TaxTMI 
TaxTMI 
2022 (6) TMI 1161
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....ase and in law the Ld. CIT(A) erred in confirming the AO's action of making the estimated addition of Rs. 22.34.11.367/- on account of alleged bogus purchases. 3. On the facts and the circumstances of the appellant's case and in law the Ld. CIT(A) erred in confirming the AO's action of making the estimation of alleged bogus purchases of Rs. 22,34,11,367/- despite the fact that no incriminating material relating to these bogus purchases were found during the course of search and no assessment or reassessment was pending as on the date of search." 02. The brief facts of the case shows that assessee is a company incorporated in joint collaboration with the German Principal Enercon GmbH holding 56% of shares and Mehra family holding 44% share. Earlier it was known as Enercon India limited Group and is engaged in the business of manufacturing of Wind Mill accessories, parts and also in maintenance of Wind Mill. For the year of consideration, assessee filed return of income on 28th September, 2008 declaring a loss of Rs.2,61,57,710/-. The return of income was picked up for scrutiny. The assessment under Section 143(3) read with section 92CA (3) of the Act was comp....
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.... Mr. Siddhartha Mehra and Mr. Yogesh Mehra and found that the assessee has paid speed money also. The learned Assessing Officer reached at a conclusion that the books of accounts are fabricated creating dummy quotes without actual purchases and delivery of goods. Therefore, he tabulated the year-wise books purchased from A.Ys. 2007-08 to 2013-14 totaling in all to Rs.362,25,04,658/-. The Assessing Officer held that assessee has failed to show the genuineness of purchases and therefore, he disallowed Rs.22,90,37,426/- and passed an assessment order under Section 153A of the Act. He further made an addition of unaccounted cash expenses of Rs.31,32,458/-. Assessment order under Section 144 read with section 153A of the Act was passed on 28th June, 2017, determining the total income of the assessee at Rs.143,22,42,624/- against the total income assessed originally under Section 143(3) of the Act order dated 22nd December, 2010 of Rs.120,72,740/-. 05. The assessee preferred an appeal before the learned CIT (A) challenging the order passed by the learned Assessing Officer and the validity of the assessment order passed under Section 144 of the Act, which was dismissed. The assessee al....
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.... "In ground Nos. 3 to 7 of the appeal, the assessee has disputed (1) the addition made by the AO of Rs. 28,46,859/- related to hawala /bogus purchases identified by the Sales Tax Department, (ii) the addition made of Rs. 27,79,200/ related to purchases from certain bogus suppliers identified during the search action and (i) the addition of the estimated amount of Rs. 22,34,11,367/- out of the total purchases by applying the average ratio of the bogus purchases to the turnover for the years relevant to AYs 2010-11 to 2012-13. Since all the said 5 grounds relate to the issue of additions made by the AO on account of bogus purchases, they are being taken up together for the sake of convenience. 7.1 It is noted that in course of the assessment proceedings, the AO observed that for the relevant year, the assessee has claimed purchases from alleged hawala/ bogus suppliers identified by the Sales Tax Department viz. M/s Pooja Enterprises (Rs 9,72,399/-), M/s RJ Corporation (Rs 7,22,637/-) and M/s Siddhivinayak Trading Company (Rs 11,51,823/-) totally aggregating to Rs 28,46,859/-. The AO proceeded to disallow the entire amount of purchases of Rs. 28,46,859/- related to the ha....
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....sh Mehra, Managing Director, enhanced the admission on account of bogus purchases to Rs. 170 crores from Rs. 129.06 crores made initially. Thus it can be observed that for the 3 years relevant to A.Y.s 2007 08 to 2009-10 for which books of accounts were not available, Shri Yogesh Mehra offered a further amount of around Rs. 41 crores. The AO also proceeded to make a further disallowance out of purchases of Rs. 22,34,11,367/- being the amount of bogus purchases estimated @ 1.04% of the turnover for the relevant year. 7.4 It is noted that in course of the search action, it was observed that the Books of accounts of the assessee are maintained on SAP accounting system and the regular purchases/expenses are booked by the relevant Heads of the Departments as per the Standard Operating Procedure (SOP) followed by the assessee company. The detailed SOP and documentation followed by the assessee company for the purchases of material as well as for booking of expenses was explained by Mr. Biju Thomas, Accounts Manager, and Shri Sajji Vellanikkran, Accounts head in course of the statements of oath recorded at the time of the search action on 15.03.2013. It was explained that the ass....
