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Income Tax - Case Laws
Showing 61 to 80 of 7696 Records
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2021 (12) TMI 1350 - TELANGANA HIGH COURT
Assessment order u/s 143(3) making additions under Section 69-A - petitioner has filed appeal before the CIT-A against addition and said appeal is presently pending for hearing - meanwhile demand notices were issued to the petitioner which were followed by garnishee notices - HELD THAT:- After hearing learned counsel for the parties and on due consideration, we are of the view that it would meet the ends of justice if a direction is issued to the Appellate Authority i.e., respondent No.1 to take up the stay petition of the petitioner dated 05.04.2021 and pass appropriate orders thereon in accordance with law. We are of the further opinion that the said stay petition should be decided within a period of six weeks from the date of receipt of a copy of this order. Till such time, the demand pursuant to assessment order dated 21.12.2019 shall remain stayed.
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2021 (12) TMI 1349 - KERALA HIGH COURT
Late filing fee under section 234E - liability to pay late fee for non filing of any statement of tax deduction at source - scope of provisions of section 200A(1)(e) - HELD THAT:- As brought to our attention the decision in M/s.Sarala Memorial Hospital v. Union of India and Another [2018 (12) TMI 1818 - KERALA HIGH COURT] wherein an identical question arose for consideration. After considering the statutory provisions and the implications of the amendment brought in to the Act, it was held that the amendment would take effect only with effect from 1st June, 2015 and is thus prospective in nature. It is submitted that the aforesaid judgment has become final and is binding upon the authorities.
In view of the above, the demand in Ext.P1 for the period from 2011-12 to the first quarter of 2015-16 is bereft of authority and cannot be legally sustainable.
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2021 (12) TMI 1348 - ITAT AHMEDABAD
Assessment u/s 153A - Undisclosed/Unexplained income - withdrawal shown in the seized documents belonging to the partners in their personal capacity or firm - whether withdrawals in the name of the partners of the firm represents the unaccounted income of the firm? - whether these documents belong to the assessee? - HELD THAT:- We find that the seized document was containing the name of the firm and the partners which was duly dated & signed by all of them along with the witnesses.
Thus, it appears that the firm is the owner of the documents and thus it is safe to infer that the document in question belongs to the assessee as envisaged under section 153C of the Act.
Withdrawal shown in the seized documents represents the amount belonging to the partners in their personal capacity - Onus lies upon the assessee to prove that the transactions shown in the seized paper do not represent the true contents.
On examination of the seized document, we note that it was duly signed and dated not only by all the partners but also by three witnesses. The name of the partnership firm along with partners was appearing. It was discernible from the seized document that there was withdrawal of money from the partnership firm. Generally, the withdrawal from the firm represents the withdrawal of the capital by the partners. This capital can either be in the form of money contributed by the partner or maybe the share of profit/remuneration/interest on the capital of the partner generated from the partnership firm. Likewise, all these transactions should have been duly recorded in the books of accounts of the firm as well as in the individual ledger of the partners maintained by the firm. But, on perusal of the financial statement of the firm and the capital account of the partners, we note that such figures are not appearing herein. The necessary details of the financial statement of the assessee and capital account of the partners. Thus, we find difficult to believe the version of the assessee that the impugned withdrawal represents the settlement of the partners account in their individual capacity.
Addition was not made solely on the basis of the statement recorded in the course of search of Shri Lialchand Patel the father-in-law of Shri Himanshu Patel one of the partner of the firm. Therefore, it is not necessary to provide the opportunity of cross examination to the assessee of statement as discussed above.
As there is nothing brought on record that such amount of transactions were recorded in the books of accounts of the individual partners we find that the assessee has not brought anything on record even in the present proceedings which is the 2nd innings. The assessee cannot escape from its liability in discharging the onus cast upon it under the provisions of law in the garb of the matter sub-judice in the court of law. In view of the above, we are of the opinion that the assessee failed to discharge its onus imposed under the provisions of law by furnishing the necessary documentary evidence. Thus, in such facts and circumstances, we are constrained and have no alternative except to confirm the order of the authorities below. Hence the ground of appeal of the assessee is dismissed.
