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Income Tax - Case Laws
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2015 (8) TMI 1577
Reopening of assessment u/s 147 - reason to believe - share premium amount received over and above the intrinsic value of shares, is income which has escaped assessment - HELD THAT:- It is not the case in the reasons to believe that what has been received as share premium is in fact not share premium. In fact the reasons do proceed on the basis that what has been received is indeed share premium. Prima facie, we are of the view that the basis of the impugned notice stands concluded in Vodafone India Services Pvt. Ltd. Vs Union of India and others [2014 (10) TMI 278 - BOMBAY HIGH COURT] and also Central Board Circular No.2 dated 29 January 2015 that receipt of share premium being on a capital account and cannot be subjected to tax as income.
We were inclined to dispose of the petition at the stage of admission itself after hearing the parties. Additional Solicitor General expressed his inability to waive service at this stage. In view of the above, adinterim reliefs in terms of prayer clause (d).
Petition is placed for final hearing in the week commencing from 19 October 2015.
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2015 (8) TMI 1575
Determination of suppressed production - estimation of production and the consequent profits thereon on the basis of consumption of electricity vis-à-vis production of TMT bars - addition was worked out in the hands of the assessee on the basis of US standards - CIT(A) in applying gross profit rate of 4% and consequently allowing manufacturing and administrative expenses on the unaccounted production - HELD THAT:- The issue arising in the present appeal is identical to the issue before the Tribunal in Shree Om Rolling Mills Pvt. Ltd. [2015 (10) TMI 2316 - ITAT PUNE] and following the same reasoning, we direct the Assessing Officer to delete the addition made on account of excess production following the consumption of electricity as per US standards as not merited. However, addition of additional income in the hands of assessee on account of admission made by the assessee of clandestine removal of goods without payment of Excise duty is to be made in the hands of the assessee as per our directions in the above said appeals. Appeals of the assessee are allowed.
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2015 (8) TMI 1573
Condonation of delay in filing his income-tax return late by 30 months - rejection of refund claim - Order passed u/s 119 - petitioner submitted that the delay in filing the income-tax return beyond the specified period, was on account of “genuine hardship” and during the relevant period, he was a distributor of ‘Cable Master’ for the entire State of Haryana and thus, due to his field duty his family life remained disturbed. More so, the TDS certificates were also misplaced - HELD THAT:- Genuine hardship explained by assessee is completely devoid of any merit, because, the petitioner has not been able to refute the stand of the respondent that he never remained distributor of ‘Cable Master’ after 31.03.2009, as per his own certificate dated 16.04.2008 (Annexure P-2) issued by M/s Innetwork Entertainment Limited and thus, it is evident that the petitioner had no field duty after 31.03.2009. Resultantly, the question of disturbance of his family life does not arise at all. Accordingly he cannot be permitted to allege that he could not file his income-tax return in the prescribed time on account of above reason.
So far as the second grouse raised by the petitioner regarding misplacement of his TDS certificates is concerned, the same has also no legs to stand, because he has not produced copy of any FIR or DDR in support of his above assertion. In the absence of any such corroborative evidence, his above plea is not liable to be accepted.
Thus as whether there existed genuine hardship or sufficient cause for condonation of delay or not, it depends upon evaluation of totality of facts and circumstances in a given case. As noticed above, the petitioner has miserably failed to convince that he had any “genuine hardship” in filing his income-tax return late by 30 months, therefore, no benefit whatsoever of the aforesaid authorities can be given to him.
