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2022 (6) TMI 1479 - CALCUTTA HIGH COURT
Penalty u/s 271AAB against dead person - undisclosed income - partial relief was granted to the assessee by ITAT - HELD THAT:- Tribunal has extracted the findings rendered by the Commissioner (Appeals) from which we find that the entire facts have been analysed and, thereafter, partial relief was granted to the assessee. Before the Tribunal, on behalf of the appellant/assessee it was contended that in the penalty proceedings notice was issued against the dead person and, therefore, initiation of penalty proceeding itself is not sustained. The Tribunal noted the facts and agreed with the assessee. The Tribunal also took into consideration the decision of ALAMELU VEERAPPAN [2018 (6) TMI 760 - MADRAS HIGH COURT]
We find that CIT(A) as well as the Tribunal has analysed the facts and then rendered the decision. Therefore, no substantial questions of law arising for consideration in this appeal.
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2022 (6) TMI 1478 - ORISSA HIGH COURT
Rejection of proposal for grant of environment clearance in respect of Laigura Stone Quarry - whether the land in question where the Laigura Stone Quarry situates belongs to the Revenue Department or the Forest Department and if so, does it come under the proposed reserved forest area? - HELD THAT:- Referring to the pleadings and documents available on record under Annexure-M/6 series, the letter dated 03.09.2021 of opposite party no. 6 addressed to the Additional Govt. Advocate makes it clear that the proposed reserved forest has not yet been notified under Section-21 of the Orissa Forest Act, 1972 as reserved forest. As such, the notification dated 28.01.1980, which was issued under Section-4 of the Orissa Forest Act, 1972 declaring that it has been proposed to constitute as reserved forest lands of Mauza Langposh Baliturei of Lamna Forest Division under Mahulpali Police Station of Kuchinda Tahasil in the district of Sambalpur, the limits of which have been demarcated by cairns and line cleared to a width of 20' or by natural boundaries as specified therein, has not been given effect to.
The legislators of the State of Odisha enacted Orissa Forest Act, 1972 giving paramount consideration to the protection and management of the forests and forest produce. Chapter-II of the Orissa Forest Act, 1972 deals with "Reserved Forest". Section-3 thereof provides that the State Government may constitute any land which is the property of the Government or over which the Government have proprietary rights of the reserved forest in the manner provided therein.
In view of aforesaid provisions of law, the procedure which is required to be followed to declare the forest as reserved under Section 21 of the Orissa Forest Act by issuing notification, but the same has not yet been done so far as the present quarry area is concerned.
In absence of any materials available on record with regard to compliance of the provision of law, the order passed by the Divisional Forest Officer vide letter dated 16.10.2020 under Annexure-11 issuing clarification regarding proposal of environment clearance of Laigura Stone Quarry over an area of 4.81 acres or 1.95 hectare at village Laigura, Tahasil- Kuchinda in the district of Sambalpur cannot sustain in the eye of law and consequential order of rejection passed by opposite party no. 7 dated 26.10.2020 referring to the letter of the Divisional Forest Officer addressed to the Tahasildar, Kuchinda refusing to grant environment clearance of the proposal under Annexure- 12 cannot also sustain in the eye of law.
The writ petition is accordingly allowed.
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2022 (6) TMI 1477 - TELANGANA HIGH COURT
Suit for recovery of money - excess order supplied which was not initially placed in the order - the demand of excess bags were on urgent basis - demand of difference price due to changes in the rates as well - levy of liquidated damages for late supply.
Whether the trial Court erred in awarding price difference for 33,000 and 9,000 bags in favour of the plaintiff? - HELD THAT:- There are no illegality in the observation of the trial court that evidence of DW. 2 would show that the defendant used to orally place orders even beyond the quantity specified in the accepted tender and later on regularized such oral orders through its purchase orders. When once the defendant accepted the two supplies and regularized them in accordance with the earlier tender documents, the defendant had to pay the price quoted in the said tenders. Hence, the claim of the plaintiff for 33,000 bags @ Rs. 10.25 ps per each bag and Rs. 9.45 ps. per bag for 9,000 bags is valid and he is entitled to the difference of price from Rs. 8.75 ps., to Rs. 10.25 ps. amounting to Rs. 49,500/- and Rs. 6,210/- towards price difference for 9,000 bags from Rs. 8.75 ps., to Rs. 9.45 ps., for a total amount of Rs. 55,710/- - answered in favour of the plaintiff as against the defendants.
Whether the claim of the plaintiffs for Rs. 1,18,000/- towards loss incurred on 25,000 bags for selling it as scrap @ 50% price on account of not taking delivery by defendants is proper? - HELD THAT:- The evidence of DW. 1 would disclose that without any contract, they accepted the supply of bags for 1,00,000 and issued a telegram to stop supply on 11.12.1993. This would support the evidence of PW. 1 that their company supplied 1,09,000 bags by 05.12.1993 and on 7.12.1993 the defendant company released formal order No. 40893 for 1,00,000 bags only and during the said period the defendant company telephoned the plaintiff company from Ramagundem Unit as well as from their Delhi office to supply bags without waiting for formal order. The plaintiff company further printed 25,000 bags on 6/7.12.1993, but the order was placed for 1,00,000 bags only on 07.12.1993. The said order was received by the plaintiff company on 08.12.1993. The defendant company had not taken delivery of 25,000 bags which were printed on 06/07.12.1993 i.e. before getting the formal order - legal notice issued by the plaintiff to the defendant marked under Ex. A39 dated 25.09.1995 also supports the said contention of the plaintiff - in view of the oral and documentary evidence of PW. 1, DW. 1 and Ex. A39, the plaintiff is entitled to claim 50% value of the 25,000 bags @ Rs. 9.45 ps. (the rate agreed by the defendants for supply of 1,00,000 bags on 07.12.1993) for Rs. 1,18,000/- as claimed by the plaintiff. Accordingly, this question is also answered in favour of the plaintiff as against the defendant and the judgment of the trial Court in this regard is upheld.