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2021 (12) TMI 1347 - ITAT ALLAHABAD
Rectification u/s 254 - challenging the validity of selecting the case of the assessee under compulsory scrutiny based on incomplete survey dated 06.01.2021 - AO has initiated the compulsory scrutiny without any prior approval of the competent authority and therefore, the question arises whether the initiation of the compulsory scrutiny by the Assessing Officer is in accordance with the criteria prescribed by the CBDT or not? - HELD THAT:- It is settled proposition of law that the scope and jurisdiction of this Tribunal under section 254(2) is very limited and circumscribed to rectify a mistake apparent from record. Therefore, the Tribunal cannot review its own order in the proceedings under section 254(2). The case law relied upon by the DR on this point are binding and there is no quarrel on this issue however, the failure to consider an important fact or contention raised during the hearing would certainly be a mistake apparent from record as the said relevant fact is likely to effect the decision on an issue.
Non consideration of such a crucial and relevant fact and point out which is going to influence the decision is an apparent mistake from record requires to be rectified under section 254(2) - DR has also relied upon the various decisions on the point that the assessee has not raised any objection regarding jurisdiction of the AO during the assessment proceedings and therefore cannot be permitted to raise this issue. It is pertinent to note that those decisions are only on the issue of jurisdiction of the AO to assess the assessee and not on the validity of the initiation of compulsory scrutiny. Therefore, even if the AO is having jurisdiction to assess the assessee, he may not have the authority to initiate the compulsory scrutiny if the prescribed criteria for such selection of compulsory scrutiny are not satisfied. Hence the decision relied upon by the learned DR on the jurisdiction of the AO are not relevant for the issue under consideration. As there is an apparent mistake in the impugned order and particularly while deciding the additional issue which goes to the root of the matter then, in the facts and circumstances of the case and in the interest of justice, the impugned order dated 21st October, 2021 of this Tribunal is recalled for deciding the appeal of the assessee afresh. Mis application allowed.
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2021 (12) TMI 1340 - MADRAS HIGH COURT
Proceedings initiated u/s 276C(2) - main contention before this Court that the amount has already been paid. Therefore, there cannot be any prosecution - HELD THAT:- These are all factual aspects which cannot be gone into at this stage. It is the matter for evidence before the trial Court. At this stage, learned counsel for the petitioner submitted that compounding petition is pending before the authority and the authority has to take decision immediately. Be that as it may. If the compound petition is pending before the authority, the authority shall act as per law and take decision within a period of two months from the date of receipt of copy of this Order. In such a view of the matter the Criminal Original Petition is liable to be dismissed.
As far as the trial is concerned, the presence of the Petitioner is dispensed with except for receiving copies, answering the charges and questioning under Section 313 Cr.P.C. or any other date that may be fixed by the trial court.
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2021 (12) TMI 1337 - ITAT CHANDIGARH
Delayed payments of employees contribution to ESI and PF by invoking the provisions of section 36(1)(va) - addition on the basis of the amendment effected by the Finance Act, 2021, to section 43B of the Act by insertion of Explanation-5 and to section 36(1)(va) of the Act by insertion of Explanation-2 - HELD THAT:- This issue has been dealt with and adjudicated by the ITAT in a number of cases, consistently ruling in favour of the assessee, holding that the amendment to section 43B of the Act by insertion of Explanation-5 and to section 36(l)(va) of the Act by insertion of Explanation-2, by the Finance Act 2021 is prospective and the issue otherwise stands decided by the jurisdictional high court in favour of the assessee
As decided in AJAY PIPLANI, VERSUS THE ASSISTANT DIRECTOR OF INCOME TAX, BENGALURU [2021 (10) TMI 1280 - ITAT] that the claim of employees contribution to ESI and PF as per section 36 (1) (va) of the Act cannot be denied in the impugned year, i. e. 2019 - 20 on the basis of amendment made to the section by Finance Act 2021. The order of the Ld. CIT(A) upholding the said disallowance to the is therefore set aside and the AO is directed to allow the claim of the assessee. Also see M/S JUPITER AQUA LINES PVT. LTD. VERSUS THE D.C.I.T., CIRCLE-6 (1) , MOHALI. [2021 (11) TMI 761 - ITAT CHANDIGARH] - Decided in favour of assessee.
