AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 835
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....he profit and loss account which was deducted from the total business income of the assessee while filing the return of income and no corresponding income was offered to tax. Accordingly, a show cause notice was issued to the assessee by the AO which was replied by the assessee by submitting that the profit on sale of motor car has been reduced from the business income in the computation of total income because block of depreciable assets did not cease to exist as the entire sale consideration of sale of vehicle had been adjusted and reduced from the said block of asset depreciable at 15% depreciation. However, the ld. AO added the amount to the income of the assessee on the ground that the assessee has failed to furnish any evidences in that regard. 4. In the appellate proceedings, the ld. CIT (A) allowed the appeal of the assessee after taking into account the assessee's explanation as the motor car sold was part of the depreciable assets and entire sale prices of Rs. 3,85,000/- was adjusted in the schedule of depreciation. The ld. CIT (A) noted that since the block of assets (Motor Car) having rate of depreciation at 15% did not cease to exist, the profit shown in Profit ....
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....ned expenditure and added to the income of the assessee. 7. Similarly, the assessee paid freight expenses of Rs. 1,70,83,525/-, insurance of Rs. 9,60,948/- landing charges of Rs. 8,70,615/- as reported by CBEC Import Export data for which no details were filed by the assessee. 8. In the appellate proceedings, the ld. CIT (A) allowed the appeal of the assessee by observing and holding as under: - "(iii) In Ground No. 3 & 5, the assessee challenged the addition of Rs. 3,99,92,042/- as Unexplained Expenditure in the form of import of newsprints and further addition of Rs. 1,89,15,088/-, against the import-related expenses. The AO, in the assessment order, noted that in terms of information received by him, it clearly had shown that the assessee had imported goods, whose invoice value was Rs. 8,54,17,628/- and assessed value, by the Customs Authorities was for Rs. 8,79,32,198/ -. During the assessment stage, the assessee denied that it had made any import of newsprints and claimed that, one Poddar Global Ltd. of 20, Engineers' Enclave, 2nd Floor, Harsh Vihar Crossing, Pitampura, New Delhi - 110 034 and having a local address at Howrah, Kolkata, had actually ....
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..... The said Poddar Global Ltd. also clarified that the payment to the foreign parties is done from their end and all transit costs and other subsequent costs are borne by them, like, freight, insurance, landing charge, cargo handling charges etc. The imported goods are stored and held by them at their warehouse and are reflected in their balance sheet as stock of goods. However, bills are raised for service charges separately to the customers, whose import-export code are used for clearing of the goods from such warehouses and thus, the name of the assessee is reflected in the information passed on, by the Olo. CBEC. The said Poddar Global Ltd. also clarified that during the FY 2015-16, an aggregate quantity of 2396.793 metric tonnes of newsprints were released from Customs Authorities, with an assessable amount of Rs. 8,79,32,197/-, using the IEC of the assessee. However, they confirmed that, in actuality, they had supplied only 1085.108 metric tonnes of newsprints, worth Rs. 4,70,30,144/- through 20 nos. of debit notes. The remaining quantity was supplied by the said Poddar Global Ltd. to the assessee Company during the very next year, i.e., FY 2016-17. They further clari....
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....e. 10. The issue raised in ground no.4 in Revenue's appeal is against the restricting the disallowance of Rs. 29,04,610/- being 10% Rs. 2,90,64,156/- as made by the ld. AO towards writers remuneration of Rs. 2,90,64,156/-and assessee in cross objection's ground no.5 challenged the part sustaining the addition. 11. The facts in brief are that the ld. AO disallowed Rs. 2,90,64,156/- incurred by the assessee on account of writer's remuneration when the assessee failed to furnish any books of account before the ld. AO for inspection. The ld. AO noted that majority of the entries were either in cash or by way of cheques drawn to self and hence, this disallowance. 12. In the appellate proceedings, the ld. CIT (A) partly allowed the appeal of the assessee by deleting 90% of the disallowance and sustaining 10% of the disallowance. 13. The Revenue is in appeal before us challenging the order of ld. CIT (A) vide ground no.4 and assessee in cross objection's ground no.5 challenged the appeal by sustaining the addition to the extent of 10%. 14. After hearing the rival contentions and perusing the materials available on record, we find that the assessee has incurr....
