Skip to main content

Mere difference in valuation method does not mean conscious concealment of income

In Shah Virchand Govanji Jwellers Pvt. Ltd. v. ACIT, Valsad Circle, Valsad, decided on 26-10-2017, the Income Tax Apellate Tribunal, Surat, passed an order for a case related to difference in the amount of income and furthermore, in the return, due to adoption of different methods by each party.

The brief facts of the case are that there was difference in the amount of income as two different methods were used by the parties respectively. Also there was an accusation of disallowance of computer expenses which was voluntarily agreed to by the assessee. The appeal for the same was filed before the CIT (A). However, the CIT (A) upheld the levity of penalty. Aggrieved by the same, the present appeal has been filed before the Tribunal.

The Tribunal observed that the difference in the valuation method alone does not amount to the conscious concealment of income. The Tribunal also said that issuing of notice without striking off the irrelevant clauses and without mentioning the specific charges against the assessee makes the notice vague and it is a settled principle now that when the charges are vague and not specific, no penalty can be levied. Further reliance in the case was made through CIT v. Manjunatha Cotton Ginning Factory, 2012 SCC OnLine Kar 8862 : [2013] 359 ITR 565, through which it was observed that the charges against the assessee should be specifically construed. Also reliance was placed on Meharjee Cassinath Holdings Pvt. Ltd.  v. ACIT Circle 4(2) , where there was a similar case of non-application of mind while serving the notice.

Article referred: http://blog.scconline.com/post/2017/11/23/mere-difference-valuation-method-not-mean-conscious-concealment-income/

Comments

Post a Comment

Most viewed this month

The recovery of vehicles by the financier not an offence - SC

Special Leave Petition (Crl.) No. 8907  of 2009 Anup Sarmah (Petitioner) Vs Bhola Nath Sharma & Ors.(Respondents) The petitioner submitted that  respondents-financer had forcibly taken away the vehicle financed by them and  illegally deprived the petitioner from its lawful possession  and  thus,  committed  a crime. The complaint filed by the petitioner had been  entertained  by  the Judicial Magistrate (Ist Class), Gauhati (Assam) in Complaint Case  No.  608 of 2009, even directing the interim custody of the vehicle (Maruti  Zen)  be given to the petitioner vide order dated  17.3.2009.  The respondent on approaching the Guwahati High  Court against this order, the hon'ble court squashed the criminal  proceedings  pending   before  the  learned Magistrate. After hearing both sides, the Hon'ble Supreme Court decided on 30th...
7 comments
Read more

Property can be sold on power of attorney - Delhi High Court

As reported in the Hindusthan Times on 5th May:-  http://www.hindustantimes.com/India-news/NewDelhi/Property-can-be-sold-on-power-of-attorney/Article1-1054964.aspx In a judgment that will benefit lakhs of Delhi residents living in co-operative housing societies and DDA flats, the Delhi High Court has quashed a Delhi government circular banning property sale in the Capital through general power of attorney (GPA). The court found that the directions in the circular, issued by the revenue department on April 27 last year, were contrary to the Supreme Court judgment dated October 11, 2011. The HC order will increase the number of saleable properties in Delhi and could bring down the value of freehold properties. According to realty watchers, on an average, around 20% of properties are registered through GPA transfers — a common way of selling leasehold properties and those that don’t have a clear title. The judgment came on a petition filed by a company, Pace Developers and ...
5 comments
Read more

Vanishing promoters and languishing shareholders

Over Rs 60,000 crore of shareholders’ wealth is stuck in 1,450 companies suspended by the stock exchanges. More importantly, near 100 per cent pledging of promoter holding appears to be common in many of these companies. This, almost rules out any chance of the companies bouncing back. The suspension is for non-compliance of the listing norms. Vanishing Companies - Definition As per the definition stipulated by SEBI, any listed company, which raised moneythrough initial public offer and, thereafter, stopped operations, did not file returnseither with the RoC or SEBI and did not exist on the registered premises wastermed as vanishing.There are provisions under Companies Act under which companies are termedvanishing companies on satisfying certain conditions. it is provided a companywould be deemed to be a vanishing company, if it satisfies all the conditions given below : a) Failed to file returns with Registrar of Companies (ROC) for a period of two years; b) Failed to fil...
3 comments
Read more