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2021 (11) TMI 93
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....T(A) must have considered unrecovered advances for the purchase of fish as expenditure and must have allowed the same in full. 4. Without prejudice to the above, on the facts and circumstances of the case, the learned CIT(A) must have allowed the claim of 60% out of the total advances as "business loss" since it is irrecoverable. 5. The learned CIT(A) erred in not giving full effect to the sworn statement after holding that "If the department believes one part, it should believe the second part also". 6. On the facts and circumstances of the case, the learned CIT(A) erred in not deleting the entire balances at bank amounting to Rs. 26,34,333. 7. The learned CIT(A) erred in holding that once a return has been filed disclosing certain income and paid taxes thereon, cannot be allowed to be retracted from the same. 8. The learned CIT(A) erred in not condoning the entire delay in filing block return for the purpose of interest u/s 158BFA. 9. The appellant craves for leave to add, to delete from, or to amend the Grounds of Appeal." 3. The assessee has also raised the following additional grounds:- "1. The order of assessme....
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.... of the fact whether regular assessment for any one or more of the relevant assessment years is pending or not. 3.4. The learned CIT(A) erred in taking the date of search i.e. 06.09.2000 as the benchmark for the purpose of levying surcharge in the case of the assessee. The levy of tax and surcharge was governed by the provisions of the Income-tax Act and that of the Finance Act which was not examined in the proper perspective. 3.5. The learned CIT(A) failed to see that the proviso inserted by the Finance Act of 2002 with effect from 01.06.2002 to Section 113 only clarified the legislative intent regarding the adoption of the appropriate years rate of surcharge falling within the block period. 4. Deletion of amount receivable on account of fish sales: Rs. 21,24,326: 4.1 The CIT(A) has erred in deleting the amount receivable by the assessee on account of fish sales even though the same was clearly mentioned in seized books as under: Ex.No. CHCS 2 Rs. 10,85,225 CHCS 42 Rs. 10,39,101 Total: Rs. 21,24,326 4.2 The CIT(A) has erred in not computing the profit on sale of fish, in spite of holding that only profit portion on acc....
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.... as advanced as on 1.9.90, and the amount claimed as prior period advances as shown below: CHCS - 137 Anjaneya 10,000 1.9.90 43,945 Jala Jyothi 49,305 1.9.90 7,320 Jala Sowgandhi 35,000 1.9.90 30,925 Jala Manikya 50,000 1.9.90 22,560 Jala Raj 10,155 1.9.90 14,525 Hitharaj 34,712 2.9.90 24,450 Laxminarayana 15,928 1.9.90 49,350 Ramanjenya 10,000 1.9.90 18,590 Sagar Deep 37,121 1.9.90 24,675 Suvarnakiran 10,000 1.9.90 7,990 S K Fisheries 5,000 2.9.90 1,380 Udaya Rashmi 25,000 1.9.90 20,680 Upkar 20,000 2.9.90 3,645 Chandrakiran 10,000 1.9.90 25,100 Vishva Indra 49,000 1.9.90 12,180 Sunder Enterprises 21,240 1.9.90 7,560 Gangajenya 8,000 1.9.90 2,000 HRF 16.000 1.9.90 15,040 Total 4,16,461 3,31,915 7 Liabilities for purchases not paid 7.1 The CIT (A) erred in--allowing assessee's claim of liability for purchases not paid amounting to Rs. 3.87 lakhs. 7.2 The learned CIT (A) erred in allowing this new claim which was....
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....payable to them at the right hand side was found and seized. Cash deposit of Rs. 26,07,363 in SB A/c No.2565 of Mahalaxmi Co-op. Bank standing in the name of Smt. Daya C. Mendon was found and seized and there was physical cash of Rs. 26,979 at the business premises of assessee found and seized. Consequently, assessment u/s. 158BC r.w.s. 143(3) of the Act was framed on 27.9.2002 for the block period 1.4.1990 to 6.9.2000 determining total income of Rs. 1,53,40,340 as follows:- Cash found : Rs. 26,34,333 Advance made to Canoe Boats : Rs. 69,38,192 Advance made to Porceine Boat : Rs. 35,47,380 Amount receivable on account of fish sales as on the date of search : Rs. 21,24,326 Undisclosed income for AY 2000-01: Rs. 96,105 ------------------ Rs. 1,53,40,336 R/Off Rs. 1,53,40,340 ------------------ 6. Against this, the assessee went in appeal before the CIT(Appeals). The CIT(Appeals) has given partial relief. Now the assessee is in appeal before us with regard to sustenance of certain additions and the department is also in appeal before us for deleting the additions. IT(SS)A No.60/Bang/2006 7. Grou....
