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2022 (11) TMI 1313
Income accrued or arose in India - Income taxable in India - assessee provided fee for technical services “FTS” - India-USA DTAA - scope of “ make available” clause - whether AO had rightly invoked deeming fiction of income u/s. 9(1)(vii) read with Sec. 9(2) Explanation that mere absence of payee/assessee’s permanent establishment “PE” in India would not be fatal to the Revenue’s cause? - HELD THAT:- Assessee herein a USA based entity had entered into a service agreement with the payer M/s. Wipro Ltd.(Indian Company) providing the impugned services through the latter’s group company in USA to M/s. McDonald’s Corporation(USA) in USA only regarding the four folded services i.e. Cloud Infrastructure Managed Private Cloud, Colocation, Mainframe and Data Recovery services. Revenue cou....... + More
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2022 (11) TMI 1312
Revision u/s 263 - unaccounted cash credit under Section 68 - Assessee applied for the Direct Tax Vivad Se Viswas (DTVSV) scheme and has filed a letter before the CIT(A) for withdrawal of his appeal filed against the order passed under Section 143(3) - whether revision proceedings can be initiated when the assessee has opted for DTVSV? - HELD THAT:- We notice that in assessee’s case the issue of cash deposits during the demonetisation period have been considered by the AO in original assessment proceedings under Section 143(3) of the Act and the assessee has opted for DTVSV scheme for the additions made in this regard. Section 8 of DTVSV Act as quoted by the PCIT, clearly mentions that the immunity is not available for any proceedings other than those in relation to which the declaration has been made. In the given case however the ....... + More
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2022 (11) TMI 1309
MAT computation - Exclusion of profit on sale of investment being capital profits in computing Book Profit us 115JB - HELD THAT:- There is no dispute that the amount in question was in the capital field, and that it does not, therefore, is not required to be routed through the profit and loss account. On such facts, and in the case of Shivalik Ventures Pvt Ltd. [2015 (8) TMI 979 - ITAT MUMBAI] a coordinate bench of thisb Tribunal has, inter-alia, held that “In view of the above said legal provisions, the assessee has contended that the profits and gains arising on transfer of a capital asset by a company to its subsidiary company does not fall under the definition of "Income" as given in sec. 2(24) of the Act and hence it does not enter into the computation provisions of the Income tax Act. As contended that, an item of re....... + More
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2022 (11) TMI 1299
Undisclosed sales - AO found difference between Tax Audit Report & Audited Accounts in local sales - CIT-A deleted the addition - HELD THAT:- CIT(A) considered the submissions of the assessee including the tax audit report and other details/particulars and based on the same deleted the addition stating that AO acted in an erroneous manner by comparing the particulars of sales to AEs reported u/s 40A(2)(b) with the sales figure reported in the Profit & Loss Account - also find merit in the appellant's case that the sales made was in the nature of deemed exports since the aforesaid body corporate is located in an SEZ and hence it was rightly reported by way of export sales. It is noted that once the sales made to M/s Pacific Jute Ltd is excluded, the sales to related entities within the territory of India (excluding deemed expor....... + More
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2022 (11) TMI 1298
Validity of assessment against company non existent - assessee company stands dissolved by NLCT - HELD THAT:- In the present case before us, the admitted facts are that the assessee company is dissolved and there is no successor for assessee company, SBQ Steels Ltd., in our view, no proceedings shall be continued against the assessee company because it is nonexistent as on date. In term of the above, we dismiss these appeals of Revenue as infructuous.
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2022 (11) TMI 1297
Addition of interest expenditure u/s 36(1)(iii) - lending business - non-charging interest or interest free loans given - AO held that the interest expenses incurred on loans obtained cannot be treated as business expenditure u/s 57 and the same cannot be allowable out of the income derived from partnership firm as there is no nexus between additions, in income and expenditures as no loans have been invested into a partnership firm as capital as stated by the assessee - HELD THAT:- CIT(A) has taken charging interest at 4.36% as compared to the interest charged at 6% on loans to friends and families but the assessee before us has demonstrated that rate of interest earned at 6% per annum for the time period of loans and advances is for particular set up of loans and advances. Similarly borrowed loan at 6% was also there in the relevant A.Y........ + More
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2022 (11) TMI 1296
Capital gain computation - valuation of property by DVO - difference in sale value as estimated by DVO and declared value by assessee - value declared by assessee on 01.04.1981 is more than its fair market value - Scope of amendment in Section 55A - whether estimation of value of assets as on 01.04.1981 is required to be ignored? - HELD THAT:- As find that there is no dispute that assessee has sold both the properties / assets prior to the amendment in Section 55A. Therefore as per the decision in the case CIT vs. Gaurangiben S. Shodhan Indl. [2014 (2) TMI 78 - GUJARAT HIGH COURT] the amended provision in clause-(a) of Section 55A, which is inserted with effect from 01.07.2012 and the words “at variance with its fair market value”, is not applicable on the transaction of assessee. Therefore, find merit in the submission of ass....... + More
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2022 (11) TMI 1295
Income deemed to accrue or arise in India - Taxability of the amounts received by the assessee on the sale of software licences - royalty receipts - HELD THAT:- As decided in own case A.Y. 2013-14 the amount received by the assessee from sale of software products/licenses to be not royalty as per Article 12(3) and as per Section 9(1)(vi) of the Act. Thus the grounds of the assessee are allowed.
