TaxTMI 
TaxTMI 
2024 (8) TMI 1727
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....n 17.01.2019 and subsequent dates on the residential premises of the directors/key personnel as well as business premises of Shyam Sel group of cases at Kolkata and other places. Besides the search and seizure action, surveys u/s 133A of the Act were also conducted on different business premises of the concerns/individuals belonging to the said group. The assessee company was part of the said actions. The assessee has been engaged in the business of manufacturing steel and power. 3. Issue raised in ground no. 1 is against the order of Ld. CIT(A) confirming the disallowance u/s 32AC of the Act amounting to Rs. 20,82,51,125/- being 15% of the plant and machinery amounting to Rs. 1,38,83,40,819/- put to use during the year AY 2017-18 on the ground that the aggregate value of these additions did not exceed 25.00 crores and therefore the same was not eligible for deduction u/s 32AC of the Act. 4. Consequent to the search operation, a notice u/s 153A dated 12.09.2019 was issued to the assessee and in compliance, the assessee filed the return of income u/s 153A of the Act on 18.10.2019 declaring total income of Rs. 3,87,89,750/- under the normal provisions of the Act and Rs. 41,01,8....
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....dditions amounting to Rs. 19.55 crore and for the remaining additions of Rs. 119.27 crores rejected on the ground that it is not possible as to when the assets were acquired and whether all these assets were eligible for deduction u/s 32AC of the Act. Thus the Ld. CIT(A) ignored the claim of Rs. 119.27 crores for the purpose of computing deduction u/s 32AC of the Act. 6. After hearing the rival contentions and perusing the material on record, we note that undisputedly the assessee has made addition to the plant and machinery which according to it were eligible for deduction u/s 32AC of the Act however due to non-furnishing of evidences before the Ld. CIT(A), the claim was rejected nonetheless the Ld. CIT(A) has recorded a finding that the assessee is entitled to claim deduction in respect of additions of Rs. 19.55 crores to plant and machinery. However the same being less than 25.00 crores and therefore threshold limit for investment was not met and thus dismissed the appeal of the assessee on this issue. While in the assessment proceedings the AO simply rejected the claim of the assessee that no fresh additional claim could be made in the return of income filed u/s 153A that to....
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....had employed 117 new employees during the year out of which the cost relating to 27 employees was eligible for deduction u/s 80JJAA of the Act. The assessee had also obtained required certificate in form 10DA which certified that the assessee was eligible to claim deduction of Rs. 11,89,353/- being 30% of additional employees cost of Rs. 39,64,465/- who were recruited during the year. Besides the assessee has claimed Rs. 3,23,310/- being 30% of additional employees cost of Rs. 10,77,770/- of employees who were recruited in AY 2015-16. Thus, in aggregate the assessee claimed deduction of Rs. 15,12,649/-. The AO rejected the claim of the assessee on the ground that this was not claimed in the return of income u/s 139(1) of the Act but claimed in the return u/s 153A which could not be allowed. 9. In the appellate proceedings, the Ld. CIT(A) rejected the claim of the assessee u/s 80JJAA of the Act on the ground that the same was not claimed u/s 139(1) and the claim made for the first time in return filed u/s 153A was not allowable in terms of provisions of Section 80AC of the Act. 10. After hearing the rival contentions and perusing the material on record, we find that in this ca....
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....e evidences qua the said claim before the authorities below as well as before us which in our opinion need to be examined at the level of AO. Accordingly we restore the issue to the file of the AO and direct to examine and decide the same. Therefore the issue restored for verification only after affording reasonable opportunity to the assessee. Accordingly ground no. 2 raised by the assessee is allowed for statistical purpose. 11. Issue raised in ground no. 3 is against the appellate order in partly accepting the revised claim made u/s 80IA based on the correct arm's length price i.e. where the ALP has the effect of reducing the claim of the assessee such reduced claim was accepted whereas claim based on the same ALP having the effect of enhancing the claim u/s 80IA of the Act, was rejected. 12. Facts in brief are that during the appellate proceedings, the assessee has filed before the appellate authority revised correct purchase rates as per the assessee's purchase of power from outside agencies while at the time of filing return u/s 139(1) and 153A, the claim was arrived on the basis of wrong transfer cost per unit. The assessee submitted before the appellate author....
