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The High Court held that the Assessing Officer had not proceeded on the basis of the excise show-cause notice as having achieved finality. While the Assessing Officer had put the assessee to notice regarding the contents of the show-cause notice and elicited a response, this was insufficient to frame an assessment. The Court clarified that the assessee could not be expected to defer completion of assessment awaiting final adjudication in excise proceedings, as assessments could become time-barred. However, the Court found that the Assessing Officer had done little else besides confronting the assessee with the excise show-cause notice. The statements accompanying the show-cause notice did not automatically get established. The Assessing Officer had merely cosmetically given an opportunity to the assessee, virtually shifting the burden of proof. There was no independent material brought on record by the Assessing Officer other than what was collected by the Excise department, which was yet to be verified. Therefore, the Assessing Officer did not have sufficient basis for making additions. Consequently, the question of the percentage of sales at which additions should be made became redundant. The appeals were dismissed.
The High Court held that the Assessing Officer had not proceeded on the basis of the excise show-cause notice as having achieved finality. While the Assessing Officer had put the assessee to notice regarding the contents of the show-cause notice and elicited a response, this was insufficient to frame an assessment. The Court clarified that the assessee could not be expected to defer completion of assessment awaiting final adjudication in excise proceedings, as assessments could become time-barred. However, the Court found that the Assessing Officer had done little else besides confronting the assessee with the excise show-cause notice. The statements accompanying the show-cause notice did not automatically get established. The Assessing Officer had merely cosmetically given an opportunity to the assessee, virtually shifting the burden of proof. There was no independent material brought on record by the Assessing Officer other than what was collected by the Excise department, which was yet to be verified. Therefore, the Assessing Officer did not have sufficient basis for making additions. Consequently, the question of the percentage of sales at which additions should be made became redundant. The appeals were dismissed.
The High Court held that the Assessing Officer (AO) had not sufficiently substantiated the additions made to the assessee's income. While the AO confronted the assessee with the contents of the excise show-cause notice and elicited a response, this was deemed insufficient. The Court noted that the show-cause notice merely represented the Excise Department's view, which was yet to be tested through adjudication. The AO had not brought any independent material on record beyond what was collected by the Excise Department, and the veracity of those statements was not established. The Court rejected the assessee's contention that no addition could be made before finalization of excise proceedings, stating that the AO cannot defer assessment indefinitely. However, the Court found that the AO had not discharged the burden of proving evasion. Consequently, the additions made by the AO and partially retained by the CIT(A) were deleted. The question of the percentage of sales for additions became redundant as the basis for making additions was found to be insufficient. The appeals filed by the Revenue were dismissed.
The High Court decided the second issue summarily, remanding it to the Assessing Officer to ascertain whether the Provident Fund contributions were employer's or employees'. If it was employees' contribution and paid after the due date under Section 36(1)(va), disallowance under Section 43B would be made, unless the payment was within a grace period as discussed in CIT v. Amoli Organics (P) Ltd. If it was employer's contribution, no disallowance would apply. On the first and more contentious issue, the Court held that the weighted average formula devised by the CIT(A) and approved by the Tribunal lacked a scientific basis and was based on unverified facts. The Court found no rational basis for disproportionate income allocation between the two units merely because a greater number of newspapers printed at Nilgiri were circulated in Ahmedabad. The Court reasoned that the newspapers were identical in content, quality, and cost. Therefore, the Court restored the formula adopted by the Assessing Officer, which allocated advertisement income between the two units in the proportion of their internal publication and circulation of the Ahmedabad edition. The question was answered in favour of the Revenue, with the AO directed to recompute the income from eligible and non-eligible units accordingly.
The High Court decided the second issue summarily, remanding it to the Assessing Officer to ascertain whether the Provident Fund contributions were employer's or employees'. If it was employees' contribution and paid after the due date under Section 36(1)(va), disallowance under Section 43B would be made, unless the payment was within a grace period as discussed in CIT v. Amoli Organics (P) Ltd. If it was employer's contribution, no disallowance would apply. On the first and more contentious issue, the Court held that the weighted average formula devised by the CIT(A) and approved by the Tribunal lacked a scientific basis and was based on unverified facts. The Court found no rational basis for disproportionate income allocation between the two units merely because a greater number of newspapers printed at Nilgiri were circulated in Ahmedabad. The Court reasoned that the newspapers were identical in content, quality, and cost. Therefore, the Court restored the formula adopted by the Assessing Officer, which allocated advertisement income between the two units in the proportion of their internal publication and circulation of the Ahmedabad edition. The question was answered in favour of the Revenue, with the AO directed to recompute the income from eligible and non-eligible units accordingly.
The High Court held that the Assessing Officer did not have sufficient material to make the additions. While the Assessing Officer did confront the assessee with the contents of the excise show-cause notice and sought a response, he did little else. The court found that merely producing copies of statements accompanying the show-cause notice did not automatically establish their veracity. The Assessing Officer had not brought any independent material on record beyond what was collected by the Excise Department, which was yet to be verified through adjudication. The court distinguished the case from Futura Ceramics, where the reassessment was based solely on an excise show-cause notice without further verification. The court also clarified that the Assessing Officer is not obligated to defer assessment pending excise adjudication, especially if it risks becoming time-barred. However, in this instance, the material relied upon by the Assessing Officer was insufficient. Consequently, the additions made by the Assessing Officer and partially retained by the CIT(A) were deleted. The question of the percentage of sales for additions became redundant. The appeals filed by the Revenue were dismissed.
