TaxTMI 
TaxTMI 
2017 (11) TMI 2040
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....e case are that search and seizure operations were carried out on 03.05.2007 at the business and residential premises of the assessee group. The assessee filed his return of income declaring income at Rs. 1,05,32,110/- which includes additional income of Rs 50 lacs declared during the course of search. The assessment u/s 153A r.w.s 143(3) was completed on 24.12.2009 at total income of Rs. 1,26,32,909/- making additions under section 2(22)(e) towards deemed dividend, unexplained jewellery, interest disallowance under section 14A. Separately, penalty proceedings were also initiated u/s 271(1)(c). Thereafter, after considering the submissions of the assessee, the AO passed an order u/s 271(1)(c) imposing a penalty of Rs. 7,41,060/- on whole of....
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....gs, the Coordinate Bench has deleted the additions towards unexplained jewellery and interest income, we find the same to be correct as apparent from the following findings of the Coordinate Bench in ITA No. 475/JP/2014 dated 05/09/2017 which are as under: "3.3 We have heard rival contentions, perused the material available on record and gone through the orders of the authorities below. The ld. CIT(A) has not given any reason for denying the benefit/set off to the extent of 250 gms in case of Aditi Mishra and Aanchal Mishra (minor grand-daughters) and partly allowing the benefit to the extent of 250 gms to Smt. Roshni Mishra. We find that the case of the assessee is covered by the CBDT Circular No. 1916 dated 11.05.1994 whereby the CBDT h....
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....judgments referred supra, in our view, the assessee admittedly had its own funds, as referred to earlier, and admittedly such funds/reserves being substantially higher than, even otherwise, the advances to the debtors, no notional interest of hypothetical interest could have been disallowed on such facts. The revenue has failed to prove nexus. In our view, the Tribunal has correctly appreciated the facts and law." The ld. D/R could not bring any contrary material to controvert the submissions of the assessee. Therefore, in view of the above discussion and case laws, the order of ld. CIT(A) is quashed. The AO is directed to allow the interest expenses. The grounds of the assessee are allowed." 5. In light of above, where the additions w....
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.... proceedings has reiterated that these advances are in the course of regular business. It is a running account, said advances later on repaid. This issue is debatable and various courts particularly in the case of Creative Dyeing & Printing (P) Ltd. (supra) wherein it has been held that business transaction is not covered under section 2(22)(e) of the Act. Various other case laws cited by the assessee has also made this issue debatable. The case relied on by the AO i.e. Mak Data P. Ltd. is not applicable as assessee at every stage had filed the explanation before the AO as well as CIT(A) i.e. these transactions were made for the purpose of business and commercial expediency, is bonafide. Penalty imposed by the AO and confirmed by ld. CIT(A)....