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2017 (12) TMI 1881 - ANDHRA PRADESH HIGH COURT
Stay of recovery of the disputed service tax demand excluding interest and penalty - Business Auxiliary Services - GTA service - Renting of immovable property for commercial purpose - commission paid to foreign agents - penalty - HELD THAT:- Post on 21-12-2017.
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2017 (12) TMI 1880 - ITAT CHENNAI
Capital Gains - year of transfer of asset - Transfer of Property Act by irrevocable Power of Attorney - transfer of the 14,307 sq.ft. of the land by applying the provisions of Sec. 50C for the AY 2010-11 - assessee had not been able to produce any documentary evidence, any proof of the transaction claimed, to have taken place during the year 2002 - as submitted that the property having already been transferred by a registered Power of Attorney and possession in respect of the said land having been handed over through the registered irrevocable Power of Attorney, the Capital Gains was not liable to be assessed for the AY 2010-11 - as argued same transaction could not be taxed again in the AY 2010-11, just because, the Sale Deed was registered only during the said assessment year
HELD THAT:- As in view of the principles laid down by the Hon’ble Supreme Court in the case of Shri Balbir Singh Maini 2017 (10) TMI 323 - SUPREME COURT it is held that the Capital Gains, if any, in respect of the transfer of the 14,307 sq.ft. of the land is assessable only during the year 2002 as has been rightly disclosed by the assessee in their returns for the AY 2002-03. Even otherwise, a perusal of the proviso to Sec. 50C(1) inserted by Finance Act 2016 w.e.f. 01.04.2017 clearly admits that the provisions of Sec. 50C are not to apply in the event that the date of agreement fixing the amount of consideration and the date of registration for transfer of the capital asset are not the same, then the value adopted or assessed or assessable by Stamp Valuation Authority on the date of agreement, may be taken for the purpose of computing the full value of the consideration of such transfer subject to conditions.
In the present case, admittedly, the Power of Attorney is considered as the agreement and the Sale Deed executed are in two different assessment years and the consideration having already been received by the assessee on the execution of the irrevocable registered Power of Attorney and the same having been offered to tax during the AY 2002-03, the provisions of Sec. 50C itself cannot be brought to play in the case of the assessees. Assessee appeal allowed.
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2017 (12) TMI 1879 - ITAT AHMEDABAD
Undisclosed income declared at the time of search - argument of Non considering disclosure made by the assessee in his statement recorded u/s. 132(4) - assessee vehemently stated that the disclosure made by the group was bifurcated in the hands of different Members of the group and the disclosure was honoured by including the undisclosed income declared at the time of search in the hands of the other assessees of the group.
HELD THAT:- We find that nobody attended during the assessment proceedings of the assessee nor anybody attended proceedings before the First Appellate Authority. Therefore, it appears that the assessments made in the cases of other assessees of the group were not verified and the entire disclosure amount has been added in the hands of the appellant assessee.
In our considered opinion, a grave prejudiced has been caused to the assessee by such non verification. Therefore, in the interest of justice, we restore these appeals to the files of the A.O.
A.O. is directed to verify from the assessment records of Shreem Developers and Others, The amount of undisclosed income offered during the course of the search proceedings as per the statement mentioned hereinabove. If the A.O. is satisfied that the undisclosed income has been taxed in the hands of other members of the group then there is no reason why the same income should be taxed in the hands of the assessee. The assessee is directed to furnish necessary details and substantiate its claim before the AO. Assessee appeal allowed for statistical purpose.
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2017 (12) TMI 1878 - CESTAT CHENNAI
Classification of services - Business Auxiliary Services or not - commission or a discount received, as a consideration from airlines - HELD THAT:- The respondent is engaged in the activity of freight forwarding. They are booking cargo in various airlines and pay freight for the same. The said freight is collected from shippers. The airlines pay to the respondent certain portion of such freight as a commission/discount. This is sought to be taxed in “Business Auxiliary Service.”