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2015 (8) TMI 1571
Exemption u/s. 80P(2)(a)(i) - AO noticed that the nature of the activity of the assessee, though registered as a credit co-operative society, is that of a banking institution notwithstanding the fact that receipt of and lending money is limited to its members - assessee submitted that the AO erred in treating the assessee as a commercial banking institution and in denying the deduction available to it u/s 80P(2)(a)(i) of the Act in respect of income arising from the transactions only with its members - Whether assessee is a co-operative society and not a cooperative bank and therefore the provisions of section 80P(4) of the Act are not applicable? - CIT(A) allowed exemption - HELD THAT:- As the issue under consideration has already been considered and decided by this Tribunal in the case of M/s. Bangalore Commercial Transport Credit Co-operative Society Ltd. [2011 (4) TMI 1222 - ITAT BANGALORE] wherein this Tribunal held that section 80P(4) is applicable only to cooperative banks and not to credit cooperative societies. The intention of the legislature of bringing in cooperative banks into the taxation structure was mainly to bring in par with commercial banks. Since the assessee is a cooperative society and not a cooperative bank, the provisions of section 80P(4) will not have application in the assessee’s case and therefore, it is entitled to deduction u/s 80P(2)(a)(i)
We are of the view that the assessee society is entitled to deduction u/s. 80P(2)(a)(i) of the Act. We uphold the order of the ld CIT(Appeals). Decided in favour of assessee.
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2015 (8) TMI 1568
Applicability of Tonnage Tax Provisions to Sundry credit balance written back u/s. 41(1) - CIT(A) has deleted the impugned addition/disallowances following the earlier years order of the Tribunal - HELD THAT:- As decided in assessee own case [2011 (7) TMI 588 - ITAT, MUMBAI] legislature in its wisdom provided the manner of computation of income under the tonnage tax scheme. In section 115VA, it is clearly provided that sections 28 to 43C would not over ride the computation of profits and gains under section 115VA. As section 41(1) falls within sections 28 to 43C, no separate addition under that section can be made. As section 41(1) seeks to bring to tax certain specified items of receipts under the head “profits and gains of business” the scheme should not be invoked while computing profits and gains of business under Chapter-XII-G. Hence, we are of the opinion that the argument of the assessee should succeed.
As no distinguishing decision has been brought to our notice by the Revenue, respectfully following the orders of the Co-ordinate Bench, we uphold the findings of the Ld. CIT(A). Ground No. 1 to 4 of the Revenue is accordingly dismissed.
Sundry receipts from core shipping and reimbursement of managed vessels - As decided in own case [2015 (3) TMI 751 - ITAT MUMBAI] submitted that neither the A.O. nor the ld. CIT(A) has examined the relevant details placed at 157 of the paper book and urged that the matter may be sent back to the A.O. for deciding the same afresh after verifying the said detail. As the ld. D.R. has no objection in this regard, the issue relating to inclusion or exclusion of item No. 3 & 6 is restored to the file of the A.O. for deciding the same afresh.
Receipts relateable to core activity of operation of qualified ship and part of incidental activity - applicability of provisions of Chapter XII-G relating to tonnage income are applicable - HELD THAT:- We find that commission on disbursements (receipts) and Sundries have not been properly explained by supporting demonstrative evidences. We, therefore, restore these issues to the file of the AO. The assessee is directed to demonstrate its claim of receipts being directly related to the core activity/incidental activity by bringing cogent material evidences on record in respect of these 2 receipts and the AO is directed to examine the same and decide afresh whether these receipts can be clubbed under core activity/incidental activity of the assessee.
In so far as rent on furniture and Application money-right to info Act are concerned, these receipts can be treated as taxable as business income under normal provisions of the Income –tax. The assessee gets part relief in respect of impugned receipts.
Adjustment of the calculation of turnover - Since we have restored the issues relating to 2 receipts to the file of the AO to be decided afresh, the second grievance of the assessee also goes back to the file of the AO which can be decided only after deciding the taxability of receipts or otherwise qua ground No. 1 of this appeal. The AO is directed to decide this issue after deciding the taxability of receipts. Ground No. 2 is allowed for statistical purpose.
Disallowance of administrative expenses and in alternative allowance of proportionate expenditure incurred by the assessee - HELD THAT:- As decided in own case [2011 (7) TMI 588 - ITAT, MUMBAI] Assessing Officer has rightly held that the assessee would not have incurred the expenditure claimed for earning income.