Whether awarding of liquidated damages of Rs. 1,63,471/- in favour of the defendants is proper? - HELD THAT:- The observations of the trial Court and the relief granted were contradictory to each other. The trial Court while stating that it was accepting Ex. A42, which accepted the liquidated damages only for an amount of Rs. 62,653/-, stated in the last sentence that the defendant was entitled to claim liquidated damages of Rs. 1,63,471/- as per Ex. A42, which was erroneous - the plaintiffs failed to confront DW. 3 with Ex. A42 relied by them and failed to question the witness with regard to the said discrepancies pointed out by them and admitted about the delays in the supplies which was liable for damages to be paid as per the contract, this point is answered in favour of the defendants as against the plaintiff. The defendants are entitled to claim liquidated damages for Rs. 1,63,471/-, as such the plaintiff is not entitled to claim the said amount and interest on it.
Whether deducting Rs. 4,89,919/- as penalty by the defendants is in accordance with the terms and conditions of the contract? - HELD THAT:- The document marked under Ex. B1 would disclose that the defendants had issued a memo on 05.04.1994 i.e. after the entire supplies of the bags was completed and a punitive penalty was also imposed on them. The evidence of DW. 5 also would disclose that they imposed higher penalty of 62% of the normal penalty without consulting the plaintiff. When the terms of the contract would not call for imposing punitive penalty, imposing the same after using the bags is also considered as improper - But, when punitive penalty is imposed, there must be evidence of damage suffered by the defendants. In the absence of the same and when the goods were utilized without rejection, imposing penalty on the plaintiff is considered not in accordance with law and terms and conditions of the contract. Hence, this point is answered in favour of the plaintiff as against the defendants and the observations of the trial Court on this aspect is considered not proper and as such, the same is liable to be set aside.
Whether the plaintiffs are entitled to claim interest @24% per annum? - HELD THAT:- As per Section 4 of the said Act, which was existing as then, buyer should be liable to pay interest to the supplies on outstanding dues beyond the appointed day at a rate which was 5% points above the floor rate - As the trial Court had not granted interest at the said rate and granted only 12% interest, the same is also considered as not proper. As Section 5 of the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 also specifies that notwithstanding anything contained in any agreement between the supplier and a buyer, the buyer shall be liable to pay compound interest (with monthly interest) at the rate mentioned in Section 4 of the of the Act on the amount due to the supplier, this point is also answered in favour of the plaintiff holding that the plaintiff is entitled to claim compound interest @ 24% per annum.
Whether the judgment of the trial Court is in accordance with law or needs any interference by this Court in these appeals? - HELD THAT:- The judgment of the trial Court is upheld on the aspects of awarding price difference of Rs. 55,710/- on 42,000 bags, awarding Rs. 1,18,000/- towards 50% value of the 25,000 bags, but is set aside on the aspect of entitlement of the plaintiff for the amount towards liquidated damages and imposing penalty of Rs. 4,89,919/- in favour of the defendants and awarding interest only at the rate of 12% per annum on the amount due to the plaintiff.
Appellants are entitled to deduct an amount of Rs. 1,63,471/- towards liquidated damages - Appeal allowed in part.
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2022 (6) TMI 1476 - ITAT JAIPUR
Addition u/s 153A - Addition made on the basis of material seized alongwith the statement as recorded during search and also confronted to the assessee - Addition u/s 68 - HELD THAT:- There is contradictory approach of the AO in making wrong addition on this account. It is also noteworthy to mention that AO made the addition on the basis of statements of Harpal Yadav who gave his search statement u/s 132(4) in relation to the loose paper found in his premises but no material on this account was found in the possession of the assessee.
As per the provisions of Sec. 153C, the material, if any, on the basis of which addition is to be made was not found in the premises of assessee then neither action could be taken under section 153A nor any addition u/s 153A can be made. The addition if any could have been made only after issuing notice under section 153C after recording the satisfaction by the AO of other search persons. In the present case the AO has not assumed any jurisdiction under section 153C rather than made the addition u/s 153A.
Thus the assessment as well as addition u/s 153A are wrongly made and liable to be deleted. Further the AO has also made the addition u/s 68 which is also incorrect or wrong in view of above deliberations. Thus in view of the above facts, circumstances and legal position of the case, the addition sustained by the ld. CIT(A) is deleted and grounds of appeal of the assessee are allowed.
Long Term Capital Gain - Addition was made on the basis of statement of Sh. Nirmal Kedia who purchased the land from assessee and paid the On-Money to the assessee and statement has been given u/s 132(4) - HELD THAT:- The same addition was also made in the hands of M/s Kedia Real Estate LLP on account of On-Money Paid by him to the assessee. On perusal of the record and material before us, it is found that Sh. Nirmal Kedia has retracted from his statements and the assessee has also nowhere admitted receiving any On-Money from M/s Kedia Real Estate LLP and no documents or evidence has been found either in the possession of the assessee or in the possession of M/s Kedia Real Estate LLP except only a statement of Sh. Nirmal Kedia, who had retracted the same later on. To this effect, the ld. CIT(A) and this Bench has deleted the addition in the hands of M/s Kedia Real Estate LLP [2019 (6) TMI 426 - ITAT JAIPUR] Thus we concur with the findings of the ld. CIT(A). Thus the appeal of the Revenue is dismissed.
