2008 (2) TMI 442 - AT - Income Tax

Summary

Issues involved:
The issues involved in this case are related to the disallowance of claims under section 80-IA and section 80G, non-availability of statements recorded from third parties under section 132(4) of the Income-tax Act, and the validity of the notice issued under section 158BD.

Disallowed claims under section 80-IA and section 80G:
The appellant raised concerns regarding the disallowance of its claims under section 80-IA and section 80G by the Assessing Officer. The CIT(A) dismissed the appellant's claim stating that the non-genuine purchases offered by the appellant as part of undisclosed income for taxation indicated awareness of the situation. The CIT(A) also found that the profit arising from the undisclosed purchases needed to be excluded from the eligible amount for section 80-IA deduction. The appellant contested these findings, arguing that all business income should be eligible for deduction under section 80-IA. The Tribunal directed the Assessing Officer to reconsider the issue of deduction under section 80-IA in light of relevant precedents.

Non-availability of statements under section 132(4):
The appellant contended that the statements recorded from third parties under section 132(4) were not made available to them, affecting the natural justice principles. The Tribunal agreed with this argument, stating that as the statements were not provided, the assessment order based on them was flawed. The Tribunal set aside the assessment order and directed the Assessing Officer to redo the assessment, providing the statements to the appellant and ensuring compliance with natural justice rules.

Validity of notice under section 158BD:
The appellant also raised an additional ground challenging the validity of the notice issued under section 158BD, citing the lack of satisfaction recorded by the Assessing Officer. Both the appellant and the Departmental Representative agreed that this issue needed further examination. The Tribunal decided to restore this issue to the Assessing Officer for reevaluation in light of relevant legal principles.

In conclusion, the Tribunal allowed the appeal of the appellant for statistical purposes, directing the Assessing Officer to re-examine the issues related to the disallowed claims under section 80-IA and section 80G, the non-availability of statements under section 132(4), and the validity of the notice issued under section 158BD.