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2021 (3) TMI 1479
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....ss of Rs. 3,19,35,031/- on account of share trading transactions without appreciating that - a. The income from money market transactions of Rs. 2,55,23,515/- were eligible and hence ought to have been set off against the share trading loss of Rs. 3,19,35,031/-. b. The money market transactions were speculative in nature. 4. The Ld. CIT (A) has erred in law and in facts in confirming the disallowance of loss on trading in Unit 64 amounting to Rs. 1,10,12,500/-. 5. The Ld. CIT (A) has erred in law and in facts in confirming the addition on account of profit from money market transactions to the extent of Rs. 64,60,000/- out of the total addition of Rs. 2,67,83,373/-. 6. The Ld. CIT (A) has erred in law and in facts in confirming the disallowance on account of short term capital loss amounting to Rs. 4,63,608/- u/s, 94(4) of the Act. 7. The Ld. CIT (A) has erred in law and in facts in confirming the disallowance on account of the short term capital loss amounting to Rs. 6,20,544/- treating the same as speculative loss. 8. The Ld. CIT (A) has erred in law and in facts in confirming the disallowance on account of following expenses:....
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...., 234B and 234C of the Act. 19. The Ld. CIT (A) has erred in making addition of Rs. 5,50,04,109/- by enhancing the assessed income without appreciating that- a. The Ld. CIT (A) had exceeded the jurisdiction by invoking powers of enhancement. b. The enhancement was made without granting sufficient opportunity of hearing to the appellant and without considering submissions filed before him. c. The enhancement of income by Rs. 5,50,04,109/- based on alleged difference in the balances in cross accounts between the books of the appellant and books of Late Shri Harshad S. Mehta / M/s. Harshad S. Mehta was incorrect and unjustified. 20. The assessee craves leave to add to, alter, amend and/or delete all or any of the foregoing grounds of appeal." 3. The issue raised in 1st ground of appeal is against the order of Ld. CIT (A) upholding the reopening of assessment under section 147 of the Act by the AO. 4. The facts in brief are that the assessee has not filed any return of income under section 139(1) of the Act. The AO reopened the assessment under section 147 of the Act by issuing notice under section 148 of the Act on 20.05.1992. The assessee is a notified entity un....
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....ate. It is also noted that the assessee insists that the AO should have followed the due procedure threadbare, however, it seems these rules do not apply to it and it blatantly neither files its statutory return of income even till date nor complies to the statutory notices issued by the AO. Accordingly, the additional ground No 1 of the appeal of the assessee filed vide letter dated 19.11.2018 challenging the issue of notice u/s 148 is dismissed." 6. The Ld. A.R. submitted before the Bench that the notice issued under section 148 of the Act dated 20.05.1992 is an invalid notice. The Ld. A.R. submitted that failure on the part of the AO to issue notice under section 148 of the Act in consonance with the provisions of the Act is a jurisdictional defect which goes to the root and therefore can not be cured at this stage. The Ld. A.R. submits that notice issued under section 148 of the Act was invalid as the time limit to file the return of income provided in the notice is less than what has been prescribed on the Act. The Ld. A.R. referred to the erstwhile provisions of section 148 of the Act prior to its amendment by Finance (No.2) Act of 1996. The Ld. A.R. submits that as per the ....
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....ered in favour of the assessee by the various decisions of the co-ordinate Bench of the Tribunal as under: 1. Ashwin S. Mehta vs. ACIT, CC 23 [ITA No. 8704/M/2011] dated 30.11.2018 2. Ashok Rao & Co. v. ACIT TA No. 5595 & 5596/Bom/19 dated 29.05.2002 3. Shri Lalit Sheth v. ACIT and vice versa [ITA No. 7394/Mum/1996] dated 28.11.2003 4. CIT vs. Sudhir S. Mehta 9265 ITR 548] 5. CIT v. Ekbal and Co. [13 ITR 154(Bom)] 6. Deepika A. Mehta v. ACIT [57 TTJ 104(Mum)j 7. Chandi Ram v. ITO and Ors [225 ITR 611 (Raj.)] 8. N. Jayaprakash, Package India Tin Fabricators v. CIT [285 ITR 369 (Ker)] The Ld. A.R. prays before the Bench that in view of the facts of the case and the ratio laid down by the various judicial forums including Hon'ble Bombay High Court the notice issued under section 148 of the Act as well as consequent reassessment framed may kindly be quashed. 6.1 The Ld. A.R. further makes without prejudice argument that a notice issued under section 148 of the Act before expiry of statutory time limit available for filing the return of income under section 139(4) of the Act is invalid. The Ld. A.R. submits that in this case the due date for filing the r....
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....IT v. IDBI Ltd [76 taxann.com 227 (Bom.)] 5. PCIT v. V. Ramaiah [103 taxmann.com 202 (SC)]. 7. The Ld. D.R., on the other hand, relied on the order of authorities below. So far as the 1st and 2nd contentions of the assessee are concerned, the ld. DR relied on the orders of authorities below. On the third without prejudice plea of not supplying the reasons recorded u/s 148(2) of the Act to the assessee, the Ld. D.R. submits that the Revenue is not liable to supply the reasons to the assessee recorded under section 148(2), since the assessee has not filed any return of income, therefore this argument of the Ld. A.R. deserved to be dismissed. 8. Having heard the rival submissions and perusing the material on record including the order of Ld. CIT (A) and also the averments made by both the parties and decisions relied upon and referred to before us during the course of hearing, the undisputed facts are that a notice under section 148 of the Act was issued to the assessee on 20.05.1992 directing the assessee to file the return within 30 days from the date of service of the notice. We have also perused the amendment made in the provisions of section 148 of Act by Finance (No.2) Act o....
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....e contention of the assessee that A.O had given less than the prescribed time to file the return has no legs to stand. Thus the Ld. CIT (A) rejected the contention of assessee about providing less than 30 days time for filing of return in response to the notice under section 148. 8. For appreciation of facts, we may refer the language of Sec. 148 of the Act at the relevant time on the statue book: "Issue of notice where income has escaped assessment. 148(1). Before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period, not being less than thirty days, as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139] (2) The Assessing Offi....
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....ndment expressly validating the reassessments also. 9. In support of the above contentions, the Ld. Representative for the assesses cited the following three judgments:- (1) Prithvi Cotton Mills v. Broach Burrough Municipality L & Ors [79 ITR 136 (Sc)]. (2) Jose Dacosts V. Bascora Sadashiv Sinal Narcomin AIR (1975) SC 1843. (3) Delhi Cloth & General Mills Co. Ltd. v Income Tax Commissioner, AIR 1927 (P7)242 In Delhi Cloth Mills case (supra), the following observations were made by the Privy Council. "The principle which their Lordship must apply in dealing with this matter has been authoritatively enunciated by the Board in the Colonial Sugar Refining Co v. Irving (1995) A. C. 369=74 Lj.P.C. 77=21 T.L.R. 513 = 92 L. T 738]. where in effect it is laid down that while provisions of a statute dealing merely with matters of procedure may properly, unless that construction to be textually inadmissible, have retrospective effect attributed to them provisions which touch a right in existence at the passing of the statute are not to be applied retrospectively in the, would deprive of their existing finality orders, which when the statue came into force, were final are provision....
