TaxTMI 
TaxTMI 
2025 (2) TMI 860
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.... reasons for such delay. The learned DR has not opposed the condonation petition. Considering the facts and circumstances of the case and the reasons given by the assessee, the delay in filing of the appeal is hereby condoned. 3. The Ld. AR raised an additional ground in all their appeals with regards to the validity of issue of notice u/s. 153C of the Income Tax Act, 1961 ('the Act'). The Ld. AR submitted that, additional ground so filed are admissible in view of judgment rendered by the Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT (1998) 229 ITR 383 (SC). The prayer for admission of additional ground, which is not in memorandum of appeal, is being admitted for adjudication in terms of Rule 11 of the Income Tax (Appellate Tribunal) Rules, 1963 owing to the fact that, objections raised in additional ground is legal in nature for which relevant facts are stated to be emanating from the existing records. 4. The brief facts of the case are that, the assessee is a company deriving income from execution of civil contract works, filed its Return of Income ("ROI") u/s.139 of the Act for all the years under consideration on different dates. Sear....
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....rence: 12. The Income Tax Appellate Tribunal (TAT), Delhi Bench in the case of M/s. New Modern Basaar Departmental Store Pvt. Ltd. is a Pvt. Ltd., held that the interest on Late Payment of TDS does not constitute Business Expenditure. In this case the assessee argued before the ld. CIT(A) that interest on late deposit of TDS is compensatory and not penal in nature. The ld. CIT(A) held that interest paid under the provisions of the Act is not a deductible expenditure, not compensatory in nature. Thus, he confirmed the action of the Assessing Officer. The assessee submitted that the interest is compensatory in nature and a part of business operations of the assessee. Had the same amount has been taken as loan from a bank, the interest paid on the same anyway would have been allowed as deduction u/s. 36. The Revenue submitted that interest on late deposit of TDS is neither an expenditure wholly and exclusively incurred for the purpose of business and further it is a payment, which is in the form of tax so it is not an allowable expenditure. The ITAT dismissed the appeal of the assessee. 13. The Hon'ble Madras High Court in CIT Vs. Chennai Properties & Investment ....
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....se of Jindal Aluminimum Limited ITA No. 31/Bang/2019 having similar facts where interest on TDS is held as ineligible business expenditure. 16. Hence, we have no hesitation to hold that interest payment on late payment of TDS is not eligible business expenditure for deduction and it is not compensatory in nature. Payment of interest on late deposit of TDS levied u/s 201(1A) is neither an expenditure only and exclusively incurred for the purpose of the business and therefore the same is not allowable as deduction u/s 37(1) of the Act." The above case law is squarely applicable to the case of the appellant and hence applied. It is important to note that the appellant is withholding somebody's due tax credit by depositing the same late and causing undue hardship to the third party. Interest on late deposit of TDS is neither an expenditure wholly and exclusively incurred for the purpose of business and further it is a payment, which is in the form of tax so it is not an allowable expenditure. In view of the above, the disallowances of Rs. 64,849/- and Rs. 12,198/- for A.Y. 2011-12 and 2012-13 respectively being interest paid on delayed deposition of TDS are upheld....
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.... of CIT Vs. Abhisar Buildwell (P) Ltd., 149 Taxmann 399, wherein the Hon'ble Supreme Court has held that, in case of unabated year, in search proceedings, no addition can be made in the hands of the assessee in absence of any incriminating material. Therefore, relying on the findings of Hon'ble Supreme Court in the case of CIT Vs. Abhisar Buildwell (P) Ltd. (supra), we hold that, as there was no incriminating material with the Ld. AO for the year under consideration, no addition can be made in the hands of the assessee by the Ld. AO. Accordingly, we delete the addition made by the Ld. AO. 9.2 In the result, this ground of the assessee is allowed. 10. As far as the second issue of the assessee is concerned, the Ld. AR submitted that, the assessment proceedings in the case of the assessee has been completed u/s.153C of the Act. However, since the search and seizure operation was conducted at the premises of the assessee, the assessment proceedings should had been completed u/s.153A of the Act. Therefore, the assessment proceedings completed by the Ld. AO u/s.153C of the Act is bad in law and is liable to be quashed. In support of his submission, the Ld. AR filed before us the c....
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....during the Assessment Year 2012-13 includes loan of Rs. 27,26,000/- taken from Smt. Latha Reddy and Rs. 62,99,490/- from Smt. Suseela. He further submitted that, Smt. Latha Reddy had given loan to the assessee out of gold loan taken by her from Manappuran Finance. In support of his contention, the Ld. AR drawn our attention to page nos.103 to 106 of the paper book containing the details of gold loan taken by Smt. Latha Reddy, justifying the source of cash in the hands of Smt. Latha Reddy. As far as the loan taken from Smt. Suseela, the Ld. AR drew our attention to page nos.126 to 128 containing the affidavit of Smt. Sushila regarding providing the cash loan of Rs. 62,99,490/- out of her past savings. Therefore, the Ld. AR submitted that, out of the addition of Rs. 1,28,72,052/- as sustained by Ld. CIT(A), the total amount of Rs. 90,25,490/- are from genuine sources as explained above and the addition to that extent are liable to be deleted. 17. Per contra, the Ld. DR relied on the decision of Ld. CIT(A) and prayed before the bench to dismiss this ground of appeal of the assessee. 18. We have heard the rival contentions and also gone through the record in the light of the subm....
