TaxTMI 
TaxTMI 
2020 (7) TMI 519
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....ow mentioned grounds are independent and without prejudice to one another. 1. The Commissioner of Income Tax (Appeals) erred in confirming disallowance u/s 43B of Rs. 36,66,290/-. 2. The Commissioner of Income Tax (Appeals) erred in confirming disallowance of Bank Commission expenses of Rs. 10,60,512/-. 3. The Commissioner of Income Tax (Appeals) erred in confirming disallowance of Foreign exchange loss of Rs. 2,20,50,511/- 4. The Commissioner of Income Tax (Appeals) erred in confirming disallowance of Bad Debts /Advances written off and Sundry Balances written off aggregating to Rs. 13,83,56,806/- 5. The Commissioner of Income Tax (Appeals) erred in confirming additions of Rs. 18,45,880/- on account of cessation of liabilities u/s 41(1)(a). 6. The Commissioner of Income Tax (Appeals) erred in confirming disallowance of Audit fees of Rs. 26,27,940/- 7. The Commissioner of Income Tax (Appeals) erred in holding that the Deed of cancellation dated 28.09.2017" in connection with Long Term Capital Gains on sale of land was not genuine. 8. The Commissioner of Income Tax (Appeals) erred in confirming additions of Unse....
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....hyam Ghia and Mr. Mukund Dalal. The assessee has filed these documents to contest the addition made u/s 68 of the Act. 9. 159-160 Order giving effect to CIT(A)'s order. 2. Before proceeding any further, we shall first advert to the letter filed by the assessee seeking liberty for admission of 'Additional Grounds of appeal'. On a perusal of the letter dated 09.01.2020 filed by the assessee for admission of the additional grounds of appeal, we find that the additional ground of appeal no.1 is more or less in the form of a clarification, or in fact elaboration of the 'Ground of appeal No. 7' which has been raised in the memorandum of appeal filed by the assessee before us. In sum and substance, the assessee by raising the aforesaid additional ground of appeal has tried to clarify the factual position attending to the issue under consideration. In so far, the additional ground of appeal no. 2 is concerned, the assessee by raising the same has sought adjudication of an issue i.e its entitlement for set off and/or c/forward of Short Term Capital Loss, as claimed by it in its return of income. We find that the adjudication of the aforesaid additional grounds of ap....
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..... Accordingly, it is claimed that due to the aforesaid set of circumstances prevailing at the relevant point of time, the requisite documents could not be gathered and filed in the course of the assessment proceedings. However, in the course of the appellate proceedings before the CIT(A) the required documents were located and filed before the appellate authority as additional evidence. In the totality of the facts of the case, the CIT(A) admitted the additional evidence and called for a remand report from the A.O. Acting upon the remand report filed by the A.O, the CIT(A) partly upheld the additions and disallowances. In the backdrop of the aforesaid facts, it is claimed by the assessee that due to lack of professional advice certain vital details and documents had remained omitted to be filed before the lower authorities. As such, as per the advice of its counsel who was engaged to argue the present appeal before the Tribunal the assessee had filed certain documents (forming part of APB-3) before us, seeking liberty to admit the same as additional evidence U/rule 29 of the Appellate Tribunal Rules, 1963, as under: Gr. No. Pg Nos of P.B. 3 Nature of documents Remark....
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....; (ii) copies of acknowledgment of returns of income of S/shri Shyam Ghia and Mukund Dalal, directors for A.Y. 2013-14, along with their affidavits; (iii) order giving effect to CIT(A) order; (iv) details of bad debt accounts along with the copy of ledger accounts; and (v) details of VAT/sales tax payable ledger accounts, are documents which either form part of the record of the revenue, or are in the nature of an extract of the 'books of account' of the assessee company for the year under consideration, would thus not require any further verification. In the totality of the facts of the case, we are of the considered view that as the aforesaid documents filed by the assessee before us by way of additional evidence would have a strong bearing on the adjudication of the respective grounds of appeal raised before us, the same thus merits to be admitted. 6. Briefly stated, the assessee company which is engaged in the business of manufacturing of polyester staple etc., had filed its return of income for A.Y. 2013-14 on 23.09.2013, declaring its total income at Rs. nil. The return of income filed by the assessee was processed as such under Sec. 143(1) of the Act. Subsequently, the ca....