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2022 (6) TMI 1475 - KARNATAKA HIGH COURT
Cancellation of an endorsement of cancellation on the passport of the petitioner by respondent No.2 and not permitting the petitioner to travel from Bengaluru to Philippines - violation of Articles 14, 19 and 21 of the Constitution of India - whether the respondent-Bank is justified in requesting respondent Nos.1 and 2 to prevent the petitioner from travelling outside the Country and to issue LOC against the petitioner? - HELD THAT:- It is true that the respondent-Bank is conferred with the power to request respondent Nos.1 and 2 to issue LOC against a person who has committed fraud or default against the Bank. It is for the Bank to take a decision as to, in which case the Bank could request LOC. Just because power is conferred to request issuance of LOC, such power cannot be exercised arbitrarily. Bank has to take a conscious decision by examining as to whether the petitioner’s case falls within the ambit of fraud or default which would affect economic interest of the Country. In the instant case, value of the secured property is more than the amount due from the petitioner to the 3rd respondent-Bank. In that circumstance, 3rd respondent-Bank is not justified in requesting for issuance of LOC.
The petitioner is not leaving the Country to avoid repayment of loan of the Bank, but the petitioner is employed in Philippines and she had come to India to tender her evidence in a pending matrimonial case.
The decision relied upon by the learned Assistant Solicitor General on Dr. Bavaguthuraghuram Shetty [2021 (5) TMI 1037 - KARNATAKA HIGH COURT] case would have no application to the facts of the present case. In the said case, the petitioner was due to the Bank in a sum of Rs.2800.00 Crores and the same would definitely affect the economic interest of the Country.
The action of the respondents is arbitrary, unreasonable and unfair in the peculiar facts and circumstances of the case. Any action of the State if it is arbitrary and unreasonable is liable to be interfered.
The petitioner is directed to deposit a sum of Rs.10,00,000/- with the 3rd respondent-Bank, which could be adjusted towards the dues and furnish a solvent surety to the satisfaction of 3rd respondent-Bank - On deposit of Rs.10,00,000/- and on providing a solvent surety by the petitioner, the 3rd respondent-Bank shall forthwith request respondent Nos.1 and 2 to withdraw the LOC and to permit the petitioner to travel outside the Country.
The petition allowed in part.
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2022 (6) TMI 1474 - CALCUTTA HIGH COURT
Jurisdiction of initiation of proceeding in question - appropriate officer under the State GST Act - jurisdiction of the respondent DRI officer - HELD THAT:- Prima facie the petitioner has been able to make out a case for an interim order and considering this aspect there will be conditional stay of the impugned adjudication order dated 4th March, 2022 and subject to deposit of 10% of the demand in question by the petitioner within ten days from date and if such payment is made by the petitioner within the time stipulated herein, no coercive action shall be taken against the petitioner for recovery of the demand in question.
List this matter for final hearing after ten weeks.
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2022 (6) TMI 1473 - MADRAS HIGH COURT
Procedural irregularity - lack of opportunity of personal hearing, prior to the framing of assessment - violation of the principles of natural justice - According to the respondent, the website of the income tax department specifically provides for a link that has to be activated for availing of an opportunity of personal hearing. The petitioner has not activated the link, and thus, the question of personal hearing does not arise - HELD THAT:- In our considered view, this cannot constitute a fatal flaw that would stand in the way of an effective and efficacious opportunity of hearing. Admittedly the petitioner has sought an opportunity of hearing in the written submissions filed and this constitutes a legitimate request that cannot be brushed aside by the authorities.
The contention of the respondents is rejected and the impugned order set aside. The assessment shall be framed after affording adequate opportunity to the petitioner in line with the following directions. Learned counsel for the petitioner would submit that there are additional written submissions to be made and seeks liberty to file additional written submissions, for which, learned Senior Standing Counsel does not express any objection.
Hence, the petitioner is permitted to upload its written submissions along with any other supporting materials, if any, within a period of four (4) weeks from date of receipt of a copy of this order. Upon receipt of the additional written submissions and materials, if any, a link for personal hearing shall be sent to the petitioner, the petitioner heard and orders passed within a period of four (4) weeks from date of conclusion of personal hearing. For the aforesaid purpose, the respondent shall open the portal forthwith for a period of four (4) weeks, so as to enable the petitioner to file its additional written submissions to the show cause notice.
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2022 (6) TMI 1472 - ITAT MUMBAI
Commission income from accommodation entries - addition on substantive basis in hand of accommodation entry provider - addition in hands of assessee on protective basis - HELD THAT:- CIT(A) in the instant case has upheld the addition on the reasoning that the Income-tax department has not accepted the percentage estimated by the Tribunal in the case of Sh. Bhanwarlal Jain [2021 (8) TMI 1316 - ITAT MUMBAI], and further appeal has been preferred - CIT(A) has ignored that he, being a appellate authority, is required to follow the decision of the higher appellate forum irrespective whether the department has preferred appeal again the same, unless the decision of that appellate forum has been stayed by the higher appellate forum.