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....de before the appellate authority. We also note that the Ld. CIT(A), in order to verify the revised purchase price per unit in respect of three CPPs and the resultant revised claim, has remanded the issue to the file of the AO and the AO, after examining and carrying out the detailed verification of the documentations furnished by the assessee in the remand proceedings, confirmed the revised purchase prices per unit to be correct. Thereafter the Ld. CIT(A) accepted the revised rate in respect of MCPP-2 where the revised average rate has the effect of reducing the claim of the assessee from Rs. 12,78,33,964/- to Rs. 3,68,88,020/- but rejected the revised claim where the claim of the assessee has gone up based on the revised average purchase rates in respect of JPP- I & II. The summary of the original and revised claims as per the original return, revised claim before ld CIT(A) and claim allowed by the ld CIT(A) assessee are given hereunder for the ready reference: Sl. No. Name of the unit Eligible amount as per auditor's report-10CCB Revised claim submitted by the assessee Claim granted by the Ld. CIT(A) 1 Mangalpur-CPP-II 12,78,33,964 3,68,88,020 3....
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....ndustries Ltd. [GA No. 1501 of 2014 dated 19.11.2014 held that amount was rightly added back by the AO in accordance with the provisions as contained in clause (f) of Explanation (1) to Section 115JB and dismissed the appeal of the assessee on this issue. 17. After hearing the rival contentions and perusing the material on record, we note that the issue of disallowance u/s 14A while computing book profit u/s 115JB of the Act has been settled once and in view of the decision of Hon'ble Apex Court in the case of Appollo Tyres Ltd. vs. CIT [2002] 122 taxman 562 (SC) wherein the Hon'ble Apex Court has held that book profit is to be calculated u/s 115JB of the Act as per Companies Act Schedule III and hence any disallowance is not permitted to be added in the calculation of book profit u/s 115JB of the Act. In view of the above said decision of Hon'ble Apex Court, we are inclined to set aside the order of Ld. CIT(A) and direct the AO to delete the addition made to the book profit. Accordingly ground no. 4 is allowed. 18. Issue raised in ground no. 5 is general in nature and needs no adjudication. IT(SS)A No. 129/Kol/2023 for AY 2017-18(Revenue's Appeal). 19. ....
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....for determining ALP. The AO following the contention of the TPO disallowed the deduction u/s 80IA. We don't have any rate of sale of power by generating companies to SEBs. However, the rates of sale of power by generating companies to SEBs are given by the TPO in the TP order for AY 2017-18, which are as under: Sl. No. Name of Seller/Power generating Plant Rate/Unit 1 Himadri Chemical & Industries Limited 2.74 2 Reshmi Cements 2.84 3 Tata Power Co Ltd. Haldia 1.86 4 Ennore Coke 2.10 5 Bengal Energy Limited 2.84 Mean (Average Rate) 2.48 Accordingly the claim of the assessee u/s 80IA was reduced. 21. In the appellate proceedings, the Ld. CIT(A) allowed the appeal by accepting the internal CUP method. After taking into consideration the decision of various High Courts on the similar issue which were discussed at length in the appellate order. 22. After hearing the rival contentions and perusing the material on record, we observe that the issue of determining the claim of the assessee u/s 80IA in respect of CPPs which were supplying power to other non eligible units were determined on the basis of electricit....
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.... to its own industrial units for captive consumption at the rate of Rs. 3.72 per unit. Assessing officer took the view that there was no justification on the part of the assessee to claim electricity charge at the rate of Rs. 3.72 for supply to its own industrial units when the assessee was supplying surplus power to the State Electricity Board at the rate of Rs. 2.32 per unit. Finally, the assessing officer held that Rs. 2.32 per unit was the market value of electricity and on that basis, reduced the profits and gains of the assessee thereby restricting the claim of deduction of the assessee under section 80-IA of the Act. 20. We have already analyzed Section 80-IA of the Act. There is no dispute that respondent-assessee is entitled to deduction under section 80-IA of the Act for the relevant assessment year. The only issue is with regard to the quantum of profits and gains of the eligible business of the assessee and the resultant deduction under section 80-IA of the Act. The higher the profits and gains, the higher would be the quantum of deduction. Conversely, if the profits and gains of the eligible business of the assessee is determined at a lower figure, the deducti....
