A.O. In his assessment order has stated that the impounded disc. containing the books of accounts under JR-I & JR-2 from where the cash payments on 31.03.2008 were found, were not manually entered as apparent from the printout. The entries were computerized, not manual. Furthermore, as stated in the submissions dated 24.12.2010, it is not tenable as during the survey, no corroborative evidence and documents were found in support of assessee’s claim from business premises
Hon’ble High Court in the case of CIT vs AFT Industries Ltd. 270 ITR 167 (Cal) held that amount paid as cess is eligible for deduction in computing the composite income under Rule 8 of I.T. Rules. This issue is, therefore, decided in favour of the assessee and against the Revenue by upholding the order of the C.I.T.(A) who has allowed the deduction of payment of cess on green leaves in computing the composite income from tea business of the assessee under rule 8 of the I.T. Rules. We may further mention that identical issue was the subject matter of appeal before the Tribunal in the case of M/s.Empire Plantations (India) Ltd. and the Tribunal vide order dated 28.2.2005 in I.T.A.No.1600 (Kol)/2004 for A.Y. 2000-01 has allowed the claim of the assessee.
Allahabad Bank Vs. DCIT Banks eligible to claim deduction for bad debts u/s 36(1)(vii) in respect of advances and also claim provision for bad and doubtful debts u/s 36(1)(viia). To conclude, we hold that the provisions of Sections 36(1) (vii) and 36(1) (viia) of the Act are distinct and independent items of deduction and operate in their respective fields. The bad debts written off in debts, other than those for which the provision is made under clause (viia), will be covered under the main part of Section 36(1) (vii), while the proviso will operate in cases under clause (viia) to limit deduction to the extent of difference between the debt or part thereof written off in the previous year and credit balance in the provision for bad and doubtful debts account made under clause (viia) . The proviso to Section 36(1) (vii) will relate to cases covered under Section 36(1) (viia) and has to be read with Section 36(2) (v) of the Act. Thus, the proviso would not permit benefit of double deduction, operating with reference to rural loans while under Section 36(1) (vii), the assessee would be entitled to general deduction upon an account having become bad debt and being written off as irrecoverable in the accounts of the assessee for the previous year. This, obviously, would be subject to satisfaction of the requirements contemplated under Section 36.
As per the definition of ‘person’ u/s 2(31), a minor is an assessable entity even though his income is clubbed u/s 64(1A) of the Act in the hands of his parents. A minor is a person distinct from his parents and is also an individual. There is no bar in separately allotting bonds upto Rs. 50,00,000 to each such person. There is no mentioned limit on the deduction allowable to an assessee under section 54EC.(The limit of Rs.50 lakhs is ceiling on investment that may be made by an assessee and not a ceiling on deduction that may be allowed to an assessee). Thus, AO was not right in disallowing deductions in respect of bonds invested by minor children of the assessee by applying the Rs.50 lakhs limit.
We have considered the rival submissions. We have also perused the said order dated 27-05-2011 of the co-ordinate bench of this tribunal in assessee’s own case for the assessment years 2004-05 & 2007-08 (refer to supra). As it is noticed that the co-ordinate bench of this tribunal in assessee’s own case (refer to supra) in para 4 & 5 of the said order dated 27-05-11 has taken into consideration the decision of the Hon’ble Madhya Pradesh High Court in the case of CIT –vs- Darshan Talkies [217 ITR 744] as also the decision of the co-ordinate bench of this tribunal in assessee’s own case for the assessment year 2006-07 in ITA No.1689/Kol/2009 dated 26-11-2009 and the tribunal has dismissed the revenue’s appeals [in ITA Nos.2210 & 2211/Kol/2010] upholding the finding of the ld.CIT(A) in directing the Assessing Officer to grant exemption u/s. 11 of the I.T Act, respectfully following the said order/decision dated 27/05/2011 of the co-ordinate bench of this tribunal in assessee’s own case for the assessment years 2004-05 & 2007-08 (refer to supra) and as also as no contrary view has been taken by any superior authority and no contrary evidence has been placed before us by the revenue, the findings of the learned Commissioner of Income-tax (Appeals) stand confirmed. The issues of revenue’s appeal are dismissed.
We find that there is no dispute about the fact that the assessee was a ‘resident but not ordinarily resident’ for the relevant assessment year. The mere fact that she relocated to India on 29th May 2005 does not alter her residential status, so far Income Tax Act is concerned, with effect from that date. Quite fairly, learned Commissioner has also not specifically disputed this position even as he has laid lot of emphasis on the fact that she returned to India on 29th May 2005 and the fact that sale was concluded after that date i.e. 31st May 2005, but then nothing really turns on these facts because whether sales took place after assessee’s relocating to India or not, her residential status continues to be of the ‘resident but not ordinarily resident’ throughout the relevant previous year.
A lot of emphasis has been placed by the CIT(A) on this Tribunal’s decision in the case of TIL Ltd (supra). However, as we have decided the matter on merits and on the first principles, we see no need to deal with the said judicial precedent. Our reasoning could be different than the reasoning adopted by the CIT(A) and that adopted by the coordinate bench in TIL’s case (supra), but then our conclusion is the same as arrived by the CIT(A) and by the coordinate bench. It is this aspect of the matter which is material for the present purposes.
Once under the special provision of section 44AD of the IT Act exemption from maintenance of books of accounts have been provided and the presumptive tax at 8% of the gross receipts itself is the basis for determining the taxable income, the assessee was not under obligation to explain individual entry of cash deposits in the bank unless such entries had no nexus with the gross receipts. In the present case though from the details filed by assessee the ld. AO observed that no TDS has been recovered, in our opinion, since assessee has disclosed the profits more than 8% of the gross receipts and there is no dispute in receipt of the gross receipts the addition made by ld. CIT(A) u/s 40(a)(ia) of the IT Act is not sustainable. Therefore we confirm the action of ld. CIT(A) and dismiss the appeal of the revenue.
After hearing the rival submissions and on careful perusal of materials available on record, keeping in view of the fact that sufficient opportunity of being heard to AO has not been given by ld. CIT(A) for preparation of Remand Report and further keeping in view of the fact that all the materials placed before ld. CIT(A)has not been sent to AO for his consideration, in our considered opinion, the order of ld. CIT(A) is not in accordance with the principles of natural justice. Therefore we set aside the order of ld. CIT(A) and restore the matter to the file of AO to re-decide all the three issues afresh by taking into consideration of the various submissions and documents placed before ld. CIT(A) and after giving a reasonable opportunity of being heard to assessee.
Secs. 271C, 271D and 271E, which were inserted in the I T Act w.e.f. 1st April, 1989, by the Direct Tax Laws (Amendment) Act, 1987, provided for the levy of penalties for certain defaults. Penalty under s. 271C was levied for failure to deduct tax at source. Penalty under s. 271D may be levied for failure to comply with the provisions of s. 269SS i.e. for taking or accepting any loan or deposit in excess of Rs. 20,000 otherwise than by an account payee cheque or bank draft. Penalty under s. 271E may be levied for failure to comply with the provisions of s. 269T relating to repayment by a company, including a banking company, a co-operative society or a firm, of deposits, including interest, exceeding Rs. 20,000/- the aggregate otherwise than by an account payee cheque or bank draft.
