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Income Tax - Case Laws
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- 2022 (5) TMI 1233
Attachment of property passed under Section 24(3) of the Prohibition of Benami Property Transactions Act, 1988 - challenge, amongst others is violation of the procedure, including the requirement to arrive at a satisfaction before forming an opinion that the property in question may be alienated during the period specified in the notice - HELD THAT:- On a specific query as petitioners has submitted that apart from the lack of satisfaction, there is no intention on the part of the petitioners to alienate the property in question and in this regard, attention of this Court has been invited to an undertaking contained in paragraph 24 of the petition whereby the petitioners have undertaken not to alienate the said property and the averments have also been properly verified in the accompanying affidavit. Shri Goswami, learned Senior Counsel fu....... + More
- 2022 (5) TMI 1232
Disallowance u/s. 43B - Electricity Duty deposited into designated bank Account as per direction of this Court - HELD THAT:- On the issue of electricity duty, there is merit in the contention of Mr. A.U. Senapati that the facts of the present case are different from the case of Indian Metal and Ferro Alloys Ltd. [2022 (3) TMI 390 - ORISSA HIGH COURT]. In that case the differential electricity duty paid in the loan lien account remained there and therefore, was inaccessible to the Government. In the present case, however, under the interim orders passed by this Court as much as nearly Rs.100 crores has been released to the State Government. In other words, the amount has not only been parted with by the Assessee but also has been received by the Government. Consequently, the deduction under Section 43B of the Act as claimed by the Assessee....... + More
- 2022 (5) TMI 1231
Validity of Reopening of assessment u/s 147 - Mandation of considering objections raised by the writ applicant - HELD THAT:- We should remit the matter to the Assessing Officer for fresh consideration of the objections raised by the writ applicant. We are not convinced with the manner in which the Assessing Officer has dealt with the objections raised by the writ applicant - assessee. The writ applicant in so many words has tried to explain that the difference between the cash deposited and the sales shown is due to the VAT component in the cash deposited. According to the writ applicant, it is not a part of sales but shown separately as a liability. Whatever may be the worth of the explanation put forward by the writ applicant, it is expected of the Assessing Officer to apply his mind and decide the same accordingly. All that the Assessi....... + More
- 2022 (5) TMI 1230
Revision u/s 263 - notice for demand made by the assessing officer against the assessee till the disposal of the appeal - HELD THAT:- As against the order under Section 263 of the Act, the appeal has been admittedly filed, which is pending before the ITAT, though attempt has been made to seek for a stay, that has been negated for the reasons stated. Be that as it may, once the appeal has been entertained and unless it is decided one way or other, if the Assessing Officer is permitted to go ahead pursuant to the order passed by the authority concerned under Section 263 of the Act, then that will make the very challenge in the appeal before the ITAT otiose. We are inclined to dispose this writ petition with the following orders: 1.That the assessing authority can go ahead with the assessment proceedings pursuant to the notice dated 26.03.20....... + More
- 2022 (5) TMI 1229
Addition u/s 69A - unexplained investment in the bank account - best judgment assessment order u/s 144 - Scope of expression “may” used in Section 69A - whether the assessee has explained the source of such deposit with the help of reliable piece of evidence? - HELD THAT:- Assessee belongs to a non-organized sector of the society. The ld. Sr. D/R is expecting the maintenance of accounts and other details in a meticulous manner as are being maintained by the big business houses, but here it has to be appreciated that the assessee is running a small shop in a rural area. He has explained the source as contribution from his father and brother towards the marriage of his daughter as well as for purchase of some items for the shop. A sum of Rs.6,01,600/- was deposited in the bank account of the assessee on 21/12/2016 and a RTGS was....... + More
- 2022 (5) TMI 1228
Legality of the assessment proceedings - assessee was not intimated about the notice issued for selection of scrutiny as to whether the case of the assessee falls under limited scrutiny or complete scrutiny and the notice issued u/s 143(2) of the Act is defective as observed by ld. CIT(A) in the impugned order - HELD THAT:- CIT(A) has himself mentioned in the impugned order that the notice u/s 143(2) of the Act is defective is devoid of any merit because in para 9.4 of the impugned order ld. CIT(A) has given his finding and before giving his finding he has mentioned the issue as the notice u/s 143(2) of the Act was defective. Nowhere ld. CIT(A) has stated that the notice u/s 143(2) of the Act was defective. Limited scrutiny or a complete scrutiny - We find that the ld. AO has specifically mentioned that the case of the assessee has been s....... + More
- 2022 (5) TMI 1227
