9911796707
TMI Blog2013 (4) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... see has disclosed was not part of the search material. Thus the enhancement on account of commission rate against stipulated would be business norms part of commission on behalf of some body else will not incur any loss to the Revenue insofar as the assessee being in the nature of holding investment on behalf of some other persons cannot claim to earn more and pay more as was the opinion expressed by the AO and CIT(A). This addition therefore has no legs to stand on insofar as the assessee had rendered income on the basis of receipts and payments made which cannot be enhanced unilaterally. The same is directed to be deleted. Depreciation disallowed as a percentage of the total claim insofar as the assets were brought forward from earl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hing of particulars of income. 4) In view of the above facts demand of additional tax and penalty of 100% of Rs. 58,898 is not justified, hence not payable by the assessee. 2. The learned Counsel of the assessee submitted the brief facts that the assessee is a Private limited company engaged in the business of investments. A search had taken place on 26th march 2009 which has resulted in seizure of Cash from Bank. An amount of Rs 2,09,40,129 has been seized from Axis Bank Bidanasi Branch on 27th Mar 2009. In the due course of hearing for assessment under section 143(3)/153B(b), the assessee presented its books of accounts and other testimonials asked for by the learned Assessing Officer from time to time. The assessee had filed return o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A/c amounting to Rs 1,27,728.53 D) That the assessing officer has also levied penalty on tax calculated on above additions i.e. on B and C amounting to Rs 59,898, being 100% on tax alleged to have been evaded. E) That interest under section 234A, B, C amounting to Rs 49,85,615 has been levied on assessed Tax u/s 143 (3)/153B (b) of the I.T Act 1961 without considering, the amount of cash seized which should have been adjusted as advance tax on the date of seizure for the purpose of calculation of Interest u/s 234 A,B and C. 3. Aggrieved, the assessee appealed before the first appellate authority, who confirmed the action of the Assessing Officer on the issue now raised before the Tribunal. 4. The learned Counsel for the assessee sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the assessee has converted the investments into stock in trade at a nominal value of Rs 27,42,000 and the capital loss generated due to this conversion has been debited to the capital reserve related to share premium account which has been carried forward from the previous years. 3.1 This stock in trade so converted for Rs 27,42,000 then sold at Rs 3,57,38,700 and credited in the profit and loss account posting a huge profit offered to tax.. Balance in the capital reserve shown in the balance sheet after adjusting capital loss on conversion of investments into stock in trade, and the remaining balance of capital reserve amounting to Rs 48,488 was carried forward to the subsequent years as per normal accounting practice of double e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal reserve and required to take as revenue income is absurd. Hence adding the same to the total income is not justified and highly uncalled for. This fact has clearly been disclosed in the books of accounts and mentioned in the notes to the accounts, a copy of which is enclosed in annexure 2. Moreover this accounting treatment is very much effected in the books and explained to the learned AO during assessment which was not appreciated or understood by him. Explanation to (C) 4.0 Bill for purchase of the vehicle was shown to the Leaned AO and entries in the bank statements were also produced before him a copy of which is annexed in Annexure 3 and Annexure 4 respectively. 4.1 The learned assessing officer was explained that the deprec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eivable and payable as was also considered in the case of other Companies as dealt with by us and heard along with this appeal, we are of the consistent view that the enhancement on account of commission rate against stipulated would be business norms part of commission on behalf of some body else will not incur any loss to the Revenue insofar as the assessee being in the nature of holding investment on behalf of some other persons cannot claim to earn more and pay more as was the opinion expressed by the Assessing Officer and the learned CIT(A). This addition therefore has no legs to stand on insofar as the assessee had rendered income on the basis of receipts and payments made which cannot be enhanced unilaterally. The same is directed to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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