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Showing 1 to 20 of 1451 Records

• 2024 (1) TMI 1455
  

  Levy of penalty u/s 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017 - non-filling of Part 'B' of the e-Way Bill - intention to evade tax or not - HELD THAT:- In the present case, the facts are quite similar to one in M/s Citykart Retail Pvt. Ltd.'s case [2022 (9) TMI 374 - ALLAHABAD HIGH COURT] and there are no reason why this Court should take a different view of the matter, as the invoice itself contained the details of the truck and the error committed by the petitioner was of a technical nature only and without any intention to evade tax. Once this fact has been substantiated, there was no requirement to levy penalty under Section 129(3) of the Act.

  The orders dated May 1, 2018 and March 15, 2019 are quashed and set aside. The petition is allowed.

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• 2024 (1) TMI 1454
  

  Seeking grant of bail - Money Laundering - proceeds of crime - wrongfully claiming the scholarship of the students belonging to certain class, who, without completing the concerned course, left the institute - twin conditions as per Section 45 of the PMLA satisfied or not - HELD THAT:- As per record, the Assistant Director, Directorate of Enforcement, had issued summons, bearing No. ECIR/SHSZO/04/ 2019-521, on 29th August, 2023, directing applicant-Hitesh Gandhi, to appear before him, forthwith. On the same day, this notice was received by applicant-Hitesh Gandhi. Thereafter, the statement of applicant-Hitesh Gandhi was recorded under Sections 50 (2) and 50 (3) of PMLA, on 29th August, 2023. The said statement was duly signed by applicant-Hitesh Gandhi. Thereafter, the grounds of arrest were served upon him on 30th August, 2023. Applicant-Hitesh Gandhi not only put his signatures over it, but, he has written “read and understood” over it. Thereafter, he was arrested on 30th August, 2023.

  It is not the case of the applicant that he was forced by the ED, to put his signatures and date over the arrest memo, which does not contain the actual date.

  The Hon’ble Supreme Court, in a case, titled as Vikram Singh and others versus State of Punjab [2010 (1) TMI 1316 - SUPREME COURT], has distinguished between the words ‘arrest’ and ‘custody’. Although, in the said case, the Hon’ble Supreme Court has discussed the above terms in relation to the provisions of Section 27 of the Evidence Act, however, the said decision has bearing on the merits of the present case, as, the applicant was associated in the investigation, by the ED, prior to his arrest, on 30th August, 2023.

  So far as the arguments of the learned senior counsel appearing for the applicant, that only the applicant has been arrested, in the present case, whereas, the other persons, against whom, the allegations have been levelled, have not been arrested, are concerned, considering the stand of the ED that the investigation is still going on, no benefit could be derived from the said fact, as such, the case law relied upon by the learned senior counsel for the applicant, in case titled as State of Madhya Pradesh versus Sheetle Sahai and others, reported in (2009) 8 Supreme Court Cases 617, in no way helps the case of the applicant.

  Conclusion - In the present case, the twin conditions, as enumerated in Section 45 of the PMLA, cannot be said to be existing in favour of the applicant, as, at this stage, there are no reasonable grounds for believing that the accused (applicant) is not guilty of such offence and it cannot be said that in case, he is ordered to be released on bail, he is not likely to commit any offence.

  The applicant is not able to make out a case for grant of bail, at this stage. Consequently, the bail application is dismissed.

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• 2024 (1) TMI 1453
  

  Maintainability of petition - petitioner argues that although the order is further appellable to the Tribunal, the Tribunal is currently unavailable, prompting the High Court to entertain the writ petition - HELD THAT:- Let the respondents file affidavit-in-opposition four weeks; petitioner to file reply thereto, if any, within two weeks thereafter.

  List this matter for final hearing in the monthly list of April, 2024.

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• 2024 (1) TMI 1452
  

  Assessment u/s. 144 denying deduction u/s. 80P - Assessee did not file return of income u/s. 139(1) or 139(4) - CIT(A) held that without a valid return of income, deduction u/s. 80P cannot be allowed - HELD THAT:- As for claiming deduction under Chapter VIA under the head, “Deductions to be made in computing total income”, which covers section 80P also, the assessee has to file return of income. However, the assessee did not file return of income at all and therefore the assessee is not eligible for deduction u/s. 80P.