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.... to mean a market in which any buyer or seller may trade and in which prices and product availability are determined by free competition. P. Ramanatha Aiyer's Advanced Law Lexicon has also defined the expression "open market" to mean a market in which goods are available to be bought and sold by anyone who cares to. Prices in an open market are determined by the laws of supply and demand. 25. Therefore, the expression "market value" in relation to any goods as defined by the explanation below the proviso to sub-section (8) of Section 80-IA would mean the price of such goods determined in an environment of free trade or competition. "Market value" is an expression which denotes the price of a good arrived at between a buyer and a seller in the open market i.e., where the transaction takes place in the normal course of trading. Such pricing is unfettered by any control or regulation; rather, it is determined by the economics of demand and supply. 26. Under the electricity regime in force, an industrial consumer could purchase electricity from the State Electricity Board or avail electricity produced by its own captive power generating unit. No other entity could....
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....ial units of the assessee would have had to purchase power from the State Electricity Board at the same rate at which the State Electricity Board supplied to the industrial consumers i.e. Rs. 3.72 per unit. 28. Thus, market value of the power supplied by the assessee to its industrial units should be computed by considering the rate at which the State Electricity Board supplied power to the consumers in the open market and not comparing it with the rate of power when sold to a supplier i.e., sold by the assessee to the State Electricity Board as this was not the rate at which an industrial consumer could have purchased power in the open market. It is clear that the rate at which power was supplied to a supplier could not be the market rate of electricity purchased by a consumer in the open market. On the contrary, the rate at which the State Electricity Board supplied power to the industrial consumers has to be taken as the market value for computing deduction under section 80-IA of the Act. 29. Section 43A of the 1948 Act lays down the terms and conditions for determining the tariff for supply of electricity. The said provision makes it clear that tariff is deter....
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....e hold that the Tribunal had rightly computed the market value of electricity supplied by the captive power plants of the assessee to its industrial units after comparing it with the rate of power available in the open market i.e., the price charged by the State Electricity Board while supplying electricity to the industrial consumers. Therefore, the High Court was fully justified in deciding the appeal against the revenue. 32. Revenue has relied upon the decision of the Calcutta High Court in ITC Ltd. (supra). In that case, the High Court rejected the first contention of the revenue that the assessee therein was not entitled to the benefit under section 80-IA of the Act because the power generated was consumed at home or by other business of the assessee. After holding so, the High Court however, answered the question on the point of computation of profits and gains of the eligible business against the assessee. On going through the judgment, we find that facts of that case are clearly distinguishable from the facts of the present batch of appeals. It is noticeable that though an opportunity was granted by the assessing officer to the assessee to adduce evidence to justif....
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....y provisions relating to exercise of option to adopt Written Down Value (WDV) method in place of the straight line method while computing depreciation on the assets used for power generation. This issue has been raised by the revenue in Civil Appeal No. 13771/2015 (CIT v. Jindal Steel & Power Ltd.) in the following manner: Whether on the facts and in the circumstances of the case, the High Court was justified in upholding the order of the Tribunal that compliance to statutory in place of straight line method prescribed under the statutory provision on the assets used for power generation can be waved in the case of the assessee? 36. This issue arises in the case of the respondent-assessee M/s Jindal Steel and Power Ltd., Hisar for the assessment year 2001-2002. While dealing with the core issue, we have already made a brief description of the status of the assessee. It is, therefore, not necessary for a repetition of the same. What is however discernible from the assessment order dated 26-3-2004 passed under section 143(3) of the Act is that the assessee had purchased twenty five MV turbines on and around 8-7-1998 for the purpose of its eligible business. Assessee....
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....ion of any block of assets shall be allowed, subject to provisions of sub-rule (2), as per the specified percentage mentioned in the second column of the table in Appendix-I to the Rules on the WDV of such block of assets as are used for the purposes of the business or profession of the assessee during the relevant previous year. In so far the present case is concerned, it is not in dispute that sub-rule (2) has no application. We may, therefore, refer to sub- rule (1A) along with the provisos thereto which read as under: "(1A) The allowance under clause (i) of sub-section (1) of section 32 of the Act in respect of depreciation of assets acquired on or after 1st day of April, 1997 shall be calculated at the percentage specified in the second column of the Table in Appendix IA of these rules on the actual cost thereof to the assessee as are used for the purposes of the business of the assessee at any time during the previous year: Provided that the aggregate depreciation allowed in respect of any asset for different assessment years shall not exceed the actual cost of the said asset: Provided further that the undertaking specified in clause (i) of sub-sect....