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2021 (12) TMI 1336 - ITAT CHANDIGARH
Delayed payments of employees contribution to ESI and PF by invoking the provisions of section 36(1)(va) - Scope of amendment - HELD THAT:- This issue has been dealt with and adjudicated by the ITAT in a number of cases, consistently ruling in favour of the assessee, holding that the amendment to section 43B of the Act by insertion of Explanation-5 and to section 36(l)(va) of the Act by insertion of Explanation-2, by the Finance Act 2021 is prospective and the issue otherwise stands decided by the jurisdictional high court in favour of the assessee.
As decided in AJAY PIPLANI, VERSUS THE ASSISTANT DIRECTOR OF INCOME TAX, BENGALURU [2021 (10) TMI 1280 - ITAT] that the claim of employees contribution to ESI and PF as per section 36 (1) (va) of the Act cannot be denied in the impugned year, i. e. 2019 - 20 on the basis of amendment made to the section by Finance Act 2021. The order of the Ld. CIT(A) upholding the said disallowance to the is therefore set aside and the AO is directed to allow the claim of the assessee. Also see M/S JUPITER AQUA LINES PVT. LTD. VERSUS THE D.C.I.T., CIRCLE-6 (1) , MOHALI. [2021 (11) TMI 761 - ITAT CHANDIGARH] - Decided in favour of assessee.
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2021 (12) TMI 1335 - ITAT MUMBAI
Deemed dividend u/s 2(22)(e) - transactions of loans/advances are made through journal entries even when the loans/advances were reflected in the balance sheets of the respective companies - HELD THAT:- On appraisal of the mentioned finding, we noticed that the CIT(A) has directed the AO to verify the ledger account of M/s. WWIL/EIL in the books of six related group of companies and re-compute the amount of deemed dividend u/s 2(22)(e) after excluding the amounts related to journal entries and considering only those amounts wherein actual payments have been made/received. We nowhere found these directions as illegal or against law and facts. The facts are not distinguishable at this stage. Moreover, we noticed that the issue has duly been covered by the decision of the Hon’ble ITAT in the assessee’s own case for the A.Y. 2007-08 & 2009-10 [2021 (8) TMI 894 - ITAT MUMBAI]
Therefore, taking into account of all the facts and circumstances, we are of the view that the CIT(A) has passed the order judiciously and correctly which is not liable to be interfered with at this appellate stage. Accordingly, we affirm the finding of the CIT(A) on this issue and decide these issues in favour of the assessee against the revenue.
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2021 (12) TMI 1332 - ITAT BANGALORE
Employees’ share of contribution to ESI to the extent not paid on or before the due date as mentioned in Sec 36(1)(va) - HELD THAT:- Hon’ble Karnataka High Court in the case of Essae Teraoka Pvt. Ltd., (supra) [2014 (3) TMI 386 - KARNATAKA HIGH COURT] has taken the view that employee’s contribution under section 36(1)(va) of the Act would also be covered under section 43B of the Act and therefore if the share of the employee’s share of contribution is made on or before due date for furnishing the return of income under section 139(1) of the Act, then the assessee would be entitled to claim deduction. Therefore, the issue is covered by the decision of the Hon’ble Karnataka High Court.
In this case there is no dispute that the assessee made payment of the Employees share of PF/ESI on or before the due date for filing return of income for AY 2017-18 u/s.139(1) of the Act. The next aspect to be considered is whether the amendment to the provisions to section 43B and 36(1)(va) of the Act by the Finance Act, 2021, has to be construed as retrospective and applicable for the period prior to 01.04.2021 also.
We find that the explanatory memorandum to the Finance Act, 2021 proposing amendment in section 36(1)(va) as well as section 43B is applicable only from 01.04.2021. These provisions impose a liability on an assessee and therefore cannot be construed as applicable with retrospective effect unless the legislature specifically says so. In the decisions referred to by us in the earlier paragraph of this order on identical issue the tribunal has taken a view that the aforesaid amendment is applicable only prospectively i.e., from 1.4.2021. We are therefore of the view that the impugned additions made under section 36(1)(va) of the Act, deserves to be deleted. Appeal of assessee allowed.
