TaxTMI 
TaxTMI 
2022 (9) TMI 238
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.... 1999 - 2000 Assessee 143 (3) 3 2497/M/2006 2000 - 2001 Assessee 143 (3) 4 2341/M/2006 2000 - 2001 AO 143 (3) 5 2498/M/2006 2001 - 2002 Assessee 143 (3) 6 2499/M/2006 2002 - 2003 Assessee 143 (3) 7 487/M/2013 2003 - 2004 Assessee penalty u/s 271 (1) (C) 8 5462/M/2006 2003 - 2004 Assessee 143 (3) 9 7547/M/2012 2004 - 2005 Assessee 143 (3) read with Section 147 10 490/M/2008 2004 - 2005 Assessee 143 (3) 11 488/M/2013 2004 - 2005 Assessee penalty u/s 271 (1) (C) 12 1919/M/2009 2005 - 2006 Assessee 143 (3) 13 489/M/2013 2006 - 2007 Assessee penalty u/s 271 (1) (C) 14 6075/M/2009 2006 - 2007 Assessee 143 (3) 15 6146/M/2011 2007 - 2008 Assessee 143 (3) 16 6147/M/2011 2008 - 2009 Assessee 143 (3) We proceed to dispose them of assessment year wise as hereinafter. ITA number assessment year filed by particulars 2323/M/2016 1999 - 2000 AO 143 (3) 2496/M/2006 1999 - 2000 Assessee 143 (3) ....
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....the facts and in law the CIT (A) erred in confirming disallowance of claim of right of Rs. 279,794/- in respect of interest on securities offered for tax in earlier year on the ground that genuineness of the transaction remains to be proved vii. on the facts and in law, the CIT (A) erred in confirming disallowance of short-term capital gain on sale of securities on ground that the genuineness of the transaction remains to be proved viii. on the facts and in law the CIT (A) erred in confirming disallowance of bad debts written off of Rs. 4,47,759/- on the ground that similar claim was disallowed in assessment year 96 - 97 ix. on the facts and in law, the CIT (A) failed to appreciate that in fact for assessment year 96 - 97, similar claim of appellant was partly allowed and thereby erred in disallowing claim of right of Rs 4447759/- x. on the facts and in law the CIT (A) erred in confirming disallowance out of interest in respect of advances given to CIFCO travel private limited relying only on the order of the CIT - A for assessment year 96 - 97 the CIT (A) erred in facts and in law in confirming disallowance out of depreciation on the ground that....
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.... submitted a detailed not. The relevant notes to the accounts for the year were also shown. The learned and assessing officer found that reversed income is aggregating to Rs. 1,730,586/- being lease rental and higher purchase interest, which accrues to the assessee during the year. He further held that assessee has consistently followed income on accrual method in accounting income being lease rental. The Prudential norms issued by the reserve bank of India are in relation to income recognition, which falls on altogether different ground. The reversal of entries made is obviously subsequent to the end of the accounting period after accounting the lease rental he further referred to the report of the board of directors of the assessee company wherein it is mentioned that assessee was not registered as nonbanking financial company as application for registration of the assessee was not considered favorably. Therefore, the AO was of the view that NBFC Prudential norms do not apply to the assessee. Hence, he held that there is no reason to reverse the income of Rs. 1,730,586 for the year under consideration. Accordingly, this addition was made. 08. The assessee challenged the same b....
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....enuineness of transactions remain to be proved. The facts show that assessee has written of Rs. 279,794/- being interest receivable on government securities on 12.5% as the SDL 2004 for the accounting year ended on 31/3/1998 and the same was offered for tax for assessment year 98 - 99 on accrual basis. However, the securities were sold in June 1998 and the amount of interest shown, as receivable in the earlier year i.e. assessment year 98 - 99 did not receive in view of the sale of the securities and therefore the same is written off. The AO questioned the same and stated that the securities were sold on cum interest basis and the assessee has incurred loss in the transaction of sale of securities. The assessee was not forthcoming with any explanation. AO disallowed the same. On appeal before the learned CIT - A assessee could not produce any evidence with respect to the sale of securities and it was found that the securities were never delivered to the assessee and was subsequently sold to the same person. Therefore, the CIT - A noted that the securities were sold remains unsubstantiated is no documents or correspondence bank transactions could be produced in support of the sale p....