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....class of assets, column two provides for the relatable depreciation allowance of such class of assets as per the percentage of actual cost. From a comparison of the two appendixes, it is evident that the depreciation allowance as per percentage of WDV in Appendix-1 is higher than the depreciation allowance as per percentage of actual cost under Appendix-1A. 42. From a conjoint reading of Rules 5(1) and (1A) of the Rules read with Appendix-1 and Appendix-1A, it is evident that while sub-rule (1) provides for allowance of depreciation in respect of any block of assets in terms of the second column of the table in Appendix 1, sub-rule (1A) enables an assessee to seek allowance of depreciation of assets acquired on or after the 1st day of April, 1997 as per the percentage specified in the second column of the table in Appendix-1A on actual cost basis. However, the second proviso to sub-rule (1A) clarifies that an assessee may opt for depreciation under Appendix-1 instead of Appendix-1A but such option has to be exercised before the due date for furnishing the return of income under sub-section (1) of Section 139 of the Act. 43. In the instant case, there is no dispute....
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....eks to avail the depreciation provided in Section 32 (1) under sub-rule (1) of Rule 5 read with Appendix-I instead of the depreciation specified in Appendix-1A in terms of sub-rule (1A) of Rule 5 which the assessee has done. If that be the position, we find no merit in the question proposed by the revenue. The same is therefore answered in favour of the assessee and against the revenue. DELETION OF ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF PAYMENT MADE BY THE ASSESSEE TO SHRI S.K. GUPTA AND HIS GROUP OF COMPANIES. 46. This brings us to the second of the additional issues which is the deletion of the addition of Rs. 3,39,95,000.00 made by the assessing officer on account of payment made by the assessee to Shri SK Gupta and his group of companies. This issue has been raised by the revenue in Civil Appeal No. 7425/2019 (CIT v. M/s Reliance Industries Ltd.). 47. Respondent assessee in this case is M/s Reliance Industries Ltd. and the assessment year under consideration is 2006-2007. Assessee claimed allowance of expenditure of about Rs. 3.39 crores on account of payments made to one Shri SK Gupta and his group of companies. The assessing officer vi....
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....him. Assessing officer had dis-believed the affidavit as well as the subsequent statement of Shri S.K. Gupta without any justifiable and cogent reason. That apart when the revenue had relied upon the retracted statement of Shri S.K. Gupta, it ought to have provided an opportunity to the assessee to cross-examine Shri S.K. Gupta which was however denied. Thus, revenue was not justified in disallowing the claim of professional expenses of the assessee on account of payment to Shri S.K. Gupta and his group of companies. 52. Therefore, we agree with the view taken by the High Court. As noted by the High Court, the entire issue is based on appreciation of the materials on record. Tribunal had scrutinized the materials on record and thereafter had recorded a finding of fact that there were sufficient evidence to justify payment made by the assessee to Shri SK Gupta, a consultant of the assessee, and that the assessing officer had wholly relied upon the statement of Shri Gupta recorded during the search operation which was retracted by him within a reasonable period. In these circumstances, we are of the view that there is no admissible material to deny the claim of expenditure m....
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....tion 80-IA of the Act. Therefore, the issue relating to carbon credit was not raised or urged by the revenue. If that be the position, revenue would be estopped from raising the said issue before this Court at the stage of final hearing. That apart, there is no decision of the High Court on this issue against which the revenue can be said to be aggrieved and which can be assailed. In the circumstances, we decline to answer this question raised by the revenue and leave the question open to be decided in an appropriate proceeding. 56. For the aforesaid reasons, the civil appeals are hereby dismissed. However, there shall be no order as to cost." Considering the facts of the assessee in the light of the aforesaid decision we are of the considered opinion that the case of the assessee is squarely covered by the decision of the Hon'ble Apex Court and therefore we are inclined to dismiss the appeal of the revenue by upholding the order of ld CIT(A) on this issue. IT(SS)A No. 79/Kol/2023for AY 2018-19(Assessee). 23. Issue raised in ground no. 1 is against the confirmation of disallowance by Ld. CIT(A) as made by the AO by rejecting the claim of the assessee u/s 80JJA....
