TaxTMI 
TaxTMI 
2020 (4) TMI 705
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....the head "Profits and Gains from Business or Profession" without appreciating the fact that cash payment has nexus towards land and building which are the business assets. The appellant craves leave to add, alter and withdraw any ground of appeal at the time of appeal hearing." 3. Briefly stated the relevant facts include that the assessee is a company and is engaged in the business of finance and investment. Assessee belongs to 'Serum Group' of companies. The assessee filed the return of income declaring loss of Rs. 3,66,911/-. A search action was carried out in this Serum Group. During the search action, some incriminating documents were found and the bundle no.7 contains the papers relating to the purchase of land. On verification of the same, the Assessing Officer found that the said incriminating documents relating to purchase of land by the assessee was executed on 29.01.2010. The Assessing Officer noted that Rs. 38,25,000/- was paid by the assessee in cash to one Shri Jayprakash Ghule and the same was not reflected in the books of account. 4. On these facts, the Assessing Officer reopened the assessment u/s 147 of the Act by issuing notice u/s 148 of the Act. In respons....
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.... under :- "The additional income offered is treated under sources" "income from other and provision of section 69B is squarely applicable. Accordingly, claim of set off of brought forward business loss (excluding depreciation loss) to the tune of Rs. 1024521/- was disallowed and added back in the income of assessee. Penalty proceedings u/s 271(1)(c) is initiated separately for concealment of income as the additional income was offered after detection of the same during search and seizure action." 7. During the first appellate proceedings, the same issue was agitated vide the ground no.2 arguing that the said amount of Rs. 38.25 lakhs constitutes a "business profits" of the assessee. The assessee desires that the claim of the assessee as given in revised computation of income should be accepted and consequential benefit of set off against the brought forward losses should be allowed. However, the CIT(A) rejected the above line of argument of the assessee and affirmed the Assessing Officer's decision of treating the said undisclosed income/surrendered income as 'income from other sources'. In the process, the CIT(A) relied on various judicial pronouncements such as (i) Fakir Mohme....
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....f company. The ld. Counsel fairly mentioned that if the assessee fails to demonstrate the same before the CIT(A), the CIT(A) free to confirm the additions made by the Assessing Officer. In this regard, ld. Counsel prayed for remanding this issue to the file of the CIT(A) for fresh examination with the direction to admit the additional evidences, if any, to be produced before the first appellate authority. 10. We also considered the contention of the ld. DR for the Revenue, who heavily relied on the orders of the Assessing Officer and the CIT(A). In fact, the CIT(A) confirmed this addition for want of direct nexus which is also highlighted by the ld. DR for the Revenue. 11. Considering the above contention of both the parties, I am of the opinion that, in the interests of justice, an opportunity should be granted to the assessee. Accordingly, I proceed to remand this issue, raised in ground no.2, to the file of the CIT(A) for fresh adjudication. The CIT(A) shall adjudicate the said issue afresh after entertaining the submissions and additional evidences of the assessee, if any, which is directly connected to this transaction of Rs. 38,25,000/- paid in connection with the transacti....
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....le 8D may be applied, if it gives more reasonable and realistic results. It is was the contention of the appellant before the learned A.O. that for computing average investments only those investments are to be considered on which income is received during the year. Disallowance computed by following this contention is Rs. 6,000/-. For the sake of simplicity investments made by the appellant company are bifurcated into three categories. Sr. No. Particulars Average Investment Dividend Received Disallowable U/s 14A read with Rule 8D-0.50% of Avg. Inv. 1 Listed Securities and Income is received NIL NIL NIL 2 Unlisted Securities and Income is NOT received 2,03,98,585/- 0 - 3 Unlisted Securities and income is received 12,00,000/- 1,80,000/- 6,000/- 4 Securities earning taxable income 25,000/- 0 0 Total 2,16,23,585/- 1,80,000/- 6,000/- It is pertinent to note here that this view has been upheld by the Special Bench of ITAT, Delhi in case of ACIT v. Vireet Investment (P) Ltd. (82 taxmann.com 415) wherein at para no. 11.16 it is held that "Therefore, in our considered opinion, no contrary view can be taken under these circ....