AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (11) TMI 1108
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.... Income Tax (Appeals) has erred in rejecting the assessee's claim that the income of Rs.33,37,093 may be treated as income derived from non-export activity only instead of income under Other Sources, so that the same could form part of domestic turnover. 2. The learned Commissioner of Income Tax (Appeals) has erred in not allowing the unrealized sale proceeds of Rs.24,32,35,200 from the profits as per the Hon'ble High Court of Madras order approving to write off of the same. 3. The learned Commissioner of Income Tax (Appeals) has erred in not excluding the unrealized sale proceeds of Rs.24,32,35,200 from the export turnover as well as total turnover in the light of the case of Abad Fisheries 258 ITR 641 KER The Appellant craves permission to amend, add or alter the above grounds of appeal. For these and other grounds that may be urged at the time of hearing of the above appeal, it is prayed that this appeal be allowed. 3. The first issue that came up for our consideration from Ground No.1 of the assessee's appeal is assessment of other income under the head 'income from other sources'. The AO has assessed other income reported in P & L....
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....the Hon'ble Madras High Court are as under: "....20. As rightly pointed out by learned Standing counsel appearing for the Revenue, when the so called loss has not crystallized as a business loss during the year under consideration, merely on the score of the amount not having been realized, one cannot allow the loss as business loss. The assessee's contention before the Assessing Officer was that in respect of the said amount, they sought permission from Reserve Bank of India for extension of time for remitting the said amount. In the face of the facts pleaded, the Assessing Officer rejected the same stating that the assessee's case could not be accepted for the grant of relief. Accordingly, the Tax Case (Appeal) stands dismissed. The order of the Income Tax Appellate Tribunal is confirmed"..... 4.3 In this view of the matter and by respectfully following the decision of the Hon'ble Madras High Court in the assessee's own case in Tax Case (Appeal) Nos.1135 & 1196 of 2008 dated 25.11.2013 for the AYs 2001-02 & 2002-03, we are of the considered view that there is no error in the reasons given by the Ld.CIT(A) to sustain the additions made by the AO and thus, we re....
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....e assessee could not file supporting invoices for new assets acquired and installed during the Financial Year relevant to the assessment year 2001-02. The Ld.CIT(A) has allowed depreciation on additions to fixed assets on the ground that there is no dispute that the assessee had incurred the expenditure and the accounts have been duly verified in the Audit. The Ld.CIT(A) further held that the claim cannot be disallowed merely in the absence of relevant documents. 8.1 The Ld.DR submitted that the Ld.CIT(A), erred in allowing depreciation on the basis of benefit of doubt without considering the fact that the assessee could not even file necessary bills & vouchers and invoices for additions to fixed assets made during the Financial Year relevant to the assessment year 2001-02. The Ld.DR, further submitted that the Ld.CIT(A) completely erred in allowing relief only on the basis of Audit Report and accounts without appreciating the fact that it is the duty of the assessee to furnish invoices to claim acquisition of new assets. The assessee itself admitted the fact that it could not file necessary evidences. But the Ld.CIT(A) has allowed relief on the basis of benefit of doubt. In thi....
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....and 02/08/2007 were issued; The copies of all the notices are enclosed as annexure 7, 8, 9 and,10. As there was no compliance by the appellant to any of the notices, the AO had passed the consequential order dated 06/09/2007 by recording the non-compliance of the appellant. Against this OGE dated 06/09/2007 the assessee preferred appeal. However, the ld.CIT(A) in the second round vide his order dated 20/4/2011 ignored all these details and erred on fact by allowing the appeal of the company simply relying upon the written submission without examining the factual aspect of the discrepancies discussed above in the claim of depreciation. In the order, he had directed the AO to allow additional depreciation of Rs.84,78,14,130 which was nowhere claimed in the computation of income or Return of Income. It is pertinent to mention here that the cairn of depreciation as per the P&L Ale of STP division filed along with Return of Income was only Rs.45,58,41,382. The depreciation for non STP was Rs.43,61,77,801. These computations are already placed in the annexure discussed above. Hence, it is submitted that prima facie the CIT(A) grossly erred on law and fact. Against this order the departme....
