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2022 (1) TMI 1358
Additions u/s.68 - sale proceeds of shares unexplained - addition made as considering it Pre-arranged transactions, Sale of scares and unusual rise in the price through rigging not backed by, Failure of the assessee to discharge its onus to prove that the LTCG claimed by it is genuine - as vehemently pleaded by the DR that AO in the remand report had only stated that the evidences submitted by the assessee are proper and genuine and had not stated that the transactions carried out by the assessee are proper and genuine HELD THAT:- As entire evidences are filed by the assessee only in support of the transactions carried out by the assessee, we are unable to persuade ourselves to accept to the narrow argument of the revenue. When the evidences are accepted as proper and genuine, that too after due enquiries and examination thereon, obviousl....... + More
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2022 (1) TMI 1357
Assessment order u/s 144 r.w.s 147 treating assessee as AOP - HELD THAT:- We find that before the ld. CIT(A), the assessee filed copy of Satakhat. On perusal of the contents of said Satakhat, we find that it has direct relevance to the grounds of appeal raised by the assessee and the same require consideration. Therefore, instead of the fact that the copy of Satakhat was filed independently on not in the record of assessment for the year under consideration before AO or not, we admit the same as relevant evidence for real determination of issue in hand and remit the issue to the file of CIT(A) to adjudicate the issue afresh by considering the Satakhat dated 04.04.2011 and pass the order in accordance with law. In the result the ground No. III is allowed for statistical purpose. Addition is made on estimation of income/project - The issue ....... + More
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2022 (1) TMI 1354
Unaccounted and unexplained of Cash deposit out of the cash withdrawals - HELD THAT:- Addition as made and confirmed by the authorities below, is not justified. No reason is assigned for not accepting the contention of the assessee that deposit was made out of cash withdrawal. AO has failed to bring any evidence suggesting that the cash so withdrawn from the account was expended for any other purpose. Therefore, in the absence of such material the findings of authorities below cannot be sustained. AO is hereby directed to delete the addition. The ground is allowed.
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2022 (1) TMI 1351
Assessment u/s 153A - Undisclosed income - Credits Transferred from Nagaland based entities - sufficient incriminating material found n search or not? - HELD THAT:- As AR submitted that in the absence of any incriminating material on record, no such additions could have been made by AO. This plea could not be accepted since this is not a case wherein no incriminating material has been found. Rather, it is the finding of CIT(A) that several incriminating materials were seized which include blank letter head of Nagaland based persons / entities, blank cheques, notes / diaries containing details of payments received and transferred. The evidence relating to unexplained investment made in cash towards purchase of immoveable properties was also seized. Thus, this is a case where sufficient incriminating material has been found by investigation....... + More
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2022 (1) TMI 1345
Eligibility of exemption as per section 10(2A) - share of profit received from the partnership firm - assessee (LLP) is deriving income from business in the form of running of plant and machineries and share of profit from partnership firm - HELD THAT:- Assessee (LLP) is a partner in M/s. M.S. Enterprises and assessee has claimed exemption u/s 10(2A) of the Act on the share of profit received from M/s. M.S. Enterprises. The section 10(2A) of the Act grants exemption to a person being a partner of firm which is separately assessed as such, his share in the total income of the firm. The firm has been defined in section 2(23) of the Act, which includes LLP also. The Act is very clear that the LLP is to be treated as a firm. A firm can be a partner in other partnership firms. There is no restriction in the income tax Act for becoming partner ....... + More
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2022 (1) TMI 1338
TP adjustment - grant of mark-up on recovery transactions - assessee argued before the lower authorities that there was mark-up on these expenses which are incurred at the instance and behest of the AE and expenses by the assessee for administrative convenience are recovered on a cost to cost basis - AR alternatively argued the additional grounds stating that as per OECD guidelines and Indian Transfer Pricing provisions, aggregation of transactions could be made - HELD THAT:- As considering the alternative submissions of the ld. AR, the issue is covered by the Pune Bench of the Tribunal in the case of Cummins India Ltd. [2015 (1) TMI 520 - ITAT PUNE] export value was less and these parties were one of customers and therefore, the risk involved was high. Further, the frequency of such transactions was very low. In view of the above facts a....... + More
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2022 (1) TMI 1337
Short Term Capital Gains - premium received by assessee for transferring Redeemable Cumulative Convertible Preference Share and Fully Compulsory Convertible Preference Shares to equity shares during the year - AO allowed the appeal filed by the assessee on this issue and held that the transfer in respect of preference shares is in the hand of the shareholder - HELD THAT:- As in case Anarkali Sarabhai [1982 (6) TMI 50 - GUJARAT HIGH COURT] redemption of preference shares will result in transfer within the meaning of section 2(47) of the Act was held to be in the hands of the shareholder, which in the present case is M/s Satguru Constructions. The Hon’ble Supreme Court in Anarkali Sarabhai [1997 (1) TMI 5 - SUPREME COURT] upheld the aforesaid findings of the Hon’ble Gujarat High Court. Further, the aforesaid decision of the Hon&....... + More