Similar dispute before Tribunal are noted on various occasions. One such reference can be made to the Tribunal’s decision in the case of COMMISSIONER OF SERVICE TAX, NEW DELHI VERSUS M/S. KARAM FREIGHT MOVERS [2017 (3) TMI 785 - CESTAT NEW DELHI] wherein it was held that brokerage and commission received from various airlines cannot be considered as a commission earned for acting on behalf of the airlines. This is more akin to a discount or incentive provided by the airlines on the freight charges which is on principal-to-principal basis, with no knowledge of the shipper.
There are no merit in the present appeal by the Revenue - appeal dismissed.
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2017 (12) TMI 1877 - NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH
Sanction of Amalgamation Scheme - Sections 230 to 232 of the Companies Act, 2013 - HELD THAT:- From the material on record, the Scheme appears to be fair and reasonable and is not in violation of any provisions of law and is not contrary to public policy. None of the parties concerned have come forward to oppose the Scheme.
Since all the requisite statutory compliances have been fulfilled, Company Scheme filed by the Transferor and Transferee Company are made absolute in terms of prayer clause of the petition - The Petitioner Companies to pay costs of Rs. 25,000/- each to the Regional Director, Western Region, Mumbai. Transferor Company to pay cost of Rs. 25,000/- to the Official Liquidator, High Court, Bombay.
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2017 (12) TMI 1876 - DELHI HIGH COURT
Refund of excess service tax paid - Reverse charge mechanism - HELD THAT:- The petitioners states that they had made representation dated 16th June, 2015 receipt of which has been disputed by the respondent nos. 1 to 4. There is no need to record any finding regarding the same as the petitioner can file an application seeking refund and it can make all averments and assertions as were made in the representation dated 16th June, 2015.
Recording the aforesaid statement of the petitioner that it would make an application for refund and directing that the same would be dealt with by the first to fourth respondents, in accordance with law, the writ petition is disposed of, without any order as to costs.
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2017 (12) TMI 1875 - CESTAT MUMBAI
CENVAT Credit - primary argument of UniDeritend Ltd. is that the credit was available to them prior to amendment in Rule 7(d) of the Cenvat Credit Rules, 2004 and therefore they cannot be asked to follow the said Rule 7(d) - Penalty - HELD THAT:- In the instant case, while the invoices were raised prior to the amendment, there is no evidence if the payment was made prior to the amendment. Thus if the credit was available prior to the amendment is also a doubtful proposition. In any case UniDeritend Ltd. has availed the credit of duty paid by them after the amendment and thus the law as it existed at the time when they converted the duty paid by them into cenvat credit would be the law applicable to the said credit. Since at the time of availing cenvat credit, sub-rule (d) of Rule 7 and Explanation 3 of the said rule was in existence at the time of availing credit, UniDeritend Ltd. was required to follow the same and avail the credit only in terms of Rule 7(d) read with Explanation 3. In these circumstances, the demand of reversal of credit is upheld.
Penalty - HELD THAT:- The plain language of the Rule is very clear and leaves no scope for doubt. Under these circumstances, imposition of penalty is justifiable.
Appeal of UniDeritend Ltd. is dismissed and appeal of Revenue is allowed.
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2017 (12) TMI 1874 - CALCUTTA HIGH COURT
Maintainability of appeal - petitioners apprehend that, the Appellate Authority will disallow the appeal as the Appellate Authority has expressed its mind in course of the hearing as recorded in a writing issued by the Advocate for the petitioner - HELD THAT:- In the facts of the present case, the decision of the Appellate Authority is awaited. The submissions made on behalf of the petitioners as the observations of the Appellate Authority as perceived by the petitioners are yet to be reduced in writing by the Appellate Authority. The decision of the Appellate Authority will appear from the communication of such decision. It is premature to speculate on the submissions and the observations made in the course of hearing of the appeal.
There are no merit to interfere in the present writ petition - petition dismissed.