CIT(A) cannot confirm an addition on protective basis. He is required to decided the issue either way and cannot proceed with keeping an addition on substantive in one case and protective in other case that too even after a finding of the higher appellate forum i.e. ITAT. We accordingly, reject this approach of the Ld CIT(A) and set aside his finding on the issue on dispute. Respectfully following the finding of the ITAT in the case of Sh. Bhanwarlal Jain the protective addition made in the case of the assessee in respect of commission income from accommodation entries is deleted. Decided in favour of assessee.
Addition for low gross profit declared in trading activity - AO has made addition at the rate of 10.32% on the sales turnover to compensate the low gross profit rate of the assessee - CIT(A) upheld the gross profit rate addition made by AO - HELD THAT:- We find that tribunal in the case of Sh. Bhawarlal Jain (2021 (8) TMI 1316 - ITAT MUMBAI) has given a specific finding that 70 associate concerns of Sh. Bhanwarlal Jain were engaged in providing only accommodation entry and no real business was carried, which was recorded in their books of accounts. The assessee also being one of the concern out of those 70 concerns, the Ld. CIT(A) has correctly rejected the claim of the assessee that it was engaged in any trading activity. Once it is held, that assessee was not engaged in any trading activity, there is no justification for making any addition for low gross profit rate in such trading activity. The finding of the Ld. CIT(A)accordingly set aside. Decided in favour of assessee.
Commission from accommodation entries enhanced by the CIT(A) - HELD THAT:- When it is evident that after the finding of the Tribunal in the case of Sh. Bhanwarlal Jian, no addition can be made on protective basis in the case of the assessee, there is no question of further enhancement of said commission income from accommodation entry and that too on substantive basis. The enhancing of such commission income from accommodation entries of bogus sales is without any reasoning and totally unjustified. We reject this action of Ld. CIT(A).
CIT(A) has enhanced the commission income without providing any show cause notice to the assessee, which is in violation of the section 251(2) - In the impugned order there is no mention of any opportunity provided to the assessee by way of issue show cause notice, before making the addition and therefore this addition is unsustainable on the ground of violation provision of section 251(2) of the Act also.
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2022 (6) TMI 1471 - GUJARAT HIGH COURT
Recovery of dues - priority of dues - first charge over the property mortgaged by the respondents No.4 to 7 under Section 26-E SARFEASI Act or not - HELD THAT:- The writ-applicant Bank undisputedly auctioned the subject property on 25.2.2021 and PRA Realities LLP being the highest bidder submitted the bid of Rs.3,41,00,000/- and in accordance with the sale notice has deposited the entire amount as per the Rules. The writ-applicant Bank is the secured creditor and having auctioned the subject property under the SARFEASI Act, the writ-applicant would have first charge over the subject property.
The ratio as laid down in PATTECH FITWELL TUBE COMPONENTS VERSUS THE STATE OF GUJARAT [2022 (6) TMI 202 - GUJARAT HIGH COURT] squarely covers the present issue. The dues of the secured creditor i.e. writ-applicant Bank shall have priority over the dues of the respondent No.2 over the subject property.
In the facts of the present case, in the revenue records undisputably the charge of respondent No.1 is at a later point of time i.e. 14.12.2015 and 7.6.2018 which is subsequent to the mortgage with the writ-applicant Bank i.e. 8.6.2012 and 26.10.2013, being the secured creditor. In view of above, as per the provisions of Section 26-E SARFEASI Act also, the balance tilts in favour of the writ-applicant Bank and then in favour of the present writ-applicant. Accordingly, there is no hesitation in holding and declaring that the respondent No.1 State authorities cannot claim first charge over the subject property.
It is hereby directed that the writ-applicant shall have the first charge over the property mortgaged by the respondents No.4 to 7 under Section 26-E SARFEASI Act and the same would overwrite the charge of the respondent No.3 under Section 48 of the GVAT, 2003. The respondent authority is further directed to post and certify a mutation entry to record the certificate of sale dated 19.3.2021 for the subject land.
The writ-application succeeds and is hereby allowed.
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2022 (6) TMI 1470 - ITAT HYDERABAD
Revision u/s 263 by CIT - Addition u/s 56(2)(viib) - PCIT said AO has neither enquired about the claim of the assessee that the property was under litigation during the course of assessment proceedings nor brought to the notice of the Assessing Officer by the assessee - as argued AO has passed order after seeking an approval of the ACIT, u/s 153D - AR had admitted that details of the property were disclosed by the assessee in pursuant to the notice issued u/s 142(1) and the same was duly examined by the AO and no additions were made on the basis of the documents filed by the assessee. Moreover it was submitted that notice u/s 153A r.w.s 143(3), the addition can only be made by the AO in respect of the documents / incriminating material found during the course of search
HELD THAT:- As during the assessment proceeding u/s 153A r.w.s. 143(3), AO is duty bound to make the addition in respect of the incriminating documents found during the course of search or in respect to the additions which are relatable to the material seized during the search. AO is not required to make any addition in respect of the material / document came to its possession on account of post search enquiries, though this issue may be debatable within the jurisdiction of Hon’ble Telangana High court.
CIT in the impugned orders had nowhere stated that the documents were filed by the assessee in response to notice under section 142(1) of the Act and that the documents found during the course of search were incriminating in nature. Unless the requirement of law, namely existence of the incriminating document is fulfilled, the Assessing Officer could not make the addition and therefore, the Assessing Officer has rightly not made any addition.
The reliance on explanation 2 to section 263 of the PCIT was incorrect, as Assessing Officer had made enquiries from the assessee and assessee had provided all information to the Assessing Officer, therefore, PCIT’s finding was factually incorrect, as it was not born out of the record.