  As relying on M/S. NILESHWAR RANGEKALLU CHETHU VYAVASAYA THOZHILALI [2023 (3) TMI 1055 - KERALA HIGH COURT] we hold that the assessee is not eligible for deduction u/s. 80P. Appeal by the assessee is dismissed.

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• 2024 (1) TMI 1451
  

  Disallowance in the intimation u/s 143(1) - appellant had not deposited the employees’ share of PF and ESIC etc within due date prescribed under respective Statutes, but paid before due date for filing Return of Income under the provisions of section 139(1) - HELD THAT:- We find that an identical issue has been decided in recent decision in CEMETILE INDUSTRIES [2022 (12) TMI 354 - ITAT PUNE] wherein held there is no merit in the contention of linking the date of deposit of the employees’ share in the relevant funds with the date of payment of wages. Section 5 of the Payment of Wages Act simply deals with the ‘Time of payment of wages’. It does not stipulate any time limit for deposit of the employees share in the relevant funds. For that purpose, the relevant Acts give a window for depositing the contribution within 15 days of the last month's salary. Thus, contribution to the relevant fund towards the salary for the month of October-ending should be deposited before 15th November.

  We are satisfied that the ld. CIT(A) was justified in sustaining the adjustment u/s 143(1)(a) by means of disallowance made in these cases for late deposit of employees’ share to the relevant funds beyond the date prescribed under the respective Acts.

  CPC while processing the return of income under the provisions of section 143(1) cannot travel beyond the return of income and the documents, material accompanied with the return of income.

  Appellate Authority and the Tribunal cannot do what the CPC itself cannot do. The fact that there is dispute regarding the quantification of amount of adjustments cannot give rise to the rectification of the intimation u/s 143(1) - Decided against assessee.

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• 2024 (1) TMI 1450
  

  Classification of Roasted Areca/Betel Nuts (whole or cut) intended to be imported - to be classified under Chapter 8, which covers "edible fruits and nuts," or under Chapter 20, which covers "preparations of vegetables, fruit, nuts or other parts of plants? - HELD THAT:-The processes mentioned in Chapter 8 include chilling, steaming, boiling, drying and provisionally preserving. It does not specifically include the process of roasting. Here it is important to understand the difference between the processes of moderate heat treatment & dehydrating/drying referred in chapter 8 and processes of dry roasting, oil-roasting and fat- roasting referred in chapter 20. The terms dry-roasting, oil roasting and fat-roasting however are not defined in the Customs Tariff Act, 1975.

  Chapter 20 of the Tariff covers the Preparations of vegetables, fruit, nuts or other parts of plants. As per Chapter Note 1 (a) to Chapter 20, the Chapter does not cover vegetables, fruits or nuts prepared or preserved by the processes specified in Chapters 7, 8 or 11. Therefore, vegetable, fruit or nut products or preparations made other than by the processes specified in Chapters 7, 8 or 11 are classifiable in Chapter 20. The processes specified in Chapters 7, 8 or 11 mainly include freezing, steaming, boiling, drying, provisionally preserving and milling. Therefore, any vegetable, fruit, nut or edible parts of a plant which is prepared or preserved by any other process than these are liable to be classified under Chapter 20.

  As per HSN Explanatory Notes, heading 2008 covers fruit, nuts and other edible parts of plants, whether whole, in pieces or crushed, including mixtures thereof, prepared or preserved otherwise than by any of the processes specified in other Chapters or in the preceding headings of this Chapter. Specifying what is included in this heading, the explanatory note states that almonds, ground nuts, areca (or betel) nuts and other nuts, dry-roasted, oil-roasted or fat-roasted, whether or not containing or coated with vegetable oil, salt, flavours, spices or other additives. Dry-roasting, oil-roasting & fat-roasting, as a process, are very much a part of chapter heading 2008 by virtue of HSN Explanatory Notes. It is also pertinent to observe that none of these processes are mentioned in the chapter note 3 to Chapter 8 of the Customs Tariff Act, 1975 as well as HSN Explanatory Notes to Chapter heading 0802.