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2017 (12) TMI 1873 - ITAT KOLKATA
Applicability of provisions of section 115JB - assessee is a Corporation, which is mainly engaged in the business of manufacturing of Cold Rolled & High Tensile Steel - HELD THAT:- As agreed by the representative of both the sides, the solitary issue involved in this appeal of the Revenue is squarely covered by the decision of the Coordinate Bench of this Tribunal rendered in assessee’s own case vide its common order [2016 (2) TMI 458 - ITAT KOLKATA] wherein a similar issue was decided after discussing all the relevant aspects as well as case laws in details by the Tribunal before summarising its conclusion.
We respectfully follow the order of the Coordinate Bench of this Tribunal for the said years and uphold the impugned order of the ld. CIT(Appeals) in directing the AO not to assess the total income of the assessee by application of section 115JB of the Act. Appeal of the Revenue is dismissed.
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2017 (12) TMI 1872 - SC ORDER
Failure to make pre-deposit of 7.5% to entertain appeal - SCN issued for non-fulfilment of export obligation - HELD THAT:- There are no merit in the review petition and the same is accordingly dismissed.
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2017 (12) TMI 1871 - SUPREME COURT
Condonation of delay in filing appeal - appeal lodged on 8th June, 2017 to be considered to be within the extended 45 days period or not - HELD THAT:- On the facts of the present case, it is clear that within a period of seven days, the defect pointed out was cured. This being the case, it is clear that the initial date of lodgement of the appeal is the date on which the appeal should be considered as filed, even though an appeal number may be given to the appeal subsequently.
The NCLAT's judgment deserves to be set aside, and the appeal that was lodged on 8th June, 2017 must be considered to be within the extended 45 days period.
The NCLAT has also noticed that no sufficient cause was made out to condone the delay that falls within the second 45 days period. This is incorrect inasmuch as the appellant has pleaded that as a result of the death of his uncle, the appellant was unable to process the appeal within the initial 45 days and that, therefore, he should be said to have made out sufficient cause to condone the delay of 42 days.
Appeal allowed.
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2017 (12) TMI 1870 - BOMBAY HIGH COURT
Disallowance u/s 14A read with Rule 8D - mandation to recording satisfaction - ITAT upholding CIT(A)'s order of deleting addition - ITAT deleted addition - HELD THAT:- Whether the satisfaction of the Assessing Officer u/s 14A(2) that the disallowance offered by the Assessee, having regard to the Accounts, is not correct, is a sine-qua-non before invoking Rule 8D(2) of the Income Tax Rules. It is also an agreed position that it is so, in view of the decision of the Supreme Court in Godrej & Boyce Manufacturing Co. Ltd[2017 (5) TMI 403 - SUPREME COURT] - Thus, no fault can be found with the impugned order.
Character of the income derived - income derived from letting out of the premises of the I.T. Park - 'Business Income' or income from property - HELD THAT:- Revenue states that he is not pressing this question in view of the CBDT Circular No.16 of 2017 dated 25th April, 2017 as clarified that income arising from the letting out of the premises in an Industrial Park/ SEZ, are to be charged under the head 'Profits and gains of business' and not under the head 'Income from house property'
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2017 (12) TMI 1869 - ITAT RAJKOT
Reopening of assessment u/s 147 - assessee has shown dividend income from Rajkot Nagrik Sahkari Bank as exempt income - exemption u/s 10(34) of the act on dividend income received from the bank was not available - HELD THAT:- As submissions made by the appellant are insufficient to conclude that there was 'change of opinion' on the issue of dividend income while reopening of the assessment u/s. 147 of the Act. After considering the entire facts of the case reopening of assessment is valid and justified as per the provisions of the Income Tax Act, 1961
We observed that according to the provision of section 10(34) of the act the income received by way of dividend is exempted if dividend distribution tax has been paid as per the provision of section 115-0 of the acts. We have further observed that Rajkot Nagrik Sahkari Bank being not a company is not subject to payment of dividend distribution tax.