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2022 (11) TMI 1294
Revision u/s 263 by CIT - mistake of non-initiation or incorrect initiation of penalty - assessment order that Penalty u/s. 271(1)(c) is initiated for concealment of income by way of issue of notice u/s. 274 r.w.s. 271(1)(c) - HELD THAT:- It is well-settled that once an appeal has been preferred against an order of assessment the entire assessment is open before the appellate authority. The appellate authority is entitled to do all that the AO could have done. The powers of the appellate authority are co-extensive and co-terminus with the powers of the AO. It is equally well-settled that PCIT cannot exercise revisional jurisdiction qua proceedings before an appellate authority. The order of assessment does not have any independent existence and stands merged with the order of the appellate authority. Hence, to read s. 263 as being applica....... + More
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2022 (11) TMI 1293
Reopening of assessment u/s 147 - reason to believe - Reopening based on audit objection and also change of opinion - HELD THAT:- Thus in view of the above discussion and case law of Hon’ble Madras High Court in the case of Cholamandalam Investment & Finance Co. Ltd.[2018 (1) TMI 146 - MADRAS HIGH COURT] that the reasons recorded in the present case are verbatim what the audit objection is. It means that the AO has not applied his independent mind to the facts of the case before recording reasons and hence, the reason merely based on audit objection cannot be a basis of reopening. Therefore, we held that reopening is bad in law and hence, the reassessment framed is quashed. Appeal filed by the assessee is allowed.
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2022 (11) TMI 1292
Levying of penalty u/s 271(1)(c) - addition made on account of LTCG for furnishing of inaccurate particulars of income - HELD THAT:- As relying on CHINUBHAI AMBALAL PATEL [2017 (8) TMI 1685 - ITAT AHMEDABAD] we do not justify the imposition of penalty levelled against the assessee on the basis of the deeming provision of Sub-Section (2) to Section 50C of the Act. Thus, the order passed by the authorities below under Section 271(1)(c) of the Act is found to be erroneous and bad in law and hence, quashed. Assessee’s appeal is allowed.
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2022 (11) TMI 1291
Disallowance of Expenses written off - M/s. Fortune Construction Pvt. Ltd. has refunded an amount from the security deposit paid by the assessee company under the project development agreement - HELD THAT:- The assessee abandoned the project due to commercial expediency and in terms surrendered the same in favour of the land owner M/s. Fortune Construction Pvt. Ltd. Further, the amount of Rs. 13 crores refunded to the assessee towards security deposits is out of the security deposit of Rs. 80 crores as on 31.03.2009 which reduce to Rs. 67 crores as on 31.03.2010. Nothing was produced by the revenue to controvert the submissions filed by the assessee before the ld. CIT(A) and the finding of the ld. CIT(A) on this issue. Hon'ble Madras High Court in the case of Chemplast Sanmar Ltd. [2018 (9) TMI 75 - MADRAS HIGH COURT] has held that wh....... + More
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2022 (11) TMI 1290
Validity of valuation by the DVO u/s 142A - Estimation of value of assets by Valuation Officer - Applicability of provisions of section 142A(6) - CIT-A allowed the appeal of the assessee - HELD THAT:- The valuation officer shall send a copy of the valuation report to the AO within the period of six months from the end of the month in which reference was made under sub section (1) of section 142A - in this case, the DVO has submitted his report on 14.06.2018 based on the reference made by the AO on 12.09.2017. The due date of the report of the valuation officer is ending on March 2018. But the DVO has submitted the report with the delay of 3 months, beyond the due date prescribed under the Act. The Ld.DR also could not contest the argument of the AR that the DVO’s valuation report is non-est in the eyes of law, since it is submitted ....... + More
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2022 (11) TMI 1289
Addition u/s 43CA - substantial difference between the market value and the agreement value in respect of some immovable property sold - assessee-company entered into this transaction of cancellation of earlier purchase transactions - HELD THAT:- Sec. 43CA is applicable in the case of transfer of property in addition to other ingredients of the section. In this case what we observed assessee-company inadvertently entered into a transaction of purchase of agricultural land, which was void ab-initio. It means assessee was never a lawful owner of the said agricultural land as mentioned supra. When assessee is not an owner of any asset, there can’t be any question of transferring the same to someone else whether provisions of sec 43CA is complied with or not will be a secondary issue. In this case assessee-company simply rectified its e....... + More
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2022 (11) TMI 1288