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....e assessee that assessing of Rs. 27,64,604/- being business advance made by the assessee in Anubhav Plantations and VGP Plantations as undisclosed income of block period is not justified. Awe find that in Paras 7 to 11 of his order, learned CIT (A) has noted about various arguments of the assessee against this addition of Rs. 27,64,604/- being business advance made by the assessee in Anubhav Plantations and VGP Plantations. The main argument is this that these are business advances and since these are not recoverable, it is allowable as business loss against this very addition made by the AO. Thereafter in paras 13 and 14 of his order, learned CIT (A) has rejected this argument by holding that addition has to be made because source of such advances could not be explained by the assessee and regarding claim of it as business loss, no specific finding is given and this claim was rejected by saying that bad debts are allowable u/s 36 (1) (vii) on actual write off and it can be claimed by the firm M/s * Co. and not by individual partner. We feel that these findings of Chandrahas learned CIT (A) are also not sustainable because if the advances are given by the present assessee, its non ....
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.... in the books of account and claim of assessee cannot be allowed u/s. 36(1)(vii) r.w.s. 36(2) of the Act. As per AO, advances could be allowed as bad debt only if written off in the books of account. In the present case, the assessee has not maintained any books of accounts and not claimed these advances as bad debts u/s. 36(1)(vii) r.w.s. 36(2) of the Act. These advances claimed by the assessee is business loss u/s. 28 of the Act. U/s. 28, any loss incurred in relation to business could be allowed as a deduction. In the present case, there is no dispute that the advances are made in the course of business and it is incurred for the purpose of business of assessee. The only dispute with regard to claim of quantum of amount to be allowed in the assessee's appeal. The ld. DR has challenged that no deduction could be given u/s. 36(1)(vii) r.w.s. 36(2) of the Act. As we have already observed, since the assessee has not maintained any books of account, there is no question of writing off any debts as bad in the books of account and section 36(1)(vii) r.w.s. 36(2) of the Act cannot be applied. On the other hand, when the assessee made advances on business necessity, non-recovery of the s....
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....ith these observations, we allow the grounds raised in appeal by the assessee and dismiss the relevant grounds in the revenue's appeal on this issue. 16. Grounds No.6 & 7 are with regard to deletion of entire balances at bank amounting to Rs. 26,34,333. During the course of search it was found that in SB A/c No.2565 of Mahalaxmi Co-operative Bank Ltd. there was a balance of Rs. 26,07,363 in the name of Smt. Daya C. Mendon and cash of Rs. 26,970 was found in the business premises, the total addition of Rs. 26,34,333 was made by the AO. On appeal, the CIT(Appeals) observed as follows:- "It is the contention of the AR that there is no obligation on appellant to file return in response to notice u/s.158BC as it is only a request, not accompanied by any notice u/s.142 etc, and so there is no direction so the income returned can be retracted. Assessee is only fisherman. AO has not issued any guidance with notice how income is to be computed and filed. Assessee cannot earn so much in three months only, Rs. 26.3 laths and there are sale proceeds which con not be taxed. If a declaration is made without knowing legal provisions, it is illegal disclosure, which should be allowed t....
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....e return filed." 18. Further he relied on the judgment of Supreme Court in S.R. Koshti v. CIT, 276 ITR 165 (Guj) wherein it was held as follows:- "18. The position is, therefore, that, regardless of whether the revised return was filed or not, once an assessee is in a position to show that the assessee has been over-assessed under the provisions of the Act, regardless of whether the over-assessment is as a result of assessee's own mistake or otherwise, the CIT has the power to correct such an assessment under section 264(1) of the Act. If the CIT refuses to give relief to the assessee, in such circumstances, he would be acting de hors the powers under the Act and the provisions of the Act and, therefore is duty-bound to give relief to an assessee, where due, in accordance with the provisions of the Act. 19. In the present case, the respondent-CIT has nowhere stated that the petitioner is not entitled to the relief under section 10(10C) of the Act. In fact, the said position is undisputed. The Assessing Officer himself had passed an order under section 154 of the Act, granting such relief. In the circumstances, even the order under section 264 of the Act made on....
