That on the facts and in the circumstances of the case, Ld. CIT(A) has erred in allowing assessees claim of interest subsidy as capital receipt and thereby deleting the addition of Rs.1,50,03,609/- without appreciating the fact that the amount is in the nature of revenue receipt .
Provision of section 40(a)(ia) of the Act are applicable not only to the amounts which is shown as payable on the date of balance sheet but it is applicable to such expenditure which becomes payable at any time during the relevant previous year and was actually paid within the previous year.
Article 7(1) of the DTAA between India and Netherlands provides for taxing profits of the enterprise in the other state only to the extent they are attributable to the PE in the other state, adopting No Force of Attraction principle. With the above broad principles in mind we will now consider the facts of the present case and the rival contentions
ITAT held that when purchase and sale of shares were supported by proper contract notes , deliveries of shares were received through demat accounts maintained with various agencies, the shares were purchased and sold through recognized broker and the sale considerations were received by account payee cheques, the transactions cannot be treated as bogus and the income so disclosed was assessable as LTCG.
Assessment under section 153A can be made on the basis of incriminating material which in the context of relevant provisions means books of account and other documents found in the course of search but not produced in the course of original assessment and undisclosed income or property disclosed during the course of search.
Provisions of section 147/148 even otherwise are for the benefit of the Revenue and not for the benefit of the assessee. If there was any mistake on the part of the assessee in filing his return of income, which was duly accepted by the Assessing Officer under section 143(1), the filing of appeal before the ld. CIT(Appeals) was not the proper remedy to correct the same.
AO placed reliance on the decision of the Hon’ble Gauhati High Court in the case of Jorhat Group Ltd vs Agricultural ITO reported in 226 ITR 622 (Gau) wherein it was held that the cess on green leaf is deductible from the agricultural income only and not from the composite income.
Failure of the assessee to give details of the sundry creditors may be a ground for raising suspicion, but suspicion alone is not enough for invoking the powers of best judgment
As per the amended section 36(1)(vii) with effect from 01.04.1989, the claim of bad debt is to be allowed once it is written off in the books of account and it is not required for the assessee to prove that the debt written off as bad has actually become irrecoverable.
Respectfully following the aforesaid judicial precedents and in the aforesaid facts and circumstances of the case, we hold that the ld CITA had rightly classified the assessee as an investor and treated the gains received on sale of shares and mutual funds as short term capital gains as against business income and granted relief to the assessee. Accordingly, the grounds raised by the revenue are dismissed.