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.... the Act in the hands of the assessee. Therefore, the Ld. DR prayed before the bench that, the argument of the assessee is liable to be rejected. 19.3 We have heard the rival contentions and also gone through the record in the light of the submissions made by either side. We have gone through the order of Ld. AO and found that the Ld. AO had made addition in the hands of the assessee on the basis of the incriminating material. Therefore, the contention of the assessee that, there was no incriminating material before the Ld. AO is not acceptable. Accordingly, we dismiss the alternative argument of the assessee. 19.4 Accordingly, this ground of the assessee is dismissed. 20. As far as the third issue with regard to the validity of issue of notice u/s.153C of the Act is concerned, we have already decided the issue in ITA no.377/Hyd/2023 at para no. 12 above, which applies mutatis mutandis to this appeal also. Accordingly, this ground of appeal of the assessee is dismissed. 21. In the result, the appeal of the assessee in ITA No.378/Hyd/2023 is partly allowed. ITA No.379/Hyd/2023 for A.Y. 2018-19 (Assessee's appeal) 22. At the outset, the Ld. AR submitted that, only t....
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....n recorded in the cash book on 9.6.2011 and has already been get included in the addition made by the Ld. AO for A.Y. 2012-13. We have gone through the page no.96 of the paper book and found that the cash has been received from Sri Aarvee Venkat Rami Reddy and not from P.V. Venkatarami Reddy. Further, the amount of interest paid on that day is Rs. 1 lakh and not Rs. 2.4 lakhs. Therefore, as the name as well as the amount of interest is not matching from the records, the contention of the assessee that the same amount has already been get included in the addition made by the Ld. AO for A.Y. 2012-13, can not be accepted. Accordingly, we dismiss this ground of the assessee on this count. 26.1 However, the alternate argument of the assessee is that, the cash balance of Rs. 10,17,86,420/- was available to the assessee on 12.08.2014 and the alleged amount of Rs. 22.40 lakhs will get subsumed in that cash balance available on 12.08.2014. We have gone through the page no.99 of the paper book and found that the cash balance as on 12.08.2014 as per cash book is Rs. 10,17,86,420/-. Therefore, we are of the considered opinion that, the assessee has sufficient cash balance to subsume the all....
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.... the alleged addition of Rs. 8 lakhs. Therefore, we delete the addition of Rs. 8 lakhs. Accordingly, we allow this ground of the assessee. 34. As far as the second issue with regard to the validity of issue of notice u/s.153C of the Act is concerned, we have already decided the issue in ITA no.377/Hyd/2023 at para no. 12 above, which applies mutatis mutandis to this appeal also. Hence, this ground of appeal of the assessee is dismissed. 35. In the result, the appeal of the assessee in ITA No.380/Hyd/2023 is allowed. ITA No.383/Hyd/2023 for A.Y. 2017-18 (Revenue's appeal) 36. At the outset, the Ld. DR submitted that, only one issue is involved in this appeal. The facts with regard to the issue are that, during the course of search operation, Excel sheets were found from the mobile back up of Sri Venkateswar Reddy, Accountant of the assessee. The Ld. AO noted that, in those Excel sheets, the assessee has shown cash receipt of Rs. 130 lakhs and Rs. 50 lakhs from Smt. Jyothi Reddy on 10.11.2016 and 01.10.2016 respectively. The Ld. AO also noted that, other cash receipts of Rs. 153 lakhs was also there in the Excel sheets, out of which Rs. 111 lakhs was received from Smt. Jy....
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....factual findings that, in all the seized Excel sheets, neither the name of the assessee was mentioned nor it was explicitly mentioned that the transactions were relating to the assessee. Further, Sri K. Ravinder Kumar Reddy, the M.D. of the assessee, had already given explanation before the investigation wing as well as before the Ld. AO that, the transactions mentioned in the seized Excel sheets are related to their personal transactions and the cash was received from Smt. Latha Reddy, Smt. Geetha Reddy and Smt. Jyothi Reddy, who in turn had received the cash from their mother Smt. Suseela and Smt. Suseela had got the cash out of sale of her property and her past savings. In support of their submission, the Ld. AR drew our attention to page no.45 to 62 of the order of Ld. CIT(A), where the Affidavits of Sri K. Ravinder Kumar Reddy, Smt. Latha Reddy, Smt. Geetha Reddy and Smt. Jyothi Reddy accepting the cash transactions, has been reproduced. On going through all these documents, we also hold that, the transactions in these Excel sheets are the personal transactions of Sri K. Ravinder Kumar Reddy, Smt. Latha Reddy, Smt. Geetha Reddy and Smt. Jyothi Reddy. Further no materials/facts....
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....lternate plea, the Ld. CIT(A) stated that, even if assuming that the payments were actual, the assessee was having enough cash balance as on 01.04.2017 as stated above, to justify the source of cash payment of Rs. 63,73,000/-. Accordingly, the Ld. CIT(A) deleted the addition of Rs. 63,73,000/- also. 44. Aggrieved with the order of Ld. CIT(A), the revenue is in appeal before us. The Ld. DR relying on the order of Ld. AO, reiterated to set aside the order of Ld. CIT(A). 45. The Ld. AR placed their reliance on the order of Ld. CIT(A). 46. We have heard the rival contentions and also gone through the record in the light of the submissions made by either side. The Ld. CIT(A) at page nos.53 to 87 of his order have given the factual findings that, out of total addition of Rs. 3,51,30,000/- Rs. 2,83,00,000/- are recorded in the books of the assessee and held that, the same is liable to be deleted. Further no materials/facts are brought before us by the Revenue contrary to the factual findings of the CIT(A). Therefore, in our considered opinion, as Rs. 2,83,00,000/- are recorded in the books of the assessee, we hold that, the same is liable to be deleted. Accordingly, we delete the....