×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
Present appeal is being filed by the assessee aggrieved from the order of the ld. CIT(A) dated 07.12.2012 on the following concise grounds :
“1. BECAUSE, upon due consideration of facts and in the overall circumstances of the case 'CIT(A)' had fallen in error of fact and in law in proceeding to pass appellate in an ex-parte manner without due consideration of material facts available on records of the authorities below.
2. (a) BECAUSE, upon due consideration of facts and in the circumstances of the case the authorities below were not justified in making addition of Rs.7,31,07,000 after rejecting the Manufacturing/Trading results as were derived from the accounts, maintained on regular basis which were duly audited under section 44AB of the 'Act' and the Auditor has furnished unqualified Audit Report certifying the correctness in the accounts.
(b)BECAUSE, the authorities below had taken the estimated rate of Gross Profit without considering the facts of the case, explanations furnished by the appellant and evidences as were brought on records during the course of hearing.
(c) BECAUSE, in any view of the matter, rejection of accounts do not ispo facto gives rise to the jurisdiction to the 'AO' to make addition in the Gross Profit as fairly shown by the 'appellant' in the light of law laid down by the Hon'ble Rajasthan High Court in the case of CIT Vs Gotan Lime Khanij Udyog reported in (2002) 256 ITR 243(Raj.).
3. BECAUSE, the authorities below erred on facts in making and sustaining addition of Rs. 12,26,645/- on account of notional gain on foreign currency as income without considering the facts that the same is unrealizable and notional.
4. BECAUSE, the authorities below had fallen in error in disallowing prior period expenses amounting to Rs. 13,52,866/- and taxing prior period income without considering the normal prudence accounting system an erroneous interpretation of law and without appreciating that accruals event of the same has taken place in current year
5.BECAUSE, the authorities below had fallen in error in making addition of Rs.29,11,000/- towards notional income on account of rent of machines without considering the facts that the same are not realized and is not realizable.
6. BECAUSE, the authorities below had fallen in error in disallowing deferred revenue expenses amounting to Rs.19,67,582/- without considering the facts that the same was never claimed in earlier years by the assessee and the same is being partly claimed on year to year basis in part and is being allowed accordingly consistently.
7. BECAUSE, on due consideration of facts and in the overall circumstances of the case the Id CIT(A) ought to have given clear cut finding in allowing the loss on merger of companies for the period 01.1 2.2007 to 31.03.2008.
8. BECAUSE, the 'AO' has erred in giving credit of TDS by Rs. 10,34,853/- instead of Rs. 13,81,255/- as claimed by the assessee in the revised computation of income.
9. BECAUSE, while making the assessment the 'AO' and while sustaining the addition the 'CIT(A)' made various observations/conclusions which are contrary to facts available on records. The findings recorded in this aspect are wholly perverse and inadmissible in law. While making and sustaining the addition submission made and evidences filed have been rejected arbitrarily.
10. BECAUSE, the 'appellant' denies levy of interest under section 234B & 234C of the 'Act'.
11. BECAUSE, the order appealed against is contrary to the facts, law and principles of natural justice.”
2. Effectively ground No. 2(a) to 2(c) pertain to rejection of books of account and estimation of gross profit @ 16% as against 13.96% disclosed by theassessee.
3. Apropos these grounds ld. AR for the assessee has drawn our attention to page 7 of the assessment order to the following effect : Perusal of above mentioned table reveals that -
1. Production loss as shown in table 'A' of the current year is 92.7 % higher than that of A.Y. 2007-08. It is 81.97% higher than that of A.Y. 09-10.
2. Consumption of processed fabric in production of garments varies from 1.578 Kg. per garment in A.Y. 2007-08 to 0.268 Kg. in A.Y. 2009-10 During the year under consideration it is 0.33 Kg.
3. Count wise details of production consumption, sales etc. of yarns has not been maintained by the assessee.
4. Valuation of stock is neither at cost or market price as can be seen from the above tables.
5. Perusal of the above chart reveals that average cost of yarns comes to Rs. 163.66 per kg, whereas the assessee is making sales @ 95.05. Cost of processed fabrics comes to Rs. 317.78 against the average sale prices of Rs.257.94 per kg.