9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (6) TMI 1591 - AT - Income TaxCharging of interest under section 234A, 234B and 234C - HELD THAT - The charging of interest is consequential and mandatory and the AO has no discretion in the matter. This proposition has been upheld by the Hon ble Apex Court in the case of Anjum H. Ghaswala 2001 (10) TMI 4 - SUPREME COURT and I, therefore, uphold the action of the AO in charging the assessee the aforesaid interest u/s 234A, 234B and 234C of the Act. The AO is, however, directed to re-compute the interest chargeable u/s 234A, 234B and 234C of the Act, if any, while giving effect of this order. Assessment under section 153A - protective and substantive additions made by the AO in the orders of assessment was based on documents found and seized in the course of search - HELD THAT - AO could not have taken cognizance of the seized documents and other material found and seized in the course of search conducted in the premises / case of Shri. Manoj Kumar Jain, while framing the order of assessment under section 143(3) of the Act in the case on hand. As a matter of fact, the ongoing assessment proceedings under section 143(3) of the Act would abate on receipt of these seized materials as per the second proviso to section 153C of the Act. We are of the view that in the event the AO wanted to take cognizance of the seized materials, he ought to have invoked the provisions section 153C of the Act after recording his satisfaction based on material sent by the AO of Shri. Manoj Kumar Jain. As pre-condition laid down by the Legislature of recording of satisfaction for taking action under section 153C of the Act cannot be side-stepped / brushed aside and additions be made in proceedings pending under section 143(3) of the Act as the scope of assessments framed under sections 143(3) and 153C of the Act are quite different. In that view of the matter, we hold that the protective additions made by the AO in the impugned order of assessment for Assessment Year 2008-09 dated 31.12.2009, are contrary to the provisions of the Act and are therefore to be deleted. Similarly, the addition sustained by the CIT(A) of ₹ 6,45,000/- on substantive basis as profit from trading in iron-ore based on the material found and seized in the search conducted in the case of Shri. Manoj Kumar Jain is also hereby deleted. Disallowance of Depreciation on Windmills - Disallowance of the same was not forming part of the cost of the Windmill; but was actually payment made for taking the land on lease - HELD THAT - 2 Respectfully following the decision of the Co-ordinate Bench of this Tribunal in the case of M/s. V. S. Lad Sons 2014 (6) TMI 922 - ITAT BANGALORE we allow the lease rent paid for acquiring the leasehold rights over the land as rent paid in advance and direct that the same is to be allowed as revenue expenditure as per the provisions of section 37(1) of the Act. Consequently, ground No.2 of assessee s appeal is partly allowed. Disallowance of claims of deduction under section 10B - whether the assessee is entitled to deduction under section 10B of the Act on the deemed exports? - HELD THAT - This issue is covered by the decision of the Hon ble Karnataka High Court in the case of Tata Elxsi Ltd 2015 (10) TMI 634 - KARNATAKA HIGH COURT - Thus we hold that the assessee is entitled for deduction under section 10B of the Act on deemed exports
Issues Involved:
1. Disallowance of deduction claimed under section 10B of the Act. 2. Carry forward depreciation from Assessment Year 2007-08 not allowed. 3. Denial of claim of depreciation on Windmill on leased land component. 4. Unaccounted transactions with Shri. Manoj Kumar Jain. 5. Charging of interest under section 234A, 234B, and 234C of the Act. Issue-wise Detailed Analysis: 1. Disallowance of Deduction Claimed Under Section 10B of the Act: The assessee claimed a deduction under section 10B amounting to ?7,11,55,891/-, which was disallowed by the AO on the grounds that the sales made to M/s. V. S. Lad & Sons were local sales and not deemed exports. The CIT(A) upheld this disallowance. However, the Tribunal referred to the Hon’ble Karnataka High Court’s decision in Tata Elxsi Ltd., which reversed the Tribunal’s earlier decision and held that sales through another EOU can be considered as deemed exports. Consequently, the Tribunal directed the AO to allow the assessee’s claim for deduction under section 10B. 2. Carry Forward Depreciation from Assessment Year 2007-08 Not Allowed: The AO disallowed the carry forward of unabsorbed depreciation amounting to ?10,65,39,137/- from Assessment Year 2007-08. The Tribunal did not explicitly address this issue in the detailed analysis provided. 3. Denial of Claim of Depreciation on Windmill on Leased Land Component: The assessee claimed depreciation of ?75,00,000/- on Windmills, which included lease rent paid for land. The AO disallowed this claim, holding that the lease rent was a capital expenditure and not part of the cost of the Windmill. The CIT(A) upheld this disallowance. The Tribunal, following the decision in V. S. Lad & Sons, held that the lease rent paid for acquiring leasehold rights over the land should be treated as revenue expenditure under section 37(1) of the Act and allowed the assessee’s claim accordingly. 4. Unaccounted Transactions with Shri. Manoj Kumar Jain: The AO made substantive and protective additions based on documents found during a search on Shri. Manoj Kumar Jain, amounting to ?28,00,00,000/- and ?13,41,36,761/- respectively. The CIT(A) deleted these additions, relying on the decision in the case of Shri. Manoj Kumar Jain. The Tribunal noted that the AO did not follow the procedure under section 153C of the Act, which requires satisfaction that the seized materials have a bearing on the income of the assessee. The Tribunal held that the AO could not take cognizance of the seized documents from Shri. Manoj Kumar Jain’s case without invoking section 153C and deleted the additions. 5. Charging of Interest Under Section 234A, 234B, and 234C of the Act: The assessee contested the charging of interest under sections 234A, 234B, and 234C. The Tribunal upheld the AO’s action, noting that the charging of interest is consequential and mandatory as per the Hon’ble Apex Court’s decision in Anjum H. Ghaswala. Conclusion: The Tribunal partly allowed the assessee’s appeal, directing the AO to allow the deduction under section 10B and treat the lease rent as revenue expenditure. The Tribunal also deleted the additions related to unaccounted transactions with Shri. Manoj Kumar Jain due to procedural lapses. The Revenue’s appeal was dismissed.
|