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....tion it removes the defect which the courts had found in the existing law and makes adequate provisions in the validating law for a valid imposition of the tax". These observations show that the defect which made the imposition of tax illegal must be removed effectively. The question before us Is whether this has been done in the present case by merely validating the notices. If the earlier law laid down by the courts was that the Invalid notices Invalidate the reassessment proceedings also, it would first appear that by merely validating the notices, the reassessments would also be validated automatically. However, we have to remember, as laid down by the Privy Council (supra), that it must be clearly provided that the amending law would disturb or take away the finality attained by the orders or the vested rights of the assessee. When the reassessments in the present case made on 2.11.93 became null and void for want of proper notices, the assessee acquired a vested right that no tax would be collected pursuant to them. If the legislature wants to effectuate those reassessment orders by injecting life to them, there must be a clear provision to that effect in the amending law o....
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.... amendment will take effect retrospectively from April 1, 1989, and will, accordingly, apply in relation to notices issued under section 148 on or after that date (Section 43). There is nothing in the Circular to show that the amendment validating the notices issued after 01.04.1989 was also Intended to validate the reassessments already made pursuant to those defective notices. 10. There is one more reason why we are unable to spell out any intention on the part of the legislature to validate the reassessments themselves. Section 153(2) prescribes a time limit of two years from the end of the financial year in which the notice u/s. 148 was served as the limitation for a reassessment u/s. 147. The amendment to section 148(1) was made in 1996 with retrospective effect from 1.4.1989. Many Assessing Officers would have issued notices u/s. 148 after this date containing the defect (giving a period of less than 30 days for tiling the return). It would appear that the new time limit given in section 148(1) as introduced wet 1.4.1989 was overlooked by the Assessing Officers who were apparently guided by the time limit prescribed by section 139(2), which was incorporated in the origina....
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....ssment order passed before the date of such amendment in absence of any express or implied intention of the legislature. The decision of the Tribunal in the case of Shri Lalit Sheth Vs. ACIT (supra) has also been affirmed by the Hon'ble Bombay High Court in ITA No. 1570 of 2005 dated 29.09.2017. 12. We have also noticed that the jurisdictional High Court in assessee's group case (brother case) in CIT Vs Sudhir S. Mehta [265 ITR 548] held that the notice u/s 148 of the Act giving less than 30 days time is invalid. In this case the Tribunal held that there was no amendment in section 148 at the time of passing of the order dated 26.06.1996 and dismissed the application of the department. Against that order the revenue filed appeal before Hon'ble Bombay High Court raising the following question of low; "Whether the Taxation Laws (Amendment) Act, 1996, applied only to pending proceedings or whether it applied even to proceedings which stood completed three months prior to the law being enacted?" The Hon'ble High Court passed the following order; 4. In the present case, the short point which arises for consideration is whether miscellaneous application filed by the Departme....
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....being declared null and void, as it was passed prior to the amendment. 14. Considering our decision as we have allowed the legal ground and held the assessment as null and void as notice u/s 148 of the IT Act is invalid, therefore, the discussion on merit of the case has become academic and is not being rendered. 15. In the result, the appeal filed by the assessee is allowed." All the decisions relied upon by the assessee before us have been discussed in detail in the above decision, therefore, they are not being discussed. Even the decision of Hon'ble Bombay High Court in the case of CIT vs. Sudhir S. Mehta (supra) has been dealt with by the co-ordinate Bench of the Tribunal in para 12. We, therefore, respectfully following the decision of the coordinate Bench of the Tribunal and also the jurisdictional High Court as stated hereinabove hold that the notice issued under section 148 of the Act is invalid and accordingly the assessment framed under section 144 read with section 148 of the Act is also invalid. Since we have decided the issue in favour of the assessee on the principal arguments, we are not deciding the other, without prejudice, submissions made before us during th....
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....hat in view of the said facts and circumstances the loss of Rs. 3,19,35,031/- from share market transactions may kindly be allowed to be set off against the income from money market transactions by assuming that the loss from share market transactions are speculative in nature. The Ld. A.R. submits that the issue is squarely covered in favour of the assessee by the decision of the co-ordinate Bench of the Tribunal in assessee's own case in ITA No. 1785/M/2015 order dated 28.02.2017 wherein it has been held that profit from money market transactions was eligible to be set off against the losses from share market transactions. The Ld. A.R. therefore prayed that the issue may kindly be decided in favour of the assessee following the said decision of the co-ordinate Bench of the Tribunal. 14. The Ld. D.R., on the other hand, relies on the order of authorities below by submitting that assessee has not submitted necessary details and records before the authorities below and therefore the disallowance was rightly made by the AO and upheld by Ld. CIT(A). 15. We have heard the rival submissions and perused the material on record including the decision of the co-ordinate Bench of....
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....5.5 The finding of the Special Court on the above two issues are extracted as follows:- "In my opinion, therefore, the fact that units of Mutual Funds were included in the definition of the term "securities" by amending Act clearly, shows that the units of the mutual funds were not included in that definition before the amendment. As observed by the Supreme court in its judgment in the case of R13! Vs. Peerless General Finance and Investment Co. Ltd AIR 1987 SC 1023 that the Legislatures resort to inclusive definitions also to bring under one nomenclature all transactions possessing certain similar features but going under different names. Depending on the context, in the process of enlarging, the definition may even become exhaustive. In my opinion, therefore; the word "include" is used in Section 2(h), in truth and substance, to give exhaustive definition of the term "securities" for the purpose of Securities Contract Act. Therefore, as on the relevant date the units of the Mutual Funds which was the subject matter of the ready forward transaction between the parties was not securities within the meaning of the Securities Contract Regulation Act, the transaction was not hit by ....
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.... This distinction has been very well analysed by the Delhi Bench of the Tribunal in the case of ANZ Grindlays Bank v. DCIT (supra) wherein it has been held after considering aforesaid judgment of Hon'ble Supreme Court in the case of Appollo Tyres Ltd. (supra) that transactions of sale and purchase of units and government securities by the assessee through a broker without exchange of actual delivery would fall within the scope of speculative transactions as defined in section 43(5). Therefore, loss/profit from shares market transactions can very well be set off/adjusted against loss/profit of money market transactions. This issue has already been decided in favour of the assessee by the Tribunal in the case of group company of the assessee namely M/s. Growmore Leasing Investment (supra) as discussed above also. No distinction has been pointed out on facts or legal position by the Ld. Special Counsel of the Revenue, therefore respectfully following the order of the Tribunal in the case of M/s. Growmore Leasing Investment (supra) as well as ANZ Grindlays Bank v. DCIT (supra), we find that the claim of the assessee is allowable. Therefore disallowance made by the AO is directed to be ....