Moreover, we agree with the view taken in the case of M/s. Indian Roadways Corporation Ltd. [2018 (10) TMI 1495 - ITAT KOLKATA] wherein the identical view was decided by the Kolkata Tribunal in favour of the assessee. Therefore, on this count alone, the order passed by the ld.PCIT is required to be annulled .
There is another reason for annulling the order passed by the ld.PCIT, as in the present case, the Assessing Officer before passing the assessment order has taken the approval of ld.ACIT under section 153D
Also in the case of Dhariwal Industries Limited, Pune [2017 (1) TMI 260 - ITAT PUNE] on similar facts, had annulled the order passed by ld.PCIT. Therefore, we have no hesitation to take a similar view, more particularly, when one of us (namely Hon’ble A. M.) was a party to the decision.
Another reason to annul the order passed by the ld.PCIT was that the ld.PCIT had directed the Assessing Officer to make the additions after invoking the provisions of section 56(2)(vii)(b) of the Act on the premise that there is difference in consideration for which the property was purchased vis-à-vis the SRO value. In our view, the addition under section 56(2)(vii)(b) is a deeming provision, based on this notional addition can be made.
We hereby hold invocation of jurisdiction section 263 of the Act by ld.PCIT was not correct. In our considered opinion, once all the material including the sale deeds and other litigation documents were available on the record before the PCIT, then it is the duty of the ld.PCIT to give a specific finding as to how the provisions u/s 56(2)(vii)(b) are applicable and why the order of Assessing Officer was passed without proper enquiry. Therefore, PCIT’s finding that the order passed by AO was erroneous and prejudicial to the interest of the Revenue, can not be upheld. Decided in favour of assessee.
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2022 (6) TMI 1469 - ITAT RAJKOT
Revision u/s 263 - Principal CIT held the assessment framed u/s 143(3) as erroneous insofar prejudicial to the interest of Revenue - correct head of income - assessee was liable to declare the income under the head income from house property on notional basis under section 22 read with section 23 of the Act but the assessee has not done so - HELD THAT:- The Finance Bill 2017 seeks to amend section 23 w.e.f. 1st April, 2018 which lays down the determination of annual value in case of house property for the purpose of calculating the Income under the head "House Property" income particularly in case of deemed let out property.
This amendment will take effect from 1st April, 2018 and will, accordingly apply in relation to assessment year 2018-19 and subsequent years.
A plain reading of the above provisions makes it clear that the amendment for charging the tax on the notional rent with respect to the properties held as stock in trade was applicable from the assessment year 2018-19 and subsequent assessment year. As such, the amended provision is not applicable for the year under consideration. Thus the question of calculating the rental income with respect to the units of the properties held as stock in trade does not arise.
Thus we hold that there was no error in the order of the AO framed u/s 143(3) which is causing prejudice to the interest of revenue. For invoking the provisions of section 263 of the Act, it is necessary that the twin conditions should be satisfied. The order should be erroneous and prejudicial to the interest of revenue. Once there is no error the order of the AO, the same cannot be subject to the provisions of section 263 - In view of the above and after considering the facts in totality, we hold that there is no error in the assessment framed by the AO u/s 143(3) causing prejudice to the interest of revenue. Thus, the revisional order passed by the learned PCIT is not sustainable and therefore we quash the same. Hence the ground of appeal of the assessee is allowed.
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2022 (6) TMI 1468 - GUJARAT HIGH COURT
Disallowance u/s 14A in course of the assessment undertaken under Section 153A - disallowance made under Section 14A while computing of Book Profit under Section 115JB - HELD THAT:-The present Tax Appeal is Admitted on the following substantial questions of law.
(i) Whether in the facts and circumstances of the case, could it not be said that the Appellate Tribunal committed an error in deleting the additions made on the count of fictitious losses from National Multi Commodity Exchange trading and also the disallowance under Section 14A in course of the assessment undertaken u/s 153A more particularly having regard to the import purport and the language of the said provision, holding that the additions have to be confined to the incriminating material found during the course of search u/s 132(1) even though there is no stipulation of the Section 153A and notwithstanding that there was no assessment u/s143(3) despite the fact that return was processed u/s 143(1) and no scrutiny proceedings were undertaken u/s 143(3) of the Act?
(ii) Whether in the facts and in the circumstances of the case and in law the Appellate Tribunal has erred in holding that disallowance under Section 14A of the Act cannot exceed the exempt income earned by the assesses?
(iii) Whether in the facts and in the circumstances of the case and in law the Appellate Tribunal was justified in excluding the disallowance made under Section 14A while computing of Book Profit under Section 115JB ignoring the clause (f) of Explanation1 to Section 115JB(2)?
(iv) Whether Appellate Tribunal committed an error in deleting the additions in respect of the allowance of losses taken from M/s. Mari Gold Vanijya Private Limited, Kolkata without appreciating the entire set of facts attended to the said aspect, whether the transaction evidenced that it was in the nature of accommodation entry and whether the Tribunal acted perverse on facts on that count?
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2022 (6) TMI 1467 - CALCUTTA HIGH COURT
Validity of reopening assessment - order passed u/s 148A(d) pursuant to the notice u/s 148A(b) challenged on the ground of alleged violation of principles of natural justice - HELD THAT:- As the impugned order u/s 148A(d) has been passed after compliance of all the formalities required under the relevant provisions of the Income Tax Act, 1961, and there is no procedural irregularity or violation of principles of natural justice.