The High Court held that the appeals filed by the Revenue did not raise any substantial question of law. The Commissioner of Income Tax (Appeals) and the Tribunal had concurrently found the deposits in question to be genuine after considering the evidence, including depositor details, PAN, and banking channel transactions. The reasoning was that the entire issue was fact-based, and the concurrent findings of the lower appellate authorities on facts were not assailable in the absence of a legal infirmity. Therefore, the appeals were dismissed. No issue was expressly left undecided.
The High Court held that the Assessing Officer did not have sufficient material to make the additions. The Court noted that the show-cause notices from the Excise Department were merely the department's stand, yet to be tested through adjudication proceedings. The AO had merely confronted the assessee with the contents of these notices and elicited a response, but had not brought any independent material on record to establish the veracity of the statements collected by the Excise Department. The Court rejected the contention that the AO could not proceed with assessment because excise proceedings were not finalized, stating that the AO cannot wait indefinitely and risk the assessment becoming time-barred. However, the Court found that the AO had shifted the burden of proof to the assessee without establishing the evasion himself. Therefore, the additions made by the AO were not sustainable. The question of the percentage of sales for additions became redundant. The appeals filed by the Revenue were dismissed.
The Tribunal deleted the penalty of Rs. 29,64,948 levied under Section 271(1)(c) of the Act. The assessee had initially not offered capital gains from the sale of agricultural land but later filed a revised return and surrendered the income. The assessee's defense was based on a bona fide belief that such income was not taxable as capital gains, a belief he claimed was formed under the guidance of his Chartered Accountant. The Tribunal, in accepting this defense, relied on the Supreme Court judgment in CIT vs. Reliance Petroproducts reported in 322 ITR 158. The reasoning was that the assessee's explanation was found reasonable and accepted in light of attendant circumstances, including the fact that other co-owners of the land also promptly corrected their tax positions. The High Court found no substantial question of law arising from the Tribunal's order. The appeal was dismissed.
The High Court decided the second issue summarily, remanding it to the Assessing Officer to ascertain whether the late contributions to Provident Fund and ESIC pertained to the employer's or employees' contribution. Disallowance would only apply to employees' contributions made after the due date, unless paid within a grace period as discussed in Commissioner of Income Tax v. Amoli Organics (P) Ltd. (41 Taxmann.com 149). For the primary issue concerning Section 80-I deduction, the Court found the weighted average formula devised by the CIT(A) and approved by the Tribunal to be lacking scientific basis and based on unverified facts. The Court noted that the assessee had not maintained separate accounts for its two Ahmedabad units. Therefore, the Court restored the formula adopted by the Assessing Officer, which allocated advertisement income between the Nilgiri and Khanpur units in the proportion of their internal publication and circulation of the Ahmedabad edition. The Court held that this was the most fair and equitable means of dividing the income. The question was answered in favour of the Revenue, with the AO directed to recompute the income from eligible and non-eligible units.
The High Court decided the second issue summarily, remanding it to the Assessing Officer to ascertain whether the Provident Fund contributions were employer's or employees'. If it was employees' contribution and paid after the due date under Section 36(1)(va), disallowance under Section 43B would be made, unless the payment was within a grace period as discussed in CIT v. Amoli Organics (P) Ltd. If it was employer's contribution, no disallowance would apply. On the first and more contentious issue, the Court held that the weighted average formula devised by the CIT(A) and approved by the Tribunal lacked a scientific basis and was based on unverified facts. The Court found no rational basis for disproportionate income allocation between the two units merely because a greater number of newspapers printed at Nilgiri were circulated in Ahmedabad. The Court reasoned that the newspapers were identical in content, quality, and cost. Therefore, the Court restored the formula adopted by the Assessing Officer, which allocated advertisement income between the two units in the proportion of their internal publication and circulation of the Ahmedabad edition. The question was answered in favour of the Revenue, with the AO directed to recompute the income from eligible and non-eligible units accordingly.
The High Court decided the second issue summarily, remanding it to the Assessing Officer to ascertain whether the Provident Fund contributions were employer's or employees'. If it was employees' contribution and paid after the due date under Section 36(1)(va), disallowance under Section 43B would be made, unless the payment was within a grace period as discussed in CIT v. Amoli Organics (P) Ltd. If it was employer's contribution, no disallowance would apply. On the first and more contentious issue, the Court held that the weighted average formula devised by the CIT(A) and approved by the Tribunal lacked a scientific basis and was based on unverified facts. The Court found no rational basis for disproportionate income allocation between the two units merely because a greater number of newspapers printed at Nilgiri were circulated in Ahmedabad. The Court reasoned that the newspapers were identical in content, quality, and cost. Therefore, the Court restored the formula adopted by the Assessing Officer, which allocated advertisement income between the two units in the proportion of their internal publication and circulation of the Ahmedabad edition. The question was answered in favour of the Revenue, with the AO directed to recompute the income from eligible and non-eligible units accordingly.
The High Court decided the second issue summarily, remanding it to the Assessing Officer to ascertain whether the Provident Fund contributions were employer's or employees'. If it was employees' contribution and paid after the due date under Section 36(1)(va), disallowance under Section 43B would be made, unless the payment was within a grace period as discussed in CIT v. Amoli Organics (P) Ltd. If it was employer's contribution, no disallowance would apply. On the first and more contentious issue, the Court held that the weighted average formula devised by the CIT(A) and approved by the Tribunal lacked a scientific basis and was based on unverified facts. The Court found no rational basis for disproportionate income allocation between the two units merely because a greater number of newspapers printed at Nilgiri were circulated in Ahmedabad. The Court reasoned that the newspapers were identical in content, quality, and cost. Therefore, the Court restored the formula adopted by the Assessing Officer, which allocated advertisement income between the two units in the proportion of their internal publication and circulation of the Ahmedabad edition. The question was answered in favour of the Revenue, with the AO directed to recompute the income from eligible and non-eligible units accordingly.