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....e, the assessee had disallowed VAT payable and Excise duty of Rs. 1,79,305/- and Rs. 1,08,62,837/-,respectively u/s 43B of the Act. Observing, that the assessee had failed to disallow u/s 43B the entire amount of VAT and Tax payable of Rs. 1,47,08,432/-(supra), the A.O disallowed the balance amount of Rs. 36,66,290/- [Rs. 1,47,08,432/- (minus) Rs. 1,79,305/- (minus) Rs. 1,08,62,837/-]. On appeal, the CIT(A) finding no infirmity in the view taken by the A.O upheld the disallowance of Rs. 36,66,490/- made by him u/s 43B of the Act. 10. Aggrieved, the assessee has assailed before us the sustaining of the disallowance of Rs. 36,66,490/- u/s 43B by the CIT(A). At the very outset, it was submitted by the ld. A.R that the lower authorities while making/sustaining the aforesaid disallowance u/s 43B had misconceived the factual position. It was submitted by the ld. A.R, that the VAT & Tax payable of Rs. 1,47,08,432/- comprised of the closing balances of the earlier years as well. In order to fortify his aforesaid claim the ld. A.R took us through 'Note 4' of the 'balance sheet' of the assessee company on 31.03.2013. Further, the ld. A.R took us through 'Schedule 3' i.e. details of disall....
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.... or before the due date applicable in his case for furnishing the return of income under sub-section (1) of section 139 in respect of the previous year in which the liability to pay such sum was incurred as aforesaid and the evidence of such payment is furnished by the assessee along with such return. Explanation 1.-For the removal of doubts, it is hereby declared that where a deduction in respect of any sum referred to in clause (a) or clause (b) of this section is allowed in computing the income referred to in section 28 of the previous year (being a previous year relevant to the assessment year commencing on the 1st day of April, 1983, or any earlier assessment year) in which the liability to pay such sum was incurred by the assessee, the assessee shall not be entitled to any deduction under this section in respect of such sum in computing the income of the previous year in which the sum is actually paid by him. Explanation 2.-For the purposes of clause (a), as in force at all material times, "any sum payable means a sum for which the assessee incurred liability in the previous year even though such sum might not have been payable within that year under the rel....
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....said claim of loss in the course of the assessment proceedings, which however it had failed to avail. On merits, it was submitted by him, that though the assessee in the course of the remand proceedings was called upon to substantiate its claim of foreign exchange fluctuation loss by submitting the complete details alongwith copies of bank statements, ledger accounts and the rate of foreign exchange payments made or received, but except for filing the copy of the ledger account of foreign exchange fluctuation loss, it had failed to place on record any other supporting material. Accordingly, the A.O not being able to verify the veracity of the aforesaid claim of the assessee, rejected the same. Observing, that the assessee had failed to substantiate its claim of foreign exchange fluctuation loss by placing on record the requisite documents, the CIT(A) concurred with the view taken by the A.O as regards the inadmissibility of such claim of deduction raised by the assessee. 13. The assessee has assailed the confirming of the disallowance of foreign exchange fluctuation loss in appeal before us. Ld. A.R for the assessee took us through the consolidated details of the foreign exchang....
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....ncurred for the purpose of acquiring fixed assets, which topic falls under s. 43A. Para 9 of AS-11 recognises exchange differences as income or expense. But then, the onus to substantiate the claim of having suffered a foreign exchange fluctuation loss remains on the assessee. On a perusal of the orders of the lower authorities, we find that the assessee despite specific directions had failed to place on record the requisite documents in support of its claim of having suffered the foreign exchange fluctuation loss viz. copies of bank statements, ledger accounts and the rate of foreign exchange payments made or received. In our considered view, though there is no infirmity in the declining of the unsubstantiated claim of the assessee by the lower authorities, but then, a perusal of the Foreign exchange fluctuation gain/loss ledger accounts filed by the assessee (Page 22-32 of 'APB'), does inspire some confidence as regards the veracity of such claim. Accordingly, in all fairness, we herein restore the matter to the file of the A.O for fresh adjudication. In case the assessee is able to substantiate its claim for foreign exchange fluctuation loss to the satisfaction of the A.O, th....
