9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (2) TMI 514 - AT - Income TaxAddition made u/s 43B of the Act - Assessee has not furnished any explanation to the proposal - Held that - The assessing officer found that the sales were shown as net of trade discount - the assessee debited an amount in the profit & loss account and claimed the same as sales-tax paid over and above sales-tax collected - The explanation called for by the lower authorities was not properly responded by the assessee thus, giving one more opportunity to the assessee to explain how the payment was made over and above the tax collected may not prejudice the interest of the revenue thus, the order set aside and the matter remitted back to the AO for fresh adjudication. Validity of block assessment proceedings Held that - Notice u/s 143(2) shall be issued on or before 30-09-2006 - no notice was issued u/s 143(2) - the issues concluded by operation of law cannot be reopened in view of the specific provisions contained in Second Proviso to section 153A(1) of the Act - The main issue with regard to addition was remitted back to the file of the assessing officer Decided in favour of Assessee. Addition of proportionate interest and diversion of interest bearing funds Held that - The assessee clearly demonstrated before the CIT(A) that sufficient interest free / own funds were available for making advance to relatives and investment in shares - The assessee has also filed copies of the statement of accounts in respect of respective years to explain the availability of non interest bearing funds - when the assessee had sufficient non interest bearing funds, advances made from and out of the non interest bearing funds cannot be a reason to disallow interest on the borrowed funds Relying uponMunjal Sales Corporation Versus Commissioner of Income Tax 2008 (2) TMI 19 - Supreme Court - when the assessee has sufficient own funds and profit, it cannot be said that the borrowed funds were diverted thus, the CIT(A) has rightly deleted the addition - From the orders of the CIT(A) and the materials filed by the assessee before this Tribunal, it is obvious that non interest bearing funds were available with the assessee Decided against Revenue. Addition towards unexplained investment in construction CIT(A) deleted the addition only on the ground that the assessee is entitled for exemption u/s 10(23C)(vi) - Held that - The Tribunal found that the term any income referred in section 10(23C) does not include the money collected for admission of the students over and above the prescribed fee - the income generated in the course of running of the educational institution, the income generated from the property held under trust and any voluntary donation other than for admission of the students may fall within the term any income referred in section 10(23C) of the Act thus, the assessee was entitled for exemption us 10(23C) of the Act - the assessing officer has made only protective assessment - a further addition on protective basis in the hands of the trustee, viz. the present assessee cannot be justified Decided against Revenue. Addition towards unaccounted receipts Held that - The assessee furnished the name and address of Smt. Hazeena so as to enable the department to make necessary enquiries - In spite of that the assessing officer has not made any enquiry Relying upon CIT vs Lakshmi Hospital 2011 (7) TMI 532 - Kerala High Court Decided against Revenue. Payment of sales-tax over and above the sales-tax collected The decision in AA Salam. Versus Assistant Commissioner Of Wealth-Tax. 2006 (8) TMI 235 - ITAT COCHIN followed - when the sales-tax collected was not routed through the profit & loss account, the claim of the assessee that he made the payment over and above the sales-tax collected needs to be verified thus, the matter remitted back to the AO for fresh adjudication.
