NO PENALTY ON SEIZURE OF GOLD IF ASSESSEE ADMITTED THAT IT WAS DERIVED OUT OF UNDISCLOSED INCOME AND PAID TAXES THEREON
NO PENALTY ON SEIZURE OF GOLD IF ASSESSEE ADMITTED THAT IT WAS DERIVED OUT OF UNDISCLOSED INCOME AND PAID TAXES THEREON
Section 271(1)(c), read with sections 69A and 271, of the Income-tax Act, 1961 – Penalty for concealment of income:-
Where assessee made statement regarding seized unaccounted gold and explained manner in which same was derived and treating its value as income paid tax, penalty was not to be levied under section 271(1)(c)(Andhra Pradesh and Telangana)-High Court Of Andhra Pradesh And Telangana -L. Giridharlal & Co. v. Income-tax Officer Search was conducted in assessee’s premises and gold was seized Assessing Officer did not accept explanation of assessee regarding unaccounted gold and initiated penalty proceedings.However, it was found that assessee had made statements under section 132(4) regarding said gold and explained manner in which same was derived.Further, value of seized gold was treated as income of assessee and assessee paid tax thereon.It was held that assessee’s case fitted into clause (2) of Explanation 5 of section 271(1) which brought immunity to assessee and, hence, penalty was not to be levied.
CASE REVIEW:-
Asstt.CIT V.Gebilal Kanhaialal, HUF [2012] 348 ITR 561/210 Taxman 244/25 taxmann.com 214 (SC) (para 10) followed.
No reassessment on basis of info received from DIT, Investigation without recording his own satisfaction by AO:-
Section 69, read with sections 11, 12, 147 and 148, of the Income-tax Act, 1961 – Unexplained investments, Unsecured loan.
Where in reassessment, Assessing Officer made additions on account of unsecured loans merely on basis of information from DIT Investigation without recording his own satisfaction for issuing reassessment, reassessment was not valid.
[2015] (Delhi – Trib.) -ITAT DELHI – Monarch Educational Society v.Income-tax Officer (Exemption):-
Notice of reassessment was issued to assessee-trust on ground that assessee made accommodation entries and arranged funds through prohibited means.
Assessing Officer issued notice under section 148 on basis of same material which was before him during original assessment.
Assessing Officer simply reproduced details received from Director of Income-tax, Investigation and recorded his satisfaction without any verification and examination of information received and only mentioned that he had reason to believe that income chargeable to tax had escaped assessment.
He made additions on account of unsecured loans which had not been mentioned in reasons recorded for issuance of notice – Whether reassessment was not valid.
CASES REFERRED TO:-
Rajat Export Import India (P.) Ltd. v. ITO [2012] 341 ITR 135/206 Taxman 50/18 taxmann.com 311 (Delhi) (para 12), Signature Hotels (P.) Ltd. v. ITO [2011] 338 ITR 51/[2012] 20 taxmann.com 797 (Delhi) (para 13), Jai Bharat MarutiLal v. Asstt. CIT [2013] 351 ITR 342/215 Taxman 113 (Mag.)/33 taxmann.com 361 (Delhi) (para 13) and RashiBuildcon (P.)Ltd. [IT Appeal No. 407 (Agra) of 2012] (para 13).
Dominion over the property is sufficient to claim depreciation even if conveyance deed isn’t yet executed:-
Section 32 of the Income-tax Act, 1961 – Depreciation Allowance-Leasehold buildings Where conveyance deeds in respect of building taken on lease were yet to be executed in favour of assessee-company but assessee exercised dominion over property and it had right to occupy and use same, assessee would be treated as owner of said property to claim depreciation.
[2015] 57 taxmann.com 223 (Delhi – Trib.) – ITAT DELHI – Indian Renewable Energy Development Agency Ltd. v. Joint Commissioner of Income-tax:-
Assessee claimed depreciation on office building and residential buildings.
However, conveyance deeds in respect of these leasehold properties were yet to be executed in favour of assessee-company.
It was held that where assessee exercised dominion over said property and it had right to occupy and use same, assessee would be treated as owner of said property to claim depreciation however, depreciation on cost of land, on which building was constructed was not allowable.
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