A plain reading of provisions of section 35DDA, it is clear that compliance with the conditions of rule 2BA is mandatory only to avail exemption under section 10(10C) by the employees but said rule is not relevant to deduction under section 35DDA.
For the purpose of Section 40(b)(v) read with Explanation there cannot be separate method of accounting for ascertaining net profit and/or book-profit. In other words, according to the said Explanation ‘book profit’ means the net profit as shown in the profit and loss account including income from other sources not the profit computed under the head profit and gains of business or profession.
Working given by the TPO shows that it is earning 7% commission, whereas as per the industry policy as decided by the AAAI the service on media agency earns commission of 2.5%. On that reason also, since it is an extreme case of earning 7% commission (in our view it is wrongly considered), on the principles that the extreme profit companies are to be excluded, this company cannot be considered as comparable for the purpose of arriving at the average mean.
Learned counsel was specifically asked whether he is in a position to produce, or has produced at any stage, evidences for services having been rendered by the persons, who have been paid the commission. While learned Counsel referred to the fact that these incomes are duly disclosed in the hands of the recipient that the same commission was allowed deduction in the other years, he was not in a position to produce any evidence for services rendered, nor such evidence was produced before the authorities below.
The brief facts of the case are that assessee has filed its return of income on 20th September, 2008 for assessment year 2008-09 declaring nil income after claiming deduction of Rs. 332,29,787 under sec. 80-IC of the Act. Similarly in assessment year 2009-10, the assessee filed its return of income on 25th September, 2009 declaring nil income by claiming a deduction of Rs.299,88,505 under sec. 80-IC of the Act.
Where there was difference of amount in question somewhere as per cash in hand as per books of account and lesser cash as per seized documents, it would also not suffice to make addition under section 68 or 69A because every person is at liberty to spend their own amount anywhere as per his choice and assessee had not claimed any deduction in this case. Examining the case of assessee from every possible angle, addition of Rs.37,30,710/- was wholly unjustified.
There is no dispute regarding the source of income of the assessee which is mainly from the business of purchase and sale of plots/lands. But it does not mean that such an assessee is debarred from purchasing and holding some plots/land as capital asset and claim benefit u/s 54F.
No material is produced before us to prove that the AO in the case of person searched was satisfied that any money, bullion, jewellery or other valuable articles or things or books accounts or documents seized or requisitioned belongs to or belong to a person other than the person referred to in sec. 153A. No material is produced before us to show if any satisfaction was recorded by the AO in that case that the seized material belongs to any person other than the person with respect to whom search was made u/s 132 of the Act.
Admittedly, the Rajkot Bench of the Tribunal in the case of I.T.O V/s M/s CMA CGM Agencies (India) Pvt. Ltd. (supra) on identical facts relied on by the ld. counsel of the assessee, quashed the order passed u/s 172(4) of the Act with the observation that the jurisdictional AO may verify the position and take such action as may be warranted in law in terms of section 172(7) to ensure that the income of the assessee from the various voyages does not escape assessment as per the normal provisions of the I-T Act.
In the instant case, the assessee denied incurring any expenditure for earning income, which did not form part of total income during the course of assessment proceedings even when huge investments were made by the assessee in the shares for having controlling interest . In terms of the aforesaid decision of the Hon’ble jurisdictional High Court in Maxopp Investment Ltd. (supra), even where the assessee claims that no expenditure has been incurred in relation to income which does not form part of total income,
