Having regard to the facts noted above as well as explanation adduced by the assessee in respect of the payments and the suspicious approach of the DGIT(E) towards the evidence adduced by the assessee without noticing the crucial facts such as payment by cheques etc., it seems that the DGIT(E) was not justified in law in readily inferring that assessee manipulated and fabricated its books of account and vouchers and also debited personal, bogus and exaggerated expenses.
In order to determine whether the payment is not sustainable, the Assessing Officer has to first return a finding that the payment made is excessive under section 40A (2). If it is found to be so, then the Assessing Officer has to determine what constitutes the fair market value of the services rendered and disallow the difference between what is claimed and what is such value determined (as fair market value).
Section-132B(4) cannot be construed or interpreted in a manner as to defeat the rights of the assessee/writ petitioner to the property itself. The fact that it limits the liability to the point of time when assessment is completed would mean that authorities have to be alive of this fact and release the amount within reasonable time.
In the present case, we find that not only is there a change of opinion but also the re-opening is barred by limitation inasmuch as the condition that the escapement of income must have resulted from the failure on the part of the petitioner to fully and truly disclose all material facts, has not been satisfied. The impugned order dated 27.10.2010 merely glosses over the objections raised by the petitioner with regard to limitation.
If the revenue was of the opinion that the expenses claimed towards ‘green boxes’ was inadmissible or was excessive, or not genuine, in order to reject the entries in the books of account and other documents of the assessee, seized during the search, it ought to have relied on other materials. Having once drawn the presumption that the contents of the documents (of the assessee) taken into possession during the search were true, the revenue could not have, consistently with that presumption, proceeded to require the assessee to produce materials in support of the expenditure entries.
Consequences for breach of the contract are provided in Chapter VI of the Contract Act which contains three sections, namely, Section 73 to Section 75. As per Section 73 of the Contract Act, the party who suffers by the breach of contract is entitled to receive from the defaulting party, compensation for any loss or damage caused to him by such breach, which naturally arose in usual course of things from such breach, or which the two parties knew when they make the contract to be likely the result of the breach of contract.
First proviso to Section 158BC (a) required no notice under Section 148 for making a block assessment, merely because the notice required to be issued under Section 158BC (a) calling for the block return is analogous to the notice under Section 148 to reopen an assessment, is without any basis, either on principle or on authority.
It is necessary to examine the question whether it is open to the Assessing Officer, having already formed an opinion that no special audit was necessary, and not having communicated the same to the petitioner, to change his mind and form an opinion subsequently that a special audit is necessary having regard to the complexities of the accounts and the protection of the interests of the revenue.
ITAT has chosen to disregard the plea of the Revenue for further investigation into the matter though there was sufficient material, which was referred to by the Assessing Officer, to suspect the motives of the assesses in claiming such huge expenditure by way of interest under Section 57(iii) of the Act.
The assessee received a donations which was not anonymous donations within the meaning of Section 11(3) of the Act because the receipts issued by the assessee trust were still in the custody of the department as the receipt books were impounded in the course of the survey and no confirmations were required to be filed by the assessee.