We restore this issue to the file of the AO. The AO is directed to decide this issue as per the directions of the Tribunal given in earlier years and as per the decision taken by him pursuant to the directions given by the Tribunal in earlier years. Ground No. 3 is allowed for statistical purpose.
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2015 (8) TMI 1567
Rectification of mistake - Depreciation on goodwill - as per assessee Tribunal adjudicated on various issues facts relating to depreciation on goodwill, even though was on record and placed on record in the course of hearing, the said facts were not considered - HELD THAT:- As can be seen from the above, the ITAT has consciously not considered the ground as the facts were not on record. Just because an amount was shown in the balance sheet and claimed depreciation on the basis of entries in Books of Accounts, it cannot be considered that all facts are on record.
Doubt has been expressed ‘how the goodwill arose, what is the amount, why assessee has not claimed depreciation and other issues require examination in AY. 2007-08’. The claim of depreciation has to be examined in the year in which such asset becomes part of Block of assets. Then in later years only consequential depreciation on WDV has to be allowed.
Admittedly the Goodwill came into assessee books in AY 2007-08. Since, we were adjudicating the issues in AY. 2009-10, Bench also gave a clear finding that consequential depreciation can be allowed in AY. 2009-10. Assessee also admits that issue and the claim for AY. 2007-08 is still pending before the CIT(A). In these circumstances, we are of the opinion that there is no mistake apparent from record and accordingly, the contentions raised by assessee are rejected.
Levy of interest U/s. 234C - As contended that interest can be levied only on the returned income and not on the assessed income as was done by the AO - HELD THAT:- Even though Ground with reference to levy of interest U/s. 234C were listed in para 3 of the order in page 3, adjudication on the issue was not made subsequently. Therefore, this contention of assessee is correct. With reference to the interest U/s. 234C, AO can examine levy as per provisions of Act in the consequential order as many issues were restored to AO in the order. Assessee should be given due opportunity and the calculation of interest should also be incorporated so as to examine the correctness of the calculations.
Miscellaneous Application is partly allowed.
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2015 (8) TMI 1566
Income from factory premises - income from business OR income from other sources - assessee has submitted that the assessee could not restart its business till date after its discontinuance in the year as back as 1988 and chairman of the assessee company is 88 years of age - HELD THAT:- The assessee is a corporate assessee and the litigation and the amount involved in the litigation could not be said to be of that magnitude that the assessee could not restart its business during the past 27 years. The facts of the case lead to the conclusion that the assessee is no more interested in restarting its business and has let out its factory premises along with its machinery, furniture and fixtures for a fixed amount of rent and, therefore, the action of learned CIT(A) in directing to treat the income under the head ‘income from house property’ was justified and no interference in the same is called for. In this view of the matter, the order of learned CIT(A) is confirmed and the ground of appeal of the assessee is dismissed.
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2015 (8) TMI 1565
Penalty u/s 271(1)(c) - assessment order was made u/s 153C/143(3) considering the revised return - assessee filed its revised return of income without claiming exemption under section 12AA of the Act and furnishing the computation of income as income from business and profession - HELD THAT:- There is no dispute that the assessments were made under section 153(c) of the Act. The petitioner after filing the returns had filed the revised returns and had participated in the proceedings. The assessment proceedings under section 153C were not challenged. Ultimately orders of assessment were passed. Accepting the assessments taxes were paid. Thereafter, penalty proceedings have been initiated under section 271(1)(c) of the Act for concealment of particulars of income. We find that the Tribunal while dismissing the appeal filed by the assessee has dealt in its order, in detail every aspect, including the factual aspect of the matter. Thus, we find that no substantial question of law arises. Hence, the applications for admission of appeal are dismissed. Consequently appeals are not admitted.