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....the issue in favour of the assessee by observing and holding as under: "5.9 Another reason pointed out by the Assessing Authority is that if at all there was any loss, the loss pertains to the succeeding assessment year and not the impugned assessment. The basis of the above finding is that the loss would be ascertained only on the final settlement of the securities in a future date. The contention of the assessee is that once the assessee has entered into the contract for the purchase and sale of Government securities for a predetermined price, as a forward contract, the result is already known and the profit or loss is ascertained in the relevant previous year itself for the reason that there is no question of delivery of instruments in these forward transactions. The learned Chartered Accountant, who appeared for the assessee, produced before us a copy of the order of the Tribunal in assessee's own case for the assessment year 1990-91 in ITA No. 5894/Mum/1995 dated 19th August, 2005 (ITAT Mumbai Bench "IT -M/s. Growmore Leasing & Investments Ltd. Vs. ACIT). 5.10 In the said order, the Tribunal was examining the question whether the assessee was liable to get its acc....
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....has already been brought to tax by the Assessing Authority. In these circumstances, we direct the Assessing Authority to allow the deduction for the loss of Rs. 1,07,75,000 by setting it of the corresponding speculation income." 23. Since the facts before us are identical to ones as involved in the ground as decided by the co-ordinate Bench of the Tribunal, we are, therefore, inclined to set aside the order of Ld. CIT (A) and direct the AO to allow the loss in the current year. Consequently ground No. 4 is allowed. 24. The issue raised in ground No. 5 is against the part confirmation of addition by Ld. CIT (A) to the extent of Rs. 64.60,000/- as against the addition of Rs. 2,67,83,373/- made by the AO on account of profit form money market transactions. 25. The facts in brief are that the AO during the course of assessment proceedings observed on the basis of incriminating material seized during the course of search that assessee has earned a profit of Rs. 6,33,98,388/- on the money market transactions whereas in the regular books of accounts which were subsequently submitted the profit from money market transactions shown was only Rs. 3,65,36,....
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....challenged the order of Ld. CIT (A) before the Tribunal disputing the various confirmations and deletion of additions, however, the deletion of Rs. 2,03,23,373/- was not contested by the Revenue before the Tribunal. The Ld. A.R. also refers to the order of the co-ordinate bench of the Tribunal to corroborate his averments, a copy of which is filed at page No. 603 to 624. The Ld. A.R. therefore, submits that the AO should not have made the addition again as the same was not challenged by the Revenue before the Tribunal and thus issue was not set aside for readjudication and the said relief had already attained finality in favour of the assessee. 28. As regards the part sustaining of addition to the extent of Rs. 64,60,000/- by the Ld. CIT (A) in the second round as well, the Ld. A.R. argues that the Ld. CIT (A) has failed to appreciate that the said amount pertains to the immediate preceding previous year and the assessee has already furnished evidences to this effect before the authorities below. The Ld. A.R. submits that the assessee was following mercantile system of accounting whereas the brokerage firm M/s. Harshad S. Mehta was following cash system of accountin....
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....e as found in the books of accounts of M/s. Harshad S. Mehta and therefore, it can not be taxed during the current year. Therefore, we uphold the order of Ld. CIT (A) on the issue of deletion of addition of Rs. 2,03,23,373/-. We have also examined the breakup of the money market transactions for assessment year 1990-91, contract notes and copy of trading account and note that Rs. 64,60,000/- was related to the assessment year 1990-91 and was accordingly accounted for in that year. Therefore, we are not in agreement with the conclusion drawn by Ld. CIT (A) on this issue and accordingly set aside the order of Ld. CIT (A) and direct the AO to delete the addition of Rs. 64,60,000/-. The ground no. raised by the revenue is dismissed whereas the ground no 5 raised by the assessee is allowed. 31. The issue raised in ground No. 6 in the assessee's appeal is against the confirmation of disallowance of Rs. 4,63,608/- by Ld. CIT (A) as made by the AO on account of short term capital loss under section 94(4) of the Act. 32. The facts in brief are that the short term capital loss was disallowed by the AO on the ground that securities were purchased prior to the record....
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....perative part of the decision is reproduced as under: "6. We have heard the rival contentions and gone through the facts and circumstances of the case. We find that that the assessee purchased 9% tax free IRFC bonds for the value of Rs. 50 crores from Harshad S Mehta for a total consideration of Rs. 50,31,95,205/- on 26-09-1991 and sells the same within a short period of 15 days on 11-10-1991 for a total consideration of Rs. 47,87,32,877/-. In this process the assessee claimed loss of Rs. 2,44,62,328/- and also received tax free interest from these IRFC bonds at Rs. 1,84,50,000/-. Whether in such circumstances, in view of the provisions of section of 94(1) & (4) of the Act, the loss claimed by the assessee is to be disallowed. We have gone through the provision of section and the same reads as under:- 94. Avoidance of tax by certain transactions in securities,- (1) Where the owner of any securities (in this sub- section and in subsection (2) referred to as" the owner") sells or transfers those securities, and buys back or reacquires the securities, then, if the result of the transaction is that any interest becoming payable in respect of the securities is receivable ot....
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.... and not of the assessee. Similarly, in respect to loss sustained on account of this transaction has been clarified by sub section of section 94 of the Act, which states that any person carrying on a business consists wholly or partly in dealing in securities, buys or acquires any securities and sell back or retransfer the securities then, if the result of the transaction is that, interest become payable in respect of securities is receivable by him but is not deemed to be his income in view of the provisions of sub section (1). Further, no account shall be taken of the transaction in computing for any of the purposes of this act, the profit arises from or loss sustained in the business. 7. We are of the view that the provisions of section 94(4) can be invoked only in case the provision of section 94(1) was applicable to the counter party. The loss on sale of securities can be disallowed only if the assessee in the course of business, bought and sold any securities and as a result of the transaction, interest was receivable by him which was not deemed to be his income by reason of Sec. 94(1) of the Act. The provisions of Sec. 94(4) would come into operation only if:- (i) Where ....