Issues Involved:
1. Addition of Rs.6,29,479 under Section 43B of the Act. 2. Validity of block assessment proceedings. 3. Addition of proportionate interest and diversion of interest-bearing funds. 4. Addition towards unexplained investment in Quilon Medical Trust. 5. Addition of Rs.47,25,000 towards unaccounted receipt from Smt. Hazeena's QMC account. 6. Disallowance of Rs.69,150 as revenue expenditure. 7. Addition of Rs.10 lakhs towards investment in Kamaliya Medical Institution. 8. Addition of Rs.49,100 as unexplained deposits in South Indian Bank. 9. Addition of Rs.18,75,383 as unexplained deposits. 10. Addition of Rs.66,486 towards accrued interest on unexplained deposits. 11. Addition of Rs.44,67,631 on account of unexplained investment in construction in Quilon Medical Trust. 12. Addition of Rs.8,19,37,628 towards unexplained investment in the building in Quilon Medical Trust. 13. Addition of Rs.21,33,500 from Hazeera QMC Account. 14. Addition of Rs.76,29,450 based on seized documents. Detailed Analysis: 1. Addition of Rs.6,29,479 under Section 43B of the Act: The assessee claimed deduction for sales-tax paid in excess of sales-tax collected, which was debited to the profit & loss account. The assessing officer disallowed the claim due to lack of proper explanation. The Tribunal remitted the issue back to the assessing officer for reconsideration after giving the assessee another opportunity to explain the payment. 2. Validity of block assessment proceedings: The assessee argued that the assessment proceedings for the year 2005-06 had concluded, and no incriminating material was found during the search to reopen the case. The Tribunal remitted the issue back to the assessing officer for reconsideration and to decide in accordance with law after providing a reasonable opportunity to the assessee. 3. Addition of proportionate interest and diversion of interest-bearing funds: The assessing officer disallowed interest on borrowed funds diverted for non-business purposes. The Tribunal upheld the CIT(A)'s decision that the assessee had sufficient non-interest-bearing funds to cover the non-business advances and investments, citing the Supreme Court's judgment in Munjal Sales Corporation. 4. Addition towards unexplained investment in Quilon Medical Trust: The Tribunal confirmed the CIT(A)'s decision to delete the addition, as the substantive addition was made in the hands of Quilon Medical Trust, which was entitled to exemption under Section 10(23C) of the Act. 5. Addition of Rs.47,25,000 towards unaccounted receipt from Smt. Hazeena's QMC account: The assessing officer made the addition based on a seized document, which the assessee denied. The Tribunal upheld the CIT(A)'s decision to delete the addition, as the assessing officer failed to conduct any enquiry despite having the name and address of Smt. Hazeena. 6. Disallowance of Rs.69,150 as revenue expenditure: The assessee paid Rs.69,150 to compensate for the inferior quality of goods supplied. The Tribunal found that this payment was a business expenditure and not penal in nature, directing the assessing officer to allow the deduction. 7. Addition of Rs.10 lakhs towards investment in Kamaliya Medical Institution: The Tribunal remitted the issue back to the assessing officer to verify whether there were two separate investments in Kamaliya Medical Institution and Mala Medical Centre Pvt Ltd, as the CIT(A) might have misunderstood the facts. 8. Addition of Rs.49,100 as unexplained deposits in South Indian Bank: The Tribunal upheld the CIT(A)'s decision to delete the addition, as the deposit was a reinvestment from an earlier account, evidenced by a bank certificate. 9. Addition of Rs.18,75,383 as unexplained deposits: The Tribunal upheld the CIT(A)'s decision to restrict the addition to Rs.20,312, as the assessee explained the source of the remaining deposits. 10. Addition of Rs.66,486 towards accrued interest on unexplained deposits: The Tribunal upheld the CIT(A)'s decision to delete the addition, as the interest accrued on deposits made through books of account. 11. Addition of Rs.44,67,631 on account of unexplained investment in construction in Quilon Medical Trust: The Tribunal confirmed the CIT(A)'s decision to delete the addition, as the substantive addition was made in the hands of Quilon Medical Trust, which was entitled to exemption under Section 10(23C) of the Act. 12. Addition of Rs.8,19,37,628 towards unexplained investment in the building in Quilon Medical Trust: The Tribunal confirmed the CIT(A)'s decision to delete the addition, as the substantive addition was made in the hands of Quilon Medical Trust, which was entitled to exemption under Section 10(23C) of the Act. 13. Addition of Rs.21,33,500 from Hazeera QMC Account: The Tribunal upheld the CIT(A)'s decision to delete the addition, as the assessing officer failed to conduct any enquiry despite having the name and address of Mrs. Hazeera. 14. Addition of Rs.76,29,450 based on seized documents: The Tribunal remitted the issue back to the assessing officer to verify the details and examine the recipients based on the addresses furnished by the assessee, as the assessee denied certain transactions. Conclusion: The Tribunal's judgment involved remitting several issues back to the assessing officer for reconsideration and verification, while upholding the CIT(A)'s decisions on others based on the availability of non-interest-bearing funds, proper explanations, and lack of proper enquiry by the assessing officer. The Tribunal emphasized the need for reasonable opportunity and proper verification in accordance with law.
|