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....t produced the books of account and therefore, AO made adhoc disallowance at the rate of 5% in respect of transportation and distribution expenses thereby calculating the disallowance at Rs. 35,47,492/- on the ground that inflation of the said expenses could not be ruled out. In the appellate proceedings, the ld. CIT (A) confirmed the order of ld. AO without giving any justification. 17. Similarly, in respect of book writing expenses the AO noted that since the assessee has not furnished any books of accounts, therefore, it is presumed that assessee has not maintained any books of account. Consequently, the entire accounting charges were disallowed. As regards printing material purchases, the AO made a disallowance of Rs. 3,16,18,342/- being 5% of the total purchases on the ground that the assessee could not prove these expenses. Similarly, Rs. 4,37,693/- was disallowed in respect of repair and maintenance, office expenses and other expenses etc. equal to 5% of the total expenses charged to the Profit and Loss account. 18. The ld. CIT (A), in three lines conclusion, dismissed the appeal of the assessee by noting that the Gross Profit of the assessee was 92.62% whereas the fin....
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....ing total income of Rs. 35,95,850/ -. The case of the assessee was selected for limited scrutiny under Computer Assisted Scrutiny Selection (CASS) and accordingly, the notice u/s 143(2) of the Act was issued on 27.08.2018. The statutory notices were duly issued and served upon the assessee. The assessee is engaged in the business of printing, publishing and circulating newspapers and other publications. It was seen from the ITS data from the departmental database that the assessee had made import purchases of different types of newsprint and reels of different specifications worth Rs. 7,33,87,730/- invoice value, Rs. 1,46,77,546/- freight expenses, insurance worth Rs. 8,25,882/- and landing charges of Rs. 7,64,770/-, which totals to Rs. 7,72,41,791/-. The ld. AO asked the assessee to furnish all purchases ledgers and all the documents regarding the value of imports made during the year, which was not replied by the assessee. Finally, the ld. AO made an addition of Rs. 7,33,87,730/- along with an addition of Rs. 3,68,75,884/- to the return income of the assessee. 23. In the appellate proceedings, the ld. CIT (A) allowed the appeal of the assessee by deleting the disallowances mad....
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....s available on record, we find that particularly the notice was issued u/s 143(2) of the Act, a copy of which is available at page no. 25 of the Paper Book. We note that the said notice has not been issued in consonance with the CBDT Instruction F No. 225/157/2017/ITA-II Dated 23.06.2017. The said notice is extracted below for the sake of ready reference: - "आमकर अधिनियम 1961 की धारा 143(2) के अधीन नोटिस Notice under section 143(2) of the Income-tax Act, 1961 संवीक्षा (कंप्यूटर आधारित संवीक्षा चयन Scrutiny (Computer Alded Scrutiny Selection) महोदय/ महोदया/ भेसर्स, Sir/Madam/ M/s, आपको सूचित किया जा&....
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....;ा को आपको ऑनलाइन माध्यम से इलेक्ट्रॉनिक रूप में Income tax india efiling.gov.in पर अपने ई-फाईलिंग खाता द्वारा प्रस्तुत किया जाना है। बाद की निर्धारण कार्यवाही भी आयकर विभाग की 'ई-कार्यवाही' सुविधा द्वारा की जायेगी। 'ई-कार्यबाही' प....
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....351;वाहीआपके द्वारा वर्णित की गईई-मे is created by you, assessment proceedings shall be carried out either through your specified e-mail account or manually (if e-mail is not available). संलग्नक : यचौधरि Enclosure as above 7. In our opinion, the notice issued u/s 143(2) of the Act which is not in the prescribed format as provided under the Act is an invalid notice and accordingly, all the subsequent proceedings thereto would be invalid and void ab initio. The case of the assessee find support from the decision of Shib Nath Ghosh Vs. ITO in ITA No. 1812/KOL/2024 for A.Y. 2018-19 vide order dated 29.11.2024, wherein the co-ordinate Bench has held as under: - "10. After hearing both the sides and the materials available on record, we find that the notice issued u/s 143(2) dated 9th August, 2017 was not in any of the formats as provided in the CBDT instruction F.No.225/157/2017/ITA-II dated 23.06.2017. We ....