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....5396/2017 dated 15.12.2017 32,54,296/- 19,50,000/- 13,04,296/- I-230405342/2017 dated 15.12.2017 23,17,539/- 13,16,667/- 10,00,872/- I-230402258/2017 dated 29.05.2017 2,83,500/- 98,182/- 1,85,318/- I-230400121/2018 dated 11.01.2018 21,88,342/- 12,33,333/- 9,55,009/- I-2304003616/2018 dated 30.1.2018 35,85,926/- 21,88,333/- 1397,593/- I-230400362/2018 dated 30.01.2018 9,13,500/- 4,83,333/- 4,30,167/- Total 62,29,164/- The AO during the course of assessment proceedings found that the market value of these plots of land was higher than the valuation as shown in the sale deeds. The AO therefore called upon the assessee to explain as to why the above difference of Rs. 62,29,164/- should not be added u/s 56(2)(x) of the Act to the income of the assessee and was finally added the same to the income of the assessee. The said addition was also confirmed by the Ld. CIT(A) in the appellate order. 28. After hearing the rival contentions and perusing the material on record, we note the difference between the amounts as per sale deeds and market value of the plots/lands is apparently more tha....
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....d as well and accordingly the ground no. 4 is allowed. IT(SS)A No. 91/Kol/2023 for AY 2018-19(Revenue) 31. Issue raised by the revenue in ground no. 1 to 6 is against the order of ld CIT(A) accepting the Internal CUP method and accepting the rate of power for calculation of claim u/s 80IA which is similar to one as decided by us in IT(SS)A No. 129/Kol/2023. Therefore our decision would, mutatis mutandis, apply to this appeal as well. Accordingly the appeal of the revenue is dismissed. IT(SS)A No. 109/Kol/2023for AY 2019-20(Assessee). 32. Issue raised in ground no. 1 is against the confirmation of addition by the Ld. CIT(A) of Rs. 59,85,000/- as made by the AO u/s 69C of the Act in respect of bogus unexplained expenditure. 33. Facts in brief are that during the course of search and seizure operation u/s 132(1) of the Act on the residential and business premises of Finance Broker i.e .. Sanwaria and Kesara group on 30.11.2018 and further investigation on the subsequent dates several incriminating material documents were seized which showed details of unaccounted cash transactions. The documents also contained the name of assessee i.e. Shyam Sel Group with certain entit....
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....he Act of Rs. 59,85,000/-(Rs. 49,87,500/-+Rs. 9,97,500/-) to the income of the assessee. Besides, the AO noted that the company has taken cash loans of Rs. 17,80,00,000/- from various companies/concerns during the financial year 2018-19 relevant to AY 2019-20 through finance broker Shri Anil Kasera and the said money was employed in their business activity of the assessee. The AO further presumed that the assessee company would have generated undisclosed profit from deploying such funds in the business and estimated the profit at Rs. 1,42,40,000/- @ 8% of Rs. 17,80,00,000/- and added the same to the income of the assessee as undisclosed profit. 34. In the appellate proceedings, the Ld. CIT(A) sustained the addition made by the AO in respect of interest and brokerage charges of Rs. 49,87,500/- and Rs. 9,97,500/- respectively however the income estimated @ 8% on the total loan of Rs. 17,80,00,000/- was deleted by the Ld. CIT(A) by observing and holding as under: "I have carefully considered the findings recorded by the Ld. AO in the assessment order and the submissions put forth by the appellant. The main thrust of the appellant's argument is that the addition/s were ....
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....statement recorded of a person who is in possession of any valuable thing or control of books found during search then it can be used as evidence in any proceedings under the Act and the presumption would be that it has been given by that person voluntarily. The burden to prove that the statement is not voluntarily obtained, but due to threat, coercion, promise etc, is upon the maker of statement. And such a burden would be discharged, if the maker of the statement is able to create "reasonable doubt" that the admission made in respect of fact-in-issue was not voluntary, then the onus shifts on the shoulder of Revenue to prove that statement was taken voluntarily. Hence, the initial onus is on the maker of the statement u/s 132(4) of the Act to raise a reasonable doubt that the facts admitted by him was purely based on wrong assumption of facts and able to adduce evidence/material to show that he was wrong on the facts he admitted. The maker of statement can later explain the circumstance which led him to make the admission and bring out the correct facts and rebut the facts stated in the admission and in that way retract from the admission made by him u/s 132(4) of the Ac....