The High Court decided the second issue summarily, remanding it to the Assessing Officer to ascertain whether the Provident Fund contributions were employer's or employees'. If it was employees' contribution and paid after the due date under Section 36(1)(va), disallowance under Section 43B would be made, unless the payment was within a grace period as discussed in CIT v. Amoli Organics (P) Ltd. If it was employer's contribution, no disallowance would apply. On the first and more contentious issue, the Court held that the weighted average formula devised by the CIT(A) and approved by the Tribunal lacked a scientific basis and was based on unverified facts. The Court found no rational basis for disproportionate income allocation between the two units merely because a greater number of newspapers printed at Nilgiri were circulated in Ahmedabad. The Court reasoned that the newspapers were identical in content, quality, and cost. Therefore, the Court restored the formula adopted by the Assessing Officer, which allocated advertisement income between the two units in the proportion of their internal publication and circulation of the Ahmedabad edition. The question was answered in favour of the Revenue, with the AO directed to recompute the income from eligible and non-eligible units accordingly.
The High Court held that the Assessing Officer (AO) had not sufficiently substantiated the additions made to the assessee's income. While the AO confronted the assessee with the contents of the excise show-cause notice and elicited a response, this was deemed insufficient. The Court noted that the show-cause notice merely represented the Excise Department's view, which was yet to be tested through adjudication. The AO had not brought any independent material on record beyond what was collected by the Excise Department, and the veracity of those statements was not established. The Court rejected the assessee's contention that no addition could be made before finalization of excise proceedings, stating that the AO cannot defer assessment indefinitely. However, the Court found that the AO had not discharged the burden of proving evasion. Consequently, the additions made by the AO and partially retained by the CIT(A) were deleted. The question of the percentage of sales for additions became redundant as the basis for making additions was found to be insufficient. The appeals filed by the Revenue were dismissed.
The High Court held that the Assessing Officer (AO) had not sufficiently substantiated the additions made to the assessee's income. While the AO confronted the assessee with the contents of the excise show-cause notice and elicited a response, this was deemed insufficient. The Court noted that the show-cause notice merely represented the Excise Department's view, which was yet to be tested through adjudication. The AO had not brought any independent material on record beyond what was collected by the Excise Department, and the veracity of those statements was not established. The Court rejected the assessee's contention that no addition could be made before finalization of excise proceedings, stating that the AO cannot defer assessment indefinitely. However, the Court found that the AO had not discharged the burden of proving evasion. Consequently, the additions made by the AO and partially retained by the CIT(A) were deleted. The question of the percentage of sales for additions became redundant as the basis for making additions was found to be insufficient. The appeals filed by the Revenue were dismissed.
The High Court agreed with the view of the Commissioner of Income Tax (Appeals) as confirmed by the Tribunal. The Court held that when the Assessing Officer doubted the genuineness of the expenditure, it was appropriate to bring to tax the profit element that was avoided by the assessee. The Commissioner of Income Tax (Appeals), in limiting the additions, had brought the assessee's declared gross profit ratio to the same rate as in the previous year, which was also in line with the percentage of the assessee's doubtful purchases. Therefore, no question of law arose from the order of the Tribunal.
The High Court held that no question of law arises in the present appeals. The Court referred to its own decision in the case of Principal Commissioner of Income-Tax v. Shri Mahila Sewa Sahakari Bank Ltd. reported in [2017] 395 ITR 324 (Guj), which has settled this issue. The Tribunal had followed this precedent. Therefore, the deletion of the addition by the Tribunal was upheld. The operative direction was the dismissal of the Tax Appeals. No issue was expressly left undecided.
The Tribunal held that the addition made by the AO was not sustainable. The Tribunal observed that the loose papers found during the search, which formed the basis of the addition, did not contain the assessee's name. Furthermore, statements of representatives of the Bhavya Group recorded during the search denied the contents of the impounded documents. The Tribunal also noted that no action was taken against the Bhavya Group concerning the notices found in these papers. Consequently, the Tribunal concluded that the papers contained mere notings and did not involve the assessee in any manner. The Tribunal found the issue to be purely factual and that no question of law arose from the AO's order.
The High Court held that no question of law arises from the order of the Income Tax Appellate Tribunal. The Court noted that both the CIT(A) and the Tribunal had concurrently concluded that the materials on record did not establish any unaccounted investments by the assessee in the three properties. The Revenue's appeal was therefore dismissed. The ratio decidendi is that concurrent findings of fact by the lower appellate authorities, if not based on any perversity or misinterpretation of law, do not give rise to a substantial question of law for the High Court to interfere. The operative direction was the dismissal of the Tax Appeal.
The High Court dismissed the Revenue's appeals. The Court noted that for over 10 years since the completion of the assessment years, the report of the prescribed authority under Section 35(1)(iv) of the Income Tax Act, 1961, remained unavailable. It was also unclear whether the Revenue had even sought such a report. While mere delay in the prescribed authority giving its opinion might not always be fatal to the Revenue's interests, in the given facts, the Court found no difficulty in accepting the Tribunal's approach. The Tribunal had deleted the demand primarily because the uncertainty arising from the non-availability of the report could not continue indefinitely. The Court relied on its previous observations in a Division Bench judgment, which stated that when a question arises regarding scientific research expenditure, the Assessing Officer cannot decide the issue but must refer it to the prescribed authority, whose decision would be final. The prolonged non-compliance with this procedural requirement by the Revenue led to the deletion of the demand.