It appears from record that, first, notice was issued u/s 148A(b) and in response to the same, the petitioner has filed its objection and thereafter the Assessing Officer concerned has passed order u/s 148A of the Act after considering the objection of the petitioner by giving reason and making elaborate discussion.
This Court in exercise of its Constitutional writ jurisdiction cannot act as an Appellate Authority over the impugned order passed u/s 148A(d) when there is no procedural irregularity or violation of principles of natural justice or the Officer has not acted contrary to any provision of the Statute and reasoning and findings given by the AO in his order u/s 148A(d) should not be substituted by a writ Court. WP dismissed.
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2022 (6) TMI 1466 - ITAT KOLKATA
Assessment against company dissolved/insolvent - proceedings initiated against the corporate debtor/assessee company including income tax proceedings and recovery of demand or giving effect of any order - Addition u/s 68 - HELD THAT:- In the light of the above order by Hon’ble NCLT in the assessee’s own case for its CIRP as per Rule 4 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules 2016, no proceedings can continue against the corporate debtor i.e. the assessee.
In view of this and drawing further force from the order of coordinate bench in the case of Real Steps Ltd. [2021 (7) TMI 1445 - ITAT AHMEDABAD] all these nine appeals before this Tribunal filed by the assessee/Department are dismissed as infructuous. However, ld. AO is at liberty to make an application for reinstitution of these appeals after the resolution process ends in IBC 2016. Accordingly, the appeals of the assessee and the Department (totaling nine in numbers) are dismissed as infructuous.
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2022 (6) TMI 1465 - CALCUTTA HIGH COURT
Assessment against company dissolved/insolvent - Income tax dues - priority to debts to be discharged - Scope of section 238 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- As against the respondent company an application for liquidation has been filed before the National Company Law Tribunal, Kolkata Bench and by order ]the application filed by Chaitanya Alloys Private Limited, the operational creditor under Section 9 of the Insolvency & Bankruptcy Code, 2016 has been admitted and a moratorium as provided under Section 14 of the Code has been ordered. There are other directions issued by the NCLT as well.
Thus, in the light of the statutory provision and in the light of the decision of the Hon’ble Supreme Court in PCIT- Vs. -Monnet Ispat and Energy Limited [2018 (8) TMI 1775 - SC ORDER] and also in the light of the overriding provisions of the Code in terms of Section 238 of the Act, the revenue cannot pursue the appeal.
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2022 (6) TMI 1464 - ITAT BANGALORE
Deduction u/s 80P - Claim denied as assessee did not file the return of income for Assessment Year 2017-18 - as contended that since the assessee did not file return of income for Assessment Year 2017-18, there was no question of invoking the provision of section 80A(5) - HELD THAT:- Section 80A(5) of the Act is applicable only when a return of income is filed by an assessee and a deduction under Chapter VI “A” of the Act, is not claimed in such return of income. It will not apply to a case where no return of income is filed. The provisions of section 80AC of the Act, as we have already seen, contemplates denial of deduction in respect of certain provisions of Chapter VI “A” of the Act, if a return of income is not filed by an assessee. Those provisions, as rightly contended by assessee, do not apply to the claim for deduction under section 80P - Revenue authorities were not justified in not entertaining the claim of the assessee for deduction under section 80P of the Act as made by the assessee.
Since neither the AO nor the CIT(A) have examined the other conditions for allowing deduction under section 80P of the Act, we deem it fit and proper to remand the issue of the assessee’s eligibility to claim deduction u/s 80P in the sense with regard to the quantum of deduction and also with regard to the other conditions for allowing deduction u/s 80P for examining afresh by the AO. Allow the appeal of the assessee for statistical purposes.
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2022 (6) TMI 1463 - KARNATAKA HIGH COURT
Maintainability of petition filed under Articles 226 and 227 of the Constitution of India read with Section 482 of the Cr.P.C. at the hands of a power of attorney holder of an accused - suppression of material facts or not - offences alleged meet their ingredients or not.
Whether the subject writ petition filed under Articles 226 and 227 of the Constitution of India read with Section 482 of the Cr.P.C. is maintainable at the hands of a power of attorney holder of an accused? - HELD THAT:- It is not in dispute that the petitioners are presently residing at United Kingdom and the petition is presented by one Mr. Gautam Giri on the strength of a power of attorney executed by the petitioners on 14-12-2021 at Bangalore. The power of attorney appended to the petition is executed at Bangalore, but signed by the executants before the Notary at London. There is no averment in the entire petition that the said power of attorney holder is aware of the facts of the case. There being no averment to the effect that the power of attorney holder has full knowledge of what is being filed and the reason for presenting the petition by the said power of attorney holder, notwithstanding the fact that it is filed invoking writ jurisdiction of this Court as an amalgam to Section 482 of the Cr.P.C., the writ petition would not become maintainable. The Constitutional Courts have consistently taken a view that the petition under Section 482 of the Cr.P.C. by a power of attorney holder is not maintainable.
The High Court of Delhi in a Judgment rendered in the case of AMRINDER SINGH v. STATE OF NCT OF DELHI [2022 (1) TMI 1421 - DELHI HIGH COURT] addresses the very issue as it was argued therein that the petition filed under Article 227 read with Section 482 of the Cr.P.C. was not maintainable. The High Court of Delhi following the judgment of the Apex Court in the case of T.C. MATHAI AND ANOTHER v. THE DISTRICT & SESSIONS JUDGE, THIRUVANANTHAPURAM [1999 (3) TMI 635 - SUPREME COURT], clearly holds that the petition filed through Special Power of Attorney Holder is per se not maintainable. Therefore, no permission can be granted to the power of attorney holder to present the petition under Article 227 of the Constitution of India or otherwise. The challenge to the proceedings seeking annulment of FIR was also held not maintainable.
