Rs. 2,78,582/- made by the AO. Accordingly, we find no reason to interfere with the decision and hence, uphold the order of CIT(A) on this issue and dismiss the ground raised by....
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....e computation so made is incorrect since the appellant co. was in the business of purchase and sale of shares as submitted by it before the AD and before me and as can be verified from the memorandum and articles of association and that the appellant company was consistently stating that it is an investment company and the losses arose in normal course. Last but not the least, it is to be stated that the AD by invoking provision of speculative transaction in the current asst. year can utmost see that any loss on account of such transaction arising during the year is not set off against the other income of the assessee for the year. This year there was no business loss nor was there any claim of set off of brought forward losses. The exercise done by the AO in reclassifying the income is unnecessary even otherwise. If the AO wanted to be technically correct, then he would have done the exercise of finding out whether the transactions were speculative transactions at all. He did not do this exercise also before invoking the provisions erroneously. 7.2 In view of the above findings, the AD is directed to recompute the income of the appellant while giving effect to th....