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....ot be identified. The total purchases/expenses booked by the assessee from these 41 parties in the years relevant to A.Ys. 2007- 08 to 2013-14 was of Rs. 266.54 crores and the amount related to one of the said 41 suppliers from the relevant year was of Rs 27,79,200/-. It was admitted by Shri Biju Thomas. Accounts Manager, in his statement on oath recorded at the time of the search action that as per the direct instructions of the used dummy codes for booking the bogus management he had purchases/expenses in the SAP in respect of the said 41 parties. 7.7 Further, at the time of the search action, parallel exercise and investigations were carried out to find out the actual consumption of the major raw materials of cement and steel as per the standard norms vis-a-vis the consumption shown in the regular books of accounts. This analysis revealed that for the years relevant to A.Ys. 2010-11 to 2012-13, the excess consumption of cement is in the range of 24.35% to 57.31% and the excess consumption of steel is in the range of 17.98% to 42.76%. Also, at the time of the search action, incriminating documents were found which showed that the assessee has incurred substantial expendi....
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....not available with the assessee. 7.10 As noted earlier, in the pendency of the assessment proceedings initiated u/s 153A, the assessee had filed an application before the Hon'ble Settlement Commission for an additional income of Rs 82.79 crores for the years relevant to AYS 2007- 08 to 2014-15 which included an offer of additional income of Rs. 12.9 crores in respect of the bogus purchases of Rs. 129.06 crores admitted at the time of the search action for the said various years. However, after duly considering the various discrepancies noted at the time of the search action, the incriminating statements on oath recorded of the employees of the Accounts Department as well as the admission of bogus purchases by Shri Yogesh Mehra, Managing Director, this offer for additional income of Rs. 12.9 crores for the said various years on account of bogus purchases was held to be a non-true and full disclosure by the Hon'ble Settlement Commission and consequently rejected. 7.11 In course of the proceedings before the Hon'ble Settlement Commission, to support its claim of purchases in respect of the said 41 parties, the assessee had submitted purchase invoices, del....
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....tion especially related to transportation, presence of blank lorry receipts book & blank lorry invoices books of certain transporters, etc to conclude that the entire purchases made from the said 41 parties in A.Ys. 2007-08 to 2013-14 for an aggregate amount of Rs. 266.53 crores is bogus. The amount of bogus purchases in respect of one of the said 41 parties for the relevant was of Rs. 27,79,299/- which was added by the AO to the total income of the assessee for the relevant year. 7.13 As noted above, during the relevant year, the assessee had also made purchases of Rs. 28,46,859/- from hawala/bogus parties identified by the Sales Tax Department, the entire amount of which was disallowed by the AO. Moreover, again as noted above, since the books of account for the years relevant to AYS 2007-08 to 2009-10 were not available, the bogus purchases for the said 3 year period was estimated at Rs 60.76 crores by applying the average ratio of the bogus purchases to the turnover of 1.04% of the years relevant to AYS 2007- 08 to 2009-10. The amount estimated for the relevant year was of Rs 22,34,11,367/- which was also added by the AO to the total income of the assessee. 7.....
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....ting evidences were found and the relevant year was a non-abated assessment, therefore as per the decision of the Hon'ble Jurisdictional High Court in the case of All Cargo Global Logistics (374 ITR 645), no additions could have been made. The Hon'ble Supreme Court in the case of P.R. Metrani v. CIT [2006] 287 ITR 209/157 Taxman 325 (SC) has explained the scope of section 132. It has been explained by the Hon'ble Supreme Court that the books of accounts, documents, money, bullion, jewellery or other valuable article or thing and any statements recorded of the persons searched may be used as evidence for any proceedings under the Act. Also, the statement on oath recorded in course of the search action u/s 132(4) has been held to be of evidentiary value by the Hon'ble Delhi High Court in the case of Dhingra Metal Works (328 ITR 384) and the Hon'ble Kerala High Court in the case of Paul Mathews (263 ITR 101) as against statement on oath recorded u/s 133A. It is not always that a person is incriminated for possession of evidence since a person can also be incriminated for not being in possession of the requisite basic documents. For example, a person can be incrimin....