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2021 (12) TMI 1331 - ITAT ALLAHABAD
Disallowing the late deposit of employee’s contribution towards ESI and EPF - contribution though the same was deposited before the due date of filing of return of income under section 139 - amendment by Finance Act, 2021 in Section 36(1)(va) and Section 43B - HELD THAT:- There is no dispute that prior to the amendment by Finance Act, 2021 in Section 36(1)(va), Section 43B, the issue of allowability of the employee’s contribution deposited belatedly as per the due date of the respective Acts however, before the due of filling of return of income under Section 139(1) is covered by the decisions of Hon'ble jurisdictional High Court as well other High Courts. The Hon'ble Jurisdictional High Court in the case of Sagun Foundry Private Limited [2016 (12) TMI 1479 - ALLAHABAD HIGH COURT] decided this issue in favour of the assessee.
Revenue has not disputed the fact that the Employee’s contribution towards EPF and ESI was deposited by the assessee before the due date of return of income u/s 139(1) which was extended by the CBDT upto 31st October, 2018. Therefore, the claim of assessee is allowed.
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2021 (12) TMI 1326 - KERALA HIGH COURT
Validity of Faceless Assessment - petitioner contended that it was unaware of the completion of the proceedings relating to the assessment year 2017-18 under the faceless scheme - Denial of natural justice - failure of an opportunity to contest the assessment proceedings - HELD THAT:- This Court is of the opinion that, though the assessing officer cannot be faulted, petitioner did not get an effective opportunity to put forth his response for the year 2017-18. Since the assessment order is the platform from which the rights and obligations of not only the assessee but also of the department arise, it is essential that such a platform is built upon strong foundations, especially when the amount involved is large. The burden of an assessment order issued without hearing the assessee will fall, not only upon the petitioner alone but even upon the system itself and may create further waste of resources.
It is relevant to bear in mind that the principles of natural justice cannot be cribbed or cabined in a straitjacket formula. The concept of natural justice depends on the context and the circumstances of each case.
When the tax department of the Country is in a transition phase, with conventional and traditional notices being replaced by e-notices or intimations in the web portal, the technological inadequacies and incompetence of the litigants cannot be brushed aside lightly, especially when the prejudice to the litigant is enormous. As the tax department and the assessees are both passing through the transition phase and shifting to electronic modes, a rigid consideration and application of rules of natural justice do not augur well for the system. The principles of natural justice are flexible enough to adapt to situations like the present, to insist for an effective opportunity for the assessee.
This Court is of the opinion that an effective opportunity of hearing could not be availed of by the petitioner in its full sense and therefore there has been a violation of the principles of natural justice while issuing Ext. P6 order of assessment.
The fact that if a fresh opportunity is granted to the petitioner to reply to the notices issued and also to consider same in a time bound manner would not cause any prejudice to the department. On the contrary, it will cater to the advancement of the cause of justice for both sides.
Ext.P6 is liable to be set aside and a fresh opportunity of hearing be granted to the petitioner. While setting aside Ext.P6 order of assessment dated 22.04.2021, the petitioner is given an opportunity to respond to all the notices issued to the petitioner on or before 14.01.2022 and the assessing officer shall consider the objections of the petitioner and pass fresh orders thereon, after hearing the petitioner on or before 31.01.2022.
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2021 (12) TMI 1324 - ITAT DEHRADUN
TP adjustment in respect of international transactions of Intra Group Services provided by the assessee to its Associated Enterprises (AE) - HELD THAT:- Revenue intends to keep issues alive, however, could not controvert view taken in respect of these issues as there has been no contrary observation/material evidences brought out on record by ld. CIT DR. It has been admitted by him that facts and circumstances of the services received by assessee for the year under consideration are same vis-à-vis assessment year 2010-11, and other preceding assessment years. We are therefore inclined to follow the same view. Respectfully, following view taken by this Tribunal in assessment year 2010-11 and other preceding assessment years, orders of which are placed in paper book, addition made by Assessing Officer stands deleted.
To maintain the rule of consistency, we follow the earlier order of Tribunal and decide the issue in favour of the assessee and the addition made being T P adjustment on account of intra group services provided by the assessee to its AE is deleted.
TP adjustment of interest payment on loan - HELD THAT:- This Tribunal for the assessment years 2011-12 to 2014-15 [2018 (7) TMI 1955 - ITAT NEW DELHI] remitted this issue to the record of the TPO for undertaking benchmarking analysis in accordance with the directions of this Tribunal for the assessment year 2010-11.