Addition made under section 68 - bogus long term capital gains claimed as exempt by the assessee - HELD THAT:- The sheer denial by the assessee, at the time of recording of his statement under section 131 about any of the information in respect of the transaction also does not provide any basis to allow the claim of exemption under section 10(38) of the Act, in view of the details furnished by various independent bodies about the conduct of the company in whose shares the assessee had transacted and earned long term capital gains. Further, submission of the assessee before lower authorities that the transaction was made through RTGS on the Recognised Stock Exchange also does not prove that the company, whose shares were purchased by the assessee and later on sold, was not engaged in providing bogus long term capital gains to its beneficia....... + More
- 2022 (5) TMI 1226
Delayed payments of Employee’s contribution to ESI/Provident Fund - addition by way of adjustment and intimation u/s 143(1) - payments made after stipulated dates prescribed under relevant laws governing provident fund and ESI, but before due date of filing of return prescribed u/s 139(1) - HELD THAT:- It is well settled that any adjustments u/s 143(1) of Income Tax Act by way of intimation u/s 143(1) of Income Tax Act, on debatable and controversial issues, is beyond the scope of Section 143(1) Adjustments made by Revenue on 31.10.2018, whereby the aforesaid amount was added to assessee’s income, were unfair, unjust, and bad in law. For this view, we respectfully take support from the order of Agra Bench of ITAT, in the case of Mahadev Cold Storage [2021 (6) TMI 506 - ITAT AGRA] At the very least, Revenue should have given du....... + More
- 2022 (5) TMI 1225
Deduction u/s. 80IA(4) (iii) - eligibility of interest on land premium for deduction under section 80IA - As per AO interest income shown by the assessee was the part of profit attributable to the business of the assessee and it was not ‘derived from’ eligible business activities - assessee submitted that the claim for deduction included interest on land premium on some industrial parks, in respect of which deduction under section 80IA had been claimed - CIT(A) deleted the addition - HELD THAT:- As the issue boils down to as to whether the receipts from the clients of the assessee who choose to make lumpsum upfront payment and who choose to make deferred installment payments along with interest are to be treated alike or not it is held that since the receipt of interest is intrinsically linked to the primary activity of allotm....... + More
- 2022 (5) TMI 1224
Reopening of assessment u/s.147 r.w.s. 148 - non deduction of tds u/s 194C on loading / sorting expenses and towards container stuffing charges - Reopening beyond period of four years - Argument of violation of first proviso to section 147 of the Act as the original assessment was completed u/s.143(3) of the Act and there is no failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment of the assessee for the relevant assessment year - HELD THAT:- AO in the reasons recorded noted that there is no evidence for deduction of TDS as per column 27(a) of the Form No.3CD i.e., audit report filed by the assessee along with the return of income. It means that the assessee has filed the complete details of particulars before the AO and from very return of income the AO has chosen these reasons. W....... + More
- 2022 (5) TMI 1223
Disallowing excess directors remuneration - sum paid towards directors remuneration and that is to the extent of 80% of the net profit - HELD THAT:- We noted that the Tribunal in the case of The Bombay Samachar Pvt. Ltd. [2018 (11) TMI 1113 - ITAT MUMBAI] has considered the issue of applicability of provisions of section 40A(2)(b) of the Act to the directors remuneration and held that this provision will not apply to the directors payment for holding that the payment is excessive or unreasonable in the absence of any material brought on record to demonstrate that the payment is actually excessive or unreasonable having regard to market rate for the goods, services or facilities availed or the business need of the assessee or commensurate with the benefit derived by the assessee. In the present case before us also the AO has not carried ou....... + More
- 2022 (5) TMI 1222
Nature of expenditure - Disallowing revenue expenditure on product testing prototyping and verification expenses - HELD THAT:- The true nature of the expenditure had not been doubted by the AO. Undisputedly, the appellant is in the business of manufacturing of automotive components since 1999. As result of this expenditure, no new asset has been created nor new product did actually materialize. The expenditure was only incurred for the purpose of facilitating the existing business of manufacturing of automotive components and enabling the management to conduct the business operations more efficiently and productively. The Hon'ble Supreme Court in the case of (i) Empire Jute Co. Ltd. [1980 (5) TMI 1 - SUPREME COURT] and (ii) Alembic Chemical Works Co. Ltd. [1980 (5) TMI 1 - SUPREME COURT] held that expenditure incurred on the existing ....... + More
- 2022 (5) TMI 1221
Deduction u/s 80IB - Claim allowed for initial initial year - Whether once the deduction is allowed in the initial year then the revenue cannot deny the same in the subsequent years? - HELD THAT:- We note that that the appeal of the assessee has been allowed by ld CIT(A) by holding that Act on the ground that deduction was allowed in the initial year i.e. AY 2003-04 after carrying due verification and enquiry and similar deduction was allowed in AY 2004-05 & 2005-06. CIT(A) has also recorded a finding a fact that deduction allowed in AY 2003-04, 2004-05 and 2005-06 have not been disturbed and therefore the deduction claimed in the subsequent year cannot be rejected by following the ratio as laid down in decisions of various by various High Courts namely Paul Brothers [1992 (10) TMI 5 - BOMBAY HIGH COURT] Simple Food Product Pvt. Ltd. ....... + More
- 2022 (5) TMI 1220