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....ct of news receivable from various parties related to hire purchase transaction. The AO noted that there are five parties financed through the dealers for purchase of various goods. These parties are now not traceable, therefore, amounts are not recoverable, hence, those were written off. AO disallowed the same for the reason that no proper agreement with the dealer was existing, doubt about the existence of genuine transaction and such write off are related to the business. 16. The assessee preferred appeal before the learned CIT - A following his own order for assessment year 96 - 97 and 97 - 98 confirmed the disallowance stating that it did not satisfy the criteria Under which the said claim is allowable u/s 36 (1) (vii) read with Section 36 (2) of the act. 17. We have heard the rival contentions on this issue and find that undoubtedly these was the amount which was financed by the assessee through its dealer for purchase of consumer goods to the various parties. Undisputed fact shows that assessee is engaged in the business of leasing and hire purchase, assessee has advanced money to these parties through its dealers. Assessee is engaged in the business of money lending, ....
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....presentative submitted that identical issue has been decided in assessment year 1998 - 1999 in ITA number 4046 and 4533/M/ 2005 dated 13/10/2021 wherein the issue has been dealt with in paragraph number 23 - 25 of the order. The learned departmental representative also submitted the same. 22. We have carefully considered and perused the orders of the lower authorities as well as the order of the coordinate bench. We find that in paragraph number 24 the coordinate bench has reproduced the order for assessment year 9697 of the coordinate bench in ITA number 3992/M/2001. In that paragraph the order of the ITAT for assessment year 94-95 was referred. In that order the orders for assessment year 1992 - 1993 and 93 - 94 one referred to and the matters were restored back to the file of the AO to decide it in accordance with the decision of ITAT. However, for assessment year 1998 - 99, the coordinate bench directed the AO to allow the depreciation. We find that the direction of the coordinate bench, which followed the decision of the other assessment years where the issue was set aside to the file of the AO, is not in conformity with those orders of ITAT. Accordingly we set-aside this i....
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..... Assessee has debited interest tax of Rs. 3 lakhs to the profit and loss account and has not paid the same before the due date of filing of the return of income. Accordingly, the AO made the addition of the same. On appeal before the learned CIT - A assessee contended that the interest tax is in the nature of tax on income and is not covered Under Section 43B of the act. The learned CIT - A the arguments of the assessee and confirmed the disallowance. 27. Before us this ground was not pressed hence same is dismissed. 28. Accordingly, appeal of the assessee is partly allowed. 29. ITA number 2323/M/2006 filed by the assessing officer contends only issue where the learned CIT - A has erred in directing the AO bifurcated the lease rentals received from certain parties in principal and interest and to tax only the interest component as income of the assessee. We find that this issue is covered in favour of the assessee by the decision of the CIT - A in assessment year 1997 - 98 wherein the claim of the appellant was accepted based on remand report by the AO. This direction of the learned CIT - A is also in consonance with CIRCULAR: NO. 9 [R. DIS. NO. 27(4)-IT/43], DATED 23-3-1....
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....f account and claimed as bad debt. The undisputed facts also show that assessee in the business of loans and advances and financing of assets through hire purchase. Identical issue arose in the case of the assessee for assessment year 99 - 2000 wherein we have allowed the claim of such bad debts as per ground number 5. Therefore, we allow the claim of that that the assessee reversing the orders of the lower authorities. Ground number 3 are allowed. 34. Ground number 4 is with respect to disallowance of depreciation of Rs. 261,210/- which is disallowed by the learned assessing officer following the order of the AO in 1997 - 1998 and 1998 - 1999 where the assets were either in not existence or whether they're been used for the purpose of the business was not known. Identical ground arose in the case of the assessee for assessment year 1998 - 1999 wherein the issue has been decided in favour of the assessee. However, we have dealt with this issue in the appeal of the assessee for assessment year 99 - 2000 wherein we have set-aside the whole issue back to the file of the learned assessing officer in accordance with the order of the coordinate bench in earlier years in assessee's own....
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....ent orders of the past years were made over and above sum new additions. These additions were challenged before the learned CIT - A who passed an order on 12/4/2004 partly allowing the appeal of the assessee. Therefore the assessee is aggrieved with the order of the learned CIT - A on confirmation of the disallowance of interest in respect of advances given to 1 of the company without charging interest and further upholding the issue of rejection of the change in the method of accounting. 41. The ground number 1 is with respect to confirming the disallowance of interest in respect of advances given to sift court travel private limited. The fact shows that there is no such addition made by the learned assessing officer with respect to the advances given to CIFCO travel private limited. Therefore, ground number 1 of the appeal is not arising out of the order of the learned CIT - A hence dismissed. 42. Ground number 2, is with respect to disallowance of depreciation on the ground that in earlier year the assets were neither found to be in existence or no evidence with respect to the fact that the assets were given on lease for the purposes of the business of the assessee. We fin....
