We have heard learned counsel for the appellant-revenue. As far as the addition of Rs. 3,30,000 is concerned, it has been held that during the proceedings under section 143(3) read with section 250 of the Act, the assessee furnished a confirmation certificate from M/s Axis Chemicals and Pharmaceuticals Ltd., Faridabad along with PAN number. On asking of the Assessing Officer, the assessee has confirmed that the said liability is still outstanding. In spite of that material, the Assessing Officer made the addition of the amount on the basis that this liability has ceased to exist and the same is not payable by the assessee, and treated the said liability as income by invoking provision of Section 41(1) of the Act. The Commissioner (Appeals), whil
After hearing learned counsel for the appellant and going through the mpugned order, we do not find any merit in the instant appeal. It is the conceded position that in the assessee’s balance sheet, the aforesaid liabilities have been shown, which are payable to the sundry creditors. Such liabilities, shown in the balance sheet, indicate the acknowledgment of the debts payable by the assessee. Merely because such liability is outstanding for the last six years, it cannot be presumed that the said liabilities have ceased to exist. It is also conceded position that there is no bilateral act of the
In the present case the assessee had taken loans from the bank on which the interest was paid and as a security for those loans, FDRs in question were kept with the bank and, therefore, the assessee was entitled to the netting of interest for the interest income and expenses thereto. This is also categorically answered in Shri Ram Honda (supra). The Court was of the opinion that even in a case where the exporter is required to mandatorily keep monies in fixed deposit, in order to avail credit facility for the export business, and interest earned on fixed deposits for the purpose of availing of credit facilities from the bank, it was held that the interest income has to be treated as “income from other sources” and not business income as it does not have an immediate nexus with the export business.
Income Tax Appellate Tribunal was right in holding that the assessee was entitled to claim deduction for bad debts of Rs.38,20,417/- in respect of the money lending business which was closed down during the accounting year relevant to the assessment year in 1998-99, without following the ratio of the decision of the Supreme Court in the case of Commissioner of Income Tax vs. Gemini Cashew Sales Corporation and contrary to the provisions of Section 36(2)(i) of the Income Tax Act. Merely because the money lending business was subsequently discontinued, that is in the subsequent accounting year relating to the relevant assessment year, it cannot be held that the assessee was disentitled to claim such a deduction though such claim as bad debt was, as a matter of fact, not in dispute.
The assessee’s income was computed u/s 115JB as it had no income under the normal provisions of the Act. The assessee claimed that despite the absence of normal profits, it was eligible for deduction u/s 80HHC in computing the book profits under Expl. (iv) of s. 115JB in accordance with the judgement of the Special Bench in Syncome Formulations 106 ITD 193 (Mum) (SB) and that the judgement of the Bombay High Court in Ajanta Pharma 223 CTR 441 (Bom) (which held that Syncome Formulations was overruled) was not applicable. HELD upholding the assessee’s plea:
The second ground for passing provisional order by the CIT under Section 263 of the Act relates to the provision for doubtful debts. As per the CIT, the provision for doubtful debts at Rs.818.03 lacs debited in the Profit and Loss account was not added back for calculating book profit under Section 115JB of the Act, which resulted into underassessment of income to that extent. In forming this opinion, the CIT has governed itself by the judgment of the Madras High Court in the case of Deputy Commissioner of Income Tax v. Beardsell Ltd., 244 ITR 256, wherein the Madras High Court held that where there is a statutory provision contained in explanation to sub-section (2) of Section 115JB of the Act, the provision made for uncertain liabilities are to be disallowed for calculating the book profits under Section 115JB of the Act.
Once an appeal against the order passed by an authority is preferred and is decided by the appellate authority, the order of the said authority merges into the order of the appellate authority; with this merger, order of the original authority ceases to exist and the order of the appellate authority prevails; the limitation for the purpose of section 154(7) is to be counted from the date of this order of CIT (A) and not the date of original order of assessment.
Once it is held that the business transactions do not fall within section 2(22)(e), one need not to go further to section 2(22)(e)(ii) to take away the basic meaning, intent and purport of the main part of section 2(22)(e).
In the present case, the dispute relates to the special deduction allowable under Section 80-IA contained in Chapter VI-A. Relevant provisions contained in Chapter VI-A including Section 80-IA (to the extent relevant),read as follows :-
The question raised before us is with regard to the taxability of the discount allotted to the subscribers of the chit, which as per the counsel for the appellant is in the nature of interest in the hands of such subscribers and not dividend