Revision u/s 263 - Validity of assessment orders completed u/s 143(3) r.w.s. 153A - eligibility of deduction u/s 80IB - HELD THAT:- Admittedly, there is no incriminating material found during the course of search u/s 132 and the assessment orders for the relevant assessment years, namely, A.Y. 2011-2012 and 2012-2013 had already been concluded as on the date of search. Hence, deduction u/s 80IB which is already allowed in the assessments completed u/s 143(3) (for assessment year 2011-2012 the assessment completed vide order dated 10.05.2013 and for assessment year 2012-2013, the assessment u/s 143(3) was concluded on 14.08.2014) cannot be denied unless incriminating material is found during the course of search, warranting disallowance. Therefore, on the fact of the instant case, in an assessment completed u/s 143(3) r.w.s. 153A pursuant ....... + More
- 2022 (5) TMI 1219
LTCG - Co-ownership on land - ancestral property - whether Shri Bhagwan Pathare was the sole owner of the land or whether his sons, daughter-in-law, grandsons and grand-daughters were entitled for sales consideration? - HELD THAT:- As AR submitted ample evidences to demonstrate that the said land is an ancestral property where the assessee, along with his two sons has offered 1/3rd each in their returns of income. A.O in this case has added the entire capital gain in the hands of the assessee alone though the ideal course would have been that the income should have been taxed in the hands of HUF but in this case since 1/3rd has been declared in the respective return of the assessee and his two sons, it is not therefore, justified to include the entire capital gain in the hands of the assessee alone. We are of the considered view that the ....... + More
- 2022 (5) TMI 1218
Rectification of mistake u/s 154 - Ex-parte appeal Decided by CIT-A - disallowances u/s 43B of the Act as well as under section 40A(7) - whether adjustment so made by the CPC cannot be taken up in appeal against the order passed by the CPC under section 154 as against 143(1) - As submitted assessee has deposited the employees contribution towards PF/ESI before the due date of filing of the return of income and provision of Gratuity disallowed under section 40A(7) of the Act while processing the return of income, the CPC has failed to take into consideration the fact that the assessee has suo moto disallowed the said sum under section 43B - HELD THAT:- Given the fact that the case of the assessee has been decided ex-parte qua the assessee and we do not have the benefit of findings of the ld. CIT (A) in this case, we deem it fit to set asid....... + More
- 2022 (5) TMI 1217
Correct head of income - Characterization of income - rental income as 'business income' or 'income from house property' - HELD THAT:- Assessee is a company engaged in the business of real estate development. According to Memorandum of Association, main object of the assessee company is to acquire properties such as land and building lease hold or free hold and also to earn rental income from these properties and to develop them. This is contained in main objects of the company clause A (1). Further, in B (5) also the assessee is having incidental and ancillary object of renting out of the properties. Therefore, there is no doubt that assessee has object of renting out of the properties as per its object in Memorandum of Association. Honourable Bombay High court in principal commissioner of income tax v. City centre mall n....... + More
- 2022 (5) TMI 1216
Assessment u/s. 44AD on presumptive basis - Estimation of profit - assessee before us made statement at bar that he has maintained books of account, which were produced before the AO during scrutiny assessment proceedings and even now he is ready to produce before the AO, in case the matter is remanded back to the file of the AO - HELD THAT:- As it is clear that the assessee can declare lower profit also in case the assessee has maintained books of account and in this case, as claimed by the assessee before Bench that he has maintained books of account, in that eventuality we are of the view that the orders of lower authorities needs set aside. Hence, the orders of lower authorities are set aside and matter remanded back to the file of the AO for making assessment on the basis of books of account. Accordingly, the AO will reframe the assessment after allowing reasonable opportunity of being hearing to the assessee. Appeal of the assessee is allowed for statistical purpose.
- 2022 (5) TMI 1215
Disallowance u/s. 36(1)(va) in respect of Contribution made to PF & ESI - contribution before the filling of return - HELD THAT:- As relying on DEVENDER YADAV C/O PANKAJ MAHESH & CO [2021 (12) TMI 1251 - ITAT DELHI] AND RAJ KUMAR [2022 (2) TMI 1224 - ITAT DELHI] employees Contribution towards PF & ESI made before due date of filing the return u/s. 139(1) have to be allowed as deduction. - Decided in favour of assessee.
- 2022 (5) TMI 1214
Gain on sale of plot - capital Income or business income - assessee is engaged in the business of real estate on part-time basis - HELD THAT:- By merely showing the aforesaid pieces of land as stock-in-trade in own books does not substantiate that the assessee is real estate agent, when the totality of facts gives a different picture. The assessee’s real estate business did not have a Firm Name, Proprietorship Name or business address, from where he has been conducting business after office hours. The assessee has not mentioned anything about his Firm name in the return of income nor is the Firm name mentioned in the letter dated 15/09/2007 addressed by SPIL to the assessee. Also, it is a commonly known facts that real estate agents normally earn ‘commission’ on purchase and sale of land and not ‘business income&rs....... + More
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