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.... the CBDT Circular No. 12/2016, dated 30.05.2016, claim for deduction of any debt or part thereof in any previous year shall be admissible under Sec. 36(1)(vii) of the Act, if inter alia it fulfilled the conditions stipulated in sub-section (2) of Sec. 36 of the Act, the CIT(A) called upon the assessee to demonstrate satisfaction of the said mandatory condition. However, the assessee in the absence of the requisite documents stated that it was not possible for it demonstrate the fulfilment of the conditions stipulated in sub-section (2) of Sec. 36. In the backdrop of the aforesaid facts, the CIT(A) not finding any infirmity in the declining of the assessee's claim for deduction u/s 36(1)(vii) by the A.O, therein upheld his order to the said extent. 16. The assessee has assailed before us the upholding by the CIT(A) of the aforesaid disallowance of Rs. 13,83,56,806/- u/s 36(1)(vii) of the Act. The ld. A.R took us through the 'bad debt' account of the assessee company (Page 115 of 'APB'), wherein the respective bad debts of its various divisions were transferred vide respective journal entries on 31.12.2012, as under: Particulars Amount Fibre Division Rs. 2,55,41....
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....f 'bad debts'. Needless to say, the A.O shall in the course of the 'set aside' proceedings afford a reasonable opportunity of being heard to the assessee who shall remain at a liberty to substantiate its claim on the basis of fresh documentary evidence. 18 We shall now advert to the claim of the ld. A.R that the CIT(A) had erred in upholding the disallowances made by the A.O, viz. (i). sundry balances w/off : Rs. 11,99,829/-; and (ii). advances to suppliers w/off : Rs. 1,28,87,408/-. It was submitted by the ld. A.R, that as giving of the aforesaid amounts of advances/sundry balances was incidental to carrying of the business of the assessee, therefore, the irrecoverability of the same in its ordinary commercial meaning was to be construed as an allowable business loss incurred in the normal course of its business. The ld. A.R took us through the complete bifurcated party vise details, alongwith the respective dates on which the amounts aggregating to Rs. 1,28,87,407/- were advanced in the preceding years by its divisions viz. (i) Futura Fibre Division: Rs. 1,17,41,598/-; (ii). Futura Polymer Division: Rs. 6,75,180/-; (iii). Futura Performs Division: Rs. 3,96,475/-; and (iv). Che....
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....'ble High Court while answering the said issue, had observed that non-satisfaction of the conditions for claim of bad debts, would not prevent the assessee from claiming deduction of the same as a business loss incurred in the course of carrying on of business as that of a share broker. The Hon'ble High Court, while concluding as hereinabove, had observed as under: "10. Section 28 of the Act imposes a charge onthe profits or gains of business or profession. The expression "Profits and gains of business or profession" is to be understood in its ordinary commercial meaning and the same does not mean total receipts. What has to brought to tax is the net amount earned by carrying on a profession or a business which necessarily requires deducting expenses and losses incurred in carrying on business or profession. The Supreme Court in the matter of Badridas Daga v. Commissioner of Income Tax, reported in 34 ITR page 10, has held that in assessing the amount of profits and gains liable to tax, one must necessarily have regard to the accepted commercial practice that deduction of such expenses and losses is to be allowed, if it arises in carrying on business and is incidental to i....
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....ain oblivious of the fact, that the assessee had failed to substantiate before the lower authorities its claim that the writing off the amounts advanced to its customers was in the nature of a 'business loss' within the meaning of Sec. 37 of the Act. In fact, the bifurcated details of the advances written off by the various divisions of the assessee had been furnished before us as additional evidence. In the backdrop of the aforesaid facts, we are of the considered view, that the assessee's claim that the amount of advances written off during the year was in the nature of a business loss requires to be adjudicated upon by the A.O. On a similar footing, the claim of the assessee that the sundry balances written off during the year were also a loss incidental to its business, on the same terms requires to be visited by the A.O. Accordingly, we herein direct the A.O to adjudicate upon the claim of the assessee as regards allowability of its claim for deduction of, viz. (i) the amounts advanced to suppliers written off during the year: Rs. 1,28,87,408/-; and (ii). the sundry balances written off during the year: Rs. 11,99,829/-, as a business loss within the meaning of Sec. 37 of the A....