The High Court dismissed the Revenue's appeals. The Court noted that over 10 years had passed since the completion of the assessment years and the filing of returns, and the report from the prescribed authority was still not available. It was also unclear whether the Revenue had even sought such a report. While mere delay in obtaining an opinion might not always be fatal to the Revenue's interest, in the given facts, the Court found no difficulty in accepting the Tribunal's approach. The Tribunal had deleted the demand primarily because the uncertainty arising from the non-availability of the report could not continue indefinitely. The Court upheld the Tribunal's decision, implicitly agreeing that the prolonged lack of a definitive opinion from the prescribed authority justified the deletion of the demand.
The Tribunal deleted the additions made by the Assessing Officer concerning investment in land. The Tribunal's reasoning was that the seized documents were 'dumb' and not found from the assessee's premises. Crucially, the typed copies of handwritten documents were titled 'PROJECTIONS', indicating they represented potential rather than actual transactions. The assessees' contention that the land deals did not materialize was accepted, supported by affidavits from proposed sellers. The AO did not dislodge this evidence. The Tribunal also noted that for a test case like Vejalpur land, the amount paid by the assessee was repaid, and there was no material to suggest the land was sold to a third party by the intermediary, thus accepting the assessee's theory that the deals did not materialize. For the second issue concerning Himalaya Mall, the Tribunal, along with the CIT(Appeals), accepted the assessees' viewpoint that on-money was not necessarily received in all sales. The remaining 49,929 sq. ft. of carpet area represented shops that did not command a prime location and were sold without premium. The seized material did not include any reference to on-money for these specific shops. The Tribunal concluded that the AO's projection of on-money for the remaining area, based on admissions for other areas, was not justified without matching material or admission for the remaining shops. The High Court held that since the Tribunal arrived at factual conclusions based on materials on record, no question of law arose, and thus dismissed the appeals.
The Tribunal deleted the additions made by the Assessing Officer concerning investment in land. The Tribunal's reasoning was that the documents were 'dumb documents' not found from the assessee's premises, and the typed copies were titled 'PROJECTIONS'. The assessees' contention that deals did not materialize was accepted, especially as the Assessing Officer did not dislodge the evidence of proposed sellers' affidavits confirming deals fell through. In a test case (Vejalpur land), the repayment of funds by Sherin Co. Op. Hsg. Soc. Ltd. further supported the assessee's claim. The Tribunal found no material to suggest that the assessee extracted profit if the land deal was eventually sold to a third party. For the Himalaya mall shops, the Tribunal upheld the deletion of additions for the remaining 49,818 sq. ft. of carpet area. The Tribunal noted that the assessees' defense was that not all sales command premium, and these shops were sold to family/outsiders without premium, with many not tenanted. Crucially, the seized material did not include any reference to on-money for these remaining shops. The High Court found that the Tribunal, having arrived at factual conclusions, did not raise any question of law. Therefore, the appeals were dismissed.
The High Court held that the Appellate Tribunal did not err in deleting the addition. The Tribunal, along with the CIT (Appeals), had relied on the Madras High Court's decision in CIT vs. Sardarmal Kothari and anr. (302 ITR 286). This precedent established that for claiming exemption under Section 54F, it is sufficient if the entire net consideration is invested within the stipulated period and the construction is substantially completed. The assessee need not necessarily complete the entire construction and occupy the house. The Tribunal's finding that the assessee had invested the entire sale proceeds and completed 65% of the construction within the three-year period was accepted. Therefore, the assessee was entitled to the benefit of Section 54F. The addition made by the AO was deleted.
The High Court held that no question of law arose from the order of the Income Tax Appellate Tribunal. The Court noted that the banakhat of March 3, 2006, showed a sale consideration of Rs. 4.25 crores, with a completion date of May 31, 2006. However, the sale deed dated May 26, 2006, evidenced payment of only Rs. 1,14,15,000. While furniture and fixtures sold for Rs. 90 lakhs were accounted for, a shortfall of Rs. 2.20 crores remained unexplained. The assessee's explanation that the property was revalued due to the building's unsuitability for a hotel and old furniture was not convincing. The Court found the assessee's projected land cost of Rs. 80 lakhs in May 2006 to be illogical, especially when a Government Approved Valuer had valued the land at Rs. 1.17 crores just six years earlier. The omission of a portion of land from the final sale deed was not sufficiently explained to justify such a dramatic downward revision. The Court found no material to support the assessee's assertion that the earlier valuation was inflated for loan purposes or to explain why sellers would agree to half the consideration without any apparent reason against their own interests. Therefore, the Tax Appeal was dismissed.
The High Court held that no question of law arises from the ITAT's decision on the first issue. The ITAT had deleted the additions based on several considerations: the documents were 'dumb documents' not found from the assessee's premises, the typed copies were titled 'PROJECTIONS', the assessees contended that the deals did not materialize, and the AO had not dislodged the evidence of affidavits from proposed sellers stating the deals fell through. The court noted that the assessees had paid and received back funds for the Vejalpur land, and the Revenue lacked material to prove a sale to a third party. For the second issue concerning the sale of shops in Himalaya mall, the court found it to be a factual matter. The ITAT and CIT(Appeals) had concurrently held in favor of the assessees, noting that the seized material did not include any reference to on-money for the remaining shops. The assessees' defense that not all sales attract premium, especially for shops sold to family members or those without income-generating potential, was accepted. The court concluded that the admission of on-money for some sales could not be projected for the remaining area without matching material or admission.