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.... the fact-in-issue as admitted by them in their statements wherein they had explained in detail the modus operandi followed by them when dealing with these finance brokers and also contents of the documents confronted to them. For the aforesaid reasons, the retractions filed by the Directors of the appellant are held to be unreliable and therefore ignored. I gainfully rely on the decision of the Hon'ble Rajasthan High Court in the case of Bannalal Jat Constructions (P.) Ltd Vs ACIT (264 Taxman 5) wherein on similar acts and circumstances the Hon'ble High Court had upheld the addition made by the AO based on several documents which had also been admitted by the Director in his statement u/s 132(4) of the Act. In the decided case also a search was carried out at business premises of assessee- company. In course of search proceedings. statement of director of assessee-company was recorded under section 132(4)admitting certain undisclosed income which was added by the AO. Subsequently .the director of assessee-company retracted said statement. The Hon'ble Tribunal noted that the statement had been recorded in presence of independent witness, and the mere fact that ....
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....as his undisclosed income. He also categorically stated that the said disclosure is in the hands of M/s Bannalal Jat Construction Private Limited in respect of unexplained cash amounting to Rs. 1,21,43,210/- and Rs. 2,50,00,000 and Rs. 30,00,000/- totalling to Rs. 2,80,00,000 in his individual capacity. 20. Subsequently, on 04.12.2014 during the post-search proceedings, statement of Shri Bannalal Jat was again recorded under Section 131 of the IT Act, wherein he was again confronted with the various documents seized and cash found during the course of search and the consequent surrender made by him in respect of his two concerns and in response thereto, he again confirmed the surrender of undisclosed income amounting to Rs. 1,21,43,210/- and Rs. 1,35,00,000/-. It is in this background that we have to view his reply to the show-cause notice submitted on 02.12.2016. This show-cause notice was issued to him by the assessing officer when the appellant-company offered the said undisclosed income to tax. There liability, importance and sanctity of admission made during search could be refuted only by cogent and convincing evidence. We may in this connection refer to earliest jud....
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....ndependently come to a conclusion that there was additional income as sought to be assessed and that there was no material to support that there was such income, this contention in our view is not correct. As held by the Supreme Court in Pullan-gode Rubber Produce Co. Ltd. v. State of Kerala, (1973) 91 ITR 18 (SC) an admission is an extremely important piece of evidence though it is not conclusive. Therefore, a statement made voluntarily by the assessee could form the basis of assessment. The mere fact that the assessee retracted the statement could not make the statement unacceptable. The burden lay on the assessee to establish that the admission made in the statement at the time of survey was wrong and in fact there was no additional income. This burden does not even seem to have been attempted to be discharged. Similarly, P.K Palwankar v CGT, (1979) 117 ITR 768 (MP-HC) and CIT v. Mrs. Doris S. Luiz, (1974) 96 ITR 646 (Ker-HC) on which also learned counsel for the assessee placed reliance are of no help to the assessee. The Tribunal's order is concluded by findings of fact and in our view no question of law arises. The applications are, accordingly, rejected....
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....ven facts of the present case. The appellant, may yet argue that, once the retractions were brought to the notice of the Ld. AO, then he ought to have afforded opportunity to cross examine. However, as held above, the retractions were an after-thought having no evidentiary value and therefore the same cannot be of any assistance to the appellant. The appellant has further referred to the income-tax assessment for AY 2017-18 wherein similar allegation regarding the loan of Rs.2 crores advanced to M/s SkipperLtd was raised by the AO and the appellant had substantiated to the Ld. AO's satisfaction that the loan was advanced in cheque to M/s Skipper Ltd and it was nota cash loan transaction. In this regard, I find that this particular instance is of no help to the appellant. Instead this particular fact fortifies that the appellant was indeed dealing through the finance brokers and had a relationship with them. It is not the case of the Revenue that all loans placed or received through finance brokers were in cash but indeed some were in cheque as well. The onus is therefore on the appellant to prove that the loan transactions reflected in these documents were conducted th....