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....Moreover, other discrepancies like a) bills / invoices, lorry receipts, etc being in mint condition, b) improbably lesser time period claimed in transportation of material over large distances, (c) lorry receipts for different financial years apparently being made by the same person on a single date, (d) absence of delivery challans, insurance documents, weighment slips, quality certification etc., (e) improbably lesser time period shown for loading huge quantities of cement bags, (f) the same persons handwriting being found on the lorry receipts of various transporters who are based at different locations, (g) the same telephone nos. being found on the transport bills of different transporters, etc. were also noted at the time of the search action as well during the proceedings before the Hon'ble Settlement Commission. (iv) The actual consumption of major raw materials as per the Standard Norms vi-a-vis the consumption shown by the assessee in the regular books was found to be at major variance in the examination carried out during the search action. The excess consumption of cement for the years relevant to AYS 2010-11 to 2012 13 was found to be in the range of 24.35....
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....t Commission. Moreover, it was also an admitted fact that in respect of the said 9 parties entries were made in the SAP accounting package using dummy codes as per the instructions of the management of the assessee company. Therefore, the contention of the assessee that the action of the AO of considering the purchases of all the 41 parties as bogus, is rejected. 7.19 The assessee contends that the payments have been made by cheque and therefore, the purchases claimed by it cannot be doubted. On this contention, it is noted that the Hon'ble Supreme Court in the case of Kanchawala Gems (2007) 288 ITR 10 (SC) has held that the mere fact that the payments have been made through cheques alone cannot prove the genuineness of the purchases claimed. 7.20 The assessee submitted that 80% of the cement & steel is utilised in installation of Wind Mills and the balance 20% is utilised for the other activities like construction of culverts, small bridges, roads, pathways, etc at its various sites. Accordingly, the assessee contended that the excess consumption worked out at the time of the search action is not correct. This contention of the assessee is rejected because at....
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....009-10, Shri Yogesh Mehra, Managing Director, enhanced the admission on account of bogus purchases to Rs. 170 crores from Rs. 129,06 crores made initially. Thus it can be observed that Shri Yogesh Mehra offered an additional amount of around Rs. 41 crores for the said 3 years relevant to A.Ys, 2007-08 to 2009-10 for which the books of account were not available with the assessee. Thus the action of the AO of making the said estimated addition of Rs 22.34.11.367/- cannot be faulted. However, after having estimated the quantum of bogus purchases by applying the said average ratio of 1.04%, it was not correct on the part of the AO of making the said separate addition of Rs 28,46,859/- on account of purchase from hawala/bogus suppliers identified by the Sales Tax Department and the said separate addition of Rs 27.79.299/-being the amount related to one of the said 41 bogus parties identified in course of the search action. Accordingly, grounds Nos. 3 to 7 of the appeal are partly allowed. 8. In ground No 8 of the appeal, the assessee has disputed the addition made by the AO of Rs 31,32,458/- on account of alleged unaccounted cash expenses in the form of "speed money" and in gr....
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....me of the search action are most critical and carry immense evidentiary value, though the same may not be conclusive as held by the Hon'ble Supreme Court in the case of Pulangode Rubber Produce Co. Ltd. (91 ITR 18). The statements recorded at the time of the search action should be considered to be the most reliable for the reason that it was recorded on the spot and possibility of after-thought or to concoct an explanation and fabricate the evidence is minimum. In the instant case, Shri Yogesh Mehra, Managing Director, in course of his statement on oath recorded at the time of search action while replying to query no 135, had explained that the source of "speed money" is out of the unaccounted funds generated by claiming bogus purchases/ expenses from parties which were identified by him. The relevant portion of the statement on oath recorded of Shri Yogesh Mehra is reproduced as under: "Q. No 135 Please explain what is the source from with this speed money is paid? Ans. Sir, I have identified certain purchases which are not verifiable in reply to Q No 69. The money is generated from these purchases and diverted for utilising the same in payment of speed mone....