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2015 (8) TMI 1564
Penalty u/s 271(1)(c) - Appeal is admitted on the following substantial questions of law:
Whether on a correct interpretation of the provisions of section 271(1)(c) of the Income Tax Act, 1961 read with the Explanation 1 appearing thereunder, the Tribunal misdirected itself in law and adopted a wholly erroneous approach in upholding the levy of penalty in the instant case, on the alleged ground that the Appellant Foundation had concealed its income and/or furnished inaccurate particulars of its income in respect of the assessment year 2011-12 ?
Whether the Order passed by the Tribunal upholding the levy of penalty in the instant case of the Appellant Foundation in respect of the assessment year 2011-12 is wholly erroneous in law, against the facts and evidences on record, wholly baseless, unreasonable and/or otherwise perverse?
The application disposed of. Let informal Paper Books be prepared and filed in the department and also be served on the respondent/revenue within 8 weeks from date along with the gist of this order.
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2015 (8) TMI 1559
Addition u/s 68 - unexplained cash credit - CIT(A) has confirmed the AO's action of adding unsecured loans in case of four parties wherein letter issued stood returned with remarks “not known” - HELD THAT:- As in case CIT vs. Orrisa Corporation Pvt. Ltd. [1986 (3) TMI 3 - SUPREME COURT] holding that once an assessee submits all assessments details of its creditors, it is not supposed to do anything further and the primary onus of proving identity, genuineness and creditworthiness stand discharged. And also that it is Revenue’s job thereafter to rebut the same.
It is to be seen that the assessee’s supportive evidence in case of all the creditors eg. its books of accounts, creditors PAN details, confirmations, returns and bank statements etc. stands on equal footing. We observe in these facts that merely because some of them have not been served the postal letters in question does not form a valid ground in rejecting assessee’s plea of genuineness and creditworthiness of the impugned credit to the extent as affirmed in the lower appellate order.
Revenue fails to point out any distinction on merits in case of abovestated four creditors vis-à-vis the other eleven parties. We quote the decisions of Chanakya Developers [2013 (10) TMI 7 - GUJARAT HIGH COURT] and CIT vs. Ranchhod Jivabhai Nakhava, [2012 (5) TMI 186 - GUJARAT HIGH COURT] reiterating the abovestated view of the hon’ble apex court in these facts and hold the assessee to have successfully proved genuineness/creditworthiness of all the impugned unsecured loans hereinabove. The Revenue’s sole substantive ground in its appeal fails and assessee’s first ground is accepted.
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2015 (8) TMI 1558
Disallowance u/s 14A r.w.r. 8D - CIT-A considering the fact that after insertion of rule 8D w.e.f. A.Y. 2008-09 there is no notional disallowance - HELD THAT:- On consideration of the above facts and submissions of the parties, we find that issue raised in the departmental appeal is covered in favour of the assessee by order of the Tribunal in the case of the same assessee for assessment year 2010-11 [2014 (5) TMI 1082 - ITAT CHANDIGARH] in which on identical grounds, the Tribunal dismissed the departmental appeal following the order of the Tribunal in earlier years. Departmental appeal is dismissed.
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2015 (8) TMI 1554
Penalty u/s 271(1)(c) - Addition u/s 68 - assessee has booked cash sales of Rs. 3 Crores in the month of September,2006 to different parties - HELD THAT:- Merely because addition on merit have been confirmed by itself is no ground to sustain the penalty automatically. It is an admitted fact that cash sales of Rs. 3.12 Cr were out of the total sales of Rs. 94.54 Cr. The assessee maintained complete books of account and the accounts are audited. The assessee produced books of account, purchase bills, sales bills and stock register before the authorities below and disclosed complete facts with regard to the sales made to different parties. Therefore, nothing was concealed to the revenue department in filing of the return as well as at the time of assessment framed by the AO.
The sale bills were supported by sales tax paid challans and sales tax return filed by the assessee with Commercial Tax Department of Una and as well as shown by the assessee in the books of account have been accepted by the sales tax authorities (VAT authorities). Thus, the sales made by the assessee including the cash sales have been accepted by the sales tax authorities. The authorities below dis-believed the explanation of the assessee with regard to cash sales made to different parties because their complete details are not noted in the bills.