  The Honourable High Court of Madras in its recent judgement on 01.08.2023 [2023 (8) TMI 492 - MADRAS HIGH COURT], has upheld the classification of Roasted Betel Nuts under CTH 2008 19 20.

  Conclusion - The Roasted areca/betel nuts fall under Custom Tariff Heading 2008, specifically under CTI 2008 19 20 'Other roasted nuts & seeds' of Chapter 20 of the First Schedule of the Customs Tariff Act, 1975.

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• 2024 (1) TMI 1449
  

  Seeking grant of regular bail - Money Laundering - proceeds of crime - predicate offence - applicability of provisions of Section 45 of the PMLA - HELD THAT:- It is true that in some cases the Hon'ble Supreme Court has granted bail despite the provisions of Section 45 of the 2002 Act or Section 37 of the NDPS Act, 1985 in order to do complete justice, but such extraordinary jurisdiction is vested only with the Hon'ble Supreme Court under Article 142(1) of the Constitution of India. A similar point in this regard was raised by a Division Bench of this Court in Daulat Singh v. State of Rajasthan [2014 (4) TMI 1333 - RAJASTHAN HIGH COURT] wherein the Hon'ble Division Bench has held that such an order can be passed by the Hon'ble Supreme Court under the extraordinary jurisdiction conferred by Article 142(1) of the Constitution of India, but such jurisdiction or powers are not available to the High Court or the trial Court.

  In the present case, it has not been revealed that the amount received by the accused is not tainted money or he is not aware of the proceeds of crime and he is innocent. The defences taken by the accused can be a subject of consideration. The accused or the companies controlled by him have received a total of Rs 85.12 crores through Bharat Bamb etc. These companies controlled by the accused/applicant have also been fake and disputed, Rs 58.72 crores is still outstanding against the accused/applicant - the conditions mentioned in Section 45 of the Act, 2002 are not being satisfied in this case. There is also no situation that the accused has undergone half the period of maximum imprisonment prescribed for the alleged crime in custody, hence the provisions of Section 436A of the Code of Criminal Procedure are also not applicable in this case.

  One of the submissions of the learned counsel for the accused has also been that the other co-accused have been granted bail by the trial court itself, but on this point, the Hon'ble Supreme Court has held in the case of Tarun Kumar vs Assistant Director Enforcement Directorate [2023 (11) TMI 904 - SUPREME COURT] that the principle of equality is not in the form of law and it is not proper to ignore the legal provisions on that basis alone. It is also worth mentioning here that the learned A.S.G. has submitted that it has been decided to challenge the bail granted to the co-accused in the higher court to get it cancelled.

  Conclusion - The bail application is dismissed, as the court found no grounds to believe that the accused was not guilty or that the conditions under Section 45 of the PMLA were met.

  Bail application dismissed.

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• 2024 (1) TMI 1448
  

  Denial of final registration u/s. 80G(5) - application was filed beyond the limitation period prescribed under the Act and also extended period of limitation granted by CBDT by various circulars issued from time to time - HELD THAT:- As per Surat Bench of this Tribunal in [2024 (1) TMI 877 - ITAT SURAT] we hereby set aside the impugned order passed by Ld. CIT(E) with a direction to reconsider Form 10AB for final registration u/s. 80G of the Act by giving proper opportunity of being heard to the assessee Trust and also restore the provisional registration already granted to the assessee. Assessee Trust should co-operate by furnishing all required details as mandated under the law for granting final registration u/s. 80G of the Act. Appeal filed by the Assessee is allowed for statistical purpose.

