2015 (10) TMI 1877 - AT - Income Tax

Bogus/unverifiable purchases - calculation under section 80HHC - Held that - The issue in question may be set aside to the file of AO to decide the same afresh after the judgment rendered in the case of Anuj Kumar Varshney & Others vs. ITO (2015 (4) TMI 533 - ITAT JAIPUR) wherein held 15% of the unverifiable purchases shall be held to be income of the assessee from undisclosed sources in the relevant years. Also even there is no note in the computation in case of addition made on account of any reasons the deduction would be allowed. - Decided in favour of assessee for statistical purposes. Deduction u/s 10AA - CIT(A) allowed the claim - Held that - No infirmity in the order of ld. CIT (A). Inadvertent mistake in Form No. 56F cannot disentitle assessee from valid claim which is corrected in Form No. 56F (Rule 60). Therefore we uphold the order of ld. CIT (A) on this issue. The ground of the revenue is dismissed.- Decided in favour of assessee

Summary

Issues:
- Challenge to relief given by CIT (A) regarding bogus/unverifiable purchases
- Rejection of books of account under section 145(3) in A.Y. 2007-08
- Calculation issue under section 80HHC
- Disallowance of deduction u/s 10AA due to a mistake in claiming under section 10A

Analysis:

1. The appeals and cross objections were filed against orders of the CIT (A) for assessment years 2008-09, 2005-06, and 07-08. The Revenue challenged the part relief given by CIT (A) regarding bogus/unverifiable purchases, while the assessee raised objections against the rejection of books of account under section 145(3) in A.Y. 2007-08.

2. The counsel for the assessee argued that since the rejection of books of account was not challenged in A.Y. 2005-06 & 2008-09, it was not pressed in A.Y. 2007-08. The Departmental Representative (D/R) referred to a previous ITAT order regarding unverifiable purchases and urged the Tribunal to decide the appeals based on that order.

3. The parties agreed to set aside the issues related to unverifiable purchases and calculation under section 80HHC to be decided afresh by the Assessing Officer (AO) after a judgment from the Rajasthan High Court. Both parties requested the matter to be remanded for fresh consideration.

4. The sole remaining ground in Revenue's appeal for A.Y. 2008-09 was the disallowance of deduction u/s 10AA due to a mistake in claiming under section 10A. The AO initially disallowed the claim, but the CIT (A) allowed it, considering it an inadvertent mistake rectified during assessment proceedings.

5. The Tribunal upheld the CIT (A) order, stating that an inadvertent mistake in the claim form should not disentitle the assessee from a valid claim. The correction made by the assessee was considered, and the claim under section 10AA was allowed. Consequently, the ground of the revenue was dismissed.

6. In conclusion, the Revenue's appeal for A.Y. 2008-09 was partly allowed for statistical purposes, while all other appeals of the revenue and cross objections of the assessee were allowed for statistical purposes. The Tribunal's decision was pronounced on 17/07/2015.