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....of shares." 35. Since facts of the present issue before us are materially same, we, therefore, respectfully following the decision of the coordinate bench of the Tribunal set aside the order of Ld. CIT (A) and direct the AO to allow the set off of loss of Rs. 4,63,608/- to the assessee as suffered by it from 9% of NHTC bonds against the profit on sale of shares. The ground no. 6 is allowed. 36. The issue raised in ground No. 7 is against the confirmation of disallowance of short term capital loss of Rs. 6,20,544/- by Ld. CIT (A) as disallowed by the AO by treating the same as loss resulting from speculative transactions. 37. The facts in brief are that the assessee has claimed short term capital loss of Rs. 6,20,544/- under head, "Investment in shares and debentures". The AO rejected the claim of the assessee on the ground that the purchase and sale recorded in the books of accounts are not fully supported by the contract notes/proofs of delivery of shares and therefore rejected the claim of the assessee by holding that the said loss debited to short term capital loss account is not allowable as being speculative loss. 38. The Ld. CIT (A) also dismissed the ....
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....e is fair and reasonable in view of the facts and circumstances of the case. 43. We find that the various expenses have been disallowed on adhoc basis by the AO which have been affirmed by the Ld. CIT (A) on the ground that the expenses under these head were not fully verifiable. On the other hand, the assessee's counsel submitted that these are quite legitimate expenses and the same could be not disallowed on the ground that same were not fully verifiable. After considering the facts on record and the submissions of the rival parties, we are of the considered view that the disallowance made by the AO is quite on the higher side that too on adhoc basis without pointing out any specific defect and confirmed by ld CIT(A). We note that in the case of M/s. Growmore Leasing Investment vs. ACIT ITA No. 2192/M/2015 for A.Y. 1992-93 which is a related entity an identical issue was decided by the co-ordinate bench of the Tribunal vide order dated 17.11.2017 wherein the disallowance has been restricted to 15% of the amount claimed. After examining the facts on record, we observe that in case of telephone expenses the disallowance made is only 10%. Therefore the disallowance is sustaine....
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....,265/-. The ground is partly allowed. 49. The issue raised in 10th ground of appeal is against the confirmation of Rs. 2,26,94,084/- as made by the AO towards unexplained investment in shares under section 69 of the Act on the basis of seized material from Madras office of the assessee. 50. The facts in brief are that the AO, on the basis of examination of seized material from the Madras office of the assessee, observed that assessee has made investments in shares of Rs. 2,26,94,084/-. The AO added the same to the income of the assessee under section 69 of the Act as unexplained investments on the ground that assessee could not explain the source of these investments. 51. In the set aside proceedings also, the Ld. CIT (A) dismissed the appeal of the assessee on this ground after taking into account the submissions and contentions of the assessee by observing and holding as under: "16.2 The contentions of the assessee have been duly considered. It is observed that this issue has been adjudicated by my Ld predecessor. The relevant portion of the order of my Ld predecessor is reproduced as under: "I have carefully considered the reasonings of the assessing officer, th....
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.... appellate order, I do not admit confirmation letters of M/s. HSM, M/s. ASM and M/s. JHM as additional evidences either under Rule 46A(1) or under Rule 46A(4). After considering the entire facts of the case, I am of the view that the addition made by the assessing officer was proper and is accordingly upheld. The ground is, therefore, rejected. 16.3 From, the above it can be observed that after a detailed analysis, the FAA in the 1st round of proceedings has upheld the said addition u/s 69 of Rs. 2,26,94,084/-. It is also noted that the additional evidence submitted by the assessee before the FAA in the 1st round of proceedings which were in the form of confirmation letters of M/s HSM, M/s ASM and M/s JHM were clearly self-serving in nature, considering that all these 3 notified broker entities are part of the Assessee Group itself. Further, as regards the contention of the assessee that the AO did not provide sufficient opportunity by way of a show cause, it is noted that the assessment has been completed u/s 144 rws 254 since there was little compliance from the assessee. The validity of the said assessment 144 rws 254 has been upheld in the preceding paras on the facts of....
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....an what has been presumed by the AO. The Ld. A.R. submitted that the theory of presumption and conjuncture can not be applied while invoking the provisions of section 69 of the Act. The AO has also failed to apply his mind and take into consideration the crucial fact that the business of stock broking and making investments in stock exchange is not only highly regulated but all the transactions take place through regular banking channels and clearing house and in the very scheme of things it is not possible to make any investments in shares and securities in cash or outside the books of accounts. The AO therefore has abused the discretionary powers available to him under S.69 of the IT Act to make large additions and a high-pitched assessment against the appellant. The AO also ought to have appreciated that the appellant was a notified entity under S.3(2) of the Torts Act and therefore the issue of ownership or existence of any investments particularly between the appellant and its associate entities was liable to be adjudicated upon and decided only by Hon'ble Special Court in view of exclusive Civil jurisdiction conferred upon Hon'ble Special Court under S.9-A of the Tort....
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.... M/s. Ashwin Mehta and M/s. J.H. Mehta as also on behalf of the family members and corporate entities who were clients of the said 3 brokerage firms. 55. The ld AR further stresses that the notwithstanding the foregoing, though the explanation given by the assessee was rejected in the assessment proceedings leading to original assessment dated 30.03.1994 but the same was accepted by FAA who granted relief to the assessee through his order dated 24.02.2000 when he deleted addition made u/a 69 of Rs. 35,62,82,900/- as per findings given in Paras 78 and 79 of his order. The AO has thereafter not made the above addition when he passed the fresh assessment order in assessee's case only because the explanation of the appellant was already accepted by FAA. The explanation of the assessee was the same even in respect of the aforesaid addition but the FAA did not accept the said explanation in regard to the subject addition. The view taken by FAA for the subject addition was completely contrary to the view taken by him for much larger addition as aforementioned of Rs. 35,52,82,900/-. That in any case in the original assessment order dated 30.03.1994, the AO had made the addition, ....
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....n by the Ld. CIT (A) in the 1st round of appeal vide his order dated 24.02.2000 [Page 229-325 of PB No. 3] at Paras 78-79. 57. The Ld. D.R., on the other hand, strongly objected to the arguments of the Ld. A.R. and submitted that the addition of Rs. 2,26,94,084/- was based upon the incriminating material seized during search operation. The Ld. D.R. submitted that the additional evidences submitted by the assessee before the first appellate authority in the first round of litigation were in the form of confirmation letters from M/s. H.S.M, M/s. A.S.M. and M/s. J.H.M. which were self serving documents as all these three brokerage entities are part of the same group and therefore there is no merit in the contentions of the Ld. A.R. The Ld. D.R. submitted that the provisions of section 69 have rightly been invoked by the AO as the assessee was found to have made investments in shares and securities as revealed by the material seized during the course of search in Madras office. The Ld. D.R., therefore, prayed that the grounds raised by the assessee may kindly be dismissed. 58. We have heard the rival submissions of both the parties and perused the material on record. The undispu....