Revision u/s 263 - exemption u/s 10(1) - CIT setting aside the assessment order passed by the Ld.AO, with a direction, to carry out fresh examination of the claim of agricultural income claimed to be exempt by the assessee under section 10 (1) - HELD THAT:- Before us, the assessee has not filed any agreement, showing the lands being leased in favour of the assessee. It is submitted that these were the documents filed by the assessee in reply to the query raised by the AO at the time of original assessment proceedings. Even there are no agreements placed before us that reveals ownership in land by the assessee, on which farming was carried out. From the materials placed before the Ld.AO it is prima facie inferred that the no details are filed by the assessee and the Ld.AO has not verified the exemption claimed by the assessee under section....... + More
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2022 (11) TMI 1287
Revision u/s 263 - As per CIT not declaring of deemed rent in the return of income and A.O. erroneously passed the order without considering the same - HELD THAT:- Section 23(5) of the Act is not applicable for the assessee for this assessment year. The assessee explained and replied to the revenue about the issues in response to the notices of the Ld. PCIT. The formation of the opinion and belief of the Ld. PCIT was changing time to time after receiving reply of the assessee. We may also like to add here that section 23(5) of the Act has been inserted by the Finance Act, 2017 w.e.f. 01.04.2018 whereby notional annual value of the property held as stock in trade is sought to be brought to tax. The said amendment is only prospective in application. PCIT in his third show cause notice had sought to consider the taxability of deemed rental i....... + More
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2022 (11) TMI 1259
Addition under the head ‘commission paid to others’ - commission expenses incurred by the Assessee, being a Medical Doctor by profession - claim of the Assessee that the Assessing Officer had made addition by completely misunderstanding and misinterpreting the facts of the case is frivolous and totally unwarranted - HELD THAT:- We are unable to accept the contradictory stand of the Assessee taken before the L. Commissioner because the contradictory stand of the Assessee clearly seems to be concocted story, twisting facts, erratic, vague and superfluous and thus liable to be depreciated. Even otherwise as per the judgements referred to above, the payment of commission by the Assessee for referring patients to it by any stretch of imagination, cannot be accepted as legal or as per public policy of India, hence such commission is....... + More
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2022 (11) TMI 1258
Deduction u/s 80P(2)(a)(i) - Claim denied as it is only a Urban Co-operative Bank then a cooperative society and the said interest income represents deposits made in a cooperative bank and thus not entitled for the relief in issue as per section 80P(4) - HELD THAT:- Section 80P(2)(d) of the Act allows whole deduction of income by way of interest or dividend derived by Cooperative Society from its investments with any other co-operative society. This provision does not make any distinction with regard to the source of investment because this section envisages deduction in respect of any income derived by cooperative society from in his investment with a cooperative society. So the Revenue is not required to look another of investment whether it was formed as required within time or otherwise. As heard the considered of the case of Totagars....... + More
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2022 (11) TMI 1257
Addition u/s 68 - unexplained cash credit - Non establishing identity, creditworthiness and genuineness of the transaction - HELD THAT:- DR has fairly agreed that the Assessing Officer in the remand report has reported that the assessee has duly established the identity, creditworthiness of the creditors and genuineness of the transaction and he has also fairly agreed that the issue is also squarely covered by the Decision of AMBITION AGENCIES PRIVATE LIMITED [2021 (11) TMI 750 - CALCUTTA HIGH COURT] and SMT. B. JAYALAKSHMI [2018 (8) TMI 208 - MADRAS HIGH COURT] - Decided against revenue. Addition u/s 14A - expenditure incurred towards tax exempted income - HELD THAT:- As held in many decisions where the assessee has not derived any tax exempt income from investments, then no disallowance is attracted u/s 14A of the Act. - Decided against revenue.
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2022 (11) TMI 1256
Validity of re-opening of assessment - reasons to believe - change of opinion - fresh materials subsequent to completion of original assessment - Eligibility of exemption claimed u/s.10AA - HELD THAT:- Although, the original assessment has been completed u/s.143(3) of the Act, on 29.09.2011, but the AO has not considered the issue of exemption claimed u/s.10AA of the Act, in right perspective of law and thus, we are of the considered view that, when the AO has not expressed any opinion, the question of concept of ‘change of opinion’ does not arise. AO has formed reasonable belief of escapement of income on the basis of fresh materials subsequent to completion of original assessment order and said materials may come from the assessment records also. Therefore, we are of the considered view that there is no merit in the argument....... + More