It was also noted that since no complete particulars of the purchasers are mentioned in the sale bills, therefore, cash sales are not subjected to verification. This was the sole reason for making the addition as well as levying the penalty under section 271(1)(c) of the Act against the assessee - As in the case of R.B. Jessa Ram Fateh Chand [1969 (7) TMI 10 - BOMBAY HIGH COURT] and similarly M. Durai Raj [1971 (3) TMI 11 - KERALA HIGH COURT] held that the books of account cannot be rejected if in cash sales, names and address of the purchasers are not mentioned. There is no need to mention name and address in the cash sales. These judgements support the version of the assessee that mere dis-believing the explanation of the assessee would not be enough to levy the penalty under section 271(1)(c)
The facts and circumstances of the case shall have to be considered because levy of the penalty is discretionary in nature. The Hon'ble Supreme Court in the case of M/s Rajasthan Spinning & Weaving Mills [2009 (5) TMI 15 - SUPREME COURT] held that on every demand, penalty is not automatic.
We are of the view that even if addition on quantum have been sustained, however assessee has been able to make out an arguable and debatable case to prove that penalty need not be imposed in this case. We, therefore, do not subscribe to the views of the authorities below in levying and sustaining the penalty under section 271(1)(c) of the Act. We, accordingly, set aside the orders of the authorities below and delete the penalty. - Decided in favour of assessee.
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2015 (8) TMI 1553
Exemption u/s 11 - as per revenue receipts of the assessee are commercial in nature - Charitable activity u/s 2(15) proved or not? - whether the Revenue has brought on record any material/evidence which may suggest that the assessee was conducting its affairs on commercial line with the motive to earn profit? - HELD THAT:- On dissolution of the assessee authority, all properties, funds and dues which are vested in or realizable by the authority shall vest in or be realisable by the state government and therefore, the funds generated during so called charitable purpose period may be utilized for the purpose of the business - On page 5 of the assessment order, there is a chart of the income of the assessee from various sources and as per the same, Realisation from allotted properties is only Rs. 480.45 lacs and interest income is of Rs. 458.24 Lacs plus Rs. 232.25 lacs and Other receipts Rs. 665.62 lacs. In this manner, as against Realisation from allotted properties of only Rs. 480.45 lacs, interest income and Other receipts is Rs. 1356.11 Lacs.
In view of these facts, the A.O. came to the conclusion that the receipts of the assessee are commercial in nature. Under these facts, in our considered opinion, the judgment of Hon’ble Allahabad High Court rendered in the case of CIT vs. Lucknow Development Authority[2013 (9) TMI 570 - ALLAHABAD HIGH COURT] cannot be made applicable in the facts of the present case. Learned CIT (A) has simply followed this judgment without examining this aspect that the facts in the present case are tallying or not with the facts in the case of CIT vs. Lucknow Development Authority (Supra). Therefore, we feel it proper that this issue should go back to CIT (A) for a fresh decision after examining this aspect that the facts in the present case are tallying with the facts in the case of CIT vs. Lucknow Development Authority (Supra) or not. We, therefore, set aside the order of CIT (A) and restore the entire matter back to him for a fresh decision - Appeal of the revenue is allowed for statistical purposes.
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2015 (8) TMI 1551
TDS u/s 194A - amount of interest deposited with the Motor Accident Claims - HELD THAT:- When interest is paid by any person, who is not an individual or a Hindu Undivided Family, who is responsible for paying to a resident any income by way of interest other than income by way of interest on securities, he is liable to deduct income-tax at the rate in force
As it would quite apparent that the award amount inclusive of interest in the present case has been deposited by the petitioner Company on 25.6.2003, 14.7.2003, 28.5.2003, 11.7.2003 and 24.7.2003 i.e. after 1st June, 2003, the date on which clause (ix) of sub-section (3) of Section 194-A of the Act came into force, which obliges the deductor to make any deduction at source on an amount paid by way of the interest on the compensation awarded by the Motor Accident Claims Tribunal. In view of the specific provisions contained in the Income Tax Act, the petitioner Company was duty bound to deduct the amount of income-tax from the amount of interest deposited with the Motor Accident Claims Tribunal for being disbursed to the respondents/claimants.