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....ing purchases 2 ASHOK LEYLAND 500 500 66125.00 DAM 11/03/91 500 Enclosed here with the contract notes evidencing purchases 3 BROOKE BOND 500 500 74250.00 DAM SSM 22/03/91 22/03/91 100 400 Enclosed here with the contract notes evidencing purchases 4 EID PARRY 1400 1400 135800.00 SSM 22/08/90 7150 Out of which 1400 qty has been taken by Madras office. Enclosed here with the contract notes evidencing purchases 5 FULLER KCP 8900 8900 1452045.00 List enclosed. Enclosed here with the contract notes evidencing purchases 6 GRASIM IND 2200 2200 484600.00 DAM PHM SMS 11/03/91 20/03/91 22/03/91 200 500 1500 Enclosed here with the contract notes evidencing purchases 7 HARRISON MALAYALAM 700 700 142400.00 HSM 22/03/91 700 Enclosed here with the contract notes evidencing purchases 8 HIND. LEVER 200 200 35300.00 PHM 22/03/91 200 Enclosed here with the contract notes evidencing purchases 9 INDIA CEMENTS LTD. 44750 44750 5079575.00 List enclosed. Enclosed here with the contract notes evidencing purchases 10 ITC LTD 200 200 26650.00 ....
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.... the Act has wrongly been made and can not be sustained. In view of these facts and circumstances we are inclined to set aside the order of Ld. CIT (A) and direct the AO to delete the addition. Ground no 10 is allowed. 59. The issue raised in ground No. 11 is against the order of Ld. CIT (A) upholding the addition of Rs. 29,23,350/- as made by the AO on account of explained investment and shares pending deliveries under section 69 of the Act. 60. The facts in brief are that the AO on the basis of documents seized from the office of the assessee at Madras observed that assessee has made some purchases to the tune of Rs. 58,46,090/- qua which the delivery of shares were yet to be made. According to the AO, since the assessee could not explain the source of this investments and the same were added under section 69 of the Act to the income of the assessee. 61. In the appellate proceedings in the first round the Ld. CIT (A) allowed the appeal of the assessee partly thereby sustaining the addition to the extent of Rs. 29,23,350/-. In the second round of appeal, the Ld. CIT (A) confirmed the same addition by observing and holding as under: "17.2 From, the above it....
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....e 397-406 of PB No. 3] (d) The contract notes issued by the counter brokers whose names are reflected on the seized page issued in the name of HSM confirming the transactions undertaken at Madras stock exchange. [Page 1586- 1616 of PB No. 7]. 63. The Ld. D.R., on the other hand, relied on the order of authorities below. 64. The issue raised in this ground is similar to one as decided by us in ground No. 10. We find that the assessee has filed before the authorities below the chart showing details of securities purchased by the broker entities for and on behalf of their family members, contract notes on sample basis, ledger accounts of the counter brokers in the books of M/s. Harshad S. Mehta reflecting these investments carried out by M/s. Harshad S. Mehta, contract notes issued by counter brokers whose names are reflected in the seized pages issued in the name of M/s. Harshad S. Mehta confirming the transactions made at the Madras Stock Exchange. We also note that these evidences were not doubted or disputed by the authorities below and the conclusion of the Ld. CIT (A) that these are self serving documents can not be accepted. We further note that these contract not....
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.... of Rs. 42,39,125/- was called for. The appellant's statement that the assessing officer, should have examined whether addition was included in the additions of Rs. 58,46,0907- or of Rs. 2,26,94,0847- is also not valid because it was for the appellant to show that the share holdings and the transactions were same. In view of this I hold that the addition of Rs. 42,39,125/- was clearly called for and accordingly I enhance the income of the appellant by the amount of Rs. 42,39,125/-. Since I have already given sufficient relief to the appellant in earlier paragraphs and this enhancement will not enhance the total income as assessed by the assessing officer, I have not given any specific notice of the same to the appellant However, the appellant was fully heard on the merits of addition of Rs. 42,39,125/-. The ground is accordingly rejected." 18.2 From, the above it can be observed that after a detailed analysis, the FAA in the 1st round of proceedings has made the said enhancement u/s 69 of Rs. 42,39,125/-. Further, as regards the contention of the assessee that the AO did not provide sufficient opportunity by way of a show cause, it is noted ....
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....on behalf of them are filed at page No. 396 of paper book No. 3. In the contract notes issued by the counter brokers whose name is appearing on the seized document issued in the name of M/s. Harshad S. Mehta confirming the transactions undertaken at Madras Stock Exchange the copies of which are filed at page No. 1597 to 1616 of the paper book No. 7. The Ld. A.R. also refers to the ledger account of the counter brokers in the books of M/s. Harshad S. Mehta reflecting these transactions carried out by M/s. Harshad S. Mehta with them, the copies of which are filed at page No. 397 & 398 of paper book No. 3. The Ld. A.R. submits that as is clear from the various documents, the said seized document consists of transactions carried out by broker M/s. Auro Mira on behalf of M/s. Harshad S. Mehta and also consists of transactions which are also reflected in other seized documents on which addition to the tune of Rs. 58,46,090/- was made in the assessment order and hence to that extent there is a double addition made by the AO. The Ld. A.R. submits that the authorities below have failed to take a note of these evidences which are available on record and acc....
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.... S. Mehta. However, the AO observed that the payments have been made in cash from the books of accounts of the assessee itself and accordingly held the submission of the assessee that payments were made from the bank account of M/s. Harshad S. Mehta as misleading, conflicting and fallacious and added the same to the income of the assessee and added the same to the income of the assessee as unexplained investments under section 69 of the Act. In the first round of litigation the said addition was confirmed by ld. CIT (A) on the ground that assessee vide letter dated 15.3.1994 filed the AO claimed that these stamps belongs to the assessee and duly accounted for in the books. In the set aside proceedings also the AO added the same amount under section 69 of the Act. 73. In the appellate proceedings, the ld CIT (A) also dismissed the plea of the assessee by observing that the assessee has come up with new theory that the amount of share transfer stamps was Rs. 25,00,000/- and not 37,50,000/- .The ld CIT(A) also rejected the plea of the assessee that these stamps worth Rs. 25,00,000/- were purchased at the request of M/S Harshad S. Mehta and out of this stamps worth Rs. ....
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....ver we note that the assessee has been changing the its stand again and again and it is hard to believe the different theories of the assessee. Under these circumstances, we are inclined to dismiss the ground of the assessee by upholding the order of ld CIT(A). Accordingly the ground no. 13 is dismissed. 77. The issue raised in ground No. 14 is against the confirmation of Rs. 74,09,265/- by Ld. CIT (A) as made by the AO in respect of unexplained investments in shares under section 69 of the Act based on the report of Shri Arjun K.S Iyer (AKSR). 78. The facts in brief are that the AO, on the basis of report of Shri Arjun K.S Iyer who was engaged by the assessee to reconcile the position of the shares purchased by the entire group, observed that assessee owned shares of Rs. 74,09,265/-. The AO added the same to the income of the assessee on the ground that assessee has failed to explain the source of purchase of these shares. In the first round of litigation, the issue was dismissed by Ld. CIT (A) on the ground that addition was made based upon the material on record. The AO made the same addition in the set aside assessment framed. 79. In the second appellate proce....
