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Showing 81 to 100 of 2114 Records
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2018 (2) TMI 2035 - ITAT MUMBAI
TDS u/s 194J - Disallowance u/s 40(a)(ia) - secondment expenses on which tax was not deducted at source - HELD THAT:- As decided in own case [2017 (1) TMI 1751 - ITAT MUMBAI] the issue is covered by the decision in the case of IDS Software Solutions (India) (P) Ltd. vs. ITO (International Taxation) [2009 (1) TMI 363 - ITAT BANGALORE-A] wherein the facts discussed as regards to where the assessee entered into a secondment agreement with US Company and obtained the services of an employee and the question arose whether the reimbursement bys the assessee to the US Company of the salary paid by the US company was chargeable to tax as “fess for technical services”.
As held that though the US Co was the employer in a legal sense but since the services of the employee had been seconded to the assessee and since the assessee was to reimburse the emoluments and it controlled the services of the employee, it was the assessee which for all practical purposes was not chargeable to tax. Though the person deputed by the US Co was a technical person, the consideration paid under the secondment agreement was not “fees for technical services” because the fact that the seconded employee was responsible and subservient to the payer (assessee) and was required to be also act as officer or authorized signatory or nominee of the assessee made it consistent with an agreement for providing technical services. We dismiss this issue of revenues’ appeal.
Estimated basis on account of compensation from customers - HELD THAT:- As decided in own case [2017 (1) TMI 1751 - ITAT MUMBAI] this Bench has deleted the identical addition in assessee’s case.
Addition of bogus purchases - CIT(A) has restricted the addition to 12.5% - HELD THAT:- The Hon’ble Gujrat High Court in CIT vs. Simit P. Seth [2013 (10) TMI 1028 - GUJARAT HIGH COURT] has upheld the decision of the Tribunal and sustained the addition 12.5% of the total bogus purchases holding that only profit element embedded in such purchases can be added to income of the assessee. We further notice that the AO has not rejected the sale shown by the assessee during the year relevant to the assessment year under consideration. Under these circumstances, there is no justification in making 100% addition of the bogus purchases made by the assessee.
In our considered view, the CIT(A) has rightly restricted the addition keeping in view the element of profit embedded in the transaction in question. Accordingly, the finding of the Ld. CIT(A) on this issue is based on the law laid down by the Hon’ble Gujarat High Court rendered in the case referred above. Hence, we do not find any infirmity in the findings of the Ld. CIT(A) to interfere with the same. We, therefore, uphold the findings of the Ld. CIT(A) and dismiss this ground of appeal of the revenue.
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2018 (2) TMI 2034 - MADRAS HIGH COURT
Suit for recovery of money - unregistered sale agreement - properly stamped or not - admissibility as evidence to the contract in a suit for specific performance - HELD THAT:- Admittedly, the suit is filed only for recovery of money paid under unregistered sale agreement. In order to mark the unregistered sale agreement, dated 24.05.2014, the revision petitioner / 1st defendant has filed the said interlocutory application for impounding the document and for sending the same to the Deputy Collector (Stamp Duty), Tiruchirapalli. As per Article 5(j) of the Schedule I of the Indian Stamp Act, the stamp duty for the sale agreement is ₹ 20/-. It is seen that the unregistered sale agreement, dated 24.05.2014, has been written on ₹ 20/- stamp paper. Hence, the said document can be taken as sufficiently stamped.
Hence, it is clear that an unregistered document may be received as an evidence to the contract in a suit for specific performance or as the evidence of any collateral transaction not required to be effected by registered instrument. Therefore, an unregistered sale deed of an immovable property of the value of ₹ 100/- and more could be admitted in evidence as evidence of a contract in a suit for specific performance of the contract. Such an unregistered sale deed can also be admitted in evidence as an evidence of any collateral transaction not required to be effected by registered document. When an unregistered sale deed is tendered in evidence, not as evidence of a completed sale, but as proof of an oral agreement of sale, the deed can be received as evidence making an endorsement that it is received only as evidence of an oral agreement of sale under the provision of Section 49 of the Registration Act.
Petition dismissed.
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2018 (2) TMI 2033 - ITAT HYDERABAD
Addition of on money payment as unexplained investment u/s 69 - CIT- A deleted the addition - HELD THAT:- We find that the CIT(A) has accepted the contentions of the assessee for giving relief to the assessee. We find that the assessee has filed the cash flow statement of Smt. Sulochanamma and the details of the cash gifts to the assessee and the cash for this purpose is drawn from her UTI, now Axis bank account. We find that the copies of the bank statements of UTI, now Axis bank are filed to demonstrate that the cash gifts were given by Smt. Sulochanamma to the assessee. We also find that initially, the assessee had claimed that the cash gifts are from Canara Bank, but before the CIT(A), it was submitted that it was from Axis Bank. Smt. Sulochanamma is proved to be a person with means, and the claim that she has gifted the money to the assessee has been proved. Therefore, we do not find any reason to interfere with the findings of the CIT(A). - Appeal filed by the Revenue is dismissed
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2018 (2) TMI 2032 - ITAT MUMBAI
Exemption u/s 54 - Capital gain on sale of residential house property treated as short term capital gain - HELD THAT:- Since, the exemption claimed by the co-owner in respect of the same property has been allowed by the Ld. CIT (A), the Ld. CIT (A) in the present case has no reason to deviate from the decision taken by the CIT (A) in the case of the assessee who is also a co-owner of the said property.
