9911796707
TMI Blog2013 (7) TMI 1167X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee is a Proprietor of M/s Chandrakala Co., a stock broking concern. The assessee filed return of income for the assessment year 1991-92 admitting an income of ₹ 2,38,65,192/- and the same was subjected to scrutiny and the total income was computed at ₹ 18,45,76,780/- which included an addition of ₹ 14.74 crores on account of disallowances of payments to Public Sector Undertakings (PSUs). 4. For assessment year 1992-93, the assessee filed return of income admitting an income of ₹ 3,34,05,960/- and the same was subjected to scrutiny and the total income was computed at ₹ 6,44,76,520/- which included an addition of ₹ 2.51 crores on account of disallowances of payments to Public Sector Undertakings (PSUs). 5. For assessment year 1993-94, the assessee filed return of income admitting an income of ₹ 4,82,83,620/-and the same was subjected to scrutiny and the total income was computed at ₹ 11,24,89,430/- which included an addition of ₹ 40 lakhs on account of disallowances of payments to Public Sector ndertakings (PSUs). 6. On appeal, the ld. CIT(A) allowed the disallowance of payments to PSUs. Against the order of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e relevant point of time when the call money market rate was exceedingly high, the bank sought cheaper funds by seeking short-term deposits from various Public Sector Undertakings who are having sufficient liquid funds available. It is further the case of the assessee which according to the assessee, tallies with the stand taken by Indian Bank in their assessment proceedings also that since at the relevant time, the rates payable on various deposits/are controlled by the rates prescribed by Reserve Bank of India from time to time and since the Public Sector Undertakings were not willing to give certain deposits to Indian Bank at the rate of interest prescribed by Reserve Bank of India, the bank agreed to pay to Public Sector Undertaking a higher rate and the difference between the actual rate paid by Indian Bank and the interest rate prescribed by Reserve Bank of India was paid to them only out of the funds obtained by increasing the price of Government securities bought by Indian Bank from the appellant and the difference was passed on to the Public Sector Undertakings by way of demand drafts which was obtained by the assessee on the basis of instructions given by Indian Bank. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,255 2297(MDS)/96 for Asst.Years 91-92,92-93 93-94 and disposed off by the Tribunal by its common Order dated 5-1-2005 and the Miscellaneous Petition filed by the assessee against the said Order on this issue was rejected by the Tribunal and the asses se filed appeal against said Order of Tribunal before the High Court of Judicature at Madras. The quantum appeals filed by the Revenue for assessment years 1992-93 and 1993-94 were also allowed, on this issue, by the Tribunal and the appellant's appeals for these three years, had been filed in the High Court of Madras. (v) After the Tribunal rendered its decision on 5-1-2005, upholding the addition of the income for the three years under appeals by reversing al\ the three orders of the Commissioners of Income Tax (Appeals) and restoring the addition made by the Assessing Officer, the Assessing Officer initiated penalty proceedings vide her letter dated 13-6-2005. After considering the submissions and the Objections raised by the appellant and his representative, the Assessing Officer, by her order dated 22- 7-2005, held that the assessee has furnished inaccurate particulars of income deliberately trying to conceal his inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the absence of any contra evidence from the Revenue's side to prove that the evidence considered by the Criminal Court are not relevant/complete and by persons who had no connection whatsoever with the transactions, we do not find any good ground to accept the Revenue's plea that the Tribunal was justified in rejecting this evidence', Paragraph 25, 'held that the status of the assessee vis-a-vis Indian Bank, was only that of a broker of Indian Bank and nothing else'. Paragraph 26, 'applying the principle of diversion by overriding title, the assessee is bound to succeed in the appeals before this Court'. Paragraph 28 'Consequently, we hold that the said amount cannot be included in his assessment. In the circumstances, we do not find any necessity to go into the question as to the applicability of Section 37. In the circumstances, the order of the Tribunal is set aside and the Tax Cases are allowed'. Paragraph 29 ' The decisions relied on by the Revenue, do not, in any manner, advance the case of the Revenue, particularly in the face of the fact that even in the proceedings before the Income Tax Authorities, the Depar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the Hon'ble Madras High Court deleted the additions made on account of payments to PSUs in assessment years 1991-92, 1992-93 and 1993-94 and therefore, as the very basis on which the penalty was levied did not survive, the penalty levied also does not survive. The ld. CIT(A) deleted the penalty on the ground that the additions made in the assessment had been deleted by the Hon'ble High Court and therefore, the penalty levied as a corollary to the deletion of the addition made by the Hon'ble High Court, was required to be deleted. 15. The ld. DR has relied on the order of the Assessing Officer. In the grounds of appeal, the Revenue has stated that they have not accepted the order of the Hon'ble High Court in the quantum appeal and has filed SLP before the Hon'ble Supreme Court and therefore, the ld. CIT(A) was not justified in deleting the penalty levied u/s 271(1)(c) of the Act. 16. No material has been brought on record by the ld. DR to show that the SLP filed by the Department against the order of the Hon'ble High Court deleting the additions made by the Assessing Officer has been accepted by the Hon'ble Supreme Court. Further, no material wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of M/s Sahib Engineering Works came from accounts of M/s. Kotak, SRF and Times. Thus, the assessee has not only proved source of its credit but also proved source of source with corroborating overwhelming evidence. The above reasons cannot be held to be non-existent. The matter is in the realm realm of appreciation of evidence. Even if it is held that two views are possible, inference drawn by the Tribunal, being final fact finding authority, cannot be held to be perverse. As regards deletion by the Commissioner of Income-tax (Appeals) after referring to additional evidence led before him, the Tribunal has examined the matter and recorded that a remand report was duly sought and thus no prejudice was caused by considering the additional evidence. There is no doubt that additional evidence has to be allowed only for the specific reason, there cannot be rigid yardstick for sufficiency or otherwise of the reason in a given case. Admittedly, the Revenue did not raise this objection before the Tribunal. Explanation given is that the fact that reasons had not been recorded came to the light only on inspection of record. This cannot held to be a handicap with the Revenue as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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