On a coalesce of the judgment so rendered by the Constitutional Courts, what can be unmistakably gathered is that the power of attorney holder of an accused cannot maintain a petition be it under Article 226 or 227 of the Constitution of India read with Section 482 of the Cr.P.C. or Criminal Petition under Section 482 Cr.P.C. Therefore, the present petition filed by the power of attorney holder of the accused, without seeking any permission at the hands of this Court, and without even narrating in the petition that he is personally aware of the facts of the case, the writ petition filed under Articles 226 and 227 of the Constitution of India read with Section 482 of the Cr.P.C. is per se not maintainable, as the accused cannot be represented by a power of attorney holder and thus, maintain the subject petition.
Whether the writ petition suffers from suppression of material facts entailing dismissal of the petition? - HELD THAT:- The petitioner No. 1 has filed an affidavit of declaration which is dated 29-03-2022 for the first time stating that in view of travel restrictions due to COVID-19 the power of attorney was handed over to a family friend Mr. Gautam Giri and has also sought to defend the allegations made in the complaint. But there is no whisper about the afore-narrated facts and events that have been suppressed by the petitioners while filing the present petition. Therefore, there can be no doubt that the petitioners are guilty of approaching this Court with unclean hands and such petitions should be thrown to the winds by imposition of exemplary costs. If there is no candid disclosure of relevant and material facts or the petitioners are guilty of misleading the Court, the petition is to be dismissed at the threshold without considering the merit of the claim.
The case at hand is to meet its dismissal with imposition of exemplary costs, as the petitioners have invoked the jurisdiction of this Court both under Articles 226 and 227 of the Constitution of India and Section 482 of the Cr.P.C. with unclean hands.
The first and second question having been answered in the negative against the petitioners, the other point with regard to merits of the matter need not be gone into, as both the points act as a threshold bar for entertaining the petition and the doors of this Court cannot be considered to be open or even ajar to the petitioners, but they are closed. Therefore, third question is not answered.
Writ Petition is dismissed with exemplary cost of Rs. 1,00,000/- to be paid by the petitioners to the High Court Legal Services Authority, Bengaluru within four weeks from the date of receipt of a copy of this Court and file an acknowledgment to that effect before the Registry of this Court.
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2022 (6) TMI 1462 - ITAT BANGALORE
TP Adjustment - MAM determination - determination of ALP of an international transaction between the assessee and its Associate Enterprises (AE) u/s 92 - application of residual PSM OR TNMM - HELD THAT:- The facts in the present asst. year are identical with issue covered by the decision of coordinate bench in the assessee’s own case in [2020 (3) TMI 947 - ITAT BANGALORE] for the assessment year 2013-14 thus we set aside the question of determination of ALP to the TPO afresh applying TNMM as the most appropriate method as was done in Assessment Years 2013-14 and 2014-15 & 2015-16 in the order referred to above. Needless to say the assessee shall be given reasonable opportunity of hearing. Assessee does not make any unique contribution to the transaction, hence PSM in this case cannot be applied.
Appeal of the assessee is allowed for statistical purposes.
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2022 (6) TMI 1461 - AUTHORITY FOR ADVANCE RULINGS, RAJASTHAN
Scope of Advance Ruling - Service recipient, M/s. Jaipur Vidyut Vitran Nigam Limited is a Government Entity or not - clause (zfa) of para 2 of Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017 as amended by Notification No. 32/2017 - Central Tax (Rate) dated 13.10.2017 - Operation and Maintenance of identified 33/11 KV Grid Sub-Stations to Jaipur Vidyut Vitran Nigam Limited are wholly exempt vide serial number 3 of Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017 [as amended] or not - HELD THAT:- The words "or a Governmental authority or a Government Entity" has been omitted at serial number 3, in column (3), in the heading "Description of Services" in the said Notification No. 12/2017- Central Tax (Rate) dated the 28th June, 2017 vide aforesaid Notification No. 16/2021-Central Tax (Rate) dated 18.11.2021 which resulted as withdrawn of exemption from tax from 01.01.2022. Thus, as on date there is no exemption is applicable on Pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Government Entity by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution. Hence, applicant is not eligible to avail the said exemption from tax.
The scope of the ruling for Authority for Advance Ruling (AAR) is limited to the transactions being undertaken or proposed to be undertaken. In the instant case, the application seeking advance ruling was filed on 16.11.2021 before the RAAR with respect to supplies undertaken for the period from 01.11.2019 to 30.04.2021. Hence, the case is out of the purview of the Advance Ruling.
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2022 (6) TMI 1460 - ITAT MUMBAI
Disallowance u/s 35(2AB) - research and development expenditure - assessee had itself admitted that there was a difference in the claim of Research & Development expenditure and that the assessee had claimed excess deduction u/s. 35 (2AB) - As per CIT contentions put forth by the appellant were not disposed off by the AO, thus AO is directed to restrict the disallowance after necessary verification as specifically brought out in the contentions of the appellant - HELD THAT:- AR has filed the working of disallowance U/sec. 35(2AB) of the Act which explains the nature of expenditure, actual expenses debited to profit &loss account, claim made in the return of income and the assessee claim before the DSIR and the revised claim. The workings tally with the net disallowance restriction directed by the CIT(A) to A.O. DR could not controvert the above findings of restoration to the file of A.O. and we do not find merit in this ground of appeal of the revenue and is dismissed.