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....mission and offered an additional amount of unaccounted income. On that basis the learned CIT - A the addition of Rs. 223,411,367/-. In view of this, we do not find any infirmity in the orders of the lower authorities in confirming the addition of the above amount on account of alleged bogus purchase. Accordingly, ground number 2 of the appeal is dismissed. 015. In the result, appeal filed by the assessee in ITA number 1465/M/2019 for assessment year 2007 - 08 is dismissed. Assessment year 2010 - 11 Appeal number 1466/M/2019 (by assessee) Appeal number 1352/M/2019 (by AO) 016. For assessment year 2010 - 11, both the parties are in appeal before us against the order passed by the Commissioner of income tax appeals - 51, Mumbai dated 26/12/2018. 017. Grounds in ITA No. 1352/Mum/2019 for A.Y. 10-11 in Revenue's appeal:- "1. Whether on the facts and circumstances of the case the Ld CIT(A) was justified in law in deleting the addition of Rs. 2,01,96,432/- made on account of unaccounted cash expenses in form of speed money by allowing telescoping as the additions have been confirmed in respect of bogus purchases without appreciating that the assessee has contes....
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....sessment order by invoking the provisions of Section 144 despite the fact that all relevant details were filed by the appellant during the course of assessment proceedings 2. on the facts and circumstances of the appellant's case and in law the learned and CIT (A) erred in confirming the AO's action of making the estimated addition of Rs. 506,455,949/- on account of alleged bogus purchases 3. on the facts and circumstances of the appellant's case and in law the learned CIT (A) erred in confirming the AO's action of making an addition of Rs. 36,845,487/- on account of alleged bogus purchases made from 6 parties is tabulated on page 153 of the assessment order on the ground that the names of these parties are appearing on the website of Maharashtra sales tax Department as the suspicious hawala dealers. 019. For this year assessee filed its original return of income on 30/9/2010 declaring a total income of Rs. 802,834,440/-. Subsequently search took place on 14/3/2013, which revealed that the assessee has made purchases from bogus parties of steel and cement, claimed bogus transportation expenditure, incurred unaccounted cash expenses on account of speed money and....
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....eleted the disallowance of interest expenditure for the reason that assessee is having sufficient availability of interest free funds. Therefore, both the parties are aggrieved and are in appeal before us. 021. Coming to the ground number 1 - 3 of the appeal of the assessee, the learned departmental representative confirmed that they are identical to the appeal of the assessee for assessment year 2007 - 08. 022. On careful consideration of the facts and orders of the lower authorities, we find that the learned CIT - A has confirmed the addition of Rs. 506,455,959 on account of bogus purchases from 41 parties identified at the time of search action and assessee has not been a in a position to provide the requisite documents especially related to transportation and the consumption of the above material. The learned CIT - A has given the similar findings as has been given by him for assessment year 2007 - 08. We have already upheld the addition for that assessment year. Therefore, following our own order in assessee's case for assessment year 2007 - 08 we do not find any infirmity in the order of the learned CIT - A in confirmation of the addition of Rs. 506,455,949/- as ass....
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....empt dividend on income could have been earned. The learned assessing officer also found that assessee has not offered any disallowance. Therefore, the provisions of rule 8D invoked and total disallowance of Rs. 105,094,178/- was made. The learned CIT appeal on appeal before him found that there is no exempt income earned by the assessee and therefore he deleted the above disallowance following the various judicial precedents. However, we find that now with effect from 1 April 2022 the Finance act, 2022 has introduced an explanation, which makes it very clear that the provisions of Section 14A with respect to the disallowance will apply and shall be deemed to have always been applied in case where the assessee has not earned any exempt income. Therefore, in view of the amendment made we set-aside these grounds back to the file of the learned assessing officer to grant an opportunity of the hearing to the assessee and decide the issue afresh. Accordingly, these grounds are allowed with above directions. 027. Ground number 6 is with respect to the disallowance of interest expenditure of Rs. 20,317,621/- made by the learned assessing officer out of interest expenditure under the ta....