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....refund after the regular assessment. In the present case, the assessment years involved are 2006-07 onwards, which pertain to period after section 143(3) of the Act was amended by the Finance Act (No.2) 1998 w.e.f. 01.10.1998. As per the amendment, the assessment under section 143(3) of the Act, inter-alia, envisages the Assessing Officer to grant refund of any amount due to the assessee consequent to the assessment and therefore, the Assessing Officer is statutorily empowered to determine the revised income which can be lower than the returned income. Therefore, in our view, the objection raised by the Revenue to the impugned order of CIT(A) is untenable in the eyes of the law, as it stood for the period under consideration." 22. Further it was submitted that the assessee is a lay fisherman and filing of return u/s. 158BC is very complex and it has to be filed within small time. In this connection, there was error in the return of income which may be condoned by this Tribunal. , 23. On the other hand, the ld. DR submitted that the assessee himself disclosed cash balance in its return filed consequent to notice u/s. 158BC. This amount is from the sale proceeds of fish which i....
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....raised before CIT (A) as noted by him in Para 5.5.3 of his order that even if source of cash deposit is not accepted as explained, it should be accepted that this is unaccounted turnover of the assessee and only profit element should be taxed, reliance is placed on the tribunal order rendered in the case of V. R. Textiles vs. JCIT, 20 Taxman 154 (Ahmedabad) and copy of this tribunal order is filed. Reliance is also placed on a judgment of Hon'ble Gujarat High Court rendered in the case of CIT vs. President Industries as reported in 124 Taxman 654 and on a judgment of Hon'ble Madhya Pradesh High Court rendered in the case of CIT vs. Balchand Ajit Kumar as reported in 135 Taxman 180. Learned DR of the revenue supported the orders of lower authorities. 43. We have considered the rival submissions. We find that as per para 8 of the assessment order, the AO states that this cash deposit by the assessee in bank account is in excess of the declared turnover not deposited by way of cheques. Hence, as per the AO also, the allegation is this that this is unaccounted turnover. Therefore, in our considered opinion, the tribunal order rendered in the case of V. R. Textiles vs. JCIT (Supra) is a....
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.... 29. In grounds No.2 to 2.2, the grievance of the department is with regard to deletion of an amount of Rs. 96,105 relating to AY 2000-01 for which year due date for filing the return of income u/s. 139(4) had not expired and assessee filed the return on 9.5.2001. 30. In the present case, search has taken place on 6.9.2000 and due date for filing the return for AY 2000-01 u/s. 139(4) had not expired and the assessee actually filed the return on 9.5.2001 which is within the due date to file return u/s. 139(4) of the Act. Further, the provisions of section 158B(a) which was amended w.e.f. 1.4.1996 reads as follows:- "Assessment of undisclosed income as a result of search. 158BA. (1) Notwithstanding anything contained in any other provisions of this Act, where after the 30th day of June, 1995 a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A in the case of any person, then, the Assessing Officer shall proceed to assess the undisclosed income in accordance with the provisions of this Chapter. (2) The total undisclosed income relating to the block period shall be charged to tax....
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....ce, these grounds are dismissed. 33. Ground Nos. 4 to 4.2 are regarding deletion of amount receivable on account of fish sales of Rs. 21,24,326. The facts are that the seized material show the sales of fish as under:- Ex. CHCS-2 : Rs. 10,85,225 Ex. CHCS-42 : Rs. 10,39,101 ------------------- Total Rs. 21,24,326 ------------------- 34. According to the AO, the above amount which is receivable on account of sale of fish is on the date of search and the same was brought to tax. The CIT(Appeals) observed that a sum of Rs. 21.24 lakhs being sales receivables has been included as an asset, whereas only profit of this transaction can be taxed as it would not be an asset. Also as per asset method, profit has to be telescoped and not included in the computation. Accordingly, he upheld the argument of the ld. AR that the AO erred in including this figure in the computation. 35. We have heard both the parties and perused the material on record. The amount of Rs. 21,24,326 receivable from the debtors represented the amount relating to sale of fish which was supplied by the boat owners and cost of such fish....
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.... he has not given any deduction. On this issue, the CIT(Appeals) after considering the seized material observed that an amount of Rs. 7.53 lakhs advanced to Canoe boat owners and Rs. 4,16,461 advanced to Purse-sein boat owners cannot be included in the block period as these are outside the block period. 38. The ld. DR submitted that on verification of seized book A/BB-1 it is seen that in this book the starting entry in these cases is mentioned as either "old" or "starting old". The block period commenced on 1.4.1990 and in none of the ledger account entries there is specific mention of period prior to 1.4.1990. 39. The ld. DR submitted that the CIT(Appeals) is not justified in observing that transaction which is outside the block period is to be excluded and he wrongly observed that the DDI had mentioned about the names of some advances of being prior period and AO has not considered the same. It is co-related to assessee's records and detailed charts have been provided by the assessee in the assessment and appellate proceedings. However, the CIT(Appeals) has not referred to the concerned seized material based on which the amount of prior period advances have been arrived at....