Depreciation on computer software - HELD THAT:- ITAT in the Assessee own case in A.Y. 2010-11 [2020 (1) TMI 1200 - ITAT MUMBAI] has observed that the computer software is eligible for depreciation @60%. We find there is nothing remains in the ground of appeal as it become in fructuous due to grant of higher depreciation on software and the ground of appeal of the revenue is dismissed.
Grant of depreciation on assets transfer in the merger and the said companies have not claimed depreciation on the assets held by them - HELD THAT:- We find the Hon’ble Tribunal In [2020 (1) TMI 1200 - ITAT MUMBAI] has considered the facts, provisions of the Act and judicial decisions and directed the A.O. to allow the depreciation. In the present case the facts are identical and CIT(A) has relied on the earlier years decision and granted the relief. We up held the same as decided in favour of the assessee.
Addition u/s 145A of the Act with respect to modvat credit - HELD THAT:- The Honble Tribunal in [2021 (10) TMI 505 - ITAT MUMBAI] as perused Tax Audit report of the assessee and find that it is the claim of the assessee that the impact of grossing up of tax, duty, cess etc. by restating the values of purchases and inventories by inter alia including the effect of CENVAT credit will be Nil, subject to Sec. 43B that the duty, taxes, cess etc. is paid before the "due date" of filing of the return of income. As the ld. D.R had submitted that the aforesaid working of the assessee would require to be verified, we therefore, in all fairness restore the matter to the file of the A.O for readjudication.
Allowance of consultancy charges as revenue expenditure and allow deduction u/s 35DD - HELD THAT:- We find that the similar issue has been decided in the assessee favour by the Honble Tribunal in [2021 (10) TMI 505 - ITAT MUMBAI] for A.Y.2003-04 dated 510-2021 as held that it is a clear case of simple professional services rendered by Accenture to the assessee which at any cost cannot be considered as a capital in nature. We find that the said expenditure has to be considered as wholly and exclusively as deduction u/s. 37(1) - We hold that the provisions of Section 35DD of the Act as alleged by the ld. CIT(A) cannot be made applicable in the instant case as admittedly the same only refers to expenses incurred pursuant to amalgamation. Hence, we direct the ld. AO to grant deduction of the said expenditure u/s. 37(1) - Decided in favour of assessee.
Correct head of income - Treating rental income from RP House and centre point under the head IFHP OR IFOS - HELD THAT:- We find the Honble Tribunal [2021 (10) TMI 505 - ITAT MUMBA] has held that the transfer of ownership has to be completed over a period of 4 years and therefore the assessee continues to remain the owner of part property of the RP House. Further it was decided that the income from RP House and Centre Point is assessable as Income From House Property.
CIT(A) has considered the factual aspects and made a reasonable observations and granted the relief. We find the revenue could controvert on the findings of the CIT(A) on this disputed issue. Accordingly, we follow the judicial precedence of ratio of the ITAT decision and dismiss the ground of appeal of the revenue.
Deduction of eligible profits u/s 80HHC of the Act while calculating the book profits u/s 115JB - HELD THAT:- We find that in the assessee’s own case for the A.Y 2003-04, the Hon’ble Tribunal has allowed the assessee’s ground of appeal in [2021 (10) TMI 505 - ITAT MUMBA] as held that deduction u/s. 80HHE had to be worked out on the basis of adjusted book profit u/s. 115JA of the Act and not on the basis of profits computed under regular provisions of law applicable to computation of profits and gains of business. - Decided against revenue.
Allowance of set off of losses /depreciation of tools division on account of demerger - HELD THAT:- As relying on own case [2021 (10) TMI 505 - ITAT MUMBAI] to hold that the ld. CIT(A) had rightly directed the ld. AO to allow set off of losses of amalgamating company in the hands of the assessee - Decided against revenue.
Allow depreciation on computer software @ 60% rate after due verification and recomputed the computer and computer software as on block &WDV and allow ground of appeal for statistical purpose.
Disallowance of interest on loan taken for purchase of a capital asset(Shares of RPIL) - AR submits that if the barrowed funds are used for investment in shares held for controlling interest, interest is allowable U/sec 36(1)(iii) of the Act and such expenditure is incurred out of commercial expediency - HELD THAT:- We find the CIT(A) has followed the assessee own case for A.Y.2002-03 &2003-04 and confirmed the disallowance of interest. Further on appeal by the assessee to the Honble Tribunal, for both the assessment years ITAT has decided in favour of the assessee as per the observations discussed in the above paragraphs. The Ld.DR has accepted the decisions of the Honble Tribunal. Accordingly, we set aside the decision of the CIT(A) on this disputed issue and direct the assessing officer to delete the disallowance of interest and allow the ground of appeal.
Capital gains on sale of RP house to be taxed over 4 years.
Grant the depreciation on the block of building - HELD THAT:- As decided in [2021 (10) TMI 505 - ITAT MUMBAI] block of building continued, depreciation thereon should be eligible to the assessee. Accordingly, we direct the ld. AO to grant depreciation.
Nature of receipts - treatment of sales tax deferral loan - revenue receipt or capital receipt - HELD THAT:- We are of the opinion that the Assessing officer should also be provided an opportunity to verify and examine the facts in the additional ground raised by the assessee. Hence to meet the ends of justice with out going in to merits of the case restore this disputed issue for limited purpose to the file of the Assessing officer to decide on merits and allow the ground of appeal for statistical purposes.
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