The order of the Ld. CIT (A) passed in the case of Gulshan Mallik [2014 (3) TMI 474 - DELHI HIGH COURT] and also in accordance with the CBDT Circular No. 672 dated 16.12.1993 and also in accordance with the decision of the co-ordinate Bench rendered in Anita K Kalyani vs. ACIT [2017 (2) TMI 788 - ITAT MUMBAI] Hence, we allow the sole ground of appeal of the assessee and set aside the impugned order passed by the Ld. CIT(A). Accordingly, we direct the AO to allow the exemption u/s 54 of the Act claimed by the assessee. - Decided in favour of assessee.
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2018 (2) TMI 2031 - GUJARAT HIGH COURT
Deemed dividend addition u/s 2(22)(e) - Revenue submitted that the Tribunal did not correctly appreciate the ratio laid down by the Supreme Court in case of Gopal And Sons (HUF) [2017 (1) TMI 331 - SUPREME COURT] - HELD THAT:- Tax Appeal is ADMITTED for consideration of following substantial question of law.
“Whether the Income Tax Appellate Tribunal was right in law in upholding the order of the Commissioner (Appeals) deleting the addition made of a sum of ₹ 12.35 crores by the Assessing Officer as deemed dividend in the hands of the assessee company under section 2(22)(e) of the Act?”
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2018 (2) TMI 2030 - ITAT DELHI
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2018 (2) TMI 2029 - MADRAS HIGH COURT
Maintainability of petition - alternative remedy of appeal - right to cross-examine the makers of statements which are heavily relied upon - Smuggling - foreign origin gold bars - vehicle Nissan Micra Car - penalty - infringement of principles of natural justice or not - HELD THAT:- No doubt, there is lapse on the part of the first respondent in not passing an order negativing the request of the petitioner as and when it was made. If a request for cross examination of witnesses or supply of certain document is made, the authority is obliged to dispose of the said request then and there. If a request for adjournment is made again it will have to be dealt with then and there. It is not proper on the part of the authority to receive applications making such a request and dispose them of while passing the final order. The order rejecting the request made in the application forms an internal part of the final order. Such an approach is to be frowned upon. But, on this score this Court does not propose to interfere in the matter.
In the light of the decisions rendered by the Hon'ble Delhi High Court in SUDHIR SHARMA, RN. ZUTSHI, AJAY YADAV, YASH PAL, VK. KHURANA, TRK. REDDY, PRADEEP RANA, ANIL MADAN VERSUS THE COMMISSIONER OF CUSTOMS, UNION OF INDIA AND ANOTHER [2015 (3) TMI 820 - DELHI HIGH COURT], this Court is of the view that the petitioner has not made out a case that the adjudicating authority has violated the principles of natural justice. Only if the infringement of the principles of natural justice is categorically demonstrated, this Court would be justified in permitting the petitioner to bye-pass the statutory remedy available to him. In as much as the petitioner has not made out a case of infringement of principles of natural justice by the first respondent, this Court is of the view that the writ petitioner can rather workout his remedies in terms of the statutory scheme laid down in the Customs Act, 1962.
This Court is of the view that since the petitioner has been relegated to availing the alternate remedy of appeal, there is no necessity to examine if the impugned order is resting on materials other than the statements of the said co-notices - The petitioner is at liberty to file an appeal before the appellate authority - petition dismissed.
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2018 (2) TMI 2028 - ITAT JAIPUR
Capital gain on sale of land - Conversion of land - admissible deduction u/s 54 - HELD THAT:- We find that the agricultural land initially purchased in year 1996 was converted and the land use changed to resort purposes in year 2002 and necessary approval sought from Nagar Vikas Niyas, Alwar. Thereafter, the said resort land was used for marriage and social functions under the name of Georgia Resorts. In year 2009, the assessee again got the land use changed from “resort” to “residential” and necessary approval sought from Nagar Vikas Niyas, Alwar which vide its order dated 31.7.2009 has approved the change of the land use to residential. Thereafter, the assessee had taken a series of steps whereby he has got the plans approved for carving out 20 plots of land, carried out various development activities and sold the residential plots to individual purchasers over a period of time. During AY 2010-11, as per admitted position by the assessee, he sold 3 plots of land. Thereafter, during AY 2011-12, he sold 1 plot of land and in the year under consideration, he sold 5 plots of land and sale deeds duly executed and assessed by stamp valuation authorities.