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....of the Act. We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record in context of the aforesaid issue under consideration. Before us, the assessee has filed by way of additional evidence, the copies of the incometax returns alongwith the computation of income for A.Y 2013-14 of the aforesaid directors, and also the 'affidavits' of the aforesaid directors viz. S/shri. Shyam Ghia and Mukund Dalal, wherein they had admitted of having advanced loans to the assessee company during the year under consideration. In the course of hearing of the appeal the ld. A.R took us through the aforesaid additional evidence viz. copies of the returns of income and 'affidavits' of the respective directors, at Page 146-158 of the 'APB'. On a perusal of the respective returns of income, we find that during the year under consideration viz. A.Y 2013-14, the directors viz. S/sh. Shyam Ghia and Mukund Dalal had returned an income of Rs. 21,38,448/- and Rs. 26,77,008/-, respectively. As regards the source of advancing of the respective loans, both of them had deposed in their respective 'affidavits' that the same was ....
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....port, the A.O treated the entire sale consideration of Rs. 315 crores as Short Term Capital Gain (STCG) in the hands of the assessee. On appeal, the assessee submitted before the CIT(A) as additional evidence the copy of the purchase agreement and the valuation report as on 01.04.1981, alongwith the copy of the MOU dated 19.12.2012, which was forwarded by the appellate authority to the A.O for his comments. In reply, it was stated by the A.O that as the assessee had filed the copy of the MOU for sale of land, dated 19.12.2012, copy of the purchase agreement and the valuation report as on 01.04.1981, therefore, the LTCG on the sale of the land, as claimed by the assessee in its return of income could be admitted on the basis of the aforesaid documents. In the backdrop of the aforesaid facts, the CIT(A) directed the A.O to compute LTCG on sale of land as per the extant law. But then, the assessee in the course of the appellate proceedings, vide its letter dated 26.09.2017, raised a new issue, that as pursuant to a deed of cancellation dated 28.09.2017 the MOU dated 19.12.2012 had been cancelled, therefore, the sale transaction under consideration stood nullified. In order to buttress....
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....at a copy of the said e-mail was also forwarded to Mr. Alex Chinnasamy, director of M/s Golden Star Promoters Pvt. Ltd. However, it was stated by the A.O, that as no reply as regards cancellation/termination of the MOU was received by him from M/s Golden Star Promoters Pvt. Ltd., therefore, in the absence of the confirmation of the other party it remained unproved that the MOU was terminated. After perusing the report filed by the A.O, it was observed by the CIT(A) that the assessee in the course of the remand proceedings had despite specific directions of the A.O failed to place on record the requisite details/documents in support of its claim that the sale transaction was terminated viz (i). details of amount transacted; (ii). copies of the bank statements from F.Y 2011-12 onwards; (iii). original deed of cancellation of the agreement; and (iv). details as regards the legal fees paid by the assessee for the agreement and its cancellation, both. Observing, that the assessee had failed to substantiate its claim that the sale transaction had been terminated, the CIT(A) concurred with the view taken by the A.O and rejected the claim of the assessee that the sale transaction had not m....
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....ve, that the assessee had filed before us as additional evidence the copies of the returns of income alongwith respective computations of income of the assessee company for A.Y 2018-19 and A.Y 2019-20, Page 128 -145 of APB. Relevance of the copies of the returns of income of the assessee company for the succeeding years viz. A.Y 2018-19 and A.Y 2019- 20, is to draw our attention to the fact that part of the land under consideration was thereafter sold by the assessee in the succeeding years. To sum up, the assessee by referring to the sale transactions of the land under consideration, had tried to fortify its claim that the impugned sale transaction of the land during the year under consideration had not materialized, and stood cancelled. The ld. A.R took us through the facts pertaining to the issue under consideration. The ld. A.R took us through the definition of the term "transfer" as envisaged in Sec. 2(47) of the Act. It was averred by the ld. A.R that as the assessee had only entered into an unregistered MOU, dated 19.12.2012, with the other party, which too stood repudiated vide a deed of cancellation, dated 28.09.2017, therefore de hors transfer of the land under conside....
