It is not a case where the Assessing Officer has brought any material on record to indicate that the revenue was aware of the non-genuineness of the gift received by the assessee. Except vague observations that there was a fake gift racket nothing specific has been pointed out in the case of the assessee. In fact action of the Assessing Officer on the ground that assessee has concealed income is contradictory in terms for the simple reason that the Investigation Wing appears to have passed on the information, in the year 2002, to the Assessing Officer that a sum of Rs. 5 lakhs was taken by assessee in the form of a gift from ‘B’, the record indicates a gift of Rs. 1 lakh only.
Where the capital asset became the property of the assessee by succession, inheritance or devaluation, the cost of acquisition of asset shall be deemed to be the cost for which the previous owner of the property acquired it, as increased by the cost of any improvement of the assets incurred or borne by the previous owner or the assessee, as the case may be. In the case before us, the assessee became owner of property by inheritance.
Agility Logistics (P.) Ltd. V/s. DCIT (ITAT Mumbai) Mere addition on account of transfer pricing adjustment cannot automatically lead to levy of penalty u/s. 271(1)(c)
The assessment order is silent on the provisions of section 43B(f) and has blindly allowed unpaid portion of leave encashment as an allowable deduction. There has been no proper inquiry conducted by the Assessing Officer. There is no discussion in the assessment order whether unpaid portion of the leave encashment is an allowable deduction. In the instant case, there is no discussion at all in the assessment order why the unpaid leave encashment is allowed as deduction. Prima facie, it is felt that the Assessing Officer has not noted the relevant statutory provisions viz., section 43B(f). It is a settled law that non-consideration of mandatory provisions of law in an order will lead the same to be erroneous and prejudicial to the interest of the revenue.
it is noticed that the assessment is an ex-parte assessment and also before the ld. CIT(A) there has been no representation. We are of the view that the assessee may be granted one more opportunity to substantiate its case before the ld. AO. It is also noticed that the ld. AR has specifically agreed that there would be no default on the part of assessee in de-novo setting aside assessment. In this situation the issue is restored to the file of AO for denovo assessment after granting the assessee adequate opportunity to substantiate its case.
In the instant case, it is found that the eligible new asset was not purchased within one year before the date on which the transfer of the original asset took place. Thus, the amount which is not utilized by the assessee for the purchase of new asset before the date of furnishing the return of income under section 139 was required to be deposited as per the provisions of sub-section (4) for availing deduction under section 54F in respect of those amounts also. In other words, as per the plain language employed in the above sub-section (4), only the amount which was actually utilized by the assessee for the purpose of purchase of the new residential house before the date of furnishing of the return of income under section 139 shall only be eligible for computation of deduction under section 54F(1).
Coming to the facts of the case, the assessee was afforded sufficient opportunities to furnish confirmations in respect of the impugned credits by the Assessing Officer (refer page 2 of the assessment order). A final show-cause notice was issued by him on 22/03/2006, stating the said fact, and by way of allowing a last opportunity to the assessee to substantiate its case, for 24/03/2006, and which (notice) again remained un-responded, even up to the date of passing of the assessment order, i.e., 29/03/2006 (refer page 3 of the assessment order).
Hon’ble Kerala High Court in the case of Girnar Industries (supra) and Tata Tea Limited (supra), we hold that the assessee is entitled for exemption under Section 10B of the Act on account of blending of tea. Similarly, in our view, the industrial units engaged in the very same activity i.e. blending, packing and export of tea in the free trade zone shall also be entitled to enjoy tax exemption under Section 10A of the Act.
The assessee has not advanced any arguments with regard to the proposition that on interest income deduction under sec. 80-IC is admissible, therefore, there is no idea to examine the provisions of sec. 80-IC and in what condition the computation for such deduction has to be made. According to the judgment of Hon’ble Delhi High Court in the case of CIT vs. Sri Ram Honda, interest income has to be assessed as a income from other sources. In paragraph 26 of the judgment, Hon’ble Court has observed that interest income on fixed deposit for the purpose of availing of credit facility from the bank does not have an immediate nexus with the export business and, therefore, it has to necessarily be treated as income from other sources and not business income.
It is very sad that AO without following the principles of natural justice and inspite of clear findings of the ITAT in the order dated 18.06.2010 has repeated the same orders as was done originally way back in 1998. Inspite of levying the cost of 5000/- on AO, which we were informed was paid to assessee, there is no change in the attitude of the Revenue with reference to assessees/assessments are concerned. By taking up the assessment at the fag end of the time barring period and by denying natural justice and not considering the evidence on record, assessees were forced to file appeals before the ITAT unnecessarily by incurring heavy cost of not only appeal fees but also engaging Counsels to defend the case. There should be an end to this sorry state of affairs.