The High Court held that no question of law arises from the ITAT's decision on the first issue. The ITAT had deleted the additions based on several considerations: the documents were 'dumb documents' not found from the assessee's premises, the typed copies were titled 'PROJECTIONS', the assessees contended that the deals did not materialize, and the AO had not dislodged the evidence of affidavits from proposed sellers stating the deals fell through. The court noted that the assessees had paid and received back funds for the Vejalpur land, and the Revenue lacked material to prove a sale to a third party. For the second issue concerning the sale of shops in Himalaya mall, the court found it to be a factual matter. The ITAT and CIT(Appeals) had concurrently held in favor of the assessees, noting that the seized material did not include any reference to on-money for the remaining shops. The assessees' defense that not all sales attract premium, especially for shops sold to family members or those without income-generating potential, was accepted. The court concluded that the admission of on-money for some sales could not be projected for the remaining area without matching material or admission.
The Tribunal deleted the additions made by the Assessing Officer on both issues. For the first issue concerning land investments, the Tribunal considered that the documents were 'dumb documents' not found from the assessee's premises, and the typed copies were titled 'PROJECTIONS'. Crucially, the Tribunal noted the assessee's contention that deals did not materialize, supported by affidavits from sellers, and that the AO did not dislodge this. The Tribunal also noted that for the Vejalpur land, payments were repaid, and no evidence showed the land was sold to a third party by the intermediary, thus accepting the assessee's theory that the deals did not materialize. For the second issue regarding Himalaya mall shops, the Tribunal found that the AO projected on-money receipts for the remaining area based on admitted receipts for other areas. However, the assessees' defense that not all sales commanded a premium was accepted. The Tribunal noted that the seized material did not include any reference to on-money for these remaining shops, and the CIT(Appeals) and Tribunal concurrently held in favor of the assessee. The High Court found that both issues were essentially factual and, with the CIT(Appeals) and Tribunal having concurrently held in favor of the assessees, no question of law arose.
The Tribunal deleted the additions made by the Assessing Officer on both issues. For the first issue concerning land investments, the Tribunal considered that the documents were 'dumb documents' not found from the assessee's premises, and the typed copies were titled 'PROJECTIONS'. Crucially, the Tribunal noted the assessee's contention that deals did not materialize, supported by affidavits from sellers, and that the AO did not dislodge this. The Tribunal also noted that for the Vejalpur land, payments were repaid, and no evidence showed the land was sold to a third party by the intermediary, thus accepting the assessee's theory that the deals did not materialize. For the second issue regarding Himalaya mall shops, the Tribunal found that the AO projected on-money receipts for the remaining area based on admitted receipts for other areas. However, the assessees' defense that not all sales commanded a premium was accepted. The Tribunal noted that the seized material did not include any reference to on-money for these remaining shops, and the CIT(Appeals) and Tribunal concurrently held in favor of the assessee. The High Court found that both issues were essentially factual and, with the CIT(Appeals) and Tribunal having concurrently held in favor of the assessees, no question of law arose.
The Tribunal deleted the additions made by the Assessing Officer on both issues. For the first issue concerning land investments, the Tribunal considered that the documents were 'dumb documents' not found from the assessee's premises, and the typed copies were titled 'PROJECTIONS'. Crucially, the Tribunal noted the assessee's contention that deals did not materialize, supported by affidavits from sellers, and that the AO did not dislodge this. The Tribunal also noted that for the Vejalpur land, payments were repaid, and no evidence showed the land was sold to a third party by the intermediary, thus accepting the assessee's theory that the deals did not materialize. For the second issue regarding Himalaya mall shops, the Tribunal found that the AO projected on-money receipts for the remaining area based on admitted receipts for other areas. However, the assessees' defense that not all sales commanded a premium was accepted. The Tribunal noted that the seized material did not include any reference to on-money for these remaining shops, and the CIT(Appeals) and Tribunal concurrently held in favor of the assessee. The High Court found that both issues were essentially factual and, with the CIT(Appeals) and Tribunal having concurrently held in favor of the assessees, no question of law arose.
The Tribunal deleted the additions made by the Assessing Officer on both issues. For the first issue concerning land investments, the Tribunal considered that the documents were 'dumb documents' not found from the assessee's premises, and the typed copies were titled 'PROJECTIONS'. Crucially, the Tribunal noted the assessee's contention that deals did not materialize, supported by affidavits from sellers, and that the AO did not dislodge this. The Tribunal also noted that for the Vejalpur land, payments were repaid, and no evidence showed the land was sold to a third party by the intermediary, thus accepting the assessee's theory that the deals did not materialize. For the second issue regarding Himalaya mall shops, the Tribunal found that the AO projected on-money receipts for the remaining area based on admitted receipts for other areas. However, the assessees' defense that not all sales commanded a premium was accepted. The Tribunal noted that the seized material did not include any reference to on-money for these remaining shops, and the CIT(Appeals) and Tribunal concurrently held in favor of the assessee. The High Court found that both issues were essentially factual and, with the CIT(Appeals) and Tribunal having concurrently held in favor of the assessees, no question of law arose.
The Tribunal deleted the additions made by the Assessing Officer on both issues. For the first issue concerning land investments, the Tribunal considered that the documents were 'dumb documents' not found from the assessee's premises, and the typed copies were titled 'PROJECTIONS'. Crucially, the Tribunal noted the assessee's contention that deals did not materialize, supported by affidavits from sellers, and that the AO did not dislodge this. The Tribunal also noted that for the Vejalpur land, payments were repaid, and no evidence showed the land was sold to a third party by the intermediary, thus accepting the assessee's theory that the deals did not materialize. For the second issue regarding Himalaya mall shops, the Tribunal found that the AO projected on-money receipts for the remaining area based on admitted receipts for other areas. However, the assessees' defense that not all sales commanded a premium was accepted. The Tribunal noted that the seized material did not include any reference to on-money for these remaining shops, and the CIT(Appeals) and Tribunal concurrently held in favor of the assessee. The High Court found that both issues were essentially factual and, with the CIT(Appeals) and Tribunal having concurrently held in favor of the assessees, no question of law arose.