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• 2024 (1) TMI 1447
  

  Undisclosed cash transaction from undisclosed sources - addition u/s 69A - Addition made on the basis of entries pertaining to the assessee firm based on the excel sheets found in the electronic devices seized during the course of search in the case of Christy group of companies - HELD THAT:- AO has failed to link any cash transactions recorded in excel sheet with any other corroborative evidence which means the cash transactions alleged to be recorded in excel sheet cannot be considered as transactions of the assessee. In this connection, it is necessary to refer to the decision of State of Kerala vs KT Shadulli and Nalla Kandy Yusuf [1977 (3) TMI 160 - SUPREME COURT] where it has been observed that, it is quite possible that the author of the seized documents may have mentioned certain transactions in their books of accounts either to embarrass the assessee or due to animus or business rivalry or such other reasons which could only be established when the department examines such author of the document.

  In our considered view unless the AO makes out a case that alleged cash receipts and payment pertains to transactions of assessee which constitute income or expenditure, no addition can be made on the basis of said documents.

  The proposition that addition cannot be made merely on the basis of entries in loose sheets found in the premises of a third party without bringing on record independent evidence to corroborate such entries has been reiterated in several decision, like MM Financiers (P) Ltd [2006 (12) TMI 189 - ITAT MADRAS-B], Regency Mahavir Properties [2018 (1) TMI 245 - ITAT MUMBAI] and Monga Metals (P) Ltd. [1999 (6) TMI 47 - ALLAHABAD HIGH COURT]

  Also as documents are found in the premises of third party, the presumption as contended in section 132(4A)/292C of the Act is not applicable.

  The Hon’ble High Court of Bombay in the case of PCIT vs Umesh Israni [2019 (4) TMI 1947 - BOMBAY HIGH COURT] held that, the entries of the loose papers which were seized were not corroborated with any other evidence on record and no enquiry or verification was made and thus, no additions can be made u/s. 69A of the Act.

  Revenue has taken a ground in light of alleged two set of accounts maintained “Tally 1 and Tally 2 by the assessee group and argued that, the appellant is in the practice of replacing the invoices not checked by any Government authorities in the accounted Tally - Ground taken by the revenue is devoid of merits, because the AO neither considered so called Tally 1 and Tally 2, nor made any additions based on said evidences in the assessment order in respect of additions made u/s. 69A of the Act. Therefore, in our considered view the ground of appeal taken by the revenue fails.

  Appending two zeros to value recorded in alleged excel sheets, the AO has added two zeros to values recorded to excel sheets for assessment year 2018-19 only - When the bank entries is matching with the books of accounts of the assessee without appending two zeros, the question of appending two zeros to cash entries alone is totally incorrect. Since, the payment through bank noted in seized excel sheets are matching with the corresponding entries found in the bank statement without need to append two zeros, it is considered that the payments through cash found noted in the same excel sheet cannot be construed by adding two zeros to the said amounts. If the payments through cash alone are considered by adding two zeros and the payment through bank are considered in the manner in which they appear in the excel sheets, the totals of the payments column and the receipts column will be grossly different from the total mentioned in the excel sheet. It is therefore clearly evident that, all the amounts mentioned in the excel sheets, regardless of whether they are cash transactions or bank transactions are the actual amounts without suppression of two zeros at the end. Therefore, we are of the considered view that the AO is erred in appending two zeros to the cash transactions appearing in the seized excel sheets and same is untenable.

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• 2024 (1) TMI 1446
  

  Penalty u/s 43 of Black Money Act - non disclosure of foreign investments in IT return - HELD THAT:- When it is undisputed fact on record that the amount was invested by Shri Nirmal Jain in the name of the assessee, who under bonafide belief has not disclosed in Schedule FA of her return of income, no malafide can be attributed to the assessee and levy of penalty by the AO is not justified. Identical issue has been decided by the co-ordinate Bench of the Tribunal in case of Aditi Avinash Athavankar [2023 (7) TMI 1561 - ITAT MUMBAI]

  When father of the assessee has already been slapped with penalty qua the amount invested by him in the name of the assessee by virtue of the order dated 31.07.2023 the assessee who has not disclosed the same under bonafide belief cannot be made to suffer, hence penalty levied by the AO and confirmed by CIT(A) u/s 43 of the BM Act is ordered to be deleted. Appeal of assessee iallowed.