In the matter of The New India Assurance Company Limited v. Ramesh Kumar Tamrakar and others [2010 (12) TMI 1340 - CHHATTISGARH HIGH COURT] it has been clearly held by this Court that in view of the provisions contained in clause (ix) of sub-section (3) of Section 194-A of the Act, if the interest component of the award had been deposited after 1-6-2003, the Insurance Company is duty bound to deduct T.D.S. from the amount of interest paid by it.
Claims Tribunal is absolutely unjustified in holding that the petitioner Insurance Company ought not to have deducted the tax at source from the amount of interest paid to the respondents/claimants, as such, the impugned order dated 8.10.2004 deserves to and is accordingly set aside and it is held that the petitioner Company is absolutely justified in deducting tax at source while making the payment of the award inclusive of the interest. In consequence of the aforesaid discussion, the writ petition deserves to and is accordingly allowed and the impugned order is hereby set aside,
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2015 (8) TMI 1550
Addition u/s 68 - unexplained cash deposits in bank - As per the explanation furnished by him, Shri Dalip Singh was an agriculturist, not well educated and had come from village for making purchases for marriage of his daughter and the money was deposited in the bank account, since, the assessee and Shri Dalip Singh both had to make purchases for the marriage of their daughters - HELD THAT:- On perusal of the stated evidences and in the back ground of the fact that Shri Dalip Singh himself has confirmed before the Assessing Officer that he has deposited this amount of Rs.3,55,000/- in assessee’s bank account, this explanation cannot be rejected outrightly. These evidences filed by the assessee also prove that Shri Dalip Singh is a man of means and there is also a relation between him and the assessee, therefore, it cannot be denied that Shri Dalip Singh, in fact, has given this amount to the assessee.
The explanation given by the assessee and Sh. Dalip Singh that the amount was deposited for making purchases for the marriage of daughter may sound weird and can raise suspicion in the mind of Assessing Officer. It can be a trigger point for further investigation by the Assessing Officer. However, in its order the Assessing Officer has not been able to bring on record any material or evidence to falsify this explanation and documentary evidences filed by the assessee. Even before me, the learned DR has not been able to do the same. The addition has solely been made on the basis of surmises. Suspicion howsoever strong cannot partake the character of the evidence/material, as held by the Apex Court in the land mark judgement in case of Umcharan Shaw & Bros. vs. CIT [1959 (5) TMI 11 - SUPREME COURT]
Thus we are not able to come to a conclusion other than that the deposit has in fact been deposited by Shri Dalip Singh. Therefore, the addition made by the Assessing Officer is hereby deleted. - Decided in favour of assessee.
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2015 (8) TMI 1544
Validity of DRP order - violating the principle of natural justice - Failure to provide reasonable opportunity to the Appellant to furnish documents and evidences - HELD THAT:- It would meet the ends of justice if the order of the DRP is set aside, because in our opinion certainly adequate opportunity of being heard is not allowed by the DRP to the assessee. There are different dates mentioned in the order of the DRP supplied to the assessee and the order in the file of the DRP. No satisfactory explanation for this variation in dates in both the orders could be given by the ld. CIT-DR. In the order-sheet there is a noting of only one date of hearing, i.e., 28.11.2014 on which date the assessee was directed to file chart/submission and time was granted up to 05.12.2014. However, thereafter there is no other noting whether any further hearing took place or not.
