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Income Tax - Case Laws
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- 2021 (2) TMI 1163 - AUTHORITY FOR ADVANCE RULINGS, NEW DELHI
Advance ruling application u/s 245N - eligibility of deduction under section 80IA - no notice under section 143(2) for the A. Y. 2019-20 issued - Revenue has submitted that the application may not be admitted for the reason that the issue raised in the application was already pending before the Income-tax Authority - HELD THAT:- In the present case, the notice under section 143(2) for AY 2018-19 was issued prior to the filing of the present application which had raised the very specific question of "Deduction Claimed for Industrial Undertaking u/s 80IA"which was subject matter of the present application. As regards objection of the Applicant that no specific issue of pendency was raised in the report of the PCIT, the matter of pendency of the issue before any Income-tax Authority is required to be decided by the Authority while ....... + More
- 2021 (2) TMI 1162 - MADRAS HIGH COURT
Reopening of assessment u/s 147 - Disallowance of non - compete fees - Whether amount incurred towards a sum under two agreements to the two companies was towards non - compete fees for a short period and therefore were in the nature of a revenue expenditure? - HELD THAT:- As earlier a collaboration agreement dated 07.11.1977 was entered into between the petitioner and the Chicago Pneumatic Tool Company which had granted a license and know how to manufacture and sell the specified products which was being transferred permanently. Clause 2.4 which has been extracted above also seems to indicate that the license granted by the Chicago Pneumatic Tool Company to the petitioner was perpetual and that the petitioner was free to license the right to manufacture and sell the specified products and to disclose, impart and supply the know how recei....... + More
- 2021 (2) TMI 1161 - MADRAS HIGH COURT
Reopening of assessment u/s 147 - it is the contention of the Income Tax Department that the method followed by the petitioner has not disallowed the correct income - HELD THAT:- The petitioner is engaged in supply and installation of paint booth for automobile companies. The petitioner has adopted mercantile method of accounting which is one of the recognized method for the purpose of recognition of income under the Income Tax Act, 1961. The law on the subject is also clear. Every assessee is entitled to arrange its affair and follow the method of accounting which the department has earlier accepted. According to the petitioner, the method adopted by the petitioner has been accepted for the Assessment Years 2010-11, 2012-13, 2014-15 and thereafter. As per outcome of a construction contract can be estimated reliably, contract revenue and ....... + More
- 2021 (2) TMI 1158 - MADRAS HIGH COURT
Deduction u/s 80HHC - Tribunal reversing the order of the first appellate authority and restoring that of the Assessing Officer for excluding receipts arising in the core business and not specified in Explanation (baa) to Section 80 HCC - HELD THAT:- Receipts constituting independent income had no nexus with exports were required to be reduced from business profits under Clause (baa). A bare reading of Clause (baa)(1) indicates that receipts by way of brokerage, commission, interest, rent, charges etc. formed part of gross total income being business profits. On a reading of all the variables, it becomes clear that every receipt may not constitute sale proceeds from exports and every receipt is not income under the Income Tax Act and every income may not be attributable to exports. In the case on hand, the insurance claim and miscellaneou....... + More
- 2021 (2) TMI 1153 - KARNATAKA HIGH COURT
Rectification u/s 254 - Tribunal had erred in disallowing the depreciation claimed by assessee in the revised return of income and therefore rectification of the error was required - HELD THAT:- There was no issue of depreciation involved in the Misc. Petition filed by the assessee and the Tribunal has stated that assessee has not claimed depreciation which is nobody's case. The above Order prima facie establishes that there is improper application of judicial mind in respect of the matters in issue and therefore, needs to be set aside and matter requires to be remanded to the Tribunal for fresh consideration in accordance with law. Appeal is allowed.