Disallowance of branch office expenditure and expenditure incurred due to non-producing of production sharing contracts - HELD THAT:- We fail to see any such provision in the act that if the other party in the joint-venture do not agree to share the particular cost, the cost incurred by one of the partners of that joint-venture becomes the expenditure not for the purpose of the business of that partner. No such provision has also been brought to our notice by the revenue. It is also not the case of the revenue that details of those expenditure are not available before them or Assessee has furnished incomplete information for its allowability. Further, no judicial precedent was cited before us by revenue, which says that such expenditure are not allowable to the Assessee. Accordingly, these grounds raised by the assessee stands allowed.
Disallowance of head office expenses - HELD THAT:- The fact that business model has not undergone any change since the AY 2010-11 and by following the decision rendered by the coordinate Bench of the Tribunal in taxpayer's own case for AY 2010-11, we are of the considered view that the cost of services availed of by the taxpayer required by PSC with regard to its standard of operation including the quality of execution of work, access to latest industry information and global updates, safety of its employees and the environment etc., cannot be disallowed merely on the ground that the said expenses have not been borne by the joint venture partner, particularly when it is not disputed by the Revenue that the expenditure were made for commercial expediency.To maintain the rule of consistency, we follow the earlier order of Tribunal and decide the issue in favour of the assessee and allow this ground of assessee's appeal.
Disallowance of depreciation and depletion - HELD THAT:- We deem it proper to restore the issue to the file of the Assessing Officer with a direction to give an opportunity to the assessee to substantiate its case. The Assessing Officer shall decide the issue as per fact and law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The ground raised by the assessee on this issue is allowed for statistical purposes - To maintain the rule of consistency, we follow the earlier order of Tribunal and restore this issue to the record of Assessing Officer with the same directions for deciding the same afresh after giving a reasonable opportunity of hearing to the assessee. Accordingly, this ground of appeal is allowed for statistical purposes.
Disallowance of inventory written off - HELD THAT:- After hearing both the sides and considering the totality of the facts of the case, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to give an opportunity to the assessee to substantiate his case. The Assessing Officer shall decide the issue as per fact and law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The ground raised by the assessee on this issue is allowed for statistical purposes.
Disallowance of deduction of Education Cess - assessee claimed deduction on account of education cess paid before the due date of filing the return of income - AO disallowed the claim of the assessee being part of the Income-tax which is not an allowable deduction - HELD THAT:- The dispute under consideration is purely legal in nature, as the facts are not in dispute. As in the case of Chambal Fertilizers and Chemicals [2018 (10) TMI 589 - RAJASTHAN HIGH COURT] and Sesa Goa Ltd. [2020 (3) TMI 347 - BOMBAY HIGH COURT], wherein after considering the CBDT Circular, it has been held that the assessee is eligible to claim the deduction of the 'cess' as per the provisions of Section 37 of the Income Tax Act. In the absence of any contrary decision of jurisdictional High Court or any other high Court, the decisions relied upon by the ld. Sr. counsel are binding on this Tribunal. Respectfully following the above decisions, this issue is decided in favour of the assessee and the claim of deduction on account of education cess is allowed.
Short credit of TDS - HELD THAT:- Assessing Officer is directed to verify the correct TDS credit available to the assessee and then to allow the same.
Interest on refund u/s. 244A - HELD THAT:- We note that the refund of tax is consequential to the outcome of the appeal filed by the assessee. Therefore, the Assessing Officer is directed to consider the consequential effect of the refund and interest there upon u/s. 244A of the Act.
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2021 (12) TMI 1322 - ITAT JAIPUR
Late payments towards EPF and ESI u/s 36(1)(va) - payment before furnishing the return of income under section 139(1) - HELD THAT:- As relying on Mohangarh Engineers and Construction Company [2021 (9) TMI 1319 - ITAT JODHPUR] since assessee had deposited the employees contribution before filing of Return of Income. Therefore, the assessee succeeds.
Impugned additions made by the Assessing Officer and sustained by the Ld. CIT(A) on account of deposits of employees contribution of ESI & PF prior to filing of the return of income u/s 139(1) of the Act, in both the years under consideration prior to the amendment made by the Finance Act, 2021 w.e.f. 1.4.2021 vide Explanation 5, are deleted. - Decided in favour of assessee.