All these facts taken together shows clearly that the assessee has taken affirmative steps and actions where he has got the land use changed to residential and converted his resort land into residential stock-in-trade of his business of selling the plots of land for earning profit. The very nature and purpose of the resort land has been changed and such change is an irreversible change where very nature and purpose of the land has been changed from resort to residential. It is not a case that the buyers have acquired resort plots and subsequently changed it to residential use.
In this case, the assessee itself has sought land use conversion and developed residential plots and then sold it to individual buyers as residential plots. Therefore, we are of the view that by such plotting of land, the resort land has been converted into stock-in-trade (in form of residential plots) of assessee’s business. The development of residential plots and said conversion has happened by assessee’s own admission during financial year 2009-10 and the intent of the assessee has thus been demonstrated through his own deeds and actions. The fair market value of the asset on the date of conversion as reduced by the cost of acquisition and improvement/development expenses as claimed to have been incurred, is required to be assessed under the head “capital gain” in the year(s) the stock-in-trade is sold/transferred. Further, sales realization of the stock-in-trade over such fair market value is required to be assessed as “business income”.
During the year under consideration, it is an admitted position that 5 plots have been sold for a consideration of ₹ 97,16,600. Therefore, the taxability arising on conversion of resort land into stock-in-trade to the extent the latter has been sold during the year, arises during the impunged assessment year. The matter is accordingly set-aside to the file of the AO to determine the capital gains in accordance with the provisions of section 45(2) as well as business income on sale of such plots. Further, the matter relating to allowability of development expenses and claim of deduction u/s 54 is also set aside to the file of the AO who shall examine the same and allow as per law.
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2018 (2) TMI 2027 - ITAT DELHI
Disallowance of loss on account of foreign exchange fluctuation - addition stating that these expenditure have not been incurred by the assessee for the purposes of the business - CIT(A) allowed the claim of the assessee @50% of such claim holding that assessee has incurred such foreign exchange loss on account of loan for the purposes of the business - HELD THAT:- Revaluation of the foreign exchange liability is in accordance with accounting standard 11 issued by ICAI and the ld Assessing Officer has allowed 50% bank charges u/s 37(1).
Hence, following the decision of the Hon'ble Supreme Court in CIT Vs. Woodward Governance India Pvt. Ltd [2009 (4) TMI 4 - SUPREME COURT] the allowed the claim of the assessee to the extent of 50%. He further held that looking to the facts on record and the true nature of transactions it cannot be said that the entire sum expended by the assessee are wholly and exclusively for the purposes of business. AR also could not show that the whole funds have been used for the business purposes.
No such details were mentioned before the ld AO or before the ld CIT(A). While disallowing the bank charges to the extent of 50% vide order he has also mentioned that the reasons for the confirmation of disallowance is absence of complete details provided before the ld AO. DR also could not show us any reason that why such fluctuation is capital in nature. In view of this we do not find any infirmity in the order of the ld CIT(A) in allowing 50% foreign exchange losses holding that they are incurred for the purposes of the business. In the result appeal of the revenue raising the solitary ground is dismissed.
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2018 (2) TMI 2026 - KARNATAKA HIGH COURT
Levy of penalty - Section 73 of the Finance Act of 1994 - service of Practicing Chartered Accountant provided - appellant had paid the arrears of tax and interest prior to the issuance of show cause notice - suppression of facts or not - Whether the proceedings under Section 73(3) of the Finance Act, 1994 in this matter could be said to be justified by any of the reasons stated in sub-section(4) of Section 73 of the Act?
HELD THAT:- It is true that in various cases like COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX VERSUS M/S ADECCO FLEXIONE WORKFORCE SOLUTIONS LTD [2011 (9) TMI 114 - KARNATAKA HIGH COURT] , that the levy of penalty imposed on the ground of delayed payment of Service Tax was set aside as the tax was paid prior to issuance of show cause notice. However, the present case has a distinguishable feature.
In the present case, the undisputed fact reveals as reflected from the Order of the Assessing Officer that the assessee came up with a plea before the Assessing Officer that he has rendered services to Karnataka State Financial Corporation (KSFC) and it is the KSFC which has not cleared the bills of the assessee and in those circumstances, the assesee was not able to pay service tax - it is also established that non-payment of Service Tax was not due to delay but on the contrary it was willful non payment of service tax with an intention to evade payment of Service tax. Thus, the assessee suppressed the facts and made willful mis-statement before the Assessing Officer and in those circumstances, the benefit of Section 74, 78 was not extended to him.
In the light of the categorical finding of fact arrived at by the Assessing Officer keeping in view Section 73(4) of the Finance Act of 1994, merely because tax was paid before the issuance of show cause notice, it can never be said that the penalty cannot be imposed upon the appellant - appeal dismissed.