- 2021 (2) TMI 1152 - MADRAS HIGH COURT
Orders passed u/s 92CA(3) barred by limitation by one day - Assessments are to be completed within the limitation set out in Section 153 - HELD THAT:- The provisions of Section 144C prescribe mandatory time limits both pre and post the stage of passing of a transfer pricing order. Assessments involving transfer pricing issues are different and distinct from regular assessments and the intention of Legislature is to fast track such assessments. Bearing in mind the specialized nature of such assessments, a separate set of Officers attend to the framing of assessments and the DRP has been constituted for redressal of disputes involving TP issues, in a timely fashion. In this scheme of things, unable to accept the submission that the period of 60 days stipulated for passing of an order of transfer pricing, is only directory or a rough and rea....... + More
- 2021 (2) TMI 1148 - ITAT MUMBAI
Disallowance of interest expenditure by applying provisions of section 40A(2)(b) - assessee submitted, the assessee has paid 15% interest on the unsecured loan availed from related parties because they are long term loans compared to short term loans availed from unrelated parties - whether the interest paid by the assessee to the related parties can be considered to be excessive or unreasonable having regard to the fair market value of interest in terms of section 40A(2)(b) ? - HELD THAT:- Rate of interest normally charged by commercial banks on loan varies between 12% to 20%. Further, it cannot be denied that if the assessee would have availed loan from banks and financial institutions, apart from paying higher rate of interest it would have paid additional cost by way of processing charges and would also have been required to furnish c....... + More
- 2021 (2) TMI 1146 - ITAT PUNE
TP Adjustment in the ‘Manufacturing activities’ - Depreciation adjustment - first disputed item of operating costs is a claim for adjustment on account of depreciation - DRP ruled in this regard directing the AO/TPO that `depreciation adjustment should be worked out in the hands of the comparables and not for the assessee.’ Giving effect to such a direction, the TPO computed the mean PLI of comparables at 6.74% as against originally computed at 6.70% in the consequential order - HELD THAT:- Depreciation cost in the case of the assessee forming part of its operating costs base gets neutralized with the rent cost in the cost base of the comparables. Having taken the figure of operating profit as numerator, both in the case of the assessee and the comparables, one cannot again go back to the individual items of operating ex....... + More
- 2021 (2) TMI 1145 - ITAT BANGALORE
Deduction u/s 37(1) - addition of amount representing 15% of sale proceeds deducted by the Monitory committee from e-auction sale of mineral stock belonging to the assessee and which was contributed to Special Purpose Vehicle, as per the direction given by Hon’ble Supreme Court - HELD THAT:- It cannot be said that these amounts are penal in nature. We notice that the Hyderabad bench of Tribunal in the case of NMDC Ltd [2018 (10) TMI 1120 - ITAT AHMEDABAD] came to the same conclusion by following the decision rendered by Hon'ble Kolkatta High Court in the case of Shyam Sel Ltd [2016 (8) TMI 511 - CALCUTTA HIGH COURT] wherein identical types of payments made to remedy the river pollution caused by the parties were held to be compensatory in nature. Hence the provisions of Explanation 1 to sec.37 will not apply to these payments. H....... + More
- 2021 (2) TMI 1144 - ITAT BANGALORE
Capital gains adopted on the basis of guideline value as per Stamp Duty Authorities - JDA entered into by the assessee - Year of assessment - assessee submitted that the capital gains should have been taxed in the year of commencement of construction after registering the Joint Development Agreement - HELD THAT:- In the present case, only for the purpose of loan required from the Bank, the Developer registered a Sale Deed on 18.07.2011, wherein it is also clearly mentioned that the property is already in Developer's possession as per the Registered Development Agreement dated 24.10.2007 and the present Sale Deed made was only for confirming the right already held by the Joint Developer by executing the Sale Deed. The Sub-Registrar while registering the Sale Deed adopted the Guideline value to determine stamp duty and Registration char....... + More
- 2021 (2) TMI 1143 - ITAT DELHI
Disallowance of interest paid - interest charged by banks for late payment of credit card dues - Allowable business expenses or not? - HELD THAT:- Assessee, before the AO as well as CIT(A), has explained that credit cards were used for business related expenses and therefore such interest on late payment of credit card dues has to be allowed as business purposes - we find merit in the above argument of the ld. Counsel for the assessee. The various expenses so incurred for which payments made through credit card were claimed as business expenses and no such disallowance has been made by the AO. Therefore, merely because there is delay in payment of credit card for which interest has been charged by the bank for late payment of credit cards, the same in my opinion, cannot be disallowed. We find merit in the arguments of the ld. Counsel that....... + More
- 2021 (2) TMI 1141 - ITAT BANGALORE
Determining the “undisclosed income” - Search proceedings - A.R. submitted that the addition has been made on the basis of a balance sheet found during the course of search proceedings - HELD THAT:- There are no corroborative evidences to show that the Balance sheet found during the course of search represents true nature of transactions. On the contrary, the assessee, being a limited company, has filed annual reports containing Balance sheets with Registrar of companies, which is based on books of accounts. Hence the balance sheet found during the course of search has to be considered as a “dumb document” only. In that view of the matter, the quantum of investment made as share application money in the above said company should be taken as ₹ 131 lakhs only. The assessee has claimed that he has invested ͅ....... + More
- 2021 (2) TMI 1140 - ITAT DELHI
‘Limited Finality’ - Proper and reasonable opportunity at the first stage (at the stage of Assessing Officer) - Disallowance being reimbursement of expenses by the appellant to its wholly owned subsidiary in United states for development of its business in United States of America - addition made by assessing officer for claiming double deduction of expenses as well as non deduction of tax at source on payment made to non residents - assessee was unable to produce evidences to show that the expenditure has been incurred by the assessee wholly and exclusively for the purpose of business; and further that no evidence was adduced to show that the EII made concerted effects to locate any business arrangements in USA - grounds for making the disallowance was not adjudicated by the Ld. CIT(A); and instead the Ld. CIT(A) followed a e....... + More
- 2021 (2) TMI 1139 - ITAT DELHI
Unexplained cash in the bank account maintained with HDFC account - assessee could not explain the source of such cash deposits in the bank account maintained with HDFC account on the ground that assessee could not explain the source of such cash deposits - CIT(A) upheld the action of the AO - HELD THAT:- It is the submission of assessee that such cash deposit is out of the realisation of sundry debtors and out of sale proceeds of the closing stock lying with the assessee apart from some opening cash in hand. It is also his submission that given an opportunity the assessee is in a position to explain the source of such cash deposit so made in the bank account. Restore the issue to the file of the AO with a direction to grant one final opportunity to the assessee to substantiate its case and decide the issue as per fact and law. Thus hold and direct accordingly. Grounds raised by the assessee are accordingly allowed for statistical purposes.