We noticed that the assessee has shown dividend income from Rajkot Nagrik Sahkari Bank claimed as exempt income but the assessee has not provided information about the nature of the impugned dividend income. The assessing officer observed that exemption u/s 10(34) of the act on dividend income received from the AOP which is not subject to payment of dividend distribution tax according to provision of section 115-O are not available. The assessee has not provided sufficient details which could have demonstrated the actual nature of the dividend income received by the assessee. Therefore, to examine the issue of availability of exemption on dividend income the case of the assessee was reopened u/s 147 of the act. Consequently during the reassessment proceedings the claim of the assessee that dividend income was exempt as per section 10(34) of the act was found to be invalid.
Therefore, after considering the above facts and material on record, we are inclined with the decision of the Ld. CIT(A). Therefore, this ground of appeal of the assessee is dismissed.
Disallowance u/s. 40A(2)(b) - Assessee failed to substantiate the payment of interest at an exorbitant rate to related parties as against prevailing market rate of interest of 12% - HELD THAT:- AO has disallowed out of the excess payment of interest to the friends and relatives on the unsecured loans in the proportionate and equivalent to an amount excess to the prevalent market rates. The assessee has failed to substantiate the payment of interest @ 24% on the loans to the relatives in comparison to the rate of 12% prevalent market rate of interest. The assessee had also paid the interest @ 12% on unsecured loans to many other parties.
After considering the facts in this regard, we observed that out of the interest paid to the relatives disallowance made u/s. 40A(2)(b) by the assessing Officer is reasonable and justified. Therefore, we do not find any error in the decision of the Ld. CIT(A). This ground of appeal is dismissed.
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2017 (12) TMI 1868 - ALLAHABAD HIGH COURT
Seizure of goods - betel nuts that transported from West Bengal to New Delhi - imported goods or not - HELD THAT:- Petitioner's defence appears to be that the goods are not imported goods, but such as have been produced inside the country, therefore, the custom authority has no jurisdiction to detain or seize the same. While the aforesaid issue may be properly gone into in adjudication proceedings which are yet to be undertaken, at this stage, the goods being perishable in nature may not be detained by the custom authority any further. Accordingly, goods in question may be released in favour of the petitioner, subject to its furnishing security in the shape of other than cash or bank guarantee for the full value of the goods as estimated by the custom authority.
The instant writ petition is disposed of, leaving it open to the respective parties to raise all issues for adjudication in proper proceedings.
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2017 (12) TMI 1867 - ITAT HYDERABAD
TP Adjustment - determination of the Arms’ Length Price to the TPO u/s 92CA - considering only operating profit and operating cost relating to the AE transactions - MAM - DRP rejected the assessee’s contention of internal TNMM because the assessee did not submit the segmental results before the TPO or DRP - Whether TPO had erred in arriving at ALP by applying the Profit Level Indicator (PLI) on the total cost which includes cost attributable to non AEs also and the total receipts from both AEs and non-AEs? - HELD THAT:- We find that where the assessee has both the AE as well as non-AE transactions, the operating profit and operating cost relating to the AE transactions alone ought to be considered for arriving at the ALP and thereafter the fixed cost attributable to both the transactions ought to be apportioned. When the TPO has adopted the TNMM as the most appropriate method and the assessee has rendered similar services to both the AEs and non- AEs, and the non-AE transaction satisfy the internal TNMM. The AO, therefore, ought to have considered them for arriving at the ALP. Therefore, we deem it fit and proper to remit this issue to the file of the AO with a direction to consider only the operating profit/operating cost of AE transactions and also to consider internal TNMM where the services rendered by the assessee are similar both to AEs and non-AEs. Accordingly, grounds of appeal Nos.3 to 3.4 are treated as allowed for statistical purposes.
Denial of deduction u/s 10A on the ground that Form No.56F was not filed along with the return of income - HELD THAT:- It is seen from the assessment order, that the assessee has filed e-return and there is no possibility of filing Form No.56F along with the e-return of income. It is also seen that the assessee has filed Form No.56F during the assessment proceedings and before completion of the assessment.