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....vide the necessary information about the date of acquisitions the said investments, the AO had no option but to reasonably adopt the market price on the last day of the year for determining the amount of unexplained investments of the assessee as per the report of M/s Arjun K S Ayer. Therefore, respectfully following the order of my Ld predecessor, no infirmity is found in the action of the AO of making the said addition u/s 69 of Rs 74.09.265/- on the basis of the report of M/s Arjun K S Ayer. Accordingly, ground No 21 of the appeal is dismissed." 80. The Ld. A.R., at the outset, submitted that the issue is squarely covered by the decision of the co-ordinate bench of the Tribunal in assessee's own case in ITA No. 3660/M/1994 & ors. A.Y. 1990-91 order dated 09.08.1996 a copy of which is filed at page No. 652 to 675 of paper book No. 4 and also other related entities for A.Y. 1990-91 i.e. immediately preceding previous year in the case of Ms. Deepika Mehta Vs ACIT in ITA No. 3554/M/1995 for A.Y. 1990-91 and Shri Sudhir Mehta Vs ACIT ITA No. 3557/M/1994 for A.Y. 1990-91 wherein the AO was directed to make the addition, if required on the basis of information....
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....94 & ors. A.Y. 1990- 91 (supra), in the cases of related concerns Ms. Deepika A. Mehta vs. ACIT, Sudhir S. Mehta vs. ACIT for A.Y. 1990-91 (supra) and Deepika A. Mehta vs. DCIT for A.Y. 1989-90(supra). Upon perusal of these decisions, we observe that under similar circumstances the Tribunal has directed the deletion of addition on the ground that the authorities have failed to carry out the investigations and enquiries from the companies in which the assessee was alleged to hold shares but in the present case also the department has not made any enquiries from the companies to ascertain the shareholding of the assessee. Accordingly, we are not in a position to allow a third round of litigation that too after a period of almost 3 decades as no meaningful purpose would be served. Accordingly, we are inclined to set aside the order of Ld. CIT (A) and direct the AO to delete the addition. 82. The issue raised in ground No. 15 is against the order of Ld. CIT (A) confirming the addition of Rs. 6,24,76,526/- as made by the AO on account of unexplained investments in the shares under section 69 of the Act on the basis of documents seized. 83. The facts in brief are that the AO ....
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....om the appellant, any reasonable man would infer that these shares were purchased by the appellant during the period from December 1990 to March 1991. They were certainly not recorded in the books of accounts of the appellant which till date have not been completed, as no copy of the final profit and loss account has been filed even before me. The appellant did not explain the sources for acquiring these shares before the assessing officer and hence I hold that the assessing officer was right in holding that these shares remained unexplained in the hands of the appellant. The appellant's argument, based on the judgement of the Hon'ble Gujarat High Court that since the appellant was a trader in shares, section 69 could not apply, is not very material because if the appellant wants to treat these shares as its stock in trade, even then the burden was on the appellant to explain the acquisition of these shares. The shares in that situation were certainly "valuable articles" and, therefore, the addition made by the assessing officer can be said to have been made u/s. 69A of the IT Act. Therefore, I find no substance in the appellant's argument and in any case this argument ....
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.... I am of the view that the present addition was rightly made except for the fact that no addition could be made in respect of the shares of Punjab Tractors which admittedly belonged to Mrs. Deepika A. Mehta. I find that Annexure 4(2) not only mentions shares of Punjab Tractors but also 350 shares of Escorts. The assessing officer has taken the value of the shares of Punjab Tractors and Escorts together at Rs. 8,42,7007-. I direct the assessing officer to deduct the value of 4165 shares of Punjab Tractors from the figure of Rs. 8,42,7007- and to substitute the resultant figure for the figure of Rs. 8,42,7007-. Subject to this direction the addition of Rs. 6,24,76,5267- is confirmed. The ground is thus partly allowed. It is clarified here that the cases cited by the appellant on principles of natural justice are all distinguishable and have been taken into consideration before deciding this matter. It is also clarified that the addition is sustained by me u/s. 69A of the IT Act." 21.3 From, the above it can be observed that after a detailed analysis, the FAA in the 1st round of proceedings has confirmed the said addition u/s 69 to the extent of Rs 6,24,76,526/-.....
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....essment order namely (i) Chart showing the details of the investments found listed in various seized letters [Page 422-423 of the PB No. 3] (ii) detailed breakup of the investments made as per the said letters, details of the broker by whom the transactions were carried out [Page 409-418 of the PB No. 3] (iii) relevant contract notes on sample basis supporting the transactions reflected in the seized documents [Page 424-473 of the PB No. 3]. Besides above, as explained earlier the CIT (A) in Paras 78 and 79 of his order dated 24.02.2000 accepted the contentions of the appellant and deleted the addition of Rs. 35,52,82,900/- which explanation was equally applicable for the aforesaid addition but the Ld. CIT (A) sustained the addition for reasons which are contrary to the findings given by him in the aforesaid Paras 78 and 79 of his order and even on this ground the above addition is liable to be deleted. This addition is strictly inter-linked with the above addition of Rs. 35,52,82,900/- and even therefore the same is bound to be deleted for the same reasons. In light of the above, it is amply clear that the investments reflected on the seized page aggregati....
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....est by Ld. CIT (A) of Rs. 69,98,298/- as made by the AO on account of disallowance of interest expenditure. 88. The facts in brief are that the AO noted from the books of accounts submitted by the assessee in the second round that the assessee has claimed interest of Rs. 69,98,298/- which was not claimed in the first round of litigation. The said interest was claimed on the outstanding amount to notified broker entities is payable. The AO treated the interest expenditure as contingent liability and accordingly rejected the claim of the assessee. 89. At the outset, the Ld. Counsel of the assessee pointed out that the issue is a recurring issue over the years and the coordinate bench of the Tribunal has consistently allowed similar claims in the case of the assessee as well as other related concerns. The Ld. A.R. submitted that even the predecessors of the AO were allowing the expenses of interest as claimed by several entities including the assessee right from assessment year 1986-87 onwards which was discontinued after assessee and other entities got notified under section 3(2) of the Torts Act. The Ld. A.R., therefore, prayed that the order of Ld. CIT (A) may kindly be....