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....y. Therefore, the ground raised by the assessee is not correct it also did not mention any amount. Therefore, ground number 1 is dismissed. 47. Ground number 2 is with respect to the disallowance of depreciation based on the order of the assessing officer in earlier years wherein the assets are given on hire neither found to be not in existence or they were not found to be used in the business of the assessee. The identical issue arose in the case of the assessee for assessment year 1998 - 1999 wherein the coordinate bench directed AO to delete the disallowance. However when identical issue arose before us for assessment year 1999 - 2000 we found that in earlier years the coordinate bench has set aside the issue back to the file of the learned assessing officer to decide it up as in accordance of the orders of the ITAT. Therefore with similar direction we set-aside this ground of appeal to the file of the learned AO. 48. Ground number 3 is with respect to the change in method of accounting made by the assessee, which was rejected by the lower authorities. We find that identical issue arose in the case of the assessee for earlier years i.e. assessment year 98 - 99, wherein ITA....
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.... is with respect to the disallowance of interest of Rs. 215,821 in respect of advances given to Acadia investment Ltd. The claim of the learned assessing officer is that assessee has used interest-bearing funds to advance these parties. The learned and CIT - A confirmed the same stating that assessee has not given any evidence that the interest-bearing funds were not utilized for the same. 54. On careful hearing the arguments of the assessee, perusal of the orders of the lower authorities, we found that the balance outstanding in the account of this party is the interest receivable from this party which was folly offered to taxation in the earlier years. The assessee has already contested that the principal amount has already been received and the amount outstanding is only interest. We do not find any reason to uphold the disallowance as the interest income has already offered for taxation in the earlier years and this amount is outstanding only with respect to that interest. We find that this is not an advance given by the assessee but merely an outstanding interest receivable. On this sum there was no disallowance made by the learned assessing officer in earlier years also. T....
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....e delinquency in the documents, the claim of the assessee cannot be rejected. We find that in the current present case and a sum of Rs. 519,222/- is interest and brokerage income already offered in earlier years and now written off. Further, a sum of Rs. 1,503,135 is the hire purchase installment of lease charges receivable from the various parties, which could not be recovered, and draft. With respect to these two items, we direct the learned assessing officer to delete the disallowance. With respect to other items, there are no evidences available and therefore the disallowance of the balance sum is confirmed. Accordingly, the assessee gets relief with respect to the sum of Rs. 1,503,135/- being outstanding hire charges receivable and a sum of Rs. 519,222/- being interest and brokerage income already offered for taxation in the earlier years. The ground number 4 of the appeal is partly allowed. 58. Accordingly, ITA number 5462/M/2006 filed by the assessee for assessment year 2003 - 04 is partly allowed. 59. ITA number 487/M/2013 is filed by the assessee for assessment year 2003 - 04 against the penalty confirmed by the learned CIT - A levied by the learned assessing officer....
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....ver, assessee failed to substantiate the same either u/s 36 or u/s 28-29 in absence of adequate details. Therefore, it cannot be said that claim of the assessee is inaccurate. 64. The order passed by the Learned AO u/s 271 (1) (C) of the act levied the penalty for the reason that assessee has furnished inaccurate particulars of income with respect to claim of bad debts. The learned CIT - A on appeal also confirmed the same. On carefully looking at the facts of the case we find that merely because, the addition has been confirmed by the appellate authorities, it cannot be said that the assessee has furnished inaccurate particulars of income. 65. Even otherwise, on the merits, the claim of the assessee is rejected. Merely because of the same, when the claim is not found to be unsustainable in law, the penalty deserves to be deleted. 66. Accordingly, we direct the learned assessing officer to delete the penalty for assessment year 2003 - 04. ITA number 407/M/2013 filed by the assessee against the confirmation of the penalty u/s 271 (1) (C) of the act is allowed. 7547/M/2012 2004 - 2005 Assessee 143 (3) read with Section 147 490/M/2008 2004 - 2005 Assessee....
