[aaykarbhavan] Fw: [Gzb_CA Group -CA. VINAY MITTAL] ITAT Kolkatta Bench Section 68 Cash credit limited scope (trade advance: future sales); 80AC belated return and deduction 80IC claim maintained; 26AS & AIR based income profit rate to receipts for assessment (Rev Fav P&H section 263; Allahabad; Reopening writ tight scope)

----- Forwarded Message -----
From: Kapil Goel <advocatekapilgoel@gmail.com>
To: CA.KAPIL GOEL <kapilnkgoelandco@gmail.com>
Sent: Thursday, 25 April 2013 4:56 AM
Subject: [Gzb_CA Group -CA. VINAY MITTAL] ITAT Kolkatta Bench Section 68 Cash credit limited scope (trade advance: future sales); 80AC belated return and deduction 80IC claim maintained; 26AS & AIR based income profit rate to receipts for assessment (Rev Fav P&H section 263; Allahabad; Reopening writ tight scope)

 

 

Kol bench ITAT on Section 80AC directory; Cash credit and trade transactions (same principle available u/s 269SS/269T); Mumbai Bench ITAT on excessive AIR based income assessment (profit rate to be applied)

 

 

 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH "C", KOLKATA  ITA No.1586/Kol/2012 /Assessment Years : 2009-10 M/s.Shelcon Properties (P) Ltd.

 

That the ld. CIT(A) erred in holding that Section 80AC of the I.T.Act was not a

procedural and machinery provision and consequently the condition contained in the

said section relating to the submission of Return within the due date specified in

Sec.139(1) of the I.T.Act is not directory but mandatory.

4. That while rejecting the assessee's claim of deduction u/s 80-IB read with Section

80AC of the I.T.Act, the ld. CIT(A) overlooked the fact that the incentive provision for

promoting growth and development is required to be interpreted liberally so as to subserve

the purpose for which it is intended."

 

 In this view of the matter we are of the considered view that there is no merit in the contention of the authorities below

when no contrary decision has been pointed out by the ld. DR in so far as on the

submission of the ld. Counsel the three decisions of the Tribunal are directly on the

issue of upholding the claim of deduction even when the return has been filed

belatedly on the basis of the facts and circumstances leading to such delay. In this

view of the matter we have no hesitation to set aside the order of the ld. CIT(A) and

direct the AO to accept the return as filed by the assessee and allow the claim of

deduction u/s 80IB(10) of the IT Act.

 

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH "A", KOLKATA /Assessment Year : 2008-09 Sri Govind Prasad Khedwal We have heard the rival submissions and perused the materials available on

record. On the facts and circumstances of the case we are inclined to find no infirmity

in the order of the ld. CIT(A) in respect of the grounds raised by the revenue regarding

the sundry creditors wherein the ld. CIT(A) has rightly considered that non response

of summons u/s 133(6) of the Act were not to be considered in the case of assessee, in so far as, the creditors had sold the goods to the assessee which bills were produced

before the AO were documented to the extent that identity, genuineness and

creditworthiness were established. The AO could not have considered the application

of case laws without accepting the facts that there was no cause for him to invoke the

provision of section 68 of the Act, in so far as, the onus rests on the AO to disprove

the facts that the purchases were bogus having accepted the purchases and payments

to them under the mercantile system of accounting cannot be challenged merely on

non response from the trade creditors.

6. With respect to the second ground it has been submitted by the ld. Counsel that

the assessee being a dealer in electrical items having turn over of Rs.57 crores the

assessee had to sale certain customized goods which are for authentic business

practice require an advance receipt from the buyers of the goods. The ld. CIT(A) on

this issue of advance receipt from sundry creditors held that the AO ought not to have

taken shelter of the cited case laws by him, in so far as, misinterpretation of the

statements cannot be a ground for invoking the provision of section 145(3). It was the

case of postponing the sales against such advance in the impugned assessment year, in

so far as, the AO has not pointed out any specific defect in receiving the advance from

sundry debtors to be applied as future as sales. The ld. CIT(A) thereafter held the same as onus being discharged by the assessee, in so far as, creditworthiness of the

sundry creditors or advance received from sundry debtors cannot be questioned under

the provision of section 68 of the Act, in so far as, the initial onus stood discharged by

the assessee itself at the threshold. It is the AO's inability to verify the same which

cannot be put on the assessee for disallowance or addition. Therefore we uphold the

order of the ld. CIT(A) on this issue

 

 

IN THE INCOME TAX APPELLATE TRIBUNAL

MUMBAI BENCHES 'C' MUMBAI ITA No.15/MUM/2013 Assessment Year 2009-10 Concrete Services &

Engineering Since the payments has been received by

the assessee only in the capacity of sub-contractor only, profit rate disclosed in

the books of accounts should be applied to the said excess payment and

addition of the entire entry is unjustified. We find some substance in such

contention as entire receipts of the assessee as sub-contractor cannot be

subject to tax. Accordingly, it is held that addition of entire sum of

Rs.1,32,50,904/- is not justified as assessee is working only in the capacity of

sub-contractor and such amount has not been shown to be received by the

assessee from the said party. However, at the same time it is also difficult to

accept the claim of the assessee that only net profit shown by the assessee in

respect of payments already credited in the accounts should be applied.

Keeping in view the fact that AO has not found any discrepancy in the

accounts to the extent payments have been accounted for by the assessee in

respect of M/s. Niraj Pratibha JV and has accepted the profit returned by the

assessee on those payment and also the fact that the assessee claimed TDS on

the said entry, we are of the opinion that it will be just and proper to apply net

profit rate of 5% on the addition of Rs.1,32,50,904/- which is made on

account of difference in contract receipt of M/s. Niraj Pratibha JV.

Accordingly the addition of Rs.1,32,50,904/- is restricted to Rs.6,62,545/-.

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