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2021 (12) TMI 1321 - DELHI HIGH COURT
Demand of Outstanding dues including taxes - respondent-Company has gone in liquidation - Company in question was in liquidation and was not in a position to pay its outstanding dues including its taxes - HELD THAT:- As per order passed in MOSER BEAR INDIA LTD. [2020 (7) TMI 760 - SC ORDER] held Official Liquidator has filed a report that the Respondent-Company (Moser Bear India Ltd.) is not financially viable and is under liquidation in proceedings pending before the National Company Law Tribunal. Even if the Appellant-Revenue were to succeed, the Official Liquidator is not in a position to pay the tax amount involved in these appeals.
Indisputedly, the respondent-Company has gone in liquidation. The company in liquidation is not in a position to pay its outstanding dues including taxes. Moreover, the tax effect in the concerned appeals is just over ₹ 2,00,00,000/- (Rupees Two Crore Only).
Taking overall view of the matter, we deem it appropriate to dispose of these appeals, leaving the question of law open to be decided in appropriate case.
Revenue is directed to obtain instruction as to whether the Revenue would like to pursue the appeals filed by it. To await instruction, list on 16th March, 2022.
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2021 (12) TMI 1320 - ITAT AHMEDABAD
Penalty u/s 271(1)(c) - assessee has furnished inaccurate particulars of income - inaccurate particulars of income v/s inaccurate claim - whether the assessee has furnished inaccurate particulars of income with respect to research and development activity carried out by it to the tune of 50% of the total claim? - HELD THAT:- The claim of the assessee at the most can be regarded as inaccurate claim which cannot be equated with the inaccurate particulars of income. It is for the reason that nothing has been brought on record by the authorities below suggesting that the assessee has furnished the particulars of income with dishonest intent.
As regards the explanation 1 to section 271(1)(c) of the Act, there was no iota of evidence suggesting that the explanation offered by the assessee was false. Since the research and development facility was maintained by the assessee and the expenditures were also incurred by it, claim of the assessee cannot be said amounting to concealment of particulars of income - there was no finding of the authorities below qua the fact that the assessee fails to substantiate the explanation offered by him and fails to prove that such explanation is bonafides with respect to material facts relating to the computation of total income. Thus in our considered view the provisions of expression 1 to section 271(1)(c) of the Act cannot be attracted in the given facts and circumstances.
We set aside the finding of the learned CIT (A) and direct the AO to delete the penalty levied by him under section 271(1)(c) of the Act. Hence the ground of appeal of the assessee is allowed.
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2021 (12) TMI 1313 - ITAT BANGALORE
TDS u/s 194J - NFS – ATM Charges paid - disallowance made u/s 40(a)(ia) for non-deduction of tax at source on payments fall under the category of technical services - HELD THAT:- Following the above said decision of co-ordinate bench rendered in the case of Canara Bank [2022 (1) TMI 124 - ITAT BANGALORE], we hold that the payments made to NPCI towards NFS ATM charges cannot be considered as “technical services” within the meaning of sec.194J of the Act. Hence there is no liability to deduct tax at source from those payments. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and direct the AO to delete the disallowance.
Applicability of sec.115JB on banking company - case of the assessee is that clause (b) of sec.115JB(2) is made applicable to banking companies, since banking company is included in sec. 211 of the Companies Act. However, it is the contention of the assessee that it is not a ‘banking company”, i.e., it is a “corresponding new bank” - HELD THAT:- As decided in M/S. CANARA BANK (ERSTWHILE SYNDICATE BANK) VERSUS DEPUTY COMMISSIONER OF INCOME-TAX CIRLE-1 UDUPI AND (VICE-VERSA) [2022 (1) TMI 124 - ITAT BANGALORE] provisions of sec.51 of the Act specifically states that only certain provisions of BR Act are applicable to “Corresponding new bank”. We noticed earlier that the Ld CIT(A) has proceeded to decide this issue by observing that all provisions of BR Act are applicable to the Company. We notice that the Ld CIT(A) did not consider the effect of provisions of sec.51 of the BR Act upon the assessee. Hence the decision taken by him under the impression that all the provisions of BR Act are applicable to the assessee is faulted one. In our view the Ld CIT(A) should considered the effect of provisions of sec. 51 of BR Act and accordingly he should have appreciated the contentions of the assessee on the definition of “banking company”, provisions of sec.211(2) of the Companies Act etc. Since these aspects go to the root of the issue, in our view, this issue needs to be examined at the end of Ld CIT(A) afresh. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and restore the same to his file for examining it afresh.
