TaxTMI 
TaxTMI 
2021 (2) TMI 799
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....d, income from storage of stem cells have been offered to tax in the Vivad se Vishwas Scheme and as such, the question of re-assessment in regard to such incomes does not arise. 5. As far as Issue No.5 in relation to the payment of tax on Provident Fund and ESI contributions is concerned, the issue stands covered by a decision of this Court in the case of Industrial Securities and Intelligence India V. CIT in T.C.(A)Nos.585 and 586 of 2015 dated 24.07.2015. Hence, the reassessment initiated on this score would not be pursued. 6. As far as Issue No.4 is concerned, refund was granted to the assessee while processing the return under Section 143(1) which was omitted to be added back in the regular assessment. The amount is sought to be added back now. The question of re-assessment would not arise in such a situation, insofar as there is no escapement of income per se. The Assessing Authority could well have addressed this issue under Section 154 of the Act. The proposal for re-assessment on this score fails. 7. What survives for consideration are Issue Nos. 2 and 3. Issue No.2 relates to re-assessment of processing fee. The petitioner is engaged in the business of stem cell r....
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....ange was bonafide. It was also material to ascertainwhether the method adopted by an assessee for making entries in the books of accounts is as per nationally accepted accounting standards. At paragraph 34, the Bench states as follows: 34. Section 145(1) enacts that for the purpose of Section 28 and Section 56 alone, income, profits and gains must be computed in accordance with the method of accounting regularly employed by the assessee. In this case, we are concerned with Section 28. Therefore, Section 145(1) is attracted to the facts of the present case. Under the mercantile system of accounting, what is due is brought into credit before it is actually received; it brings into debit an expenditure for which a legal liability has been incurred before it is actually disbursed. (see judgment of this Court in the case of United Commercial Bank v. CIT reported in 240 ITR 355). Therefore, the accounting method followed by an assessee continuously for a given period of time needs to be presumed to be correct till the AO comes to the conclusion for reasons to be given that the system does not reflect true and correct profits. As stated, there is no finding given by the AO on the....
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....her facts inferred from them, the authority has to draw the proper legal inferences, and ascertain on a correct interpretation of the taxing enactment, the proper tax leviable. Thus, when a question arises whether certain in come received by an assessor's capital receipt, or revenue receipt, the assessing authority has to find out what primary facts have been proved, what other facts can be inferred from them, and, taking all these together, to decide what the legal inference should be. 10. There can be no doubt that the duty of disclosing all the primary facts relevant to the decision of the question before the assessing authority lies on the assesses. To meet the possible contention that when some account books or other evidence has been produced, there is no duty on the assessee to disclose further facts, which on due diligence, the Income-tax Officer might have discovered, the Legislature has put in the Explanation, which has been set out above. In view of the Explanation, it will not be open to the assessee to say, for example - "I have produced the account books and the documents : You, the assessing officer examine them, and find out the facts necessary....
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....n be reasonably drawn and what legal inferences have ultimately to be drawn. It is not for somebody else - far less the assessee - to tell the assessing authority what inferences, whether of facts or law, should be drawn. Indeed, when it is remembered that people often differ as regards what inferences should be drawn from given facts, it will be meaningless to demand that the assessee must disclose what inferences - whether of facts or law - he would draw from the primary facts. 16. Applying this judgment to the facts of the present case, the petitioner has made a disclosure of i) revenue from all income streams including processing fee ii) the portion of processing fee recognised as income for the purpose of taxation and (iii) balance is carried over to the subsequent year. It is true that there is no note in the financials or in the audited report explaining the method of accounting in detail, that is, to clarify the position that only the processing fee relating to the deliveries occasioned prior to 31.03.2012 had been recognised an income and the balance carried forward to the next year. However, as noted earlier, the petitioner has been following a consistent method of ....