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...., but also additional claims to wit claims not made in the return filed by it. It is necessary for us to refer to some of these decisions only to deal with two submissions on behalf of the department. The first is with respect to an observation of the Supreme Court in Jute Corporation of India Limited v. Commissioner of Income Tax, 1991 Supp (2) SCC 744 = (1991) 187 ITR 688. The second submission is based on a judgment of the Supreme Court in Goetze (India) Limited v. Commissioner of Income Tax. 11(A). In Jute Corporation of India Limited v. CIT, for the assessment year 1974-75 the appellant did not claim any deduction of its liability towards purchase tax under the provisions of the Bengal Raw Jute Taxation Act, 1941, as it entertained a belief that it was not liable to pay purchase tax under that Act. Subsequently, the appellant was assessed to purchase tax and the order of assessment was received by it on 23rd November, 1973. The appellant challenged the same and obtained a stay order. The appellant also filed an appeal from the assessment order under the Income Tax Act. It was only during the hearing of the appeal that the assessee claimed an additional deduction in re....
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....s or limitations if any prescribed by the statutory provisions. In the absence of any statutory provision the Appellate Authority is vested with all the plenary powers which the subordinate authority may have in the matter. There appears to be no good reason and none was placed before us to justify curtailment of the power of the Appellate Assistant Commissioner in entertaining an additional ground raised by the assessee in seeking modification of the order of assessment passed by the Income Tax Officer." [emphasis supplied] (B) It is clear, therefore, that an assessee is entitled to raise not merely additional legal submissions before the appellate authorities, but is also entitled to raise additional claims before them. The appellate authorities have the discretion whether or not to permit such additional claims to be raised. It cannot, however, be said that they have no jurisdiction to consider the same. They have the jurisdiction to entertain the new claim. That they may choose not to exercise their jurisdiction in a given case is another matter. The exercise of discretion is entirely different from the existence of jurisdiction. 12. At page 694, afte....
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....aised at that particular stage when the return was filed or when the assessment order was made... "clearly relate to cases where the ground was available when the return was filed and the assessment order was made but "could not have been raised" at that stage. The words are "could not have been raised" and not "were not in existence". Grounds which were not in existence when the return was filed or when the assessment order was made fall within the second category viz. where "the ground became available on account of change of circumstances or law." 14. The facts in Jute Corporation of India Ltd., various judgments referred to therein as well as in subsequent cases, which we will refer to, establishes this beyond doubt. In many of the cases, the grounds were, in fact, available when the return was filed and/or the assessment order was made. In Jute Corporation of India Ltd., the ground was available when the return was filed. The assessee did not claim any deduction of its liability to pay purchase tax as "it entertained a belief that it was not liable to pay purchase tax under the Bengal Raw Jute Taxation Act, 1941". Thus, the ground existed when the return was filed. Th....
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.... before the Division Bench was as under :- "(2) Whether, on the facts and in the circumstances of the case, the Tribunal erred in not allowing the assessee leave to raise in its own appeals additional grounds and in the departmental appeals cross objections regarding the deductibility of the sums transferred to contingency reserve and tariff and dividend control reserve?" (B) The Division Bench which heard the reference, finding that there was a conflict of decisions, placed the papers before the Hon'ble Chief Justice for constituting a larger bench to resolve the controversy. The Full Bench answered the reference in the affirmative and in favour of the assessee. The Full Bench held :- "Thus, the Appellate Assistant Commissioner has very wide powers while considering an appeal which may be filed by the assessee. He may confirm, reduce, enhance or annul the assessment or remand the case to the Assessing Officer. This is because, unlike an ordinary appeal, the basic purpose of a tax appeal is to ascertain the correct tax liability of an assessee in accordance with law. Hence an Appellate Assistant Commissioner also has the power to enh....
