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TMI Blog2019 (4) TMI 408X X X X Extracts X X X X X X X X Extracts X X X X ..... ent upheld by the CIT(A) cannot be justified - decided in favour of assesee Additions on account of Kalyana Mantapa (i.e., income from house property) - HELD THAT:- The assessee has neither received any income / receipt from the Kalyana Mantapa nor has she incurred any expenditure pertaining the same. All donations / receipts were received by Someshwar Temple Committee and the same were expended for temple organisational activity and the Kalyana Mantapa. If at all any addition is to be made, the same ought to have been done based on notional ALU of the property. In my view, the additions made, based on receipts by the Temple Committee, is not correct and therefore delete the addition sustained by the CIT(A) @ 30%, on account of income from Kalyana Mantapa. Consequently, grounds raised by the assessee on this issue are allowed. Validity of assessment u/s 147/148 - reasons provided to assessee - No objection filed - HELD THAT:- the assessee had requested for a copy of the reasons recorded for initiation of proceedings vide letter dated 05.11.2007; which were communicated to the assessee by the AO vide letter dated 12.02.2008. It is a matter of record that the assessee has not r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , issued notices under section 148 of the Act on 03.02.2000 to the assessee for these four assessment years. The assessments for these Assessment Years 1995-96 to 1998-99 were concluded under section 143(3) r.w.s. 147 of the Act on the basis of material impounded in the course of survey proceedings; vide separate orders dated 27.03.2002 as under: Assessment Year Income Returned (Rs.) Date of filing of return of Income Annual income (Rs.) 1995-96 74,800/- 05.03.1998 6,33,434/- 1996-97 (-)44,940/- 05.03.1998 19,46,531/- 1997-98 1,42,950/- 05.03.1998 22,18,942/- 1998-99 69,600/- 21,59,829/- 2.2 Aggrieved by the orders of assessment dated 27.03.2002 for Assessment Years 1995-96 to 1998-99, the assessee filed appeals before the CIT(A)-IV, Bangalore, who vide orders in ITA Nos. 31 to 34/R-7/CIT(A)-IV/2003 dated 30.05.2003 allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent Year Income Returned (Rs.) Income assessed (Rs.) 1995-96 74,800/- 2,58,360/- 1996-97 (-)44,940/- 6,39,831/- 1997-98 1,42,950/- 18,05,639/- 1998-99 69,600/- 13,73,289/- 2.4 Aggrieved by the orders of assessment dated 27.03.2008 for Assessment Years 1995-96 to 1998-99, the assessee filed appeals before the CIT-4, Bangalore. The CIT(A) disposed off the assessee s appeals for these 4 years vide order dated 27.09.2018 allowing the assessee partial relief; the details of which are as under: A. Income from KBR Drama Company sustained to the extent of 50% of income assessed by AO: Assessment Year Assessed by AO (Rs.) Addition sustained by CIT(A) to the extent of 50% (Rs.) 1995-96 NIL NA 1996-97 4,11,831/- 2,05,916/- 1997-98 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eneral in nature, no adjudication is called for thereon, and the same are accordingly dismissed as infructuous. 5. Ground No. 7 for Assessment Year 1996-97 to 1998-99 Ground No. 6 for Assessment Year 1995-96 Charging of interest under section 234A and 234B of the Act 5.1 In this ground (supra), the assessee denies himself liable to be charged interest u/s 234B of the Act. The charging of interest is consequential and mandatory and the AO has no discretion in the matter. This proposition has been upheld by the Hon ble Apex Court in the case of Anjum H. Ghaswala (252 ITR 1) (SC) and I, therefore, uphold the action of the AO in charging the assessee the aforesaid interest u/s 234B of the Act. The AO is, however, directed to re-compute the interest chargeable u/s 234B of the Act, if any, while giving effect of this order. 6. Ground No. 4 for Assessment Year 1996-97 to 1998-99 Income from KBR Company 6.1 In support of the grounds raised on this issue (supra), the learned AR for the assessee submits that the gross receipts as per the profit and loss accounts filed by the assessee, exceeds the total amount as per the impounded material and there is no supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/- for Assessment Year 1996-97; ₹ 24,54,095/- for Assessment Year 1997-98 and ₹ 19,87,721/- for Assessment Year 1998-99. Thus, there is no understatement of gross receipts by the assessee. Moreover, in my considered view, the net income from the Drama Company, as a percentage of gross receipts, cannot be as high as has been held by the CIT(A). In this context, it is pertinent to note that the Co-ordinate Bench of this Tribunal in its order dated 30.09.2004 (supra)in the first round of appeals for these Assessment Years at para 5.4 thereof had come to the conclusion that no addition was called for on this issue. This finding of the Tribunal has not been controverted by the authorities below i.e., by the CIT(A); while sustaining the addition made at on adhoc figure of 50%; as being the earnings of the drama company. In view of the peculiar facts and circumstances of the case and in the absence of any comparable case put forth by the authorities below, the additions, even to the adhoc extent upheld by the CIT(A) cannot be justified. In this view of the matter, I delete the additions sustained by the CIT(A) on account of income from drama company for Assessment Years 1996- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of assumption of jurisdiction by AO under section 147/148 of the Act 8.1 In this ground (supra), the assessee challenges the validity of assumption of jurisdiction by the AO under section 147/148 of the Act for commencing assessment proceedings for Assessment Years 1995-96 to 1998-99. In this regard, I have heard the rival contentions and perused and carefully considered the material on record. From an appraisal of the material on record, it is seen that the assessee had requested for a copy of the reasons recorded for initiation of proceedings vide letter dated 05.11.2007; which were communicated to the assessee by the AO vide letter dated 12.02.2008. It is a matter of record that the assessee has not raised any objections in this regard. In the light of the above facts, it is evident that the AO has correctly and validly assumed jurisdiction under section 147 of the Act for commencing proceedings for assessments for Assessment Years 1995-96 to 1998-99. Though raised by the assessee, it is seen that there is no violation of the provisions contained in section 151 of the Act. In view of the above and finding no merit in this ground No. 2 raised by the assessee (supra), the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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