TaxTMI 
TaxTMI 
2013 (7) TMI 1167
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....acts of the case are that the assessee is a Proprietor of M/s Chandrakala & Co., a stock broking concern. The assessee filed return of income for the assessment year 1991-92 admitting an income of ₹ 2,38,65,192/- and the same was subjected to scrutiny and the total income was computed at ₹ 18,45,76,780/- which included an addition of ₹ 14.74 crores on account of disallowances of payments to Public Sector Undertakings (PSUs). 4. For assessment year 1992-93, the assessee filed return of income admitting an income of ₹ 3,34,05,960/- and the same was subjected to scrutiny and the total income was computed at ₹ 6,44,76,520/- which included an addition of ₹ 2.51 crores on account of disallowances of payments to Public Sector Undertakings (PSUs). 5. For assessment year 1993-94, the assessee filed return of income admitting an income of ₹ 4,82,83,620/-and the same was subjected to scrutiny and the total income was computed at ₹ 11,24,89,430/- which included an addition of ₹ 40 lakhs on account of disallowances of payments to Public Sector ndertakings (PSUs). 6. On appeal, the ld. CIT(A) allowed the disallowance of payments to PSUs. A....
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....e that at the relevant point of time when the call money market rate was exceedingly high, the bank sought cheaper funds by seeking short-term deposits from various Public Sector Undertakings who are having sufficient liquid funds available. It is further the case of the assessee which according to the assessee, tallies with the stand taken by Indian Bank in their assessment proceedings also that since at the relevant time, the rates payable on various deposits/are controlled by the rates prescribed by Reserve Bank of India from time to time and since the Public Sector Undertakings were not willing to give certain deposits to Indian Bank at the rate of interest prescribed by Reserve Bank of India, the bank agreed to pay to Public Sector Undertaking a higher rate and the difference between the actual rate paid by Indian Bank and the interest rate prescribed by Reserve Bank of India was paid to them only out of the funds obtained by increasing the price of Government securities bought by Indian Bank from the appellant and the difference was passed on to the Public Sector Undertakings by way of demand drafts which was obtained by the assessee on the basis of instructions given by Indi....
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....s. 2585/94,255 & 2297(MDS)/96 for Asst.Years 91-92,92-93 & 93-94 and disposed off by the Tribunal by its common Order dated 5-1-2005 and the Miscellaneous Petition filed by the assessee against the said Order on this issue was rejected by the Tribunal and the asses se filed appeal against said Order of Tribunal before the High Court of Judicature at Madras. The quantum appeals filed by the Revenue for assessment years 1992-93 and 1993-94 were also allowed, on this issue, by the Tribunal and the appellant's appeals for these three years, had been filed in the High Court of Madras. (v) After the Tribunal rendered its decision on 5-1-2005, upholding the addition of the income for the three years under appeals by reversing al\ the three orders of the Commissioners of Income Tax (Appeals) and restoring the addition made by the Assessing Officer, the Assessing Officer initiated penalty proceedings vide her letter dated 13-6-2005. After considering the submissions and the Objections raised by the appellant and his representative, the Assessing Officer, by her order dated 22- 7-2005, held that the assessee has furnished inaccurate particulars of income deliberately trying to conceal ....
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.... 'In the absence of any contra evidence from the Revenue's side to prove that the evidence considered by the Criminal Court are not relevant/complete and by persons who had no connection whatsoever with the transactions, we do not find any good ground to accept the Revenue's plea that the Tribunal was justified in rejecting this evidence', Paragraph 25, 'held that the status of the assessee vis-a-vis Indian Bank, was only that of a broker of Indian Bank and nothing else'. Paragraph 26, 'applying the principle of diversion by overriding title, the assessee is bound to succeed in the appeals before this Court'. Paragraph 28 'Consequently, we hold that the said amount cannot be included in his assessment. In the circumstances, we do not find any necessity to go into the question as to the applicability of Section 37. In the circumstances, the order of the Tribunal is set aside and the Tax Cases are allowed'. Paragraph 29 ' The decisions relied on by the Revenue, do not, in any manner, advance the case of the Revenue, particularly in the face of the fact that even in the proceedings before the Income Tax Authorities, the Dep....
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.... Hon'ble Madras High Court deleted the additions made on account of payments to PSUs in assessment years 1991-92, 1992-93 and 1993-94 and therefore, as the very basis on which the penalty was levied did not survive, the penalty levied also does not survive. The ld. CIT(A) deleted the penalty on the ground that the additions made in the assessment had been deleted by the Hon'ble High Court and therefore, the penalty levied as a corollary to the deletion of the addition made by the Hon'ble High Court, was required to be deleted. 15. The ld. DR has relied on the order of the Assessing Officer. In the grounds of appeal, the Revenue has stated that they have not accepted the order of the Hon'ble High Court in the quantum appeal and has filed SLP before the Hon'ble Supreme Court and therefore, the ld. CIT(A) was not justified in deleting the penalty levied u/s 271(1)(c) of the Act. 16. No material has been brought on record by the ld. DR to show that the SLP filed by the Department against the order of the Hon'ble High Court deleting the additions made by the Assessing Officer has been accepted by the Hon'ble Supreme Court. Further, no material was brought o....