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2018 (2) TMI 2025 - ITAT MUMBAI
Revision u/s 263 - Assessment u/s 153A - AO jurisdiction to make additions - HELD THAT:- Assessing Officer had no jurisdiction to make additions in respect of non-abated years i.e. years for which assessment were completed u/s 143(3) of the Act or time limit for issuing notice u/s 143(2) had expired except if the additions were based on incriminating material found during the course of search. We find that the issue is settled in case of CIT v. All Cargo Global Logistics Ltd [2015 (5) TMI 656 - BOMBAY HIGH COURT] wherein, it is held that in respect of non-abated years, additions can only be made on the basis of incriminating material found during the course of search pertaining to those additions. We find that the Assessing Officer had no jurisdiction to make additions on the above issues, non-consideration of those issues in the assessment order would not make the assessment order passed u/s 143(3) r.w.s. 153A of the Act erroneous and prejudicial to the interest of Revenue. Hence, the CIT could not have disturbed the said assessment order by exercising jurisdiction u/s 263 of the Act.
Thus we hold that since no incriminating material was found during the course of search that took place in case of appellant the Assessing Officer could not have made any addition in the order passed u/s 143(3) r.w.s. 153A of the Act. Hence, the CIT had no jurisdiction to revise the assessment order on the ground that the said issue was not considered by the Assessing Officer.
Necessary approval u/s 153D - Assessing Officer has passed the order after obtaining necessary approval from Addl.CIT u/s.153D of the I.T. Act, therefore,we are of the considered opinion that the CIT has no power to revise the order u/s.263 of the I.T. Act in the instant case since the same has been passed with the approval of the Addl.CIT u/s.153D of the I.T. Act.
We hold that the CIT has to conduct minimal inquiry by examining the details filed by appellant and after due application of mind on the details and replies filed by appellant has to come to a conclusion that the order passed by Assessing Officer is erroneous and prejudicial to the interest of revenue.
Undisclosed bank account with JP Morgan - We find that the document was found from the premises of Mrs. Priti Milan Mehta, on 11.03.2014 ex-wife of the assessee. They were divorced on 04.09.2009, therefore the document did not found from the assessee hence the AO has no jurisdiction to make an addition pertaining to the said bank account since the said documents was not found during the course of search conducted in case of the assessee. Therefore AO could not have made addition while passing the order u/s.143(3) of the Act since the addition have been made if the assessment order passed u/s.143(3) r.w.s. 153C of the Act. Since the AO has not made this addition in the assessment order u/s.143 r.w.s153 of the Act. Non consideration of this issue would not make the order erroneous and prejudicial to the interest of revenue. Hence CIT has no jurisdiction to invoke the jurisdiction u/s.263 of the Act
In respect of 2011-12& 2012-13 - We find that incriminating documents were found from the search conducted in the premises of Mrs. Priti Milan Mehta on 11.03.2014. Mrs. Priti Milan Mehta, ex-wife of the assessee, they were divorced on 04.09.2009. The documents were not found from the search conducted in the case of assessee. Hence in both the assessment years the AO has no jurisdiction to make the addition pertaining to said bank account since the document has been not found during the course of search conducted in the case of the assessee. The AO could not have made any addition in the order passed u/s.143 r.w.s.153A of the Act. Therefore, the AO in case of assessee could not have made this addition while passing the order u/s.143(3) r.w.s.153. of the Act. Since the addition could have made if the order is passed u/s.143(3) r.w.s.153C of the Act. Since the AO could not have made this addition in respect of assessment order passed u/s.143(3) r.w.s.153 of the Act. Hence CIT has no jurisdiction to invoke section 263 of the Act. Therefore we are of the view that no inquiry was conducted by CIT setting aside the order of AO.
No enquiry was conducted by CIT before deciding the issue afresh - We find that u/s.263 of the Act, power given to CIT for call for details of the assessee and provide assessee an opportunity of hearing. The CIT has power to call for details and to provide opportunity of hearing to the assessee would show that CIT has to conduct minimal enquiry by examining the detail filed by the assessee and after due application of mind by details and reply filed by the assessee has to come to conclusion that order passed by the AO is erroneous and prejudicial to the interest of the revenue. As per the decision of Hon’ble Delhi High Court in case of CIT v. Delhi Airport Metro Express [2017 (9) TMI 529 - DELHI HIGH COURT]. We respectfully following the decision, we are of the view that CIT is failed to the fundamental requirement of valid presumption of jurisdiction as per mandate of law. Therefore, we allow the appeal of the assessee.