As in the case of American Data Solutions India (P) Ltd [2014 (2) TMI 128 - KARNATAKA HIGH COURT] has held that the appellate proceedings are the continuation of the assessment proceedings and if Form No.56F is filed during the course of appellate proceedings, the same should be considered, as the requirement to file the Form 56F along with the return of income is only directory and not mandatory.AO is directed to consider Form No.56F and allow deduction u/s 10A of the Act, provided the assessee, otherwise fulfills all the other conditions prescribed u/s 10A of the Act. Thus, ground of appeal No.4 is treated as allowed for statistical purposes.
Bad debts claim - amount is outstanding from “Collins & Aikman Litigation Trust Distribution Account” as on 31.03.2004 and since the said company has become bankrupt during the year, the assessee has written it off as bad debt - HELD THAT:- As it is the case of the assessee that the assessee has offered it as income in the relevant A.Y. in which it has received the amount - Subject to verification of this fact by the AO, i.e. whether the assessee has offered this income to tax in the relevant A.Y, i.e. 2013-14, this issue is decided in favour of the assessee. If the assessee has offered this income to tax in the relevant A.Y, the claim of the assessee for the A.Y 2009-10 shall be allowed, as it is not disputed that Collins & Aikman Corporation has become bankrupt during the relevant financial year. As regards the amount receivable from SCSL and written off by the assessee, the assessee has not been able to produce any evidence in support of the same either before the authorities below or before us. Therefore, this addition is confirmed. Thus, ground of appeal No.5 is partly allowed.
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2017 (12) TMI 1866 - KERALA HIGH COURT
Seeking to re-instate the petitioner in service - petitioner was placed under suspension from service with effect from 5-9-2016 under Rule 10 (3) of Kerala Civil Services (Classification, control & Appeal) Rules, 1960 on the reason that the petitioner was detained under custody for more than 48 hours - HELD THAT:- Suspension cannot be said to be a punishment. However, prolonged suspension amounts to punishment. In view of the above reason, this Court is of the view that the continued suspension of the petitioner will not be justified in this case. In the said circumstances, the petitioner is entitled to be re-instated in service immediately. For the said reason, the 2nd respondent is directed to pass affirmative orders on Ext. P22 as expeditiously as possible, and at any rate, within a period of 20 days from today. The learned Special Public Prosecutor will transmit a copy of this order to the 2nd respondent.
Petition disposed off.
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2017 (12) TMI 1865 - SUPREME COURT
Lifting of seizure of the bank accounts - Appellants contend that to justify the freezing of the bank accounts the investigating authority must demonstrate that the monies held in these accounts are connected with the commission of the offence - HELD THAT:- The sweep and applicability of Section 102 of the Code is no more res integra. That question has been directly considered and answered in the case of STATE OF MAHARASHTRA VERSUS TAPAS D. NEOGY [1999 (9) TMI 960 - SUPREME COURT]. The Court examined the question whether the police officer investigating any offence can issue prohibitory orders in respect of bank accounts in exercise of power Under Section 102 of the Code. The High Court, in that case, after analysing the provisions of Section 102 of the Code had opined that bank account of the Accused or of any relation of the Accused cannot be held to be "property" within the meaning of Section 102 of the Code. Therefore, the Investigating Officer will have no power to seize bank accounts or to issue any prohibitory order prohibiting the operation of the bank account - After this decision, there is no room to countenance the challenge to the action of seizure of bank account of any person which may be found under circumstances creating suspicion of the commission of any offence.
In the present case, FIR has been registered at least against three private Appellants, naming them as Accused. CJP Trust has not been named as an Accused in the FIR. But the investigation thus far, according to the Respondents, reveals that Teesta Atul Setalvad and Javed Anand are actively associated with the said Trusts and have carried out transactions which may be found under circumstances suspicious of the commission of the alleged offence - For the present, the Investigating Officer is of the view that there are certain circumstances emerging from the transactions done from these bank accounts which create suspicion of the commission of an offence. It is on that belief he has exercised his discretion to issue directions to seize the bank accounts pertaining to CJP Trust.
In the case of M.T. Enrica Lexie [2012 (5) TMI 696 - SUPREME COURT], the Court noted in paragraph 7 that agencies had completed their respective investigations and vessel was seized in exercise of power Under Section 102 of the Code. In Para 16, the Court noted the concession given by the counsel for the Government that the vessel was not the object of the crime or the circumstances which came up in the course of investigation that create suspicion of the commission of any offence.