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....s of additions to fixed assets in Tax Audit Report and thus, opined that merely for the reasons of non-furnishing invoices, claim of depreciation cannot be denied. 8.4 We find that the Ld.CIT(A) has allowed relief to the assessee without any basis. The main reason for the AO to deny depreciation on additions to fixed assets is non-furnishing of necessary evidences. Further, the assessee has claimed depreciation for STPI Units and non-STPI Units and if you consider depreciation claimed for both the Units, it does not match with total depreciation debited into the P & L A/c for the year ending 31.03.2001. Even before us, the assessee could not explain with necessary evidences, the differential figures of depreciation claim in the P & L A/c and in the statement of total income, computation of income for STPI Units & non- STPI Units. Since, the assessee could not file necessary invoices in support of additions to fixed assets and also basis for adopting different figures of depreciation for computing income from STPI Units & non-STPI Units, we are of the considered view that the issue needs further verification from the AO and hence, we set aside the issue to the file of the AO and ....
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.... findings of the Tribunal is affirmed by the Hon'ble Madras High Court in Tax Case (Appeal) Nos.1135 & 1196 of 2008 dated 25.11.2013 for the AYs 2001-02 & 2002-03. Therefore, the Ld.CIT(A) erred in giving further relief by re-computing export turnover and total turnover. 10.1 The Ld.DR has furnished a detailed written submissions on this issue and argued that how to compute export turnover and total turnover for the purpose of deduction u/s.10A of the Act. The written submissions filed by the Ld.DR are as under: Issue-2: Quantification of Export Turn over: 2.1 In the Return of Income, as per the computation, the profit of 10A unit (STP unit) claimed by the assessee for the AY 2001-02 was Rs.132,18,47,053. In order to claim deduction/ exemption the company ought to furnish Form 56 F as mandated in section 10A(5) of the IT Act. This form 56F filed by the assessee is enclosed as Annexure 11. As per Form 56F, the total turnover of the business was Rs.596,94,09,132. This includes overseas business turn over (Rs.496,33,99,855), domestic turnover (Rs.87,15,35,037) and other income (Rs.13,44,74,240) and the break up was available in the audited P&L a/c. 2.2 In....
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....agraph 4.3). In this connection it is to be mentioned here that the CIT(A) had relied upon his predecessor order dated 27/2/2006 passed for the A Y 2002-03. Aggrieved by the order of CIT(A) the company had preferred the appeal before the Hon'ble ITAT. 2.6. Decision of ITAT: The Hon'ble ITAT dealt this issue in ITA No.228(Mds)/2007 dated 14/3/2008. It is pertinent to mention that the alternative plea of the appellant company before the CIT(A) was that the unrealized sale proceeds of Rs.24,32,35200/ was claimed as write off of bad debt. This was not allowed by the CIT(A) as well as Hon'ble ITAT (Paragraph 5 of the decision). The assessee moved the appeal against this order before Hon'ble HC of Madras. 2.7 Decision of High Court: The Hon'ble HC of Madras had passed a speaking order on this aspect in its order dated 25/11/2013 and this order is placed between page 86 and 103 of the appellant's paper book dated 21/1/2019. The substantial question of law was answered against the assessee. Hence, all the ground of appeal of the appellant in IT A 11o.1128/2011 in infructuous. 2.8 CIT(A) decision in second round: By ignoring all th....
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....urther relief to the assessee. 10.4 Having said so, let us come back to the dispute on hand in question. Before us, is whether the Ld.CIT(A) is right in re-computing total turnover by excluding unrealized sale proceeds. We find that the Ld.CIT(A) admitted the fact that in the first round of litigation the ITAT has confirmed the order of the Ld.CIT(A) in denying exclusion of unrealized sale proceeds from total turnover. However, in the subsequent order dated 24.03.2008 for the AY 2003-04, the ITAT by following the decision of the Kerala High Court in the case of Abad Fisheries (supra), held that the unrealized sale proceeds have to be excluded from export turnover and total turnover. Therefore, on the basis of subsequent development, the Ld.CIT(A) has re-computed total turnover by excluding unrealized sale proceeds by following the decision of the Hon'ble Kerala High Court in the case of Abad Fisheries (supra), because said findings are further fortified by the decision of the Hon'ble Supreme Court in the case of HCL Technologies Ltd. (supra), where it has been held that any expenditure excluded from export turnover needs to be excluded from total turnover also. Therefore, consid....