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2018 (2) TMI 2024 - ITAT DELHI
Disallowance on account of sale of tax subsidy and refund of interest on Term Loan - nature of receipt - revenue or capital receipt - HELD THAT:- Hon'ble Supreme Court in case of CIT Vs. Pooni Sugars & chemicals Ltd [2008 (9) TMI 14 - SUPREME COURT] has held that character of the receipt in the hands of the assessee has to be ascertained looking at the purpose for which the subsidy is provided. Therefore, Hon'ble Supreme Court held that for ascertaining the true character of the subsidy the purpose of the subsidy i.e. “purpose test” needs to be looked into. Hon'ble Supreme Court further stated that source of the subsidy, time of the subsidy is not relevant.
According to the Hon'ble Supreme Court if the object of the subsidy scheme was to enable the assessee to run the business more profitably then the receipt was on revenue account - if the object of the subsidy was to set a new unit or to expand existing unit then such receipt is on capital account. Hence, it was held that the object for which the subsidy is given necessarily determines the nature of the subsidy. The form or the mechanism through which the subsidy is given is irrelevant. The ld CIT(A) has decided the issue based on the above decision of the Hon'ble Supreme Court. The ld CIT(A) has discussed the whole issue in para No. 4 of his order wherein, he has decided the issue as per the guidelines the decision of the Hon'ble Supreme Court. In view of this we do not find any infirmity in the order of the ld CIT(A) in holding that subsidy received by the assessee is capital in nature. Appeal of the revenue is dismissed.
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2018 (2) TMI 2023 - ITAT AHMEDABAD
No interest in prosecuting appeal by assessee - HELD THAT:- On the date of hearing i.e. on 14-02-2018, none appeared on behalf of Assessee nor an adjournment application was filed on behalf of the Assessee though the notice fixing the date of hearing was served on Assessee, which indicates that the assessee is not interested in prosecuting the appeal, therefore, following the decision of ITAT Delhi Bench in the case of CIT Vs Multiplan India (Pvt.) Ltd..[1991 (5) TMI 120 - ITAT DELHI-D] we dismiss the appeal of the assessee in limine.. The assessee shall however be at liberty to approach the Tribunal for recalling of this order, if prevented by sufficient cause for non-appearance on the date of hearing. Appeal of the Assessee is dismissed.
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2018 (2) TMI 2022 - HIGH COURT OF KARNATAKA AT BENGALURU
Dishonor of Cheque - insufficiency of funds - acquittal of accused - legally recoverable debt or not - Section 138 of the Negotiable Instruments Act, 1881 - HELD THAT:- There is no illegality committed by the Trial Court, which calls for interference. It is to be seen that the cheque was not issued by the accused – respondent towards a legally recoverable debt. It was issued as a security for the loan which he had borrowed from the complainant.
There are no no infirmity in the judgment of acquittal rendered by the Trial Court. Hence, there is no necessity to revisit the impugned judgment - appeal dismissed.
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2018 (2) TMI 2021 - ITAT MUMBAI
Undisclosed unaccounted cash transactions - Addition on the basis of rough cash books 1 & 2 found and seized during the course of search and also on the basis of admission of the assessee in the statement recorded u/s 132(4) - peak credit theory advocated by the assessee - HELD THAT:- Peak cash credit theory advocated by the assessee cannot be accepted as it applies only in a case where the cash has been rotated several times by depositing and withdrawing from banks or used in the business. The basic idea behind the peak credit theory is to avoid double addition and to bring only the actual income of the assessee where there are large number of unexplained credit and debit entries. In the assessee’s case, it is not the case. According to the assessee’s admission, the transactions recorded in RCB 1 & 2 are transactions pertaining to its business activity and hence, the peak credit theory advocated by the assessee has been rejected.
Second method suggested by the assessee to determine undisclosed income on the basis of estimation of reasonable profit on total receipts - The assessee has pleaded for 10% net profit on total receipts. There is no uniform yardstick for estimation of net profit. The estimation of net profit depends upon facts of each case and nature of business activity carried on by the assessee. The assessee is in the business of construction and development of flats. Normally, the net profit percentage in unaccounted transactions is quite more than the net profit in normally accounted transactions. In the case of construction business, the statute itself has provided for 8% net profit in cases of certain class of assesses where the turnover does not exceed specified limit. Though the provisions of section 44AD cannot be strictly applied to the facts of assessee’s case, a clue from the said provision can be drawn to estimate net profit as the assessee’s nature of business squarely fit into the class of assessee where the provisions of section 44AD applies. Therefore, keeping in view the facts and circumstances of this case and also drawing a clue from the provisions of section 44AD, further, considering the fact that these are unaccounted transactions, a reasonable net profit of 15% would meet the ends of justice. Therefore, we direct the AO to estimate net profit of 15% on total receipts quantified by the assessee.