It is noticed that the prosecution has alleged that the two Trusts are run by the private Appellants and other Accused. They were actively involved in collecting huge funds as donation in the name of providing legal assistance to the 2002 Gujarat Riot Victims. Such donations received by the two Trusts had never reached the victims, the members of the Gulberg Society in respect of which grievance has been made in the subject FIR - It is alleged by the Respondents that the Appellants deliberately and intentionally did not disclose that they have already opened new accounts and transferred huge sums of money after knowing that stated bank accounts of the Appellants were seized on 21.01.2014 by the investigating agency. The details of the two newly opened accounts were not forthcoming. Further, in the proceedings filed before different Courts, incorrect plea has been taken by the Appellants, suggestive of the fact that their accounts were not compliant and duly scrutinized by the Competent Authority.
Once the investigation is complete and police report is submitted to the concerned Court, it would be open to the Appellants to apply for de-freezing of the bank accounts and persuade the concerned Court that the said bank accounts are no more necessary for the purpose of investigation, as provided in Sub-section (3) of Section 102 of the Code - such a course would meet the ends of justice.
Appeal dismissed.
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2017 (12) TMI 1864 - ITAT AHMEDABAD
Addition u/s 68 - unexplained unsecured loans - HELD THAT:- As carefully gone through the copy of ledger account of all the creditors. We find that inadvertently the tax auditor has treated the aforementioned persons under the head “unsecured loan” whereas, in fact, all the above persons are “trade creditors” and with whom the assessee has done some contract business including supply of labourers on contractual payments. We find that tax has been deducted at source as per the provisions of law. On given facts, we do not find this to be a fit case for the additions u/s 68.
Disallowance of 5% of the expenses claimed in trading account - CIT(A) deleted the addition - HELD THAT:- It is true that the assessee did not file all the details of expenditure during the course of assessment proceedings. It is equally true that all the necessary details were furnished before the CIT(A) who had called for a remand report from the Assessing Officer. Once the details have been furnished and transmitted to the AO, and the same were examined by the CIT(A), we do not find any reason to interfere with the findings of the CIT(A).
Appeal of revenue dismissed.
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2017 (12) TMI 1863 - DELHI HIGH COURT
Seeking winding up of the respondent company - respondent company is unable to pay its debts - Sections 433(E) and 434 (1)(A) of the Companies Act, 1956 - HELD THAT:- The petition is admitted and the Official Liquidator attached to this Court is appointed as the Provisional Liquidator. He is directed to take over all the assets, books of accounts and records of the respondent-company forthwith. The citations be published in the Delhi editions of the newspapers ‘Statesman’ (English) and ‘Veer Arjun’ (Hindi), as well as in the Delhi Gazette, at least 14 days prior to the next date of hearing. The cost of publication is to be borne by the petitioner who shall deposit a sum Rs.75,000/- with the Official Liquidator within 2 weeks, subject to any further amounts that may be called for by the liquidator for this purpose, if required - The Official Liquidator shall also endeavour to prepare a complete inventory of all the assets of the respondent-company when the same are taken over; and the premises in which they are kept shall be sealed by him.
List on 20.04.2018.
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2017 (12) TMI 1862 - ITAT MUMBAI
Addition of “on money” towards purchase of the property (including commission) - HELD THAT:- As the details mentioned against the amount are clearly at variance as against that of the property under consideration, therefore, there was no occasion for the A.O to have acted upon the said impugned notings in context of the purchase of the property under consideration. We have further perused the notings marked as “Commission” of the impounded document, and though find that as against the term “Commission” certain amounts are found mentioned, but are unable to comprehend as to how such dumb notings have been related to the purchase of the property under consideration.
Thus here is no basis for relating the notings in the impounded document with the purchase of Flat by the assessee, therefore, are of the considered view that the addition made by the A.O u/s 69 and sustained by the CIT(A), cannot be upheld. Decided in favour of assessee.
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