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....ssment year. The order for A.Y. 1990-91 in fact has been passed by the AO after the date of notification and the enactment of the Special Court Act. We have gone through the order passed by the CIT (A) in the case of Shri Ashwin S. Mehta assessment years 2010-11 and 2011-12, where we noted that this issue of taxability of interest income of the assessee and other parties has specifically been dealt with by the CIT (A) and accordingly interest income of Rs. 10,68,83,732/- was brought to tax. In view of this fact it is apparent that the assessee is liable to pay interest on the amount outstanding. Therefore the liability towards interest got accrued. Under the mercantile system of accounting interest is deductible when it has accrued. This also proves that there was an agreement, may be oral, to pay the interest on the borrowed funds by the assessee to the other family members. We, therefore, reject the plea of the learned D.R. that no liability towards interest has accrued but it was merely a contingent liability. We noted that section 4 of the Special Court Act empowers the custodian and the court to cancel any contract or agreement in relation to the property of a person notified ....
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....ssee. These finding and observation in the above orders of the CIT (A) has not been disputed by the Revenue by filing an appeal. In view of this finding becoming final, in our view, the existence of liability for payment of interest cannot be disputed. 14. Coming to the objection of the Revenue that interest cannot be allowed as deduction has not been shown by recipients in their income. As has been discussed by us in the preceding paragraphs the interest has been shown as income by Mr. Ashwin S. Mehta in assessment years 2010- 11 and 2011-12. We also noted that Late Shri Harshad Mehta has been offering his income on cash basis and the method of accounting has been duly upheld by the Tribunal in his case for A.Y. 1989-90. Even otherwise disallowance of interest claimed by the assessee cannot be made merely because in the opinion of the AO the corresponding interest income has not been offered by the recipients. The interest can be allowed on the basis of method of accounting followed by the assessee. We noted that similar issue when arose in the case of M/s. Growmore Leasing & Investment Ltd. vs. CIT in ITA No. 51354 & 5136/Mum/2012 wherein the Coordinate Bench of this Tribu....
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....ome. After being notified, such shares and securities got converted into Fixed Deposits with various banks. These fixed deposits generated interest income which is offered to tax. Hence, a reasonable nexus can be said to exist between the interest liability incurred by the appellant, and the interest income earned from these assets. However, this matter being sub-judice before the Hon'ble Special Court, no finding can be given on these matters." 15. Similar issue has arisen in the case of Shri Hitesh S. Mehta for A.Y. 2005-06 wherein the CIT (A) vide his order dated 31.08.2010 approved the nexus between borrowed funds and the investment in term deposit which has been followed by the CIT (A) even in the case of the assessee for A.Y. 2006-07 dated 27.09.2013. We do not agree with the submission of the learned D.R. that interest expenses cannot be allowed till the Hon'ble Special Court decide the issue. The allowance or disallowance of the expenditure depends on the accrual of expenditure. Even no dispute has been raised in respect of interest on such credit balances before the Special Court. Even on this basis, following the principle of consistency, as the interest has bee....
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....should be allowed and the question should be answered in the affirmative namely, that the Tribunal was justified in holding that the income derived by the Radhasoami Satsang was entitled to exemption under Sections 11 and 12 of the Income Tax Act of 1961." The aforesaid dictum of law was reiterated recently by the Supreme Court in CIT vs. Excel Industries Ltd. : 358 ITR 295. "It appears from the record that in several assessment years, the Revenue accepted the order of the Tribunal in favour of the Assessee and did not pursue the matter any further but in respect of some assessment years the matter was taken up in appeal before the Bombay High Court but without any success. That being so, the Revenue cannot be allowed to flip-flop on the issue and it ought let the matter rest rather spend the tax payers money in pursuing litigation for the sake of it." 16. In view of our aforesaid discussion we set aside the order of the CIT (A) and direct the AO to allow deduction in respect of said interest accrued and calculated at 12% per annum amounting to Rs. 2,64,72,208/- after disallowing proportionate interest in respect of the investment in shares amounting to Rs. 3,51,176/- after v....
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....td. (supra). 97. Since the facts of the instant issue before us is identical vis-à-vis the coordinate bench decision supra, we accordingly, direct the AO to re-compute the interest under section 234A, 234B and 234C of the Act in terms of the above decision after reducing the amount of tax deductible at source on the income assessed. Ground is allowed for statistical purposes. Accordingly, the ground No. 18 is allowed for statistical purposes. 98. The issue raised in 19th ground of appeal is against the enhancement of income of Rs. 5,50,04,109/- by Ld. CIT (A) which was made on account of difference in the balances as per books of accounts of the assessee and books of M/s. Harshad S. Mehta. 99. The facts in brief are that in course of appellate proceedings in the second round, the Ld. CIT (A) observed that M/s. Vyas & Vyas auditors appointed by Special Court had noted discrepancies in the account of M/s. Harshad S. Mehta as per the books of accounts of the assessee vis-à-vis the account of assessee in the books of accounts of M/s. Harshad S. Mehta as on 31.03.1991 of Rs. 5,50,04,109/-. Accordingly, a show cause notice dated 24.12.2018 was issued to th....
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....3 in appeal No CIT(A)C-V/ACIT CC-23/59/95-96 dated 24.02.2010. In the said appeal, the assessee had raised identical contentions against the proposed enhancement which were considered by my Ld Predecessor and the issue decided. The operative portion of the decision of my Ld Predecessor on this issue is reproduced as under: "I have considered the issues on the differences as raised by the Assessing Officer, the facts of the case and the submissions of the appellant. As I see, one of the main plank of the appellant's defense is that M/s. Vyas & Vyas had not referred to the books of account and Audit Report of the three firms of Chartered Accountants of the notified parties correctly. This contention is totally misplaced. As I note, M/s. Vyas & Vyas have given their findings on the differences in the balances after collecting information from the appellant's computers, banks, financial institutions and other parties. In this direction, I find that M/s. Vyas & Vyas had written letters to banks, financial institutions and other parties to confirm the transactions of M/s. HSM recorded in his book. The observations of M/s. Vyas & Vyas in paras 8.1 and 8.2 of their report call fo....
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....sible. This premise is patently wrong both from the point of view of accounting principles and income-tax proceedings. As may be noted, in normal prudence, a business entity and an individual entity are though the same, the accounting treatment of their transactions is different. This is natural as the implication of a transaction undertaken as an individual and transaction undertaken for business has to be different. It is precisely because of this that the entities in question are maintaining separate sets of books of account, one as an individual and the other as a business entity. This difference is also recognized by M/s. Vyas & Vyas and three Chartered Accountants while preparing the accounts of appellant and the other entities, respectively. As may be seen, it is because of this that M/s. Vyas & Vyas have prepared separate accounts of the appellant for his individual and business entities. Same is the case with the three Chartered Accountants and the other entities. In this backdrop, I find that the appellant has tried to reconcile the differences not by matching the balances between individual to individual and business entity to business entity but by matching with individ....