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....fully developed wind power site acquired from Messer's Vish wind infrastructure LLP by invoking the provisions of Section 40 A (2) (b)/37 (1) 5. on the facts in the circumstances of the appellant's case and in law the learned CIT (A) erred in confirming the AO's action of disallowing a sum of Rs. 60 crores by invoking the provisions of Section 37 (1) 031. in ITA number 1353/M/2019 the learned assessing officer has raised the following grounds of appeal:- 1. whether on the facts and circumstances of the case the learned CIT (A) was justified in law in deleting the addition of Rs. 33,912,150/- made on account of unaccounted cash expenses in form of speed money by allowing telescoping as the additions have been confirmed in respect of bogus purchases without appreciating that the assessee has contested the additions made on account of bogus purchases 2. whether on the facts and circumstances of the case the learned CIT (A) was justified in law in deleting the addition of Rs. 33,912,150/- made on account of unaccounted cash expenses in form of speed money by allowing telescoping as the additions have been confirmed in respect of bogus purchases without app....
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....owed and assessee failed to show the transportation detail for the material purchased as well as its consumption at the various sites. Accordingly, the assessing officer made an addition of Rs. 557,079,690/- treating the said purchases is bogus. The assessee was also found to be having incurred speed money expenditure and accordingly such unaccounted cash expenses of Rs. 33,912,150/- was added. During the year, assessee has claimed expenditure of Rs. 291 crores in purchase of site development rights in the nature of approvals and allotments of windmill project from Vish wind infrastructure LLP. During the course of search, it revealed that the above party did not have any technical knowhow, the technical manpower, or the sophisticated infrastructure in respect of acquisition of the site development rights. On the other hand, all these expertise were available with the assessee. It was also admitted by the managing director that knowhow, manpower, and infrastructure has been provided by the assessee to the above party for the acquisition of site development rights. Assessee has not received any amount for the said services rendered. Even the proceedings before the settlement commiss....
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....he learned CIT - A and ground number 1 and 2 of the appeal is dismissed. 036. Ground number 3 - 6 is identical to ground number 3 - 6 of the appeal of the AO for assessment year 2011 - 12 wherein we have set-aside the whole issue back to the file of the learned assessing officer in view of the amendment in the income tax act by Finance act 2022, for the similar reasons we also set-aside these three grounds back to the file of the AO to decide in accordance with the law. Accordingly, these grounds are allowed. 037. Ground number seven of the appeal is with respect to the deletion of the interest disallowance amounting to Rs. 34,358,442/-. This is identical to the ground number 7 of the appeal of the learned assessing officer for assessment year 2011 - 12 wherein we have upheld the action of the learned CIT - A in deleting the above disallowance in view of the specific finding that assessee has sufficient interest free funds available more than the amount invested in subsidiary companies without charging interest. Therefore, in absence of any change in the facts and circumstances of the case, we confirm the action of the learned CIT - A in deleting the same. Accordingly, ground....
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....t of purchases of development rights of fully developed when the power site acquired from Vish wind infrastructure LLP[ LLP] . We find that this issue has been considered by the learned CIT - A as per paragraph number 9 of the appeal order. The facts relating to the above addition shows that during the course of search it was found that LLP had hardly carried out any business activities, which showed sale of development right of Rs. 291 crores to the assessee company. Further, in subsequent years also this LLP has shown sale of development right of Rs. 390 crores and Rs. 102 crores respectively. During the course of search proceedings the entire process of acquisition of development right was examined and it was found that the same constitute the complex activities which require highly technical knowhow, technical manpower and sophisticated infrastructure with latest technology. The LLP did not have any such expertise or infrastructure. It was further found that the site development approvals et cetera taken by the LLP were solely using the name of the assessee. It was also found that there is hardly any expenditure booked by the assessee and the such expenditure was financed by ob....
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....y other alternative but to confirm the action of the learned CIT - A in confirming the above disallowance of Rs. 60 crores. Accordingly, ground number 5 of the appeal is dismissed. 044. Accordingly, appeal filed by the assessee in ITA number 1467/M/2019 four assessment year 2011 - 12 is dismissed. AY 2012-13 ITA number 1468/M/2019 (by assessee) ITA number 1354/M/2019 (by AO) 045. These are the cross appeals filed by the both the parties against the order of the learned CIT - A - 51, Mumbai dated 26/12/2018. 046. ITA number 1468/M/2019 is filed by the assessee raising following grounds of appeal:- 1. on the facts in the circumstances of the appellant's case and in law the learned CIT (A) erred in confirming the AO's action of passing the assessment order by invoking the provisions of Section 144 despite the fact that all the relevant details were filed by the appellant during the course of assessment proceedings. 2. On the facts in the circumstances of the appellant's case and in law the learned CIT (A) erred in confirming the AO's action of making the addition of Rs. 803,285,982/- on account of alleged bogus purchases 3. on the facts and....