DRP has passed the order without allowing adequate opportunity of being heard to the assessee. We, therefore, set aside the order of the DRP and restore the matter back to its file. We direct the DRP to allow adequate opportunity of being heard to the assessee, and thereafter pass a speaking order in respect of assessee’s objections in accordance with law. Assessee’s appeal is deemed to be allowed for statistical purposes.
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2015 (8) TMI 1543
Depreciation on the windmill - Addition on the ground that the Revenue has filed an appeal before the Apex Court against the judgment of the Madras High Court in Velayudhaswamy Spinning Mills Ltd. [2010 (3) TMI 860 - MADRAS HIGH COURT] - AO admits in the assessment order that the issue before him is similar to one that was decided by the Madras High Court - HELD THAT:- No infirmity in the order of the lower authority in following the binding judgment of the Jurisdictional High Court. A mere pendency of SLP before the Apex Court cannot be a reason for not following the judgment of the Jurisdictional High Court. It is not the case of the Revenue that the operation of the judgment of the Madras High Court was stayed by the Apex Court. In those circumstances, this Tribunal do not find any infirmity in the order of the lower authority. Accordingly, the same is confirmed.
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2015 (8) TMI 1541
Revision u/s 263 by CIT - Addition u/s 68 - HELD THAT:- As decided in M/S SUBHLAKSHMI VANIJYA PVT. LTD., TULSI TRACOM PVT. LTD., KOLKATA AND OTHERS [2015 (8) TMI 174 - ITAT KOLKATA] contention of the assessee that since the AO of the assessee company was not empowered to examine or make any addition on account of receipt of share capital with or without premium before amendment to section 68 by the Finance Act, 2012 w.e.f. A.Y. 2013-14 and hence the CIT by means of impugned order u/s 263 could not have directed the AO to do so, is unsustainable.
Failure of the AO to give a logical conclusion to the enquiry conducted by him gives power to the CIT to revise such assessment order - the notices u/s 263 were properly served through affixture or otherwise. Further the law does not require the service of notice u/s 263 strictly as per the terms of section 282 of the Act. The only requirement enshrined in the provision is to give an opportunity of hearing to the assessee, which has been complied with in all such cases.
Limitation period for passing order is to be counted from the date of passing the order u/s 147 read with sec. 143(3) and not the date of Intimation issued u/s 143(1) of the Act, which is not an order for the purposes of section 263. In all the cases, the orders have been passed within the time limit. CIT having jurisdiction over the AO who passed order w/s 147 read with section 143(3), has the territorial jurisdiction to pass the order u/s 263 and not other CIT.
Addition in the hands of a company can be made u/s 68 in its first year of incorporation.After amalgamation, no order can be passed u/s 263 in the name of the amalgamating company. But, where the intention of the assessee is to defraud the Revenue by either filing returns, after amalgamation, in the old name or otherwise, then the order passed in the old name is valid.
Order passed u/s 263 on a non-working day does not become invalid, when the proceedings involving the participation of the assessee were completed on an earlier working day. Order u/s 263 cannot be declared as a nullity for the notice having not been signed by the CIT, when opportunity of hearing was otherwise given-by the CIT.
Refusal by the Revenue to accept the written submissions of the assessee sent after the conclusion of hearing cannot render the order void ab initio. At any rate, it is an irregularity. Search proceedings do not debar the CIT from revising order u/s passed u/s 147 of the Act. Appeal dismissed.
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2015 (8) TMI 1539
Disallowance of job charges @ 10% - Non rejection of books of accounts - HELD THAT:- Addition has been made only on estimated basis by the AO and the ld. AO disallowed 20% of the job charges and the ld. CIT(A) restricted the same to 10% of the job charges is totally unwarranted as the entire books of account and vouchers were duly produced by the assessee during the course of assessment proceedings. Without rejection of the books of account, the action of the ld. AO as well as the CIT(A) in sustaining the addition on an estimated basis is arbitrary and unwarranted. Hence no hesitation to delete the said addition made in the sum of ₹ 9,000/- being 10% of the job charges. Hence, this ground of appeal is allowed.