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• 2024 (1) TMI 1445
  

  Denying exemption u/s 11 - statutory requirement of filing the form No. 10B on or before the filing of return of income was not fulfilled by the assessee trust - condonation of delay in filing of Form 10B was rejected - whether PCIT (Appeals), NFAC was justified in allowing the appeal filed by the assessee thereby condoning the delay in filing the Form 10B? - HELD THAT:- The revenue has not dealt with the said circular nor anything has been brought on record to show that Circular No. 16 of 2022 dated 19-07-2022 cannot be applied to the case on hand.

  CIT(Exemptions) while rejecting the application for condonation of delay by order dated 17-08-2020 has referred to the Circular No. 2 of 2020 dated 3.1.2020 which admittedly gives power to condone the delay in filing Form 10B up to a period of 365 days.

  CIT (Appeals), NFAC also took note of a decision of Gujarat Oil And Allied Industries [1992 (9) TMI 67 - GUJARAT HIGH COURT] wherein it was held that the filing of the auditor’s report along with return of income has to be treated as procedural provision and therefore, directory in nature. Thus we find that there is no error committed by the Tribunal in dismissing the appeal filed by the revenue. Decided against revenue.

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• 2024 (1) TMI 1444
  

  Seeking permission to withdraw the petition - Challenge to communication from the GNCTD to the Directorate of Enforcement - seeking to declare impugned Letter as false and incorrect - HELD THAT:- The Writ Petition is disposed of as withdrawn. Pending applications also stand disposed of.

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• 2024 (1) TMI 1443
  

  Bogus purchases - bogus accommodation bills - estimation of income - hawala transactions from certain parties who were only providing accommodation sale bills - HELD THAT:- We are not inclined to interfere with the impugned judgment and order passed by the High Court. Hence, the Special Leave Petition is dismissed.

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• 2024 (1) TMI 1442
  

  Addition u/s 68 - unexplained entries in bank account -as per AO assessee has failed to produce any concrete - CIT(A) deleted addition - HELD THAT:- CIT(A) held that the assessee company has received funds from various concerns as mentioned above and thereafter amounts were transferred to the above mentioned companies/concerns immediately, thus the appellant company is not beneficiary company. CIT(A) also obtained the remand report from the AO and held that the AO has verified the fund flow statement depicting the source of funds and utilization of the same for payments to beneficiaries submitted by the assessee.

  CIT(A) held that it was found which established that the Sh. Anand Jain and Sh. Naresh Kumar Jain were operating bank accounts in the names of various concerns/companies through which accommodation entries were being provided and the appellant company was one of such shell concerns. Further the beneficiaries of such accommodation entries were also identified and information to their respective AOs was also disseminated as mentioned in the assessment order as well as the remand report.

  Charging of commission is concerned in the case of the assessee, it has been held by the AO in the assessment order that Sh. Anand Jain and Sh. Naresh Jain were entry operators who were managing and controlling various shell concerns including the appellant for providing accommodation entries in lieu of commission and taking that logic there is no question of charging of commission income in the hands of the appellant company arises, since nothing has been earned by the company, being the shell concern.

  Since, the commission already stands taxed in the hands of the entry operators in their individual capacity, no separate commission can be charged in the hands of the pass through/ companies floated by the entry operators. As the assessee is found to be one of such pass-through entity, we decline to interfere with the order of the ld. CIT(A) in deleting the commission charged.

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• 2024 (1) TMI 1441
  

  Reassessment order u/s 148A(d) - the petitioner had not submitted his reply to the Show Cause Notice - specific contention of the petitioner that due to a technical glitch and non-availability of relevant documents, it was not possible for the petitioner to submit a reply/response within the stipulated period - it is contended that during the period between 07.03.2023 and 28.03.2023 petitioner submitted his replies which has not been considered by respondent No.3 in the impugned order, which is contrary to the material on record as well as violative of principles of natural justice and the same deserves to be set aside.