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....on 6. whether on the facts and circumstances of the case the learned CIT (A) was justified in law in deleting the disallowance of Rs. 188,365,527/- ignoring the CBDT circular number 5/2014 issued in exercise of powers conferred u/s 119 of the income tax act which provides disallowance even when no exempt income is earned 7. whether on the facts and circumstances of the case the learned CIT (A) was correct in law in deleting the disallowance of interest of Rs. 34,358,442/- made by the AO u/s 36 (1) (iii) for interest free loans and advances to its subsidiary is on account of sufficient availability of interest free funds in view of the decision of the honourable Supreme Court in the case of Avon cycles Ltd (civil appeal number 1423 of 2015) wherein the proportionate disallowance of interest in case of mixed use of fund was upheld. 048. The learned departmental representative submitted that above all grounds in the appeal of the assessee as well as of the learned AO are covered by appeal of the assessee and AO for assessment year 2011 - 12. 049. We first deal with the appeal of the assessee. We find that the ground number one of the appeal is identical to grou....
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....et-aside these grounds of appeal to the file of the learned AO to decide afresh with similar direction. Accordingly, these grounds are allowed. 055. Ground number 7 is with respect to the deletion of the disallowance of interest expenditure in view of the fact that assessee has sufficient availability of interest free funds. This ground is similar to ground number six of the appeal of the AO for assessment year 2011 - 12. We have confirmed the order of the learned CIT - A in deleting the above disallowance. For the similar reasons we also confirmed the order of the learned CIT - A for this year. Accordingly, ground number 7 is dismissed. 056. Ground number three of the appeal is with respect to the disallowance deleted by the learned CIT - A of Rs. 6,9451,510 u/s 43B of the act. We find that this issue has been set-aside by the learned CIT - A to the file of the learned AO with a direction to examine the nature of the expenditure whether it falls within the ambit of the provisions of Section 43B of the act or not and whether the actual payment of the above sum has been made during the relevant year before allowing the claim of the assessee. We find that the learned CIT - A ha....
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....owance of interest expenditure of Rs. 79,399,439/-. The facts and circumstances of the disallowances identical to the ground number 7 of the appeal of the AO for assessment year 2012 - 13. The learned and CIT - capital has deleted the disallowance holding that assessee has sufficient interest free funds available then the amount of advances given interest free to its subsidiary companies. We do not find any infirmity in the order of the learned CIT - A. In view of this following our own decision for ground number seven in appeal of the AO for assessment year 2012 - 13 we dismiss this ground. 063. Accordingly ITA number 1355/M/2019 filed by the learned assessing officer is partly allowed. 064. Coming to appeal of the assessee wherein the first ground is against the action of the learned assessing officer confirmed by the learned CIT - A in passing the assessment order u/s 144 of the income tax act. This ground is identical to the grounds of appeal raised by the assessee for assessment year 2011 - 12. We have dismissed this ground of appeal in that appeal. Therefore, for the similar reasons we also dismiss this ground. Accordingly, ground number one is dismissed. 065. Ground....
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....case the learned CIT (A) was justified in law in allowing the relief of Rs. 31,119,000/- against the disallowance of deduction on account of liquidated damages of Rs. 84,194,465/- made by the AO on the basis of debit note issued by one Messer's E N wind power when such evidence was not produced before the AO during the assessment and remand proceedings and therefore, the relief allowed is in violation of rule 46A of the IT rules, 1962 2. whether on the facts and circumstances of the case the learned CIT (A) was justified in law in deleting the disallowance of Rs. 541,007,860/- made u/s 14 A ground that no exempt income has been earned during the assessment year Under consideration 3. whether on the facts and circumstances of the case the learned CIT (A) was justified in law in deleting the disallowance of Rs. 541,007,860/- on the basis of the decision of the honourable Supreme Court in case of Chittanand logistics private limited (95 taxmann.com 221) as the aforesaid decision is a nonspeaking order and no reason has been given for the decision and therefore not a binding precedent Under article 141 of the Constitution 4. whether on the facts and circumsta....