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2022 (1) TMI 1331
Reopening of assessment u/s 147 - addition on account of interest u/s 43D - Assessment reopened beyond the period of 4 years from the end of the relevant assessment year - HELD THAT:- From the material on record, it is clearly indicated that the provision of NPA account was made in accordance with the direction of RBI. It is settled position of law that the primary duty of the assessee is only to disclose fully and truly all material facts necessary for the purpose of making the assessment and not draw the inferences. Thus, it cannot be said that there is failure on the part of the assessee to disclose fully and truly all material facts necessary for the purpose of making the assessment. Reliance in this regard can be placed on the decision of Kalpataru Ltd. [2021 (10) TMI 465 - BOMBAY HIGH COURT] Thus, we are of the considered opinion th....... + More
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2022 (1) TMI 1330
On-money received from its business of real estate development - on-money components on the sale of the bungalows - assessee had received on-money on sale of the property in the course of business and there was nothing to demonstrate any expenditure incurred out of the same by the assessee - Assessee plead restricting the addition to the profit element embedded in the same - HELD THAT:- We therefore agree with the ld.counsel for the assessee that making addition of the entire on-money received by the assessee would not be justified. Though we are of the view that the onus is on the assessee to show what expenses have been incurred by it in cash, which have also remained unexplained, but at the same time noting the fact that bungalows sold by the assessee were not hi-end properties, but small sized bungalows the component of the on-money r....... + More
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2022 (1) TMI 1328
Unexplained investment made in the land - seized document itself proves that the assessee had made investment in the purchase of land - CIT-A deleted the addition - HELD THAT:- Cash was received by the assessee from director which would have been utilized for the payment against purchase of land. This presumption also gets strength from the fact that assessee was not having any source of income until July 2013. Further the assessee time and again contended that the cash was paid out of cash received from the directors and directors have offered the cash income in their individual returns. Therefore considering the fact in totality we are of the view that amount of Rs. 1.98 crore and 1 crore paid in the A.Y. 2012-13 and 2013-14 are made out of the cash received from directors. Hence the source of investment in the hand of the assesse gets ....... + More
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2022 (1) TMI 1327
Disallowance of interest on delayed payment of TDS - assessee has claimed expenses on account of interest on TDS which is not an allowable expense under the provisions of the Income-tax Act, 1961 - HELD THAT:- We may refer to the decision of Lachmandas Mathuradas [1997 (12) TMI 16 - SUPREME COURT] wherein it was held that interest on arrears or on outstanding balance of sales tax is compensatory in nature and would be allowable as deduction in computing profits of a business. Referring to the same decision, ITAT in the case of Narayani Ispat (P) Ltd. [2017 (10) TMI 67 - ITAT KOLKATA] has held that interest expenses on account of delayed payment of service tax as well as TDS is an allowable expenditure. Similar proposition has been laid down in other case laws that such interest is compensatory in nature and is allowable expenditure. Appeal of the assessee stands allowed.
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2022 (1) TMI 1325
NCDEX Trading Loss - Speculation Loss - addition treating the claim of loss of the assessee as speculative loss but allowed to set off against the speculative profits in future as has been done by the AO - HELD THAT:- In this case, it is noted that the AO during the course of assessment proceedings treated the transaction made prior to the notification out of total transaction as speculation by giving prospective effects to the said notification dated 27-11-2013 which has been confirmed by the ld. CIT(A). It is not imperative to repeat the facts as narrated by the ld.CIT(A) in his appellate order but the Bench noted that the issue in question is directly covered by the decision in the case of P.D. Sekharia Trading Company Pvt. Ltd.[2019 (3) TMI 2011 - ITAT AMRITSAR] Bench has also been apprised that Revenue has not challenged the order of....... + More
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2022 (1) TMI 1322
Maintainability of appeal before ITAT - low tax effect - HELD THAT:- In the present case it is an admitted fact that the CBDT vide Circular No. 17/2019 enhanced the monetary limit to Rs. 50,00,000/- for not filing the appeal by the department before the ITAT, earlier this limit was specified at Rs. 20,00,000/- in the original Circular no. 03/2018 dt. 11/07/2018. Now vide the new Circular no. 17/2019 dt. 08/08/2019 the Tax Effect limit has been enhanced and this new Circular dt. 08/08/2019. From the contents of the aforesaid Circular it is crystal clear that the anomaly in the earlier Circular no. 3 of 2018 dt. 11/07/2018 at page 5 has been removed and the limit specified in para 3 of the earlier Circular has been enhanced. Now the CBDT simply enhanced the monitory limit and the directions given earlier vide para nos. 12 & 13 of the Ci....... + More
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2022 (1) TMI 1321