  HELD THAT:- A perusal of the material on record will indicate that despite the petitioner having submitted his replies on 21.03.2023 and 25.03.2023 prior to passing of the impugned order on 28.03.2023 as held by this Court in Shankar Reddy’s case [2023 (9) TMI 1673 - KARNATAKA HIGH COURT] and since the impugned order without providing sufficient or reasonable opportunity to the petitioner is violative of principles of natural justice, the respondent No.2 committed an error in not considering the reply which was undisputedly submitted prior to the impugned order and consequently, the impugned order passed u/s 148A(d) deserves to be quashed and the matter be remitted back to the second respondent for reconsideration afresh in accordance with law.

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• 2024 (1) TMI 1440
  

  Offence punishable u/s 276B - TDS (Tax Deducted at Source) was collected by the company but not deposited into the Central Government account in time - delay of payment on 39 occasions as per the online data available - HELD THAT:- The entire amount of TDS along with interest was paid to the income tax department. The delay occurred on 39 occasions and since the payments were delayed, the interest component was collected.

  The petitioners had clarified that the delay in crediting TDS amount to the Central Government account, was on account of crisis in the company. In the said circumstanes, it cannot be said that company entertained any fraudulent intention to avoid the TDS collected. No useful purpose would be served at this length of time to criminally prosecute the petitioners.

  In the peculiar facts and circumstances of the present case, when the entire amount of TDS along with interest was paid even prior to the first communication from the Department and the balance interest amount was paid after the notice, this Court deems it appropriate to quash the proceedings against the petitioners.

  Proceedings against the petitioners on the file of Special Judge for Economic Offences at Hyderabad, are hereby quashed. Criminal Petition is allowed.

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• 2024 (1) TMI 1439
  

  Prohibition of Benami Property Transactions - Attachment order passed u/s 24(3) of the Benami Transactions (Prohibition) Amendment Act - As decided by [2022 (9) TMI 524 - GUJARAT HIGH COURT] as held authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into prior to the coming into force of the 2016 Act, viz., 25.10.2016 and as a consequence thereof, all such prosecutions and confiscation proceedings which had been initiated came to be quashed.

  Prosecution and initiation of proceedings in the instant case being pursuant to the Amendment Act impugned attachment order stan

  HELD THAT:- There is a gross delay of 359 days in filing the Special Leave Petition. The issues which arise in this case are covered by the judgment of this Court in Union of India & Anr. vs. M/s. Ganpati Dealcom Pvt. Ltd. [2022 (8) TMI 1047 - SUPREME COURT]

  Special Leave Petition is dismissed both on the ground of delay as well as on merits.

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• 2024 (1) TMI 1438
  

  Non-payment of service tax - providing nonbinding investment advisory services to various overseas clients (Group companies) as per the contractual norms agreed upon - export of service as per the conditions laid down under Rule 3(2)(a) of the Export of Service Rule, 2005 or not - CENVAT Credit - input services - rent-a-cab service - outdoor catering service - air travel agent service.

  Non-payment of service tax - providing nonbinding investment advisory services to various overseas clients (Group companies) as per the contractual norms agreed upon - export of service as per the conditions laid down under Rule 3(2)(a) of the Export of Service Rule, 2005 or not - HELD THAT:- It is an admitted fact on record that the appellants have entered into the agreement with the overseas entities for providing the services under the category of non-binding investment advisory services in their behalf. The payment for provision of said services were also received in convertible foreign exchange. The services provided by the appellants were for the benefit of the overseas entities and as such, falls under the Category-III of services defined under Rule 3(1) (iii) ibid - CBEC vide Circular dated 13.05.2011 has also clarified the said phrase ’used outside India’, mentioning that the benefit should accrue in favour of the overseas entities for the purpose of qualifying certain transaction as export of service.

  Further, it is also found that the issue arising out of the present dispute is no more open for any debate, in view of the order passed by this Tribunal in the case of Arcelor Mittal Stainless India Pvt. Ltd. [2023 (8) TMI 107 - CESTAT MUMBAI-LB]. The Larger Bench of the Tribunal in said case has held that since the benefit of service is accruing outside India, the said service should qualify as export of service in terms of the Rules, 2005.