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....peals). The assessee filed an appeal before the Tribunal. The inclusion of the amount was not objected to even in the grounds of appeal as originally filed before the Tribunal. Subsequently, the assessee by a letter, raised additional grounds to the effect that the said sum could not be included in the total income. The assessee contended that on a erroneous admission, no income can be included in the total income. It was further contended that the ITO and the Commissioner of Income-tax (Appeals) had erred and failed in their duty in adjudicating the matter correctly and by mechanically including the amount in the total income. It is pertinent to note that the assessee contended that it was entitled to the deduction in view of two orders of the Special Benches of the Tribunal and the assessee further stated that it had raised these additional grounds on learning about the legal position subsequently. The Tribunal declined to entertain these additional grounds. The Supreme Court did not answer the question on merits, but framed the following question and held as under :- "4. The Tribunal has framed as many as five questions while making a referenc....
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....aim. That the respondent is entitled to the deduction in law is admitted and, in any event, clearly established. In the circumstances, the respondent ought not be prejudiced. 19. The orders of the CIT(A) and the Tribunal clearly indicate that both the appellate authorities had exercised their jurisdiction to consider the additional claim as they were entitled to in view of the various judgments on the issue, including the judgment of the Supreme Court in National Thermal Power Corporation Limited. This is clear from the fact that these judgments have been expressly referred to in detail by the CIT(A) and by the Tribunal. 20. We wish to clarify that both the appellate authorities have themselves considered the additional claim and allowed it. They have not remanded the matter to the Assessing Officer to consider the same. Both the orders expressly direct the Assessing Officer to allow the deduction of Rs. 40,00,000/- under section 43B of the Act. The Assessing Officer is, therefore, now only to compute the respondent's tax liability which he must do in accordance with the orders allowing the respondent a deduction of Rs. 40,00,000/- under section 43B of the Act....
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....d does not impinge on the power of the Income-tax Appellate Tribunal under section 254 of the Income- tax Act, 1961. There shall be no order as to costs." [emphasis supplied]" 23. It is clear to us that the Supreme Court did not hold anything contrary to what was held in the previous judgments to the effect that even if a claim is not made before the assessing officer, it can be made before the appellate authorities. The jurisdiction of the appellate authorities to entertain such a claim has not been negated by the Supreme Court in this judgment. In fact, the Supreme Court made it clear that the issue in the case was limited to the power of the assessing authority and that the judgment does not impinge on the power of the Tribunal under section 254. 24. A Division Bench of the Delhi High Court dealt with a similar submission in Commissioner of Income-tax v. Jai Parabolic Springs Limited, (2008) 306 ITR 42. The Division Bench, in paragraph 17 of the judgment held that the Supreme Court dismissed the appeal making it clear that the decision was limited to the power of the assessing authority to entertain a claim for deduction otherwise than by a revised return and d....
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....ously, Sections 17 and 49 of the 1908 Act were amended, clarifying that unless the document containing the contract to transfer for consideration any immovable property (for the purpose of Section 53A of 1882 Act) is registered, it shall not have any effect in law, other than being received as evidence of a contract in a suit for specific performance or as evidence of any collateral transaction not required to be effected by a registered instrument. It was observed by the Hon'ble Apex Court, that after the commencement of the Amendment Act of 2001, if an agreement, was not registered, then it shall have no effect in law for the purposes of Section 53A. In short, there would be no agreement in the eyes of law which could be enforced under Section 53A of the Transfer of Property Act. In the backdrop of its aforesaid observations, the Hon'ble Apex Court had concluded that in order to qualify as a "transfer" of a capital asset under Section 2(47)(v) of the Act, there must be a "contract" which can be enforced in law under Section 53A of the Transfer of Property Act. In sum and substance, the Hon'ble Apex Court had observed, that in terms of Sec. 2(47)(v) of the Act, transfer of any ....