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....e have held that this amount is pertaining to outstanding interest receivable from that party. It is not the advance which is been given out of interest-bearing funds available with the assessee. The interest receivable has already been offered for taxation in the earlier years. There is no provision in the agreement either oral or written to charge interest on outstanding interest. In nutshell, the assessee has not advanced interest-bearing funds to that party i.e. Arcadia investment Ltd. Accordingly, for the reason given by us in earlier years, the interest disallowance of Rs. 215,821/- deserves to be deleted, accordingly reversing the orders of the lower authorities, ground number 1 of the appeal is allowed. 74. Ground number 2 is with respect to the disallowance of depreciation of Rs. 83,023/- this disallowance is with respect to the assets, which could not be found in existence or could not be found to have been given on hire purchase/lease in the ordinary course of business of the assessee. This issue arose originally in assessment year 1996 - 97. The coordinate bench in assessee's own case has dealt with this issue in earlier years. We have also followed the same while de....
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....ore, the penalty also does not sustain for the reason that the penalty was levied on all the additions confirmed by the learned CIT - A. 80. Issue of this the appeal in ITA number 488/M/2013 filed by the assessee for assessment year 2004 - 05 against confirmation of penalty u/s 271 (1) (C) of the act is allowed. 81. ITA number 7547/M/2012 is filed by assessee against the order passed by the Commissioner of income tax (appeals) - 40, Mumbai dated 22/10/2012 for assessment year 2004 - 05. Appeal filed by the assessee against the order passed u/s 143 (3) read with Section 147 of the income tax act dated 28/12/2011 passed by the Deputy Commissioner of income tax (OSD -II), Central range - 7, Mumbai was dismissed. 82. Briefly the fact shows that assessee filed return of income for assessment year 2004 - 05 originally on 30/10/2000 for at a total loss of Rs. 7,566,870/-. This was assessed u/s 143 (3) on a total loss of Rs. 920,100/- on 19/12/2006. Subsequently on verification of the case record, the learned assessing officer found that the assessee followed the cash system of accounting from assessment year 98 - 99 however no addition has been made on account of accrual of inter....
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....2 filed by the assessee for assessment year 2004 - 05 against the reopening of the assessment is allowed. 1919/M/2009 2005 - 2006 Assessee 143 (3) 87. ITA number 1919/M/2019 is filed by the assessee for assessment year 2005 - 06 against the order passed by the learned Commissioner of income tax (appeals) Central - V, Mumbai dated 28/11/2008 . the appeal filed by the assessee against the order passed u/s 143 (3) of the act dated 17/12/2007 by the Asst Commissioner of income tax, Central range, 7, Mumbai is partly allowed. 88. The assessee is aggrieved with the order of the learned CIT - A and has challenged the same on account of confirmation of disallowance of interest of Rs. 215,821/- on amount of advances given related parties, disallowance of depreciation amounting to Rs. 62,267/- and rejection of the change in the method of accounting and making an addition of Rs. 7,815,641/- confirmed by the learned CIT - A. 89. Assessee filed its return of income on 20/10/2005 (wrongly mentioned by the learned assessing officer as 30/10/2004) at a loss of Rs. 7,053,823/-. The return of assessee was picked up for scrutiny and it was found that as in last year there is an a....
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.... issue back to the file of the learned assessing officer to decide in accordance with the direction of the coordinate bench in earlier years. Accordingly, this ground of appeal number 2 is allowed with above direction. 94. Ground number 3 is with respect to the addition of Rs. 7,815,641/- which arose on account of the change in the method of accounting made by the assessee. We find that identical issue arose in the case of the assessee for assessment year 1998 - 1999 wherein the coordinate bench held that the change in the method of accounting made by the assessee is proper, in accordance with the law, and as per the direction of the reserve bank of India. Therefore respectfully following the decision of the coordinate bench for assessment year 1998 - 1999 we allow ground number 3 of the appeal and direct the learned assessing officer to delete the addition of Rs. 7,815,641/-. 95. Accordingly, appeal of the assessee for assessment year 2005 - 06 in ITA number 1919/M/2009 is allowed. 489/M/2013 2006 - 2007 Assessee penalty u/s 271 (1) (C) 6075/M/2009 2006 - 2007 Assessee 143 (3) 96. ITA number 6075/M/2009 is filed by the assessee for assessment year ....
