9911796707
Advanced Search 
TMI Blog2012 (11) TMI 663X X X X Extracts X X X X X X X X Extracts X X X X ..... ances of the appellant's case, the learned CIT(A) has grossly erred in upholding the learned Assessing Officer's action of granting deduction u/s. 10 B of the Income-tax Act, 1961 after excluding the additional business income of Rs.147.06 lacs which was part of the appellant's share of additional business income of Rs.275.00 lacs out of the income of Rs.590.00 lacs surrendered by the appellant Group on the basis of certain record of Receipts and Payments found and seized from the residential premises of Shri Lalit K. Patel, a director of the appellant company, during the proceedings u/s. 132 of the Income-tax Act, 1961." 3. The facts of the case are that the assessee Company declared income of Rs.8,20,32,180/- in its return filed in response to notice u/s 153A of the IT Act, consequent to search u/s 132 of the IT Act on 22-09-2005. The AO noted that the assessee offered as net additional business income of Rs.2.75 Crores, on the basis of page No.93 of Annexure A-4, seized from the residence of Shri Lalit K. Patel and Kantibhai Patel, directors. The AO noted that the amount in this seized page was Rs.690 lacs but the amount of Rs.275 lacs was offered in case of the assessee Compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s regard. The initiation of penalty proceedings and charging of interest were also assailed. 4. The learned CIT(A) however, did not accept the contention of the assessee and confirmed the order of the AO in rejecting the claim of the assessee u/s 10 B of the IT Act. The findings of the learned CIT(A) in Para 7 and 8 of the appellate order are reproduced as under: "7. The contentions were carefully considered. The AO in his computation of income, has noted that the net profit as per P & L Account was Rs.13,53,36,699/- which after adding the disallowables, totaled Rs.17,56,15,070/-. To this, was added additional business income of Rs.2.75 crores. Finally after deducting the depreciation and contribution u/s. 35(1) (ii), the business income of Unit 1 & 2 was computed at Rs.18.42 crores. The exempted business income of 100% EOU unit after depreciation was computed at Rs.9.53 crores and the eligible deduction u/s. 10B was worked out at Rs.9.46 crores. The appellant had also disclosed income on short term capital gains. In other words, the assertion of the appellant that its business income constituted almost entirely from exports, was not correct. The appellant had business income apa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefit to the assessee for exempt business income u/s 10B of the IT Act, but the additional income was not considered for the purpose of granting deduction u/s 10 B of the IT Act. He has submitted that the assessee has offered additional income on account of business which is also accepted by the AO under the head "business income" and the assessee has no other source of income. Therefore, the AO should have considered the additional income as business income of the assessee. He has submitted that the details mentioned in the seized paper PB -31 shows non-genuine expenses which were reduced from the expenses claimed in the books of accounts which resulted into enhancement of the income. Therefore, the AO has not appreciated the facts of the case properly and denied the exemption to the assessee wrongly. He has also referred to PB-56 which is the statement of Lalitbhai K. Patel in which he has further explained that receipts and payments contained in the seized paper was on account of income on difference of purchases and sales of both the assessee Companies as well as details of misc. expenses of both the assessee Companies. He has submitted that the reasons given by the AO are, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndisclosed income for the block period commencing from 1986-87 to January 6, 1996. The Assessing Officer rejected the claim of the assessee. The Tribunal on an interpretation of the provisions of sections 158BB(1), 158BB(4) and 158BH as applicable to the facts and circumstances of the case held that the assessee was entitled to deduction under section 80-I or section 80-IA in respect of the undisclosed income assessed by the Assessing Officer under the block period since the undisclosed income declared in Form No.2B was under the head "Business income" from industrial undertaking as the only activity of the assessee was that of manufacture and sale of board paper and craft paper which had been all along assessed as business income and in all the assessment years failing within the block periods. On a reference contending the Tribunal was required to consider the amended provisions and decide about availability of relief under section 80-I or section 80-IA of the Act after determining (i) whether the entire undisclosed income is relatable to the industrial undertaking; and (ii) the requirements of filing the audit report, which may be even during the course of the appellate proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction u/s 10B of the IT Act. The assessee surrendered the additional income on account of business income which is also accepted by the AO in computation of business income in the assessment order. The AO also granted exemption to the assessee in respect of income earned from business of exports u/s 10 B of the IT Act in computation of income. Therefore, the AO was not justified in holding that the assessee has not submitted any evidence with regard to the said receipts/amounts from exports made. The AO was also not justified in holding that for additional deduction no specific working is given. Since the assessee made a claim of pro-rata deduction only, therefore, the authorities below are not justified in denying exemption to the assessee that the assessee claimed capital gains and other income. The computation of income made by the AO in the assessment order specifically prove that capital gains and other income have no relation with the business income of the assessee. Since the AO accepted the claim of the assessee for business income on account of surrender of additional business income, therefore, findings of the authorities below are not justified to hold that the business ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
