AI Drafter 
TaxTMI 
TaxTMI 
2020 (9) TMI 188
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....ed assets can be taxed in the hands of the appellant. 2. The Ld. Commissioner of Income-tax (Appeals) has erred in law and in facts in rejecting the books of accounts of the appellant. 3. The Ld. Commissioner of Income-tax (Appeals) has erred in law and in fact in confirming addition of unexplained investment of 38,08,416/-. 4. The Ld. Commissioner of Income-tax (Appeals) has erred in law and in facts in confirming addition of unexplained deposits in bank account of the appellant amounting to 85,225/-. 5. The Ld. Commissioner of Income-tax (Appeals) has erred in law and in facts in confirming addition of share of profit of MIs. Sunrise Enterprises amounting to 252075/-. 6. The Ld. Commissioner of Income-tax (Appeals) has erred in law and in facts in confirming disallowance of interest expenditure amounting to 2.76,76,843/- 7. The Ld. Commissioner of Income-tax (Appeals) has erred in law and in facts in not considering the claim of the appellant relating to deduction u/s. 80L of the Act amounting to Rs. 12,000/-. 8. The Ld. Commissioner of Income-Tax (Appeals) has erred in law and in facts that in confirming the levy of ....
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....ding was initiated and notice u/s 143(2) of the Act was issued on 08.11.2013 which was served upon the assessee. Thereafter, the AO completed the assessment u/s 144 r.w.s. 254 of the Act determining the income to the tune of Rs. 3,62,50,724/- after making the following additions.:- (i) Unexplained investment Rs. 1,16,51,516/- 2. Unexplained receipts Rs. 1,62,327/- 3. Profit from Sunrise Ent. Rs. 2,52,075/- 4. Dividend and interest income Rs. 60,61,163/- 5. Share Trading Profit. Rs. 1,56,96,071/- 6. Long Term Capital Gain Rs. 23,61,869/- 7. Salary Income Rs. 65,703/- Thereafter the assessee filed an appeal before the CIT(A) who partly allowed the claim of the assessee, therefore, the assessee has filed the present appeal before us. ISSUE NO. 1 5. This issue was not pressed by the Ld. Representative of the assessee, therefore, this issue is being decided in favour of the revenue against the assessee being not pressed. ISSUE NO.2 6. Under this issue the assessee has challenged the issue of rejection of the books of account by the AO which was confirmed by CIT(A). It is a third round of the appeal before the Hon'ble ITAT. Init....
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....o be applicable in the case of assessee. However, on the other hand, the Ld. Representative of the Department has refuted the said contention. The assessee has given the details explanation to each of the objection by virtue of letter dated 20.02.2015 which has not been discussed and decided by the AO. The assessee has given the following explanation of the objection.:- a) As regards non furnishing of certified copy of bank statement, it is submitted that while completing the original assessment u/s 144 of the Act on 28.02.1995, the copy of the bank statements was called from the RBI and was available with the assessing officer. [Pg. 6-7 of PB]. b) The objections in the Special Audit Report dated 06.02.2002 were mainly because certain documents were not submitted to the auditors due to its unavailability at the relevant point of time i.e. in 2001. This was mainly because, Late Shri Harshad Mehta had expired on 31.12.2001 and there was complete imbalance in the family. However, later in 2006, complete, books of account and explanations have been submitted before the Assessing Officer with respect to these discrepancies at the time of assessment proceedings. Hence, ....
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....ness and Profession, there was no requirement to carry out audit u/s 44A6 of the Act. Further, the observation of the assessing officer that the assessee is having tens of crores of turnover is also factually incorrect as there is no business/professional carried out by the assessee. In any case, even presuming that audit was required to be carried out but not done so, the assessing officer should have verified the books of accounts independently and could have rejected the same only if specific defects were found in the books of account. h) As regards day to day drawing of books of account, it is submitted that at the time of search, incomplete books of account were seized. The books of account could not be fully drawn due to notification and other difficulties. The assessee could draw it's complete books in 2006. These books of account were filed before the assessing officerand hence ought to have been examined by the assessing officer and could not have been rejected at the threshhold. Hence, the aforesaid observation is not relevant now. i) As regards uniform drawings of Rs. 5,000/- per month, it is submitted that the same is factually incorrect. There are....
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.... D Based on seized assets 62,400 Total 38,08,417 9. The CIT(A) has confirmed the addition in sum of Rs. 12,38,857/- on the basis of the company letter which is hereby mentioned below.:- Sr. No. Nature of scrip Amount 1 Bihar Alloys & Steels Ltd. 4,175 2 Goa Carbon 53,250 3 Additions based on seized assets 58,652 4 Ispat Alloys Ltd. 4,410 5 Manglore Chemicals and Fertilizers Ltd. 1,638 6 Onida 81,763 7 Singer India Ltd. 1,000 8 Southern Petrochemcal Ind. Corp. Ltd. 3,05,044 9 Reliance Capital and Finance Trust Ltd. 1,24,000 10 MRF Ltd. 1,34,625 11 Steel Tubes of India Ltd. 85,100 12 Indo Rama Synthetics India Ltd. 3,84,800 Total 12,38,857 10. The Ld. Representative of the assessee has argued that the AO nowhere provided company letter of scrips corresponding the addition of Rs. 5,09,932/- on account of following parties.:- Sr. No. Nature of scrip Amount 1 Bihar Alloys & Steels Ltd. 4,175 2 Goa Carbon 53,250 3 Additions based on seized assets 58,652 4 Ispat Alloys Ltd. 4,410 5....