Disallowance of bad debts claimed u/s 36(1)(vii) - HELD THAT:- We notice that the Ld CIT(A) has followed the decision rendered by the co-ordinate bench in the assessee’s own case [2018 (1) TMI 1575 - ITAT BANGALORE] and deleted the disallowance of bad debts claimed by the assessee u/s 36(1)(vii) of the Act. Accordingly, we do not find any reason to interfere with his order passed on this issue.
Disallowance of depreciation on HTM Securities - AO took the view that the RBI has allowed banks to claim depreciation on securities which are “Held for Trade” and “Available for sale” only thus he held that the depreciation is not available on securities “Held to Maturity - CIT-A deleted the addition - HELD THAT:- As decided in own case [2018 (1) TMI 1575 - ITAT BANGALORE] depreciation claimed on investments 'held on maturity' by a bank has to be treated as stock-in- trade in accordance with RBI guidelines and CBDT Circular.
Disallowance made u/s 14A - HELD THAT:- We notice that the co-ordinate benches have decided this issue prior to rendering of decision by Hon’ble Supreme Court in the case of Maxopp Investment Ltd [2018 (3) TMI 805 - SUPREME COURT] However, before us, the Ld A.R relied upon certain other decisions in order to contend that no disallowance u/s 14A is called for. In view of the subsequent development of law on this issue, in our considered view, this issue requires fresh examination at the end of AO by duly considering the various decisions on the subject. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and restore the same to the file of AO for examining it afresh.
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2021 (12) TMI 1303 - ITAT CHENNAI
TDS u/s 194A - Addition u/s 40(a)(ia) - assessee did not discharge the required onus and failed to file Form 26A which justify the confirmation of impugned disallowance - HELD THAT:- As decided in case of M/s Royal India Gems & Jewels Pvt. Ltd.[2018 (9) TMI 2072 - ITAT CHENNAI] by virtue of the judgment of Hon’ble Delhi High Court in the case of Ansal Land Mark Township P. Ltd (supra), first proviso to Section 201(1) as well as proviso to Section 40(a)(i) of the Act had to be construed retrospectively. Considering the facts and circumstances of the case, we are of the opinion that issue requires a fresh look by the ld. Assessing Officer. Ld. Assessing Officer can use the powers vested on him for getting the required information from M/s. Reliance Capital Ltd, so as to ascertain whether they had included the interest paid by the assessee, as a part of their income and filed return after paying due taxes.
We find that the assessee could escape the rigors of Sec.40(a)(ia) in terms of second proviso to Section 40(a)(ia) read with first proviso to sub-section (1) of Section 201 by demonstrating that the payee had duly offered the payment in their Income tax returns and paid due taxes thereon. In such a case, no disallowance u/s 40(a)(ia) is called for. As per the submissions of Ld. AR, the assessee could demonstrate the fulfillment of these conditions and is ready to file the requisite certificate / declaration from the payee. Therefore, we deem it fit to restore the matter back to the file of AO on similar lines as above to provide an opportunity to the assessee to demonstrate fulfillment of these conditions by adducing requisite documentary evidences - Appeal stand allowed for statistical purposes.
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2021 (12) TMI 1296 - MADRAS HIGH COURT
Reopening of assessment u/s 147 - non passing of speaking order - petitioner has not been filed a reply to Section 143(2) notice - HELD THAT:- Assessment orders have to be passed within the time. Therefore, no fault can be found with the respondent as otherwise entire exercise taken would have lapsed due to limitation.
The fact remains that the petitioner has also sent a representation/objection on 28.12.2018, the date on which the Impugned Orders have been passed without a speaking order proceeding these orders.