The Tribunal deleted the additions concerning investment in land. The Court noted the Tribunal's reasoning that the documents were "dumb documents," not found from the assessee's premises, and bore the title "PROJECTIONS." Crucially, the Tribunal accepted the assessees' contention that the deals did not materialize, supported by affidavits from proposed sellers and the repayment of funds by Sherin Co. Op. Hsg. Soc. Ltd. The Assessing Officer failed to provide material to discard the assessees' theory that the deals did not materialize. The Court found no question of law arose as the Tribunal reached a factual conclusion. Regarding the Himalaya mall shops, the Tribunal accepted the assessees' view that on-money was not necessarily received for all sales, particularly for the remaining 49,818 sq. ft. of carpet area. The assessees argued these shops were sold without premium to family members or outsiders, and many were untenanted. The Tribunal found no concrete material suggesting on-money receipt for these specific sales, and the seized material lacked any reference to on-money for this area. The Court considered this a factual issue where the CIT(Appeals) and Tribunal concurrently held in favour of the assessees, thus not entertaining the issue.
The Tribunal deleted the additions concerning investment in land. The Court noted the Tribunal's reasoning that the documents were "dumb documents," not found from the assessee's premises, and bore the title "PROJECTIONS." Crucially, the Tribunal accepted the assessees' contention that the deals did not materialize, supported by affidavits from proposed sellers and the repayment of funds by Sherin Co. Op. Hsg. Soc. Ltd. The Assessing Officer failed to provide material to discard the assessees' theory that the deals did not materialize. The Court found no question of law arose as the Tribunal reached a factual conclusion. Regarding the Himalaya mall shops, the Tribunal accepted the assessees' view that on-money was not necessarily received for all sales, particularly for the remaining 49,818 sq. ft. of carpet area. The assessees argued these shops were sold without premium to family members or outsiders, and many were untenanted. The Tribunal found no concrete material suggesting on-money receipt for these specific sales, and the seized material lacked any reference to on-money for this area. The Court considered this a factual issue where the CIT(Appeals) and Tribunal concurrently held in favour of the assessees, thus not entertaining the issue.
The Tribunal deleted the additions concerning investment in land. The Court noted the Tribunal's reasoning that the documents were "dumb documents," not found from the assessee's premises, and bore the title "PROJECTIONS." Crucially, the Tribunal accepted the assessees' contention that the deals did not materialize, supported by affidavits from proposed sellers and the repayment of funds by Sherin Co. Op. Hsg. Soc. Ltd. The Assessing Officer failed to provide material to discard the assessees' theory that the deals did not materialize. The Court found no question of law arose as the Tribunal reached a factual conclusion. Regarding the Himalaya mall shops, the Tribunal accepted the assessees' view that on-money was not necessarily received for all sales, particularly for the remaining 49,818 sq. ft. of carpet area. The assessees argued these shops were sold without premium to family members or outsiders, and many were untenanted. The Tribunal found no concrete material suggesting on-money receipt for these specific sales, and the seized material lacked any reference to on-money for this area. The Court considered this a factual issue where the CIT(Appeals) and Tribunal concurrently held in favour of the assessees, thus not entertaining the issue.
The Tribunal deleted the additions concerning investment in land. The Court noted the Tribunal's reasoning that the documents were "dumb documents," not found from the assessee's premises, and bore the title "PROJECTIONS." Crucially, the Tribunal accepted the assessees' contention that the deals did not materialize, supported by affidavits from proposed sellers and the repayment of funds by Sherin Co. Op. Hsg. Soc. Ltd. The Assessing Officer failed to provide material to discard the assessees' theory that the deals did not materialize. The Court found no question of law arose as the Tribunal reached a factual conclusion. Regarding the Himalaya mall shops, the Tribunal accepted the assessees' view that on-money was not necessarily received for all sales, particularly for the remaining 49,818 sq. ft. of carpet area. The assessees argued these shops were sold without premium to family members or outsiders, and many were untenanted. The Tribunal found no concrete material suggesting on-money receipt for these specific sales, and the seized material lacked any reference to on-money for this area. The Court considered this a factual issue where the CIT(Appeals) and Tribunal concurrently held in favour of the assessees, thus not entertaining the issue.
The Tribunal deleted the additions concerning investment in land. The Court noted the Tribunal's reasoning that the documents were "dumb documents," not found from the assessee's premises, and bore the title "PROJECTIONS." Crucially, the Tribunal accepted the assessees' contention that the deals did not materialize, supported by affidavits from proposed sellers and the repayment of funds by Sherin Co. Op. Hsg. Soc. Ltd. The Assessing Officer failed to provide material to discard the assessees' theory that the deals did not materialize. The Court found no question of law arose as the Tribunal reached a factual conclusion. Regarding the Himalaya mall shops, the Tribunal accepted the assessees' view that on-money was not necessarily received for all sales, particularly for the remaining 49,818 sq. ft. of carpet area. The assessees argued these shops were sold without premium to family members or outsiders, and many were untenanted. The Tribunal found no concrete material suggesting on-money receipt for these specific sales, and the seized material lacked any reference to on-money for this area. The Court considered this a factual issue where the CIT(Appeals) and Tribunal concurrently held in favour of the assessees, thus not entertaining the issue.