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....maining being untraceable. Significantly, I also note that the source of passing the journal entry in the books of the appellant has not been explained. This again is a major flaw. In view of the foregoing major flaws, the concept of clarity is badly missing in the accounts of the appellant and other related parties. The differences further accentuate the flaws. As I find, the appellant has not been able to disclose how the journal entries were made in the books of account and any reconciliation based on such flawed accounting is unacceptable. Further, most importantly, I find that the reconciliation and the accounts submitted by the appellant through the several submissions only relate to the balances as on 8.6.1992 and accordingly, they relate only to the assessment year 1993-94. There is no reconciliation whatsoever of the balances as on 31.3.1992. As I note, the Assessing Officer has invited attention to the balances as on 31.3.1992 and 8.6.92 but, the appellant has not given any reconciliation on the balances as on 31.3.1992. In view of this, for the present year under consideration, no reconciliation of the balances has been given. So for the present assessment year under con....
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....nt, the income of the assessee is enhanced by an amount of Rs 5,50,04,109/-." 100. The Ld. A.R. submits that the said enhancement has been made by the Ld. CIT (A) without relevant jurisdiction and without appreciating the facts of the present case. The ld AR submits that the assessment in the present case has been made pursuant to the directions of the Hon'ble Tribunal in the 1st round of appeal and therefore the assessment proceedings in present case were to be limited to the issues set-aside by the Hon'ble Tribunal and could not be extended to the new issues not raised in the 1st round of appeal. The ld AR submits that the said issue of enhancement has not been raised in the 1st round of appeal. Under these circumstances, the Assessing Officer never had any jurisdiction to examine and assess any new issue not dealt with in the 1st round of appeal. Since the Assessing Officer never had a power to examine the said issues, consequently, even the Appellate authority could not exercise the power of enhancement and make the addition what Assessing Officer could not have made as per law. The power of the Appellate authorities are restricted to only raise those issues which othe....
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....aid Chartered Accountant had no authority to provide their report to the AO since it was first liable to be accepted by the Special Court for its accuracy and the said report was prepared for the specific purpose of making distribution u/s 11(2) of the Torts Act. The ld. AR submits that under these circumstances, the difference determined by the Ld. CIT (A) were not correct. 103. The ld. AR contends that the said report cannot be considered a reliable evidence to come to conclusion that there are differences in the Ledger account between the 2 parties as the Hon'ble Special Court, in its order in MA No. 70 of 2014 dated 28.11.2014 [Page 531-533 of PB No. 3] has held that the said report cannot be considered as a reliable piece of evidence and that the report of the auditor is only an opinion expressed by an expert. Moreover, the auditors, M/s. Vyas and Vyas in its letter dated 06.12.2013 [Page No. 529-530 of PB No. 3] has also categorically observed that several records were not verified by them, and hence the audit has been carried out by them only on the basis of the documents which were presented to them. The Chartered Accountants, M/s. Vyas & Vyas had themselves heavily qu....
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....round of litigation. The Ld. D.R. submitted that though the Tribunal has set aside the matter to the file of the AO and AO has not made any decision, however, this can not be construed that power of the Assessing Authority as well as Ld. CIT (A) are curtailed in any way from making any prima-facie addition which was omitted to be made in the earlier round. On merit, the Ld. D.R. submitted that the auditors M/s. Vyas & Vyas appointed by the custodian in order to bring out the truth as these books of accounts were very complicated and fallacious and thus auditors have only after carrying out the necessary exercises and examination of the records and books of accounts came to the conclusion that there is a difference between the books of the assessee and M/s. Harshad S. Mehta in the mirror account. The Ld. D.R. also brushed aside the contention of the Ld. A.R. that all the accounts were not considered while working out the difference. Lastly the Ld. D.R. brought before the Bench that the ground raised by the assessee may kindly be dismissed. 106. We have heard the rival submissions of both the parties and perused the material on record. The undisputed facts are that the Ld. CIT (A) i....
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....tter has been set aside by the Tribunal, the assessee cannot be put into a worst situation than what it was at the time of original assessment. Since after giving effect to the order of the Tribunal, there cannot be any scope of enhancement of assessment and, therefore, the disallowance made in the original assessment should stand. In support of this contention, he relied on the judgment of Hon'ble Supreme Court in Mcorp Global (P) Ltd. v/s CIT, [2009] 309 ITR 434 (SC). 31. On the other hand, the learned Departmental Representative submitted that this is clearly a case of double deduction and does not amount to any kind of enhancement of assessment as the verdict of the Tribunal was to examine the issue afresh. 32. We have heard the rival contentions and perused the material available on record. It is now a settled proposition of law that the Appellate Tribunal under section 254(1) of the Act, had no power to take back the benefit conferred by the Assessing Officer or enhance the assessment. Once the matter has been restored by the Tribunal, the income cannot be enhanced from what was determined at the time of original assessment proceedings, which was the subject matter of....
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....wherein the Special Court has held that report issued by the Chartered Accountants M/s. Vyas & Vyas can not be treated as evidence and it is only an opinion expressed by the expert. Under these circumstances, the findings of the Ld. CIT (A) are incorrect and can not be sustained. We therefore are inclined to hold that even on merit the addition has wrongly been made by the Ld. CIT (A) and accordingly direct the AO to delete the addition. Accordingly, Ground No. 19 is allowed both on legal as well as on merit. 108. Accordingly, the appeal of the assessee is allowed. ITA No. 1196/M/2019 A.Y. 1991-92 109. The grounds raised by the revenue in its appeal are as under:- 1. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) was correct in ignoring the facts of the case that the total of the difference earned by the assessee company on Money Market Transaction is Rs. 6,33,19,388/- which was shown as payable to the assessee company; however, the assessee company has shown Money Market Transactions at Rs. 3,65,36,015/- only and balance amount of Rs. 2,67,83,373/- not shown. 2. Whether on the facts and in the circumstances o....
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....levant year which suggested that the possession of the premises has not been taken. 13.3 There is merit in the contention of the assessee that the only requirement for claiming depreciation is that the said premises should be in its occupation and should be in the state of ready to use. It is also a fact that the said office premises was covered in the search action which was carried out on 28.02.1992 and it was found to be operational. In the first round of appellate proceedings, the assessee's claim of depreciation in respect of the said office premises was rejected since the additional evidence submitted by the assessee was not allowed to be admitted. However, now since the books of accounts of the assessee have been directed to be admitted by the Hon'ble ITAT and the said office premise is duly reflected in the said books, the disallowance of depreciation by the AO mainly on the ground that stamp duty and registration fee have not been paid till the end of the relevant year, cannot be sustained. Also there is no evidence to suggest that the said office premises was not ready to use till the end of the relevant year. Accordingly, ground no. 14 of the appeal is allowed.....