It was for the Assessing Officer to examine whether the disallowance offered by the assessee itself was sufficient on facts and circumstances of the case, notwithstanding the view he took regarding the applicability of rule 8D. It is not expected of him to take piecemeal decisions regarding the merits of the disallowance.
In the present case, this Court notices that the Assessing Officer went into great lengths to verify the genuineness of these transactions. He issued summons to the share applicants- only 9 could be served; none actually responded through their authorized or principal officer. Even during remand, 16 of the 18 share applicants could not be served.
It is difficult to appreciate the petitioner’s objection that the information received from DAO-45, New Delhi, acting under Article 26 of the Indo-Japanese treaty for the Avoidance of Double Taxation, cannot constitute valid material on the basis of which the Assessing Officer can form even a tentative or prima facie belief that income to the extent of Rs. 11,28,644/- had escaped assessment.
There is a fundamental fallacy in invoking the provisions of the Wealth Tax Act to the application of section 69B of the Income Tax Act, notwithstanding that both the Acts are cognate and have even been said to constitute an integrated scheme of taxation. Under the Income Tax Act, we are to find what was the real and actual consideration paid by the assessee and whether the full consideration has been recorded in the books.
Under Section 72 of the Income Tax Act, to give to the amalgamated company the benefit of the loss or, as the case may be, allowance for depreciation of the amalgamating company for the previous year in which the amalgamation was effected for the purposes of the Income Tax Act, the Central Government must, upon the recommendation of the specified authority, be satisfied that the amalgamating company was not, immediately before the amalgamation, financially viable by reason of its liabilities, losses and other relevant factors, and that the amalgamation was in the public interest.
AAI had let out/given on licence or lease certain premises to the petitioners therein for the purpose of running a counter or for parking and the Service Tax Department, invoking Section 65 (105) (zzm) of the Finance Act, 1994 was claiming service tax on the rental/licence fee which was being paid by the petitioners therein to the AAI. It was the contention of the petitioners therein that Section 65 (105) (zzm) does not entail renting out of immovable property and the same does not constitute a taxable service and is not exigible to service tax. Reliance was placed on clarification issued by Central Board of Custom and Excise vide Circular No.80/10/2004-S.T., dated 17.9.2004.
We are unable to uphold the view of the Tribunal that it is incumbent upon the Assessing Officer, on the facts and circumstances of the case, to establish with the help of material on record that the share monies had come or emanated from the assessee’s coffers. Section 68 of the Act casts no such burden upon the Assessing Officer.
a. The search commenced on 29.8.1996 and was finally concluded on 30.8.1996. It is impossible for anybody to accurately take stock in a span of just one day and this itself vitiated the entire process of inventorisation followed by the income tax authorities.
The proviso to s. 36(1)(iii) enacts that any amount of the interest paid towards capital borrowed for acquisition of an asset or for extension of existing business regardless of its capitalization in the books or otherwise,
In the absence of a finding rejecting the accounts of the assessee, the reference to the DVO could not have been made by the Assessing Officer in the first place. It is evident that the valuation in the instant case was uncritically accepted by the Assessing Officer. As can be seen from a comparison of the valuation by the assessee, with that of the DVO, the variation is 3.86 per cent. This is a very minor variation, having regard to the large amounts involved.
