TaxTMI 
TaxTMI 
TaxTMI 
2022 (6) TMI 146
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.... of the grounds either before the appellate proceedings, or in the course of appellate proceedings". 3. The Registry has pointed out that the appeal is time-barred by 14 days. In order to explain the delay, the Revenue has filed an application pleading therein that Shri Sebabrata Banerjee was to complete the administrative formalities for preparation of this appeal but somehow he fallen ill and was admitted in B.M. Birla Heart Research Centre. A certificate from the Hospital alongwith his medical history has been placed on record. Considering the brief delay of 14 days, vis-à-vis the explanation of the Revenue, we deem it appropriate to condone the delay. We are of the view that Revenue has demonstrated sufficient reasons for not filing the appeal in time. Therefore, we condone the delay and proceed to decide the appeal on merit. 4. In response to the notice of hearing, no one has come present on behalf of the assessee. This notice has duly been served upon the assessee. Therefore, we take the proceeding ex-parte qua the respondent (assessee) 5. Brief facts of the case are that the assessee has filed its return of income on 20.09.2014 declaring total income at 'NIL....
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....share premium was raised in A.Y. 2007-08 and 2008-09. Therefore, the addition is bad in law and cannot be sustained. The order passed u/s. 144 of the Income-tax Act, 1961 is best judgment assessment in which the AO shall take into account all relevant material which he has gathered and after giving the appellant sufficient opportunity being heard, make assessment of, the total income or loss to best of judgment and determined the sum payable by the appellant. This section does not give arbitrary power to the AQ to make the assessment on his whims and fancies. The assessment order should be based on material available with the AO and shall be reasonable estimate. It appears that the AO has not considered the audited accounts available with him while making the addition. There are plethora of case laws referred to below which have held that the order u/s. 144 should be decided with wisdom and not based on arbitrary caprice of the AO but on settled and invariable principles of justice. "1. In CST vs. H.M. Esufali H.M. Abdulali (1970) 90 ITR 271 (SC) it has been observed by the Supreme Court that the assessing authority while making the "best judgment" assessment, no doubt, should ar....
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.... was received in the A.Y. 2011-12 as evident by the balance sheet of the appellant and ITR. The balance sheet of A.Y. 2012-13 clearly indicates that share application money of Rs. 39 lakhs was brought forward from the previous year. Therefore, there was no basis for making addition u/s. 68 of the I.T. Act. The Guwahati High Court in the case of Nemi Chand Kothari vs CIT reported in 264 ITR 254 [2003] had observed that no assessment can be made contrary to the provision of law. Under the Income Tax Act, there is no provision of taxing cash credits in any previous year except in the year in which it was introduced in the books. This view has been affirmed by the Jurisdictional ITAT in the case of ITO vs M/s. Jellotic Supply Pvt. Ltd. reported in 2018 (7) TMI 372 where in a similar case, it had held that "the AO has also stated that the aforesaid claim of the assessee company was also verified from the subscriber companies that the share capital along with the share premium for the total sum of Rs. 54,95,00,000/- was actually received by the assessee company during the FY 1999-2000 relevant to A.Y. 2000-01. We note that the assessment has to be done, oh the right person, right year an....
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....t's previous year which shall be relevant for including such unexplained credit u/s. 68 of the Act. The Hon'ble High Court has held that "we feel fortified in our conclusion when we recall that under Section 68 when any sum is found credited in the books of an assessee maintained for any previous year and his explanation is rejected, the sum so credited may be charged to Income-tax and the express words of the section are "as the income of the assessee of that previous year". These are decisive words. Can we say that when the statute provides a precise method for the taxing of an unexplained cash credit entry in the assessee's books of account, any option is available to the department to shift the opted previous year enabling it to rope in the unexplained entry? The answer is plainly in the negative. In this context a reference to Section 69 would further illuminate the intention of the legislature. It provides that where in the financial year immediately preceding the assessment year the assessee had made investments which are not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the natu....
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....ineness of the transactions. Step 5: Whether explanation of the assessee is reliable or acceptable? If yes, no further action is required and the sum so credited may not be charged to income tax. Step 6: If the explanation so offered by the assessee is not acceptable or reliable, the AO should give a detailed reasoning in the assessment order for not accepting the same. Step 7: The reasons for not accepting the explanation of the assessee should be communicated to the assessee. Step 8: The order passed by the AO should be speaking one bringing on record all the facts, explanation furnished by the assessee in respect of nature and source of the credit in its books of accounts and reasons for not accepting the explanation of the assessee. Relevant case laws should be relied upon wherever possible. The above questions are not exhaustive but illustrative and the questions and sequence may vary depending upon fads of each case. The above procedure be brought to the notice of all officers working under your jurisdiction for compliance." The Standard Procedure issued by CBDT makes it clear that section 68, would apply only to credits in the books of account of the appellant ....