Denial of deduction u/s 80IB(10) in respect of housing project - AO disallowed deduction u/s 80IB(10) of the Act, on the ground that the assessee has not made any claim in original return filed u/s 139(1) and the fresh claim made in revised return filed u/s 153A cannot be accepted as the provisions of section 153A is for the benefit of the Revenue and hence, the assessee cannot make any fresh claim which was not made earlier - HELD THAT:- If assessments are abated, then the AO is having jurisdiction to assess or reassess total income on the basis of return of income filed filed by the assessee u/s 153A, including incriminating material found as a result of search. Going by the same analogy, if the assessments are abated as on the date of search, the assessee is at liberty to file a true and correct return making a claim which was not made earlier in the original return filed u/s 139(1) if such claim is allowable under the Act. In this case, on perusal of the facts available on record, we find that the search took place on 29-09-2011, the dispute involved with regard to the claim of deduction u/s 80IB(10) pertains to AY 2009-10 to 2012-13. The assessment for the assessment year 2009-10 has been unabated / concluded as on the date of search as the time limit for issue of notice u/s 143(2) has been expired on 30-09-2010 even though no assessment has been framed u/s 143(3). Insofar as assessment year 2010-11 onwards, the time limit for issue of notice u/s 143(2) was due on 30-09- 2011, 30-09-2012 and 30-09-2013 and all the dates are after the date of search. Therefore, we are of the view that the assessment for AY 2009- 10 is unabated and AY 2010-11 onwards are abated and in view of the ratio of the Hon’ble jurisdictional High Court in the case of Continental Warehousing Corporation (Nava Sheva) Ltd and Gurinder Singh Bawa, the assessee can make a fresh claim which was not made in the original return u/s 139(1) is abated assessments.
Accordingly, the assessee is eligible for deduction u/s 80IB(10) as per the claim made in the return filed u/s 153A of the Act and hence, we direct the AO to admit the claim of the assessee and make a limited verification insofar as the observation of the CIT(A) with regard to the distance of the project before allowing the claim. In the result, the ground raised by the assessee insofar as deduction u/s 80IB(10) for the assessment year 2009-10 has been rejected and in respect of AYS 2010-11 to 2012-13 is allowed.
Reduction in the value of closing stock - addition of income towards suppressed stock on the ground that the said claim was not supported by the letter from M/s Bombay Infrastructure Ltd. the assessee submitted before the AO that due to strained relations with the buyer, it could not able to get confirmation from the party - HELD THAT:- Facts are not clear. The assessee claims that it has furnished necessary evidences to justify reduction in value of closing work-inprogress in respect of loss incurred on sale of City Centre Mall to M/s Bombay Infrastructure Ltd. The CIT(A), on the other hand, observed that the assessee has not filed any evidences. The assessee has filed various details to explain the loss. Therefore, we are of the considered view that the issue need re-examination from the AO in the light of evidence filed by the assessee; hence, we set aside the issue to the file of the AO and direct him to consider the evidence filed by the assessee and to decide the issue afresh in accordance with law after affording opportunity of hearing to the assessee. In the result, ground raised by the assessee is allowed, for statistical purpose.
Assessment u/s 153A - interest on partners’ capital account received from partnership firms - AO made addition towards interest accrued but not due on partners’ capital account from partnership firm, M/s Akshar Developers on the ground that the assessee has included interest on capital in original return filed u/s 139 whereas excluded such interest in revised return filed u/s 153A without there being any material changes in facts - HELD THAT:- The assessments which are pending as on the date of search shall abate and accordingly, the AO shall assess or re-assess the total income on the basis of regular books of account and other seized material found during the course of search. The sum and substance of the ratio of judgments of jurisdictional High Court is that in case of abated assessments, the scope of assessment is not limited to seized materials, but on the basis of regular books of accounts and return filed by the assessee. Going by the same analogy, when the AO is permitted to assess or re-assess total income on the basis of regular books of account and seized materials, the assessee also can make a fresh claim in respect of items which have not been claimed in the original return of income or make any deductions which were not claimed in the original return of income - if an assessment is abated, then the assessee can make a fresh claim including deduction or exclusion of any item of income if such exclusion or inclusion is in accordance with the provisions of Act. In this case, on the basis of information available on record, we find that the search took place on 29-9-2011and as on the date, the time limit for issue of notice u/s 143(2) for AY 2009-10 was expired on 30-09-2010. The assessment for AY 2009-10 was concluded / unabated and hence, the assessee cannot make any fresh claim or exclusion of income in the revised return u/s 153A of the Act. Accordingly, ground raised by the assessee for AY 2009-10 is rejected.
Taxability of interest on capital - CIT(A) observed that for the AY 2011-12, the partnership firm M/s Akshar Developers has claimed interest on capital u/s 40(b) against profits in the statement of total income in original return filed u/s 139(1) and in a return filed in response to notice u/s 153A, the position remains same. The facts are contradictory to each other. Therefore, we are of the considered view that the issue needs to be re-examined by the AO in the light of contradictory facts and if the AO finds that the partnership firm has claimed interest on capital against from profits then certainly, the assessee cannot excluded interest on capital in its return of income. If the firm has not claimed interest on capital against its profits and reversed interest on capital by reducing it from work-in-progress, then certainly, exclusion made by the partners in their individual hands in revised return is in accordance with law. Therefore, we direct the AO to verify these facts and take an appropriate decision in the light of our observation above. Hence, the ground raised by the assessee for the AYs 2010-11 to 2-12-13 in both the assessee’s case are set aside to the file of the AO.
