ITAT Chandigarh held In the case of M/s Amit Engineers vs. ACIT that it is a trite law that the only condition for the Assessing Officer to reopen the case is that for whatever reasons he has ‘reason to believe’ that income has escaped assessment.
Penalty u/s 271(1)(c) can be levied only in the cases of concealment of income in the return of income filed by the assessee. In the present case, the return filed in response to notice u/s 153A was accepted by the AO as it is which also included surrendered income not disclosed in the original return due to bonafide error.
ITAT Chandigarh held In the case of M/s Shree Dhanwantri Herbals vs. The ITO that the careful reading of the form 10CCB, in a serial order would clearly show that the assessee is required to inform the location of the Industry and column (c) specifically ask the assessee to state whether business is a new business
CIT vs. M/s Hind Agro Industries (ITAT Chandigarh) The assessee pleaded since it is not feasible to maintain stock register, therefore books should not be rejected CIT (A) upheld rejection of books , but considered G.P. rate taken by A.O. of previous year
In the case of DCIT Vs. M/s Sunrise Stock Services P.Ltd. Chandigarh bench of ITAT reversed the order of CIT (A) who deleted the penalty made on estimation basis. It was allegation of AO that assessee voluntarily surrendered the addition and statement of the director was recorded.
The ITAT Chandigarh in the case of Late Sh.Jagat Singh vs. ITO held that the interest paid by assessee on borrowings not allowable as the same were used to finance the sister concern when the crux of transaction results that no direct or indirect benefit accrues to assessee on such loans advanced.
In the cited case, ITAT directed AO inter-alia to include installments received on sale of various houses and flats under hire purchase agreement and at the same time allow corresponding expenditure which has been expended by the assesses in cash (including through cheque).
In the case of Shri Barjinder Singh Bhatti vs. ITO ITAT has held that in absence of not having any evidence or material before him to contradict the report of the Registered Valuer, AO cannot reject valuation report of Registered Valuer.
ITAT Chandigarh held in the case M/s Himlayan Expressway Limited vs. ITO that it is clear that the borrowed funds were not required by the assessee for business purposes. Therefore, the same funds were surplus funds in nature for that period which was utilized for making term deposits on which the assessee earned the interest.
The test to decide, as to whether the income is revenue in nature or capital receipt, is that if the funds borrowed are just surplus and by virtue of that circumstances they are invested in fixed deposits the income earned in the form of interest will be taxable under the head ‘Income from other sources’ [as per ratios of SC decision in 227 ITR 172].