The Tribunal deleted the additions concerning investment in land. The Court noted the Tribunal's reasoning that the documents were "dumb documents," not found from the assessee's premises, and bore the title "PROJECTIONS." Crucially, the Tribunal accepted the assessees' contention that the deals did not materialize, supported by affidavits from proposed sellers and the repayment of funds by Sherin Co. Op. Hsg. Soc. Ltd. The Assessing Officer failed to provide material to discard the assessees' theory that the deals did not materialize. The Court found no question of law arose as the Tribunal reached a factual conclusion. Regarding the Himalaya mall shops, the Tribunal accepted the assessees' view that on-money was not necessarily received for all sales, particularly for the remaining 49,818 sq. ft. of carpet area. The assessees argued these shops were sold without premium to family members or outsiders, and many were untenanted. The Tribunal found no concrete material suggesting on-money receipt for these specific sales, and the seized material lacked any reference to on-money for this area. The Court considered this a factual issue where the CIT(Appeals) and Tribunal concurrently held in favour of the assessees, thus not entertaining the issue.
The Tribunal deleted the additions made by the Assessing Officer concerning investment in land. The Tribunal's reasoning was that the seized documents were 'dumb' and not found from the assessee's premises. Crucially, the typed copies of handwritten documents were titled 'PROJECTIONS', indicating they represented potential rather than actual transactions. The assessees' contention that the land deals did not materialize was accepted, supported by affidavits from proposed sellers. The AO did not dislodge this evidence. The Tribunal also noted that for a test case like Vejalpur land, the amount paid by the assessee was repaid, and there was no material to suggest the land was sold to a third party by the intermediary, thus accepting the assessee's theory that the deals did not materialize. For the second issue concerning Himalaya Mall, the Tribunal, along with the CIT(Appeals), accepted the assessees' viewpoint that on-money was not necessarily received in all sales. The remaining 49,929 sq. ft. of carpet area represented shops that did not command a prime location and were sold without premium. The seized material did not include any reference to on-money for these specific shops. The Tribunal concluded that the AO's projection of on-money for the remaining area, based on admissions for other areas, was not justified without matching material or admission for the remaining shops. The High Court held that since the Tribunal arrived at factual conclusions based on materials on record, no question of law arose, and thus dismissed the appeals.
The Tribunal deleted the additions made by the Assessing Officer concerning investment in land. The Tribunal's reasoning was that the seized documents were 'dumb' and not found from the assessee's premises. Crucially, the typed copies of handwritten documents were titled 'PROJECTIONS', indicating they represented potential rather than actual transactions. The assessees' contention that the land deals did not materialize was accepted, supported by affidavits from proposed sellers. The AO did not dislodge this evidence. The Tribunal also noted that for a test case like Vejalpur land, the amount paid by the assessee was repaid, and there was no material to suggest the land was sold to a third party by the intermediary, thus accepting the assessee's theory that the deals did not materialize. For the second issue concerning Himalaya Mall, the Tribunal, along with the CIT(Appeals), accepted the assessees' viewpoint that on-money was not necessarily received in all sales. The remaining 49,929 sq. ft. of carpet area represented shops that did not command a prime location and were sold without premium. The seized material did not include any reference to on-money for these specific shops. The Tribunal concluded that the AO's projection of on-money for the remaining area, based on admissions for other areas, was not justified without matching material or admission for the remaining shops. The High Court held that since the Tribunal arrived at factual conclusions based on materials on record, no question of law arose, and thus dismissed the appeals.
The Tribunal deleted the additions made by the Assessing Officer concerning investment in land. The Tribunal's reasoning was that the seized documents were 'dumb' and not found from the assessee's premises. Crucially, the typed copies of handwritten documents were titled 'PROJECTIONS', indicating they represented potential rather than actual transactions. The assessees' contention that the land deals did not materialize was accepted, supported by affidavits from proposed sellers. The AO did not dislodge this evidence. The Tribunal also noted that for a test case like Vejalpur land, the amount paid by the assessee was repaid, and there was no material to suggest the land was sold to a third party by the intermediary, thus accepting the assessee's theory that the deals did not materialize. For the second issue concerning Himalaya Mall, the Tribunal, along with the CIT(Appeals), accepted the assessees' viewpoint that on-money was not necessarily received in all sales. The remaining 49,929 sq. ft. of carpet area represented shops that did not command a prime location and were sold without premium. The seized material did not include any reference to on-money for these specific shops. The Tribunal concluded that the AO's projection of on-money for the remaining area, based on admissions for other areas, was not justified without matching material or admission for the remaining shops. The High Court held that since the Tribunal arrived at factual conclusions based on materials on record, no question of law arose, and thus dismissed the appeals.
The High Court held that the Settlement Commission erred in declaring the proceedings abated. It reasoned that while the petitioner had approached the High Court and Supreme Court regarding Section 245HA, the Supreme Court case (Prabhu Dayal) was withdrawn without a decision on merits. The Court emphasized that the delay in proceedings should not extinguish the petitioner's rights if it was not attributable to them. Citing the Supreme Court's approval of the Bombay High Court's decision in Star Television News Ltd., the Court stated that abatement would only apply if the delay was due to reasons attributable to the applicant, a finding not recorded by the Settlement Commission. Consequently, the impugned order of abatement was set aside, and the proceedings were revived before the Settlement Commission. Regarding the tax deposit, the Court noted that the Settlement Commission had not provided specific reasons for its conclusion of a shortfall. Therefore, the matter was remanded back to the Settlement Commission to examine the materials presented by both sides and determine if the tax was fully deposited. The Settlement Commission was also directed to examine the implication of the Ajmera Housing Corporation judgment concerning the nature and timing of disclosures.