Short term capital gain and long term capital gain on the basis of original return of income filed u/s 139(1) - AO rejected the claim of the assessee on the ground that the assessee has failed to file any evidence in respect of recomputation of capital gain by filing necessary evidence to justify the date of acquisition of the property and also cost of improvement and reinvestment in purchase of another house property u/s 54 - HELD THAT:- We find that the assessee has revised computation of capital gain in respect of sale of property and shifted short term capital gain declared in original return to long term capital gain in the revised return filed u/s 142(1) by changing the date of acquisition of property, according to which, the period of holding of asset is more than 36 months. As per the workings furnished by the assessee showing computation of capital gain as per original return of income filed u/s 139(1) and as per return filed u/s 142(1), there is a mismatch of date of acquisition of property, cost of acquisition and sale consideration. The assessee claims that while adopting cost of acquisition, it has inadvertently omitted to included registration charges and stamp duty. Similarly, the assessee claims that cost of acquisition was deducted twice from the sale consideration which resulted in double deduction and under statement of capital gain in respect of two shops. The assessee has filed various details to justify its arguments that the property has been purchased on 21-08-2007 by way of booking advance, however, in the return the date of acquisition has been taken as per registration of agreement.
The facts are not clear. One side the AO claims that the assessee has not furnished any evidence to justify the date of acquisition of property, cost of improvement and exemption claimed in respect of 54F towards reinvestment in purchase of property. On the other hand, the assessee has filed various details including copies of agreement, sale deeds and letter of allotment for booking the flat. The assessee also filed a chart explaining various expenditure incurred in the assessment year 2009-10 for improvement of property. We do not know whether these documents have been furnished before the AO at the time of assessment proceedings or not. Therefore, we are of the considered view that the issue needs to be re-examined by the AO in the light of additional evidence filed by the assessee. Therefore, we set aside the issue to the file of the AO and direct him to examine the claim of the assessee in the light of additional evidence and if the assessee is able to justify the date of acquisition of the property on 21-08-2007 by filing necessary evidence, then the AO is directed to treat gain from sale of property under the head ‘long term capital gain’ instead of short term capital gain. If the assessee has considered the date of acquisition on the basis of allotment letter without there being any agreement, then the holding period of the asset should be considered from the date of agreement but not from the date of allotment letter. Similarly, the assessee has claimed various expenditure to justify improvement to the asset. If the assessee is able to establish expenditure incurred with necessary evidences and also source, then the AO is required to examine the evidences before taking any decision to allow cost of improvement. If the assessee is able to justify the cost of improvement with necessary evidence, then the AO is directed to allow cost of improvement as claimed by the assessee.
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2018 (2) TMI 2020 - ITAT BANGALORE
Disallowance of provision for warranty - whether there is an obligating event for creating the provisions, whether there is any outflow of resources to settle the obligations and whether any reliable estimate was made to quantify the obligations - HELD THAT:- n the instant case, it is evident from the aforesaid table that in earlier years, no provision of warranty was created. It was created for the first time in the assessment year 2009-10 but there was no utilization nor reversal in that year. In subsequent year, i.e., 2010-11, further provision was created but there was no utilization and only reversal of earlier provisions was done. Similarly, in the assessment year 2011-12, no further provision was made and no utilization was done. Only reversal of the earlier provision was done. In the light of details available, we find that there was no obligating events which requires the provisions for liability. Moreover, there is no outflow of the resources required to settle the obligation. In the absence of the obligating event and the outflow of resources required to settle the obligations, we are of the view that estimate of provisions made by the assessee is not on scientific basis and also not reliable. It is also important to note that from assessment year 2011-12, assessee stopped creating provision of warranty. Under these circumstances, we are of the view that in the absence of any claim of warranty in earlier year, provisions of warranty was not required at all. Therefore, it cannot be allowed. We accordingly find force in the observations of the AO though he was required to allow the claim on account of directions of DRP. Therefore, we reverse his findings and direct the AO to disallow the claim of provisions of warranty.
TP Adjustment - MAM selection - TNMM or RPM - HELD THAT:-Undisputedly, assessee is a distributor of AO Smith China which is involved in the manufacture of water heaters and sells the water heater imported from AO Smith China in India without making any value addition to the product, in a similar type of case, it has been repeatedly held by the Tribunal and the Hon'ble High Court of Bombay that in case of distributor, whether the product is being sold to the uncontrolled entities without making any value addition RPM is the most appropriate method and should be preferred over TNMM. Accordingly, we set aside the order of the AO, passed consequent to the direction of the DRP in this regard and direct the AO/TPO to adopt the RPM as the most appropriate method.