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.... & suspicions. It is settled proposition of law that suspicion howsoever strong it may be cannot take the place of proof or evidence as held by the Supreme Court in Uma Charan Shaw & Bros. Vs. CIT (37 ITR 271). For the aforesaid reasons therefore, the ad hoc addition of Rs. 1,42,40,000/- by way of undisclosed income is found to be unjustified on facts and in law and is thus directed to be deleted. Hence, Ground no. 3 stands dismissed and ground no. 4 is allowed." The assessee is in appeal against the confirmation of addition of Rs. 59,85,000/- whereas the revenue is in cross appeal challenging the deletion of Rs. 1,42,40,000/-. 35. After hearing the rival contentions and perusing the material on record, we find that though the incriminating material was found at the premise of the third party who is finance broker and the name of the assessee appeared in the said incriminating documents. We note that Shri Deepak Agarwal is a director of Shyam Metaliks and Energy Ltd and not on the assessee though he had confirmed the brokers were involved in arranging finance to the assessee during the financial year as calculated above. The assessee was stated to have received of Rs. 17,84,0....
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....loans which were alleged to be taken by the assessee is incorrect and cannot be sustained. Accordingly we reverse the order of Ld. CIT(A) and direct the AO to delete the addition. Accordingly ground no. 1 is allowed. 36. Issue raised in ground no. 2 is against confirmation of Rs. 6,65,583/- by CIT(A) which was added by the AO on account of difference between fair market value and value as shown by the assessee in the sale deeds in respect the lands purchased which is similar to one as decided by us in ground no. 2in IT(SS)A No. 79/Kol/2023 for AY 2018-19 which has been restored to the file of the AO to decide the same after obtaining valuation from the DVO. Therefore our decision would, mutatis mutandis, apply to this ground as well. Accordingly ground raised by the assessee is allowed. 37. Issue raised in ground no. 3 is similar to one as decided by us in IT(SS)A No. 108/Kol/2023 for AY 2018-19 in ground no. 4. Where we have deleted the addition made to book profits in respect of disallowance made u/s 14A. Our finding would, mutatis mutandis, apply to this ground as well. Consequently the ground raised by the assessee is allowed for statistical purposes. IT(SS)A No. 130/K....
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....oup. These email correspondences contained tabulated data of loans advanced by Shyam Sel Group to Emami Group along with columns denoting interest of 8% in cheque and interest of 7.05% in cash. It is observed that although these emails were sent by Mr. Ghanshyam Agarwal to Mr. Shantinath, however there was no return confirmation or acknowledgement of the same received back from Emami Group. Hence, it is noted that these mails were only sent by the lender to the borrower tabulating the details of loan, and interest thereon. However, there is no email or correspondence or any document found in the course of search which suggests that the borrower had agreed to the terms of interest set out in these emails. It is noted that these emails were confronted to Mr. Deepak Agarwal, who was the person marked on this mail by Mr. Ghanshyam Agarwal, in the course of search. Perusal of his statement recorded u/s 132(4) of the Act on 17.01.2019 shows that he had explained these emails as follows: "Q.43 I am now showing, you the records of your emails, taken from d- agrawal2000yahoo.co.in arid marked as SME/10Page 22 and 24, being produced hereunder: Please confirm the sa....
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....ease explain as to how proposal was sent at a later date after advancing of loans, whereas on the other hand, it is obvious that all modalities regarding payment of interest would have been completed before advancing of loans. Ans. Actually this was our proposal to claim higher interest which was not accepted by Emami group." From the above it is noted that Mr. Ghanshyam Agarwal had explained that this was only a proposal sent to Emami Group at the direction of the management, in which Shyam Sel Group had proposed a higher interest rate which inter alia comprised of interest component of 7.05% in cash. However, according to Mr. Ghamshyam Agarwal, this proposal never materialised and therefore no interest was received in cash. I find that in order to examine the veracity of this statement, the AO had made enquiries u/s 133(6) from the Emami Group of Companies who had provided the loan confirmation and had clearly stated that the interest was only paid in Cheque in as much as there was no cash payment. It is also noted that, before the AO, the appellant had also filed the duly sworn affidavits of the Directors of the Emami Group of companies affirming the version of....