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.... filed by the appellant during the course of assessment proceedings 2. on the facts and circumstances of the appellant's case and in law the learned CIT (A) erred in confirming the AO's action of making an addition/disallowance of Rs. 182,785,086/- by invoking the provisions of Section 43B 3. on the facts in the circumstances of the appellant's case and in law the learned CIT (A) erred in confirming the AO's action of disallowing set-off of brought forward loss of Rs. 336,508,609/- 4. on the facts and circumstances of the appellant's case and in law the learned CIT (A) erred in confirming the AO's action of disallowing deduction u/s 80 IA amounting to Rs. 146,249,255/- 5. on the facts and in the circumstances of the appellant's case and in the law the learned CIT (A) erred in confirming the AO's action of disallowing bad debts written off amounting to Rs. 2,007,599/- 6. on the facts in the circumstances of the appellant's case and in law the learned CIT (A) erred in confirming the AO's action of disallowing liquidated damages amounting to Rs. 53,075,465/- 7. on the facts in the circumstances of the appellant's case and in law th....
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....erein we have upheld the order of the learned CIT - A deleted the about disallowance. Therefore, for the similar reasons, we confirm the order of the learned CIT - A. Accordingly ground number 6 of the appeal is dismissed. 075. Ground number 1 of the appeal of the AO is against the deletion of disallowance to the extent of Rs. 31,119,000/- on account of liquidated damages of Rs. 84,194,465/-. The facts relating to the above disallowance made by the assessing officer is reproduced in paragraph number 16 of the assessment order. The assessee has claimed liquidated damages amounting to Rs. 84,194,465 in the profit and loss account. The assessee was asked to furnish the details the before the assessing officer assessee could not furnish any detail and therefore the learned assessing officer disallowed the above sum. The matter reached before the learned CIT - A who dealt with this issue in paragraph number 10 of his order. Before the assessing officer, it was submitted that assessee has entered into a memorandum of understanding on 26/2/2013 with one party for supply and commissioning of 20 MW wind power project in Rajasthan for a total contract amount of Rs. 1,037,300,000. As per t....
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....peal of the assessee are with respect to the disallowance of certain expenditure confirmed by the learned CIT - A. The facts relating to the above ground is that assessee has claimed certain expenditure Under the head employee's benefit, repairs and maintenance, other manufacturing expenses, commission and discount on sales and legal and professional fees as well as security service charges. Before the assessing officer, no further submissions were made and therefore the learned AO made an ad hoc disallowance of 10% of the above aggregate expenditure. Such disallowance was amounting to Rs. 333,689,904/-. The assessee contested before the learned CIT - A the submissions made by the assessee were not considered. The remand report was called for where the assessee only filed copies of the Ledger account of the said expenses and simple copies of the bills and invoices. In rejoinder assessee submitted that its registered office, factory is situated at a different place and records are lying under lockout and no employees are there to take care of. Therefore, it was stated that it is practically impossible to comply with the requirement of the AO. Assessee also stated that regular assess....
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....spect to the confirmation of disallowance of Rs. 182,785,086/- u/s 43B of the act. The learned CIT - A has dealt with this issue in paragraph number 6 of the appeal. He has decided this issue after obtaining the remand report of the learned assessing Officer and rejoinder to the remand report of the assessee. The issue is 18.27 crores of service tax, which has been paid by the assessee on 18/9/2013 under the protest he held that, assessee, can claim the same as bad debt if the same is not received from the client but it is not allowable u/s 43B of the act. We do not find any infirmity in the order of the learned CIT - A in making the about disallowance invoking the provisions of Section 43B of the act as it did not satisfy the requisite criteria. In the result ground number 2 of the appeal is dismissed. 082. Ground number 3 is with respect to the not allowing set of brought forward losses of Rs. 336,508,609. This amount is and unabsorbed depreciation and not carry forward of losses. The learned CIT appeal did not allow the same because of the reason that there is no unabsorbed depreciation available to the assessee as per the assessment records of the earlier year. Therefore, th....