As the Impugned Assessment Orders are quashed and the cases are remitted back to the respondent to pass a speaking order in terms of the decision in GKN Driveshafts (India) Limited Vs. Income Tax Officer and Ors [2002 (11) TMI 7 - SUPREME COURT] and to thereafter pass appropriate Assessment Order. Since the dispute pertains to the Assessment Years 2010-2011 and 2011-2012, the respondent may pass a speaking order preferably within a period of thirty (30) days from the date of receipt of a copy of this order based on the representation/objection filed by the petitioner on 28.12.2018 in accordance with law and on merits. The respondent shall pass Assessment order within a period of thirty (30) days thereafter.
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2021 (12) TMI 1295 - ITAT MUMBAI
Disallowance of delayed deposit of employees contribution to provident fund and Employees state Insurance scheme - HELD THAT:- We find for the month of December, 2016 of employees’ contribution towards provident fund which was required to be deposited according to the respective Provident Fund Act on or before 15th January, 2017 was deposited on 16th January, 2017. The Ministry of Labour and Employment has issued a letter dated 12/01/2017 wherein as a special case due to the problems on the portal on allotment of UAN, the due date for payment of contribution for the month of December, 2016 was extended upto 20th January, 2017. Assessee has already deposited the same on 16th January 2017, therefore, there is no delay in payment of employees’ contribution of provident fund for the month of December, 2016. Therefore, the disallowance is incorrectly confirmed by the learned CIT(A).
With respect to the employees contribution to ESIC undisputed facts shows that though such contribution is deposited after the due date prescribed under the respective law, but before filing of the return of income. We find that identical issue is GHATGE PATIL TRANSPORTS LTD. [2014 (10) TMI 402 - BOMBAY HIGH COURT] which is the jurisdictional High Court wherein it has been held that both employees and employer’s contribution are covered under the amendment to section 43B of the Act relying on the decision of the Hon’ble Supreme Court in CIT vs Alom Extrusions Ltd [2009 (11) TMI 27 - SUPREME COURT] and therefore, if such payments are made on or before the due date of filing of the return of income, same are not disallowable. We find that instead of following the decision of jurisdictional High Court, the learned CIT(A) has followed the decision of non jurisdictional High Court, that is, Gujarat High Court.GUJARAT STATE ROAD TRANSPORT CORPORATION [2014 (1) TMI 502 - GUJARAT HIGH COURT] - As the jurisdictional High Court decision squarely covers the issue in favour of the assessee, we direct the learned assessing officer to delete the disallowance on account of delayed payment of employees’ contribution to ESIC. - Decided in favour of assessee.
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2021 (12) TMI 1294 - ITAT MUMBAI
Unexplained expenditure u/s 69C - difference of balances of creditors - HELD THAT:- Provisions of section 69 C of the Act provide if assessee for which no explanation incurs any expenditure or unsatisfactory explanation is provided. In the impugned appeal, there is no evidence that the difference in the credit balance in the books of assessee with the debit balance in the books of creditor is an expenditure incurred by assessee during financial year. It is not the case of the revenue that creditor has received sum but it are not recorded in books of assessee as payment. Therefore, according to us provision of section 69C cannot be attracted in this case, unless revenue brings on record any proof of incurring such expenditure. Hence, we reverse the orders of lower authorities and direct ld AO to delete the addition made u/s 69C of the Act. Accordingly, Ground no 1 of the appeal of the assessee is allowed
Disallowance of interest paid by the assessee on the pretext that assessee has given loans and advances to its employees without charging any interest and, therefore, interest to that extent is not allowable under section 36(1)(iii) - HELD THAT:- The natures of advances are festival loans, medical advances, educational advances and personal loans. Looking into the nature of the operation of the company where the employee benefit expenses are incurred and the annual turnover is shown, amount of advances to the staff is in the nature of business advances. The assessee has also stated that advances are given in accordance with the company policy. Therefore, we find that advances given by the assessee are for the purposes of the business. It can also not said that there is an absence of business expediency in giving loans to staff. There is no contrary evidences recorded by the lower authority that advances given to the staff are bogus or for any non-business purposes and is not in accordance with the nature of business policy of the assessee as well as the custom of the trade. In view of this, the amount disallowed by AO and confirmed by the learned CIT(A) is unsustainable. Accordingly, we reverse the orders of the lower authorities and direct the assessing officer to delete the above disallowance.
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