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....hat this was merely a proposal which was never even replied to. The appellant, by way of evidence has produced confirmations from Emami which has gone under sworn affidavit to say that such cash interest was never given by it. Incidentally, the appellant has also furnished such an affidavit. Now, if the plausible explanation, along with the said evidence in support, was not to be accepted by the AO, then it was open to him to cross-examine the deposing parties. An affidavit, creates a right to cross- examine under CRPC in favour of the person before whom the contents of such an affidavit are placed and who wishes to contest the contents thereof. This right, it has been held by judicial authorities, if not exercised, is taken to be forfeited and the contents of such considered final. In this case, it was open to the AO to cross-examine the parties that had sworn such affidavits. Merely to reject them without any investigative effort would be to negate the inherent legal value of sworn affidavits and would therefore be impermissible in law. Further, it has been posted out by the Ld AR during discussions in appeal, that it has never been the case of the department that the case of Ema....
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....a proposal to Emami Group which was not accepted and never materialized. Thus the Emami Group has not accepted the proposal of Shyam Sel Group to pay higher interest and paid interest only be cheques. The Ld. A.R also stated that detailed Affidavit of Emami group stating that they have not received any interest in cash from Emami Group and the same was filed before the AO which is available at page no. 161 to 168 of PB. The Ld. A.R stated that during the course of assessment proceedings, the AO issued notice u/s 133(6) of the Act to the Emami Group and they have also replied that no cash interest was paid to Shyam Sel Group or any other group entities of the said group. The Emami Group company have also made Affidavit duly sworn before the First Class Magistrate and filed before the AO along with reply to notice issued u/s 133(6) stating that the loan taken through proper banking channel, the loan has been repaid, interest has been paid after deduction of TDS through banking channel only. The Ld. A.R relied on the order of Ld. CIT(A) heavily and submitted that the Ld. CIT(A) has passed a very speaking and reasoned order while deleting the addition and therefore the same may kindly ....
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....'s theory and conclusion and therefore addition made on the basis of estimation, conjecture and surmises could not be sustained. Thus we do not find any infirmity in the appellate order and accordingly are inclined to uphold the same on this issue by dismissing the ground raised by the revenue. IT(SS)A No. 106/Kol/2023 for AY 2017-18(Assessee). 48. Issue raised in ground no. 1 is not pressed at the time of hearing. Accordingly the same is dismissed as not pressed. 49. Issue raised in ground no. 2 is against the confirmation of addition/disallowance by ld CIT(A) of Rs. 38,73,638/- as made by the AO to book profits u/s 115JB which is similar to one as decided by us in ground no. 2 in IT(SS)A No. 79/Kol/2023 which has been allowed by us. Our decision would, mutatis mutandis, apply to this ground as well. Consequently the ground raised by the assessee is allowed. IT(SS)A No. 127/Kol/2023 for 2017-18(Revenue). 50. Issue raised in ground nos. 1 to 4 is qua the allowing the claim made u/s 80IA which is similar to one as decided by us in grounds no 1 to 5 in IT(SS)A No. 129/Kol/2023 for AY 2017-18 wherein we have dismissed the grounds raised by the revenue. Therefore our....
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....hard disks related to its undisclosed trading activities. The Ld. AO is noted to have only disagreed with the profit percentage of 5% applied by KTPL. Instead, according to the Ld. AO the profit should be 8% and therefore reworked the undisclosed income to Rs. 4,88,359/-. Having regard to': the foregoing, it is noted that admittedly KTPL had undisclosed sales of Rs. 61,04,487/- out of which profit of Rs. 4,88,359/- had been assessed to tax and therefore KTPL had sufficient sum of Rs. $6,16,128/- (61,04,487 - 4,88,359) to telescope any cash expenses/payments found in the seized documents against this unrecorded sales and its embedded profit. On these given facts therefore, I note that the cash expense of Rs. 1,75,000/- found in the name of Mr. Ganesh Iyer relating to AY 2017-18 can be easily telescoped and be considered to be a part of the undisclosed trading business of KTPL which has already been considered and assessed to tax in its income tax assessment dated 29.06.2021. It is also not the case of the Ld. AO that the notings found on this Page 2, SME/1 contained the name of the appellant or that the same in any manner denoted that this cash expense belonged to the appellant.....