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....part of the land by the assessee in the period relevant to A.Y 2018-19 and A.Y 2019-20, further fortifies the veracity of the aforesaid claim of the assessee. At this stage, we may herein observe that the revenue by assessing the LTCG in the hands of the assessee had sought to tax a hypothetical income, which finds its roots in a transaction which had never fructified into a sale transaction. As observed by the Hon'ble Apex Court in the case of CIT Vs. Shoorji Vallabhdas and Co., (1962) 46 ITR 144 (SC), income-tax is a levy on income. No doubt, the Income-tax act takes into account two points of time at which the liability to tax is attracted ,viz., the accrual of the income or its receipt, but the substance of the matter is the income. If income does not result at all, there cannot be a tax, even though in book-keeping, an entry is made about a 'hypothetical income', which does not materialize. As observed by the Hon'ble High Court, where the income can be said not to have resulted at all, there is obviously neither accrual nor receipt of income, even though an entry to that effect might, in certain circumstances, have been made in the 'books of account'. On the basis of our afore....
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....ets along with workings and other relevant documents. The assessee was further asked on perusal of MOU that lumpsum amount of Rs. 40 crs has been shown as sale consideration for other assets. In view of this fact, the assessee was asked to specify as to how it had allocated the amount of sale consideration between various assets sold and ratio adopted for working of loss on account of depreciable assets. In response, the assessee vide letter dated 3-8-2017 has submitted that the total value of Rs. 27.19 Ors. in respect of sale of other depreciable assets has been taken on the basis of book value of these assets as on 31-12-2012 (52 Annual Report 2011-12 Pg. No. 34) A Copy of Annual Report 2011-12 submitted. Accordingly, from the opening WDV for depreciable assets as on 31-03-2012 has been deducted from the sale value and the total loss has been worked out at Rs. 69,72,79,948/-. The said loss has been disclosed in Schedule DPM and Schedule DOA forming part of return of income Pg. Nos.18 & 19. In this regard, on perusal of terms and conditions laid down in MOU dated 19-12-2012 entered between the assessee company and Golden Star Promoters Pvt. Ltd., it is s....
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....able assets had not assigned any costs to the intangible asset in its return of income, and resultantly had claimed a loss of Rs. 49,35,99,792/- on transfer of intangible assets. On the contrary, no such loss is reported in the 'annual report' of the assessee company for 2011-12. As regards the sale consideration taken by the assessee for the inventory sold, the same had neither been correlated with the market value of the inventory nor with the cost recorded in the 'books of account' of the purchaser or its subsequent sale by the purchaser. In the backdrop of the aforesaid facts, it can safely be concluded that as the assessee had failed to substantiate the basis for allocation of the sale consideration to the individual assets, and also its inventory, the A.O had for the said reason disallowed its claim for Short Term Capital Loss of (-) Rs. 69,72,79,928/-. In our considered view, the matter in all fairness requires to be revisited by the A.O, for allowing an opportunity to the assessee to substantiate its claim of Short Term Capital Loss so raised in its return of income. Accordingly, we herein restore the matter to the file of the A.O with a direction to re-adjudicate the same.....
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....under Sec. 154, dated 20.06.2016 in appeal before the CIT(A). After necessary deliberations, it was observed by the CIT(A) that the issues raised by the assessee before him were beyond the scope of adjustments permissible under Sec.154 of the Act. Accordingly, the CIT(A) drawing support from the judgment of the Hon'ble Supreme Court in the case of T.S. Balaram, Income Tax Officer Vs. Volkart Brothers & Ors. (1971) 82 ITR 50 (SC), rejected the claim of the assessee for the reason that the mistakes pointed out in the rectification application did not fall within the purview of rectification under Sec. 154 of the Act. Accordingly, the appeal of the assessee was dismissed. 31. The assessee being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. We have given a thoughtful consideration and concur with the view taken by the lower authorities, that as the issues raised by the assessee in its application for rectification under Sec. 154 are not free from doubts and debate, and would involve a long drawn process of reasoning, the same would thus not fall within the realm of rectification within the meaning of Sec. 154 of the Act. As such, finding no infir....
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....inter alia, observed as under: "We, therefore, direct the President of the Appellate Tribunal to frame and lay down the guidelines in the similar lines as are laid down by the Apex Court in the case of Anil Rai (supra) and to issue appropriate administrative 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. 34. We find that the aforesaid issue after exhaus....
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....an event or effect that can be neither anticipated nor controlled' When such is the position, and it is officially so notified by the Government of India and the Covid-19 epidemic has been notified as a disaster under the National Disaster Management 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 prag....