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....s like non-consideration of sale of shares by notified parties, the companies who have not yet indicated the holdings may send the information in future, the value of the shares are subject to prevailing market rate which is bound to fluctuate. c. The figures of shareholding cannot be treated as firm and final figures. d. The figures so derived by the custodian are on the basis of company letters are itself not matching with the company letters. Hence, the figures stated in the custodian letter cannot be relied." 12. In support of his contention the Assessee has also relied upon the decision of the Hon'ble ITAT in the case of Growmore Leasing & Investments Ltd. Vs. DCIT for A.Y.1992-93 dated 17.11.2017 in ITA. No.2192/M/2015. No doubt, this issue is required to be examined on the basis of the decision of the Hon'ble ITAT in the case of Growmore Leasing & Investment Ltd. (supra) so far as the addition of Rs. 82,775/- and Rs. 62,400/- is concerned, the contention of the assessee is that the no material was given to the assessee before raising the said addition. Anyhow in the interest of justice, the relevant record/ opportunity is liable to be given to the assess....
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....gly, this issue is decided in favour of the assessee against the revenue. ISSUE NO.5 15. Issue no. 5 is in connection with the addition of share of profit from partnership firm of Rs. 2,52,075/-. The Ld. Representative of the assessee has argued that the addition in sum of Rs. 2,52,075/- was raised on the basis of the share profit from partnership firm namely M/s. Sunrise Enterprises. It is specifically argued that the final figure is not on record, therefore, the issue is liable to be restored to the file of the AO to decide the matter of controversy afresh to adopt the final figure of profit determined in case of M/s. Sunrise Enterprises in the hands of the assessee. Anyhow when the profit figure has been taken from the M/s. Sunrise Enterprises, therefore, it is necessary to determine the matter of controversy on the basis of the final figure of profit determined in the case of M/s. Sunrise Enterprises. Accordingly, we set aside the finding of the CIT(A) on this issue and direct the AO to decide the matter of controversy afresh, after obtaining the final figure of the profit determining in the case of M/s. Sunrise Enterprises. Accordingly, this issue is decided in fav....
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.... along with the orders of the Tax Author/ties be/ow. We have also gone through the case law as has been cited before us the relevant provisions of the Special Court Act which has been referred to before us during the course of hearing. This is an undisputed fact which we noted that the assessee is a notified person from 08.06.1992 under Section 3(2) of the Special Court Act as per the provisions of the Special Court Act contract entered into by a notified person prior to notification made under Section 3(2) are not affected by the notification. Section 4(1) of the Special Court Act empowers the custodian to cancel any contract or agreement entered into between 01.04.1991 to 06.06.1992 if the custodian finds that these contracts have been entered into fraudulently or to defeat the provisions of the Special Court Act. In A. Y. 1990-91. the AO in the assessment order passed under Section 143(3) dated 26.03.1993 allowed the interest expenses to the assessee to the extent of F5,86,4041-. From page 75 of the paper book which contains the computation of income for A. Y. 1990-91, we noted that the assessee has disclosed the loan taken for the purchase of investment The assessee is consiste....
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....ssions of the Ld. AR. I find that though there is no express document evidencing payment of interest to the brokerage firms, the intentions of the parties were always so, this is evident from the fact that identical claim was also made during A. V. 1990-91 and the same was allowed to the appellant and other concerns. The claim made in the affidavit of Custodian in MP No. 41 of 1999 also supports this claim. I also agree with the appellant that there need not be any written agreement and that the oral agreement coupled with the actions and intentions of the parties is sufficient to prove the existence of the liability." 18. The copy of order in the case of brother of the assessee in Ashwin S. Mehta Vs. ACIT bearing ITA. No.2474/M/2015 dated 07.12.2018 is on the file in which the relevant finding is hereby reproduced as under.:- "9. Since, the coordinate Bench has already dealt with the identical issue and decided the same on merits in favour of the assessee in assessee's own case for the earlier assessment years, we do not find any reason to deviate from the findings of the coordinate Bench. The revenue has not brought on any order passed by the courts of law, contrary t....
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....d the deletion of the addition to the extent of 78,43,099/- on account of unexplained investment in shares. Before going further, we deem it necessary to advert the finding of the CIT(A) on record.:- "14. 1 have considered the facts of the case, submissions and contentions the assessee as also the order of the AO. On perusal of the assessment order, it is clear that this addition of Rs. 1,16,51,515/- has been made by the AO in respect of 38 scrips which is annexed along-with the present order. The assessee has furnished a detailed explanation, in nature of Company letters including share holdings of the assessee at the relevant point of time which are appearing from Page 79 to 132 of the paper book of the assessee, custodian letter appearing from page 133 to 151, affidavit filed by the 3rd parties showing purchases on behalf of the assessee as appearing from page 186 to 211 and other relevant details, in respect of the following scrips as per which the discrepancies as worked out by the AO earlier stands explained. Scrip Name Balance Unexplained Investment Value of unexplained investment Alkyl Amines 550 90063 Andhra Valley Caprihans 545 850200 ....