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....und number 1 of the appeal. 101. Ground number 2 of the appeal is with respect to the disallowance of depreciation of Rs. 46,700/- based on the orders of the coordinate bench in earlier years wherein this issue also arose before us for assessment year 1999 - 2000, we have set-aside this issue back to the file of the learned assessing officer to decide the issue in accordance with the direction of the coordinate bench. With similar directions we also set-aside ground number 2 of the appeal. 102. Ground number 3 of the appeal is with respect to the rejection of the change in the method of accounting made by the assessee by the lower authorities and thereby making an addition of Rs. 7,737,131. We find that identical issue arose in case of the assessee for assessment year 1998 - 2000 wherein the coordinate bench has held that the change in method of accounting made by the assessee is bona fide, proper, in accordance with the law and in accordance with the directions of the reserve bank of India. Accordingly, respectfully following the decision of the coordinate bench, we direct the learned assessing officer to delete the disallowance/addition of Rs. 7,737,131/- and allow ground n....
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....ed CIT - A confirmed the addition disallowances made by the learned assessing officer in order passed u/s 143 (3) of the act on 14th/12/2009. Such additions were i. disallowance of interest of Rs. 215,821/- relying on the orders of the earlier assessment years, ii. disallowance of depreciation of Rs. 35,025/- on the basis of the earlier assessment years, iii. addition on account of change in the method of accounting rejected by the assessing officer and making an addition/disallowance of Rs. 7,737,171, iv. disallowance of amounts written off , v. not adjudicating the claim of the assessee that the amount credited in respect of reversal of lease rent and hire purchase income is not taxable for the reason that same is already taxed in earlier years, vi. Rejecting the claim of the assessee that the amount written back as waiver of principal amount state bank of India is not taxable on the ground that no such claim was made in the return of income. 109. The brief facts of the case show that assessee filed its return of income on 24 - 10 - 2007 declaring total income of Rs. Nil. The assessment u/s 143 (3) of the act was made on 14....
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....anced given by the assessee out of the interest-bearing funds as this amount is outstanding as interest receivable which was offered for taxation in earlier years. Accordingly, ground number 1 of the appeal of the assessee is allowed and AO is directed to delete the disallowance of Rs. 215,821. 114. Ground number 2 is with respect to the disallowance of depreciation of Rs. 35,021/- based on the orders of earlier assessment years, which also arose in appeal of the assessee for earlier years wherein we have deleted the disallowance and matter was restored back to the file of the learned assessing officer to determine the disallowance on the merits of the case as per the direction of the coordinate bench in earlier years. Therefore, for the similar reasons set-aside this ground of appeal back to the file of the learned assessing officer. 115. Ground number 3 is with respect to the addition of Rs. 7,737,171/- on account of rejection in the change in the method of accounting. This issue arose in the case of the assessee for assessment year 1998 - 1999, wherein the coordinate bench held that the change in the method of accounting adopted by the assessee is bona fide, proper, in acc....
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....hence the same is not liable to be included in the taxable income for the year and therefore AO was requested to consider the above and reduce the taxable income by some of Rs. 12,719,687/- being principal amount of loan due to state bank of India which was written back on account of one-time settlement with them. The assessee also submitted a copy of the resolution passed at the board meeting held on 3 September 2007 where there is a state bank of India cash credit account has been written back amounting to Rs. 19,327,008.14. It is apparent that when the assessment order was passed on 14th/12/2019 there is no mention of such amount. Therefore, it is apparent that the letter is dated 21 December 2019 whereas the assessment order was already passed on 14 December 2019. Therefore, naturally, there was nothing before the assessing officer at the time of passing of the order. Neither the claim was not made by filing revised return nor was not the claim available during the course of assessment proceedings even by letter. Therefore, this issue was agitated by assessee before the learned and CIT - A who dealt with the same as per paragraph number 9 of his assessment order. Learned CIT - ....
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....which has been allowed to the assessee as deduction or not. It is the duty of the assessee to show before the learned assessing officer that what was the one-time settlement amount agreed upon between the parties by submission of the documents and how it did not contain any element of interest. Accordingly additional ground is allowed and set-aside to the file of the learned assessing officer with a direction to the assessee to substantiate its claim for the AO. AO may examine the same and decide it in accordance with the law. 125. In the result ITA number 6146/M/2011 filed by the assessee for assessment year 2007 - 08 is partly allowed. 6147/M/2011 2008 - 2009 Assessee 143 (3) 126. ITA number 6147/M/2011 filed by the assessee for assessment year 2008 - 09 against the order passed by the learned CIT - A - 40, Mumbai dated 8/6/2011 wherein the appeal filed by the assessee against the order passed u/s 143 (3) of the act dated 1/12/2010 by the learned assessing officer is dismissed. Therefore assessee is aggrieved on 4 different points as Under:- i. disallowance of interest expenditure of Rs. 215,821/- based on findings in earlier assessment years i....