Though the order of the AO was erroneous, the same was not prejudicial to the interest of the revenue as no part of the capital gain became taxable because of loss of exemption u/s.11(1A) of the Act. Since the order sought to be revised u/s.263 of the Act was erroneous but not prejudicial to the interest of the revenue, jurisdiction u/s.263 could not have been invoked by the CIT. We hold accordingly and quash the order u/s.263 of the Act. The appeal of the Assessee is allowed with the above directions and computation.
AO and the CIT(A) did not make any effort to verify the confirmations, identity and creditworthiness of the creditors in question and they also ignored the fact that the transaction of cash credits received and its repayment were made through bank and we also hold that the authorities below did not bring any incriminating material or evidence against the assessee trust to establish that the amount shown in the balance sheet as cash credits amounting to Rs.1,70,000 actually belonged or was owned by the assessee trust itself.
Sub-rule (3) of rule 18DA itself provides the consequence of violation of sub-rule (2). As per sub-rule (3), if at any stage it is found that any provisions of the Act or the rules have been violated, the prescribed authority specified may withdraw the approval so granted. Therefore, if there is a violation of sub-rule (2), the prescribed authority has to take action against the assessee by withdrawing the approval.
In the instant case the powers of the CIT[A] are not questioned but what has been questioned is the powers of the AO in framing a de novo assessment , when the original assessment is set aside laying down the boundaries for framing the set aside assessment .
In the appeal of the revenue by ground no. 2, the department has challenged the conclusion of the learned CIT(A) regarding deduction u/s 36(1)(vii) for bad and doubtful debts written off restricted to the amount in excess of the provision for bad and doubtful debts created in the books of accounts u/s 36(1)(viia) of the Act or it is restricted to the excess of the amount of provision claimed in the return.
At the time of hearing the ld. Counsel appearing on behalf of assessee by referring to the paper book at page nos.9 to 31 which contain copies of Kishanlal M.Dayama’s I.T.Return Ack., P&L A/c Capital A/c, Balance Sheet and Banker’s Certificate, Copies of Rajesh Kaishchand Vyasa’s I.T.Return Ack; Brokerage A/c, Interest A/c., Capital A/c, Balance Sheet and PAN Card, Banker’s Certificate
It is a settled law that the powers of the Commissioner of Income Tax is co-terminus with that of Assessing Officer. Under the circumstances, the particular enquiry that was not made by the Assessing Officer which was necessary in the facts of the case, should have been done by the Ld. Commissioner of Income Tax (A).
While deciding the issue relating to determination of actual value of the assessee’ s property in Mumbai the income from house property must be computed on the basis of the sum which might reasonably be expected to let from year to year and with the annual Municipal value provided such a value is not above the standard rent receivable and the same could be adopted as the safest guide for this purpose.
Unit in SEZ will be covered by sub-section(6) to section 115JB of the Act irrespective of the fact that those units were claiming deduction u/s.10A of the Act. We also observe that benefit given to SEZ unit from the applicability of provisions of section 115JB has been withdrawn by the Finance Act, 2011 by inserting a proviso to section 115JB(6) of the Act,
Once it is not in dispute that the facts of the case are materially similar to the facts of ISG Traders Ltd. vs. CIT, WB-II, Kolkata (I.T,A No.264 of 2003-2011- TIOL-621-HC-KOL-IT). And that the said decision applies in this case, the computation of disallowance has to be done on the same basis as was accepted by Their Lordships in ISG Traders Ltd.’s case (supra).