Disallowance of administrative expenses - HELD THAT:- Addition has been made only on estimated basis by the AO and the ld. AO disallowed 20% of the administrative expenses and the ld. CIT(A) upholding the action of AO is totally unwarranted as the entire books of account and vouchers were duly produced by the assessee during the course of assessment proceedings. Without rejection of the books of account, the action of the ld. AO as well as the ld. CIT(A) erred in sustaining the addition on an estimated basis is arbitrary and unwarranted.
Addition being professional fees received by the assessee from I.C.I.C.I. Prudential Life Insurance Corporation Ltd.- HELD THAT:- As seen from the materials available on record that ICICI Prudential Life Insurance Corporation Ltd had cut a cheque on 21.03.2008 and tax was duly deducted on the same which is mentioned in the TDS certificate of the assessee and in consonance with the mercantile method of accounting followed by the assessee, the assessee ought to have disclosed this receipt as income in A.Y.2008-09. Hence the action of the assessee in not disclosing the same is not appreciated. However, it is also seen that the assessee has offered the same in A.Y.2009-10 on receipt basis - hereby direct the ld. AO to withdraw that income in A.Y.2009-10 together with TDS thereon to meet the ends of justice and in order to avoid double taxation of the same receipt. Accordingly, this ground of appeal is dismissed subjected to the directions contained herein above
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2015 (8) TMI 1538
Revision u/s 263 by CIT - Incorrect calculation of capital gain/loss - FMV determination - valuation of sold property as on 1.4.1981 taken - apparent discrepancy and lack of proper investigations during the assessment proceedings - lack or enquiry v/s inadequate enquiry - HELD THAT:- Assessee has not only disclosed the way it had made calculation of capital loss, it had also enclosed all the corroborative evidences together with the return of income - AO had raised a specific query which the assessee had duly replied. In view of this, it cannot be said that the AO has not applied his mind as alleged by CIT that he has not made proper investigation during the assessment proceedings. Assessing Officer was fully aware of the whole matter.
Even after passing of the assessment order, he has issued notice under section 133(6) of the Act and also the notice under section 154 of the Act, which were duly replied by the assessee. Even the notice under section 154 of the Act mentions the facts which have been stated in the notice under section 263 of the Act issued by the learned Commissioner of Income Tax later on. In view of these evidences, it cannot be said that this is a case of lack of enquiry/investigation.
On the appraisal of the said plethora of evidences, if the Assessing Officer takes a view which is not in consonance with the view of the learned Commissioner of Income Tax, it cannot give the learned Commissioner of Income Tax the jurisdiction under section 263 of the Act. This is certainly not a case of lack of enquiry, at most, it may be a case of inadequate enquiry, which also to our mind, in the facts and circumstances of the case, does not seem correct.
There was some mistake in the Valuation Report of Registered Valuer, which the assessee enclosed with the return of income, also does not advance the case of the Department. It is a case in which on the basis of evidences filed by the assessee, the Assessing Officer forms an opinion and then makes the assessment. There is nothing illegal in this. There is no law which says that the Valuation Report has to be drawn in a certain specific fashion. The valuation is an art and any Valuation Officer who is registered by the Government to make such kind of valuation can make his own basis for valuing the property. In the present case, the Valuation has been done by a Registered Valuer, which the Assessing Officer has perused and formed an opinion. No specific procedure has been prescribed under the Statute as to how the Assessing Officer has to react in such situation.
As per the assessee, the value taken is in accordance with the report of the Registered Valuer, which the Assessing Officer accepted while the learned Commissioner of Income Tax wanted to substitute the same to the value of some other property purchased by the assessee itself a few months later - Assessing Officer being an Adjudicating Officer has to form an opinion on the basis of evidences, which he has duly done. If the learned Commissioner of Income Tax on the same set of evidence draws different opinion, it being a question of fact, does not give him jurisdiction to revise the same under section 263 - Decided in favour of assessee.
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