The Tribunal reversed the findings of the Revenue Authorities. It observed that while the AO had the power to collect information on sale instances, the material collected related to a nearby village (Kharadpada). The Tribunal noted that the AO ought to have collected data of similarly situated land, if available, and could not compare rates of land from an adjoining area when the assessee's land was situated on the roadside, connecting NH-8 and Silvassa City. The Tribunal found that the assessee's land had more potentiality than the land compared by the AO. If this comparison was excluded, there was no evidence with the AO to suggest the assessee's cost of acquisition was on the higher side. The assessee's claim was supported by a certificate from a Government Registered Valuer who had inspected the site. The Tribunal held that this report could not be brushed aside without rebuttal evidence. Therefore, the Tribunal allowed the assessee's appeal and directed the AO to compute long-term capital gain by taking the cost of acquisition at Rs. 120 per sq. meter as on April 1, 1981.
The High Court set aside all impugned orders. The Court allowed the petitioners to represent their full cases before the competent authority. This was to be done by enabling the petitioners to file their replies to the show cause notices and produce necessary documents and materials by April 30, 2018. The competent authority was directed to consider these defenses while passing fresh orders. As a condition for this opportunity, the petitioners or the company were required to deposit a further sum of Rs. 15 lakhs towards the outstanding tax liability by May 15, 2018, and file an undertaking to this effect by April 20, 2018. The Court also directed the company to request the Commissioner (Appeals) for expeditious disposal of pending appeals. The ratio is that procedural lapses, especially failure to respond to show cause notices, should not preclude a taxpayer from presenting their case, provided certain conditions are met, including a deposit towards dues and an undertaking for future compliance. The Court did not decide on the ultimate liability under Section 179.
The High Court held that the notice issued by the Principal Commissioner under Section 263 was invalid. Firstly, the Court found that the Principal Commissioner's premise that the Assessing Officer had held the purchases from M/s. Tarini Trading Pvt. Ltd. to be bogus was factually incorrect. The AO had, in fact, accepted the genuineness of the purchases based on the vendor's director's statement, and the addition was made on the basis that the assessee should have disclosed a higher profit due to not bearing transportation costs. Since the foundational fact for the revisional notice was erroneous, the consequential observations could not survive. Secondly, the Court held that the issue had already been considered and decided by the Commissioner (Appeals). The Commissioner (Appeals) had deleted even the limited additions made by the AO. In light of Explanation 1(c) to Section 263, which circumscribes the revisional powers when an order has been the subject matter of an appeal and decided therein, the Principal Commissioner lacked jurisdiction to issue the impugned notice. The Court relied on its earlier decision in CIT vs. Nirma Chemicals Works P. Ltd. The impugned notice was therefore set aside.
The High Court held that the Settlement Commission committed serious errors in both its decision and decision-making process. Firstly, it was incumbent upon the Commission to resolve the factual controversy regarding whether the assessment orders were actually passed on 26.12.2017, as alleged by the Revenue, or later, as suspected by the assessee. The Commission failed to do so, leaving a crucial factual dispute undecided. Secondly, the Commission erred in law by distinguishing the High Court's judgment in Shalibhadra Developers vs. Secretary, which was binding on it. The Court emphasized that subordinate authorities must follow the law laid down by the High Court. Consequently, the impugned order of the Settlement Commission was set aside. The proceedings were remanded to the Settlement Commission for fresh consideration from the stage of passing the order under Section 245D(2C). The Commission was directed to examine the assessee's contention about the date of passing the assessment orders, allowing parties to file additional documents. The Commission was to pass a fresh order by 15.05.2018, bearing in mind the observations and declaration of law in Shalibhadra Developers. If unable to conclude the issue, it could keep it open for final determination during the settlement order stage.
The High Court dismissed the Revenue's appeal. The Tribunal had relied on its earlier decision concerning the same assessee for a prior assessment year. The High Court, in a previous appeal (Tax Appeal No. 779 of 2017), had considered a similar issue. In that prior case, the High Court noted that the Supreme Court's decision in Commissioner of Income Tax vs. Smifs Securities Ltd. would squarely apply. The High Court observed that the Assessing Officer had not provided material to hold the depreciation claim as fictitious. If the Assessing Officer's view was that intangible assets do not qualify for depreciation, it was contrary to the Supreme Court's ruling in Smifs Securities Ltd. If the claim was baseless, there was no discussion or reference to material to support that conclusion. Therefore, the High Court found no error in the Tribunal's deletion of the disallowance.
The High Court dismissed the Revenue's appeal without recording separate reasons. For the first issue concerning the disallowance of provisions for doubtful debts and advances, the Court noted that in a similar appeal for an earlier assessment year, it had relied on the Full Bench decision of the Gujarat High Court in CIT v. Vodafone Essar Gujarat Ltd. ([2017] 397 ITR 55 (Guj) [FB]). For the second issue regarding depreciation on goodwill, the Court referred to the Supreme Court's decision in CIT vs. Smifs Securities Ltd. (348 ITR 302 (SC)). Based on these precedents applied to the earlier assessment year, the present appeal was also dismissed. The specific reasoning for the ITAT's order on the merits of the disallowance or depreciation claim is not detailed, as the High Court's decision hinges on the application of prior judgments.
The High Court held that no question of law arises from the ITAT's order. The Tribunal had reversed the Assessing Officer's disallowance of excess depreciation claimed by the assessee on trucks and truck-mounted equipment. The Tribunal's reasoning was based on documents produced by the assessee, which indicated that the assessee was engaged in the business of providing oil field related equipment and had indeed given vehicles on hire to parties like ONGC and GSPCL, as evidenced by work orders. The High Court found no error in this determination by the Tribunal. The appeal was therefore dismissed.