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2018 (2) TMI 2019 - MADHYA PRADESH HIGH COURT
Suit for declaration and permanent injunction in respect of the land - Bhumiswami - Land and temple - defendants issued an advertisement inviting applications for for giving the suit land by way of auction for the year 1993-94 - whether the suit land is a private property of the plaintiff? - HELD THAT:- In revenue register the suit land/property neither recorded in the name of ancestors of the plaintiff or in the name of the Government. The land is recorded in the name of Mandir. The plaintiff has sought the relief in the plaint that a decree of declaration be passed that the property is neither the property of Okaf Department nor the Government and the advertisement is void and illegal and the defendants be restrained not to put the land on auction. The plaintiff had also challenged that the entry by which the name of Collector was recorded as Manager. The plaintiff did not claim the relief that he be declared owner of the temple and the land. Despite that the learned Trial Court has casted the burden on plaintiff to prove his ownership. Admittedly the land is recorded in the name of the temple then the burden lies on the plaintiff to prove that the temple is a private property. The name of Bhagwandas was recorded as Pujari of the temple not as an owner of the land and temple. Initially the name of Bhagwandas was recorded as Pujari which was replaced by the name of Ganeshlal and thereafter in the year 1974 the name of the Collector had been recorded as Manager. The plaintiff did not file any document to demonstrate that the name of his fore fathers was ever recorded as Bhumiswami. The plaintiff has successfully proved his possession over the suit land and his status as Pujari by way of oral evidence of PW-1 to PW-5. Therefore, the learned appellate Court has wrongly recorded the finding that the temple and the land is a private property of plaintiff and his ancestors. The plaintiff has failed to prove his ownership over the temple and land. Hence, findings recorded in sub-para (1) and (2) of Para 25 are perverse and liable to be set-aside.
In the case of THE STATE OF MADHYA PRADESH VERSUS PUJARI UTTHAN AVAM KALYAN SWAMITI [2015 (8) TMI 1514 - MADHYA PRADESH HIGH COURT], the Division Bench of this Court has held that the name of the Pujari cannot be removed from the revenue records and setaside the notification of the Government by which the direction was issued to record the name of the Collector as Manager.
The Question is answered in favour of the appellant by setting-aside the finding that the land and temple are a private property of plaintiff and his ancestors and upheld the findings recorded so far as it relates to the deleting the name of Collector as a Manager from the revenue records and restraining the Collector to put the land for auction.
Appeal allowed in part.
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2018 (2) TMI 2018 - ITAT KOLKATA
Disallowance of expenditure under section 14A while computing the book profit of the assessee company under section 115JB - HELD THAT:- Similar issue relating to addition on account of expenditure disallowed under section 14A while computing book profit under section 115JB of the Act has been decided by the Special Bench of this Tribunal at Delhi in the case of ACIT vs Vireet Investment Pvt. Ltd. [2017 (6) TMI 1124 - ITAT DELHI] wherein it was held that the expenditure incurred to earn exempt income computed under section 14A of the Act could not be added while computing book profit under section 115JB.
In the case of CIT vs Jayshree Tea Industries Ltd. [2014 (11) TMI 1169 - CALCUTTA HIGH COURT] has also expressed a similar view by holding that the provision of section 115JB in the matter of computation is a complete code in itself and resort need not and cannot be made to section 14A - Computation of the amount of expenditure relatable to exempt income of the assessee must be made independently by applying clause (f) of Explanation (1) under section 115JB of the Act where the assessee has not claimed such expenditure to be nil. Respectfully following the said decision we set aside the impugned orders of the Ld. CIT(A) on this issue and restore the matter to the file of the A.O. for computing the amount of expenditure relatable to the exempted income of the assessee independently for all the four years under consideration by applying clause (f) of Explanation (1) under section 115JB of the Act without resorting to section 14A or Rule 8D.
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2018 (2) TMI 2017 - SC ORDER
Application for settlement of the case by the Settlement Commission - For the purpose of application under section 245C(1) of the Act, a case would be pending only as long as the order of assessment is not passed. Once the assessment is made by the Assessing Officer by passing the order of assessment, the case can no longer be stated to be pending. Application for settlement would be maintainable only if filed before the said date - HELD THAT:- Leave granted.
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2018 (2) TMI 2016 - ITAT MUMBAI
Addition u/s 68 - share capital and share premium received by the assessee-company for allotment of 10% non cumulative preference shares to M/s. Janitor Distributors Pvt. Ltd. - HELD THAT:- We are of the view that the order of the CIT(A) confirming the order of the AO on the ground that the share capital and share premium are non genuine and suspicious is not correct and therefore cannot be sustained. In the present case the identity, creditworthiness and genuineness are proved by filing the necessary evidences. We, therefore, set aside and reverse the order of the CIT(A) and direct the AO to delete the addition. - Decided in favour of assessee.
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