  CENVAT Credit - input services - rent-a-cab service - outdoor catering service - air travel agent service - adjudicating authority has denied the benefit of Cenvat Credit solely on the ground that no documentary evidences were produced to demonstrate that those disputed services would be considered as input service - HELD THAT:- Since, the appellants are the business entity and utilized the services for provision of the output services and also paid the service tax on the input services, it cannot be said that those disputed services were not used/utilized for provisions of the output services. Since, the disputed services were used for accomplishing the purpose of the business, the said service, should qualify as ‘input service’, defined under Rule 2(l) ibid.

  Conclusion - i) The non-binding investment advisory services provided by the appellants qualified as export of service. ii) The appellants were entitled to avail Cenvat Credit on the disputed input services.

  There are no merits in the impugned order, insofar as it has confirmed the adjudged demands on the appellant - appeal allowed.

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• 2024 (1) TMI 1437
  

  Denial of grant registration u/s 12AB(1) - assessee has already been granted registration which is valid till 2026-27 - HELD THAT:-Clause (c) of Section 12AB(1) provides for grant of provisional registration for a period of three years from the assessment year from which the registration is sought which the assessee has been granted.

  Now, the assessee has applied for permanent registration u/s 12AB(1) Clause (b) of the Act and CIT (Exemption) is required to call for the documents and information and after recording his satisfaction grant registration for a period of five years.

  Thus, the assessee has filed the application for grant of registration for a period of five years and nothing else. Therefore, we find that ld. CIT (Exemption) has not properly appreciated the facts of the case and has wrongly dismissed the application of the assessee for permanent registration as premature in nature.

  The case of the assessee finds support from the decision of Fatika Nazrul Sukanta Educational Training Center [2023 (11) TMI 1271 - ITAT KOLKATA] wherein a similar issue has been decided in favour of the assessee.

  Set aside the orders of ld. CIT (Exemption) in all the above four appeals and restore the issue back to the file of ld. CIT (Exemption) for afresh adjudication. Appeals filed by the assessee are allowed for statistical purposes.

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• 2024 (1) TMI 1436
  

  Undisclosed investment in 29315 boxes of goods - undisclosed sales detected during the course of search by Excise Department - CIT(A) restricted the addition to the extent of gross profit and deleted balance addition made by the assessee on ground of undisclosed investment u/s 69C - HELD THAT:- Entire sale proceeds should be taxed (covering both gross profit and undisclosed investments) or only the gross profit embedded in undisclosed sales should be taxed.

  In the case of President Industries [1999 (4) TMI 8 - GUJARAT HIGH COURT] has held that in case of undisclosed sales only profit margin should be taxed and in absence of any specific findings of any investment routed in undisclosed sales, the undisclosed investment cannot be taxed on assessment basis.

  In the case of CIT vs. Leo Formulations Pvt. Ltd. [2014 (4) TMI 633 - GUJARAT HIGH COURT] AO observed that the assessee had not recorded consumption of different raw materials correctly in the books of account and had suppressed production.

  Accordingly, the Assessing Officer estimated unaccounted sales of assessee at 40% of the turnover. The Gujarat High Court held that the contention of the Revenue that entire excess consumption should be added to the income of the assessee could not be accepted as the AO himself has recorded in the assessment order that there has been unaccounted purchases which needed to be considered against unaccounted sales and further excess consumption of raw materials could not automatically result into matching value of excess sales of finished product.

  High Court held that the entire unaccounted sales cannot be added the income but only the net profit can be added to the income of the assessee.

  Thus, in instant facts, in our view, Ld. CIT(A) has correctly observed that Assessing Officer has not recorded any finding of any undisclosed investment found as a result of search by Excise Department. The undisclosed investments has only been assumed as the source of purchases recorded for subsequent sales. Accordingly, in view of the aforesaid discussions, we are of the considered view that Ld. CIT(A) has correctly held that looking into the instant facts, the addition should be restricted only to the extent of gross profit and no further additions can be made on account of undisclosed investments. Appeal of the Department is dismissed.

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