TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 1160
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....confirming the action of the Ld. A.O. in assuming jurisdiction to issue notice u/s 143(2) of the Act and has further erred in making the impugned assessment without having valid jurisdiction over the assessee and more so when the entity in whose name jurisdiction was assumed did not exist. 2) That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. A.O., issue of notice u/s 143(2) of the Act in the name of M/s Goldfield Sales Agencies Ltd. is bad in law and against the facts and circumstances of the case and the order passed u/s 143(3) of the Act, in the name of M/s Goldfield Sales Agencies Ltd. is void ab-initio. 3) That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. A.O. in making disallowance of freight charges of Rs. 1,06,65,085/- u/s 37(1) of the Income Tax Act, 1961 vide para-3 of the assessment order and more so by alleging failure of assessee to produce bills and vouchers. 4) That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the disallowance of Rs. 1,06,65,085/- is bad in law and against the facts and circumstances of the case. 5) That in any....
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....tems. It is also significant to note that the appellant is selling material on rate-to-rate basis within the group companies without making any profit in the process thereby incurring huge losses. These transactions are intentionally not undertaken at arm's length and hence genuineness of expenditure incurred on freight charges is disproportionate and highly questionable. The inflated expenditure is also reflected in poor Gross Profit rate admitted by the appellant and negative net profit which only goes to prove the point that such freight expenses are bogus. Further, a perusal of the details of entire cartage and freight expenditure claimed by appellant for which, the copies of the Ledger account were furnished, the following facts are noticed - 1. No description of the items being transported is given anywhere. 2. All payments are made in cash. 3. No description of the vehicle which was used to carry the goods. 4. No names of the parties for whom the goods were being transported. 5. No description or name of place/godown/site, where they were being carted to. The above observation clearly proves that the freight expenses claimed are bogus. In the light of above....
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....mpugned addition is deleted." 9. Respectfully following the above decision, we are inclined to allow Ground Nos.3 & 4 raised by the assessee. 10. With regard to Ground No.5 & 6 are general in nature, hence not adjudicated. 11. In the result, the appeal being ITA No.3576/Del/2018 for AY 2012-13 filed by the assessee is partly allowed. 12. The assessee in ITA No.1774/Del/2019 for AY 2010-11 has raised the following revised grounds of appeal :- "1) That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of the Ld. A.O. in assuming jurisdiction to issue notice u/s 148 of the Income Tax Act, 1961 and the consequent assessment proceedings in the case and the assessment order passed are bad in law and against the facts and circumstances of the case and void-ab initio, and more so when the entity in whose name jurisdiction u/s 147 and 148 of the Act was assumed and assessment was framed did not exist, and basic jurisdictional conditions and pre-requisites under section 147 to 151 of the Act were not met. 2) That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts ....
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....ssessing Officer has merely discussed the investment and dividend income earned by the assessee, however failed to record proper satisfaction. He submitted that even though the disallowance made by the Assessing Officer is very small amount, still he submitted that without recording proper satisfaction, the Assessing Officer should not have proceeded to make disallowance u/s 14A. 16. On the other hand, ld. DR of the Revenue relied on the findings of the lower authorities. 17. Considered the rival submissions and material placed on record. We observed that no doubt, Assessing Officer observed that assessee has declared income of Rs. 1,45,600/- and assessee has disallowed an amount of Rs. 63,805/- under protest relying on the decisions of ITAT, Chandigarh Bench and ITAT, Mumbai Bench. Since assessee has disallowed certain expenditure and Assessing Officer has not recorded proper satisfaction before proceeding to make addition u/s 14A of the Act. With the above observation, therefore, we are inclined to allow these grounds raised by the assessee by deleting the disallowance u/s 14A with the observation that no proper satisfaction was recorded. 18. Grounds No.7 is general in nature,....
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....sment order and that too without proper appreciation of facts on record, and by recording incorrect facts and findings and without observing the principal of natural justice. 8) That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in passing the impugned order without giving adequate opportunity of being heard and by not observing the principles of natural justice." 21. At the time of hearing, ld. AR of the assessee did not press Ground Nos.1 & 2, accordingly the same are dismissed. 22. With regard to Ground Nos.3 & 4, our above findings in AY 2012-13 applies mutatis mutandis to these grounds, hence Ground Nos.3 & 4 are allowed. 23. With regard to Ground Nos.5 & 6, ld. AR of the assessee submitted that Assessing Officer proceeded to make the addition of Rs. 26,910/- solely on the basis of Form 26AS. He submitted that the assessee has declared the mismatch amount of Rs. 26,910/- found from Form 26AS in the subsequent year. Therefore, it amounts to double taxation. He prayed that since the assessee has already declared the abovesaid amount in the subsequent assessment year, the addition canno....
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.... lower authorities. 30. Considered the rival submissions and material available on record. We observed that the assessee has declared carried forward losses in its books of account and it was submitted before us that the abovesaid brought forward and carried forward losses is not being carried forward by the merged company. Accordingly, the Assessing Officer has disallowed the same. However, in the appellate proceedings, assessee has raised separate ground before the ld. CIT (A) as well as before us. We observed that for some reason, assessee has not made any submissions before the ld. CIT (A). After considering the detailed submissions, we are inclined to remit this issue back to the file of Assessing Officer to verify the same as per law whether assessee is allowed to carry forward and brought forward losses to the merged company and if so, the same may be allowed after due verification as per law, needless to add assessee may be provided opportunity of being heard. Accordingly, Ground No.7 raised by the assessee is allowed for statistical purposes. 31. Ground No.8 is general in nature, hence the same is not adjudicated. 32. In the result, the appeal being ITA No.1775/Del/2019....
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....giving adequate opportunity of being heard and by not observing the principles of natural justice." 34. At the time of hearing, ld. AR of the assessee did not press Ground Nos.1 & 2, accordingly the same are dismissed. 35. With regard to Ground Nos.3 & 4, our above findings in AY 2012-13 applies mutatis mutandis to these grounds, hence Ground Nos.3 & 4 are allowed. 36. With regard to Ground No.5 relating to disallowance of interest expenditure, the relevant facts are, during assessment proceedings, the Assessing Officer observed from the Profit & Loss account that assessee has claimed interest on unsecured loan of Rs. 33,10,022/-. He observed that the assessee has given interest free short term loans and advances of Rs. 5,33,32,000/-. When the assessee was asked to furnish the details of the same along with necessary document for advancement of interest free loans. When the assessee was asked to explain as to why in the absence of necessary detailed evidence, the entire finance cost should not be disallowed as the same are not explained with respect to specific purpose of borrowing rather this interest bearing funds have been utilised for giving non-interest bearing loans and ad....
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.... (A) sustained the addition made by the Assessing Officer with the following observations :- "(i) The AO has made this disallowance because the appellant had claimed expense on account of interest on unsecured loan amounting Rs. 33,10,022/- whereas interest free advances and loans of Rs. 5,33,32,000/- had been given during this year. (ii) Further, during the assessment proceedings, the appellant failed to furnish supporting documents to show as to how the interest bearing funds have not been utilized for advancing noninterest bearing loans and advances. (iii) During the appellate proceedings, it has been submitted by the appellant that advances are out of the current account, wherein business receipts were regularly deposited. Current A/c are generally link to over-draft limits which are interest bearing. Further, the appellant has failed to establish that these loans were given out of interest free funds nor prove that these advances were for business purposes. (iv) It has been held by the Courts that the assessee is not entitled to claim interest expenditure on the borrowed funds which were diverted non-business objects." 39. At the time of hearing, ld. AR of the assesse....