Exemption u/s 11 - requirement of filing of audit report and income tax return by the trust or institutions registered u/s 12A - CPC while processing u/s 143(1)(a) denied the said exemption on account of two reasons; firstly the return of income was not filed before due date as prescribed u/s 139(4) of the Act and secondly audit report on Form 10B not uploaded before due date prescribed under the Act - HELD THAT:- As per Circular issued by CBDT on 23.04.2019 giving clarification with regard to time allowed for filing of return of income subsequent to insertion of clause (ba) in sub-section 1 of section 12A CBDT has issued and while dealing with this issue, the returns filed within the time allowed u/s 139 of the Act have been directed to be accepted for the purpose of considering benefit of deduction u/s 11 of the Act. Now, since only sec....... + More
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2022 (1) TMI 1320
TP adjustment - assessment on account of notional interest on outstanding payments of receivables from associated enterprises (AE) - HELD THAT:- Sole adjustment proposed by the TPO is with regard to the outstanding receivables on the delayed payment beyond 15 days from its AE holding it to be in the nature of un-secured loan and thereby proposing adjustment of Rs.46,07,661/- for assessment year 2012-13, wherein the AO has taken SBI PLR rate of 12.60%; whereas in assessment year 2013-14 the Assessing Officer has made adjustmen by taking average LIBOR rate plus 400 basis point which was arrived at 4.37% treating it to be separate international transaction. Also an un-disputed fact that before the authorities below the assessee had submitted the working capital adjustment vis-à-vis the comparable companies before the TPO / AO which if....... + More
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2022 (1) TMI 1318
Completion of the assessment in the name of the deceased assessee without bringing on record his legal heirs - HELD THAT:- Scrutiny proceedings in the case of the assessee were initiated vide notice dated 01/08/2012, issued under section 143(2) of the Act. Thereafter, notice under section 142(1) of the Act was issued along with the questionnaire. In response thereto, assessee’s wife vide letter dated 26/06/2013, informed the AO that the assessee expired on 17/04/2013, due to renal failure. Assessee’s wife also expressed her inability to respond to queries and produce the documents as required vide aforesaid notice. It is evident from the record that thereafter neither the legal heir of the assessee was brought on record nor the AO issued statutory notices on the legal heir seeking any information. The above aspect becomes more....... + More
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2022 (1) TMI 1317
Assessment in the name of company non existent - scheme of amalgamation concluded - HELD THAT:- As assessment order passed by the assessing officer in the name of a non existing company, despite having prior information provided by the assessee and such facts recorded in the draft assessment order as well as the final assessment order, suffers from jurisdictional defect and, therefore, same is set aside. Accordingly, we hold that the assessment order passed by the learned assessing officer is without jurisdiction and hence, quashed.
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2022 (1) TMI 1316
Addition u/s 56(2)(viib) - difference between the FMV of shares at which shares were allotted by the assessee and FMV determined per share thereby making aggregate addition u/s 56(2)(viib) - Whether FMV of shares for the purpose of section 56(2)(viia) r.w.r. 11UA determined on the basis of ‘Balance-Sheet’ drawn on the date of allotment and audited subsequently, can be accepted? - HELD THAT:- Where the Balance Sheet is not drawn on the date of valuation, the Balance Sheet drawn on a date preceding the date of valuation which has been approved and adopted in the Annual General Meeting of the shareholders should be considered. The definition has two limbs: The first limb applies in a situation where the Balance sheet is drawn on the date of valuation and the second limb of definition applies in a situation where no Balance Sheet ....... + More
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2022 (1) TMI 1314
TDS u/s 195 - amount paid towards refurbishment / reconstruction charges - non-deduction of TDS - addition u/s 40(a)(i) - As argued amount paid towards refurbishment / reconstruction is not in the nature of fee for technical services covered u/s.9(1)(vii) of the Act as refurbishment activity is in the nature of reconstruction / repair and accordingly no TDS is deductible on this expenditure - HELD THAT:- As evident that the assessee company is in the business of generation and sale of electricity. The assessee owns and operates a 330.5MW combined cycle power plant. To run this cycle power plant, the necessary machinery like gas turbine including spare parts viz., HGPS consisting of Combustor Baskets, Transition pieces, Fuel Nozzles, Turbine Static Blades and Turbine Moving Blades with each component having a pre- defined standard life bas....... + More
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2022 (1) TMI 1310
Revision u/s 263 - Owing to non-addition of the amount adjusted by the TPO in his order passed u/s 92CA by the Assessing Officer PCIT passed order u/s 263 - HELD THAT:- The reference to the TPO to determine the Arm’s Length Price is not an empty exercise to be undertaken by the revenue but to bring to tax the difference determined by the TPO with regard to the Arm’s Length Price. While the TPO order passed u/s 92CA determine upward adjustment we find that the AO has erred in holding that the adjustment by the TPO in respect of international taxation with the AE is Nil. Thus, the order passed by AO is erroneous insofar as it is prejudicial to the interest of revenue. Hence, the ld. PCIT in accordance with the provisions of the Act has given an opportunity of being heard to the assessee, determined the amount of the adjustment m....... + More
