ITAT held that it is generally accepted prudent practice that the closing stock to be valued at lower of cost or net realizable value. Further, net realizable value means the value which the goods would fetch at the time of actual sale.
mar Ujala & A & M Publication had being merged & Assessing officer disallowed cost of finance incurred for merger of above said companies & thus CIT(A), ITAT & Highcourt deleted addition made by AO & thus gave following decision: All the funds available at that point of time with the respondent / assessee were, in the course of the year, deployed in the business of the respondent/assessee. Therefore, the Assessing Officer could not have disallowed the discount and interest on borrowing through commercial papers and non-convertible debentures.
AO is bound to furnish the reasons recorded for initiation of proceedings under section 147 of the Act within a reasonable period of time so that the assessee could file its objections thereto and the AO was to dispose of the same by passing a speaking order thereon, which the AO has not done.
AO/CIT(A) have made the addition under section 68 of the Act merely on presumptions, suspicions and surmises in respect of penny stocks; disregarding the direct evidences placed on record and furnished by the assessee in the form of brokers contract notes for purchases and sales of the ‘said shares’
The presumption is so compelling that comparatively a small amount of investment made by the assessee during the previous year period relevant to the assessment years 1999- 2000 and 2000-01 have grown into a very sizable amount ultimately yielding a fabulous sum of Rs. 1,41,08,484 which was used by the assessee for the purchase of the flat at Colaba.
Since redemption of preference shares does not result in reduction of share capital as per Sec 80 of the Companies Act,1956 , the redemption value cannot be taxed as deemed dividend as the distribution of profits if at all there may be is not resulting in reduction of capital.
Just because the assessee has not filed its income tax returns in earlier years, it can not be said that the activities of the assessee are not genuine. It has been held that non-filing of return cannot be one of the reasons for denying registration under section 12A of the Act.
ITAT held that simultaneous trading of shares in cash segment and arbitrage in derivative segment by assessee company cannot be splitted into speculative and non-speculative transactions . So, as soon as it is found that assessee is trading in shares , the entire trading activity to be treated as speculative business as per explanation to Sec 73 which clearly state that if any part of assessee’s business is trading in shares then the same trading to be treated as speculative business.
The Hon’ble Bombay High court in the above cited case held that a consideration receivable by the transferor which is contingent on happening of a future event the outcome of which is uncertain and cannot be predicted with a reasonable degree of certainty.
The assessee is registered u/s. 12A of the Income Tax Act, 1961 (hereinafter referred the Act) and has been claiming exemption u/s. 11 of the Act which has been denied by the Assessing Officer mainly on the ground that the assessee is involved in commercial activities as the assessee receives coaching fees from the students of CA while giving coaching to the CA students.