- 2021 (2) TMI 1138 - ITAT PUNE
Disallowance u/s. 14A r.w. Rule 8D(2) - disallowance offered by the assessee suo-moto - HELD THAT:- Assessee reflects the share capital, reserves and surplus to an extent of ₹ 32,38,52,976/- which is admittedly more than the investments made. Further, we note that Note No. 9 in Assets clearly discloses the Non-Current Assets to an extent of ₹ 16,18,55,626/- showing that the assessee made investments during the year under consideration out of which ₹ 1,00,00,000/- invested in government bonds. It is needless to say that the investments made in government bonds yield no dividend but only interest. It is a settled proposition that if the own funds are more than the investments made should be presumed that the assessee made investments from its own funds. As discussed above, the assessee made investments to the tune of ͅ....... + More
- 2021 (2) TMI 1137 - ITAT DELHI
Ex-parte appeal decided by CIT-A - AR submitted that the Ld. CIT(A) has dismissed all the appeals without giving adequate opportunity to the assessee of being heard - DR vehemently argued that the assessee should not be permitted to take advantage of their carelessness and non cooperative approach and that the appeals of the assessee deserved to be dismissed in view of the failure of the assessee to establish their claims with documentary evidences before both the Lower Authorities - HELD THAT:- Having heard both the parties and duly taking note of the fact that both the parties have agreed that these appeals can be restored to the office of the Ld. CIT(A), for the cause of substantial justice, we deem it expedient to restore all the captioned appeals to the file of the Ld. CIT(A) for being adjudicated upon afresh by passing a speaking or....... + More
- 2021 (2) TMI 1135 - ITAT MUMBAI
TP Adjustment - payment made towards SAP ERP implementation - HELD THAT:- Cost paid by the assessee for implementation of SAP ERP system without any mark-up cannot be treated as nil by applying the benefit test. It is for the assessee to decide whether a particular system or investment would be beneficial to him or not. The Transfer Pricing Officer certainly cannot step into the shoes of the assessee or the Assessing Officer to evaluate the business expediency of a cost incurred for business purpose and the benefit derived. His job is to determine the arm's length price by adopting any one of the prescribed methods. In the facts of the present case, though, the Transfer Pricing Officer has stated that he has adopted CUP method for determining the arm's length price, however, in reality, he has determined the arm's length price....... + More
- 2021 (2) TMI 1134 - ITAT MUMBAI
Penalty u/s 271(1)(c) - Addition u/s 43B - Assessee voluntarily offered to tax the outstanding MVAT and sales tax liability as its income - HELD THAT:- We find that learned CIT(A) is totally wrong in holding that just because 43B liability is shown by tax audit report penalty has to be fastened upon the assessee. The assessee has furnished all particulars there is no concealment or furnishing of inaccurate particular of income. Just because assessee's claim is not accepted the same does not ipso facto lead to levy of penalty. Similarly, there is small difference between 26AS and income returned. This is also very minor and the assessee does not deserve to be visited with the rigour of penalty. We are of the considered opinion that assessee's conduct is not contumacious and his claims are not mala fide. Hence, assessee should not b....... + More
- 2021 (2) TMI 1132 - ITAT MUMBAI
Penalty u/s 271G - assessee failed to furnish documents as required under the Rule 10D(1) and sub-section (3) of the section 92D in respect of the international transactions entered into by it - HELD THAT:- Respectfully follow the view taken by the Tribunal in the case of Navinchandra Exports Pvt. Ltd. [2017 (11) TMI 1307 - ITAT MUMBAI] wherein it was observed that considering the practical difficulties involved in furnishing the segmental details of AE transactions and non-AE transactions in the diamond industry, penalty under Sec. 271G could not be justifiably imposed. Before parting, we may herein observe, that the Tribunal in its aforesaid order had observed that considering the reasonable cause for non-furnishing of the segmental details of the AE transactions and non-AE transactions because of the peculiar nature of the trade in dia....... + More
- 2021 (2) TMI 1131 - ITAT AMRITSAR
Ex-parte assessment order by AO and CIT-A - HELD THAT:- The present case it is an admitted fact that the A.O. passed the assessment order ex parte and the Ld. CIT(A) also passed the impugned order ex parte . It is noticed that the Ld. CIT(A) mentioned in the impugned order that various notices were issued to the assessee but there was no compliance and that the latest notice was issued on 07/08/2018 for compliance on 14/08/2018. Nothing is brought on record to substantiate that the notices issued either by the A.O. or by the Ld. CIT(A) were served upon the assessee. It is well settled that nobody should be condemned, unheard as per the maxim, "audi alteram partem". We therefore keeping in view the principles of natural justice deem it appropriate to set aside this case back to the file of Ld. A.O. to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee.
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