TaxTMI 
TaxTMI 
TaxTMI 
2020 (7) TMI 273
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....e department has not accepted the decision of Hon'ble Mumbai High Court in the case of HDFC Bank Ltd. and has moved SLP before Supreme Court. 2. Whether the ld. CIT(A) is correct in stating that the seized document does not have any documentary evidentiary value with respect to unexplained investment in any property. 3. Whether the ld. CIT(A) is correct in deciding that the addition cannot be upheld/confirmed merely on the basis of seized paper in the absence of corroborative evidence. " 2. Briefly stated, the assessee company which is engaged in the business of manufacturing of cigarettes and chewing products, trading of tobacco products, tea and other retail products had efiled its return of income for A.Y 2012-13 on 30.09.2012, declaring a total income of Rs. 242,60,95,470/-. The return of income was processed as such u/s 143(1) of the Act. Subsequently, the case of the assessee was selected for scrutiny assessment u/s 143(2) of the Act. 3. In the course of the assessment proceedings the A.O inter alia made the following two additions/disallowances : Sr. No. Particulars Amount 1. Disallowance u/s 36(1)(iii) of interest attributable to the borrowed funds utilised towar....
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....im in context of the issues under consideration. 6. We have heard the authorised representatives for both the parties, perused the orders of the lower authorities and the material available on record as well as the judicial pronouncements relied upon by them. We shall first advert to the disallowance by the A.O of the interest expenses which as per him were attributable to the borrowed funds utilised towards capital work-in-progress. It was observed by the A.O that the details of the 'fixed assets' revealed that the assesee had a capital WIP of Rs. 137.40 crore on 31.03.2012 as regards its new factory at Rabale. It was noticed by the A.O that the assessee in its Profit & loss account had claimed interest expenditure of Rs. 15.26 crores on long term/short term borrowings aggregating to Rs. 266.24 crores. Also, it was observed by him that the assessee had self owned funds of Rs. 920.90 crores. It was gathered by the A.O that no part of the interest expenditure was capitalised by the assessee to the capital WIP of its new upcoming factory at Rabale. Observing, that the assessee had both self-owned and interest bearing borrowed funds the A.O held a conviction that interest expenditur....
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....elf-owned funds to justify the investment made towards capital WIP, therefore, no part of the interest expenditure pertaining to interest bearing borrowed funds could have been disallowed u/s 36(1)(iii) of the Act. Insofar the claim of the revenue that they had not accepted the judgment of the Hon'ble High Court in the case of CIT Vs. HDFC Bank Ltd. (2014) 366 ITR 505 (Bom) and had filed a SLP before the Hon'ble Supreme Court is concerned, we are afraid that the same does not find favour with us. As the operation of the order of the Hon'ble High Court in the case of HDFC Bank Ltd. (supra) had not been stayed by the Hon'ble Apex Court, therefore, the same holds the ground till date and continues to be binding. Ground of appeal No. (i) is dismissed. 8. We shall now take up the addition of Rs. 1 crore that was made by the A.O u/s 69B of the Act, which however was vacated by the CIT(A). Succinctly stated, the assessee during the year had made an investment towards purchase of land at Ghaziabad for a consideration of Rs. 13.01 crore. On a perusal of the contents of a hand written paper that was seized during the course of search proceedings from the residential premises of the preside....
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....ores merely on the basis of one of the aforesaid rough noting de hors any corroborative evidence. In sum and substance, the adoption of the purchase consideration of the property in question by the A.O was only on the basis of an unsubstantiated and dumb rough notings on a piece of paper seized during the course of the search proceedings. On a perusal of the aforesaid seized document, we find, that the same only refers to a set of figures which on a standalone basis could not have been adopted as the purchase consideration of the property in question. Apart from that, we find that the support drawn by the A.O from the fact that while framing the assessment in the case of the seller i.e M/s Ganesh Paper Mills an addition of Rs. 1 crore was made in respect of the transaction under consideration looses all the force as the said addition on appeal had already been deleted by the CIT(A)-29, Delhi, vide his order dated 05.02.2016. Lastly, we find that the landed cost (inclusive of stamp duty and other charges) had been recorded by the assessee in its books of accounts at Rs. 14.14 crores i.e an amount in excess of the impugned purchase consideration of Rs. 14.01 crores. Accordingly, we a....
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....nistrative directions to all the benches of the Tribunal in that behalf. We hope and trust that suitable guidelines shall be framed and issued by the President of the Appellate Tribunal within shortest reasonable time and followed strictly by all the Benches of the Tribunal. In the meanwhile (emphasis, by underlining, supplied by us now), all the revisional and appellate authorities under the Income-tax Act are directed to decide matters heard by them within a period of three months from the date case is closed for judgment‖. In the rule so framed, as a result of these directions, the expression "ordinarily‖ has been inserted in the requirement to pronounce the order within a period of 90 days. The question then arises whether or not the passing of this order, beyond a period of ninety days in the case before us was necessitated by any "extraordinary‖ circumstances. 12. We find that the aforesaid issue after exhaustive deliberations had been answered by a coordinate bench of the Tribunal viz. ITAT, Mumbai 'F' Bench in DCIT, Central Circle-3(2), Mumbai Vs. JSW Limited & Ors. [ITA No. 6264/Mum/18; dated 14/05/2020, wherein it was observed as under: "Let us in th....
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....Act, 2005, and also in the light of the discussions above, the period during which lockdown was in force can be anything but an "ordinary‖ period. 10. In the light of the above discussions, we are of the considered view that rather than taking a pedantic view of the rule requiring pronouncement of orders within 90 days, disregarding the important fact that the entire country was in lockdown, we should compute the period of 90 days by excluding at least the period during which the lockdown was in force. We must factor ground realities in mind while interpreting the time limit for the pronouncement of the order. Law is not brooding omnipotence in the sky. It is a pragmatic tool of the social order. The tenets of law being enacted on the basis of pragmatism, and that is how the law is required to interpreted. The interpretation so assigned by us is not only in consonance with the letter and spirit of rule 34(5) but is also a pragmatic approach at a time when a disaster, notified under the Disaster Management Act 2005, is causing unprecedented disruption in the functioning of our justice delivery system. Undoubtedly, in the case of Otters Club Vs DIT [(2017) 392 ITR 244 (Bom)....