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Income Tax - Appellate Tribunal - Case Laws
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2023 (1) TMI 1234
Income deemed to accrue or arise in India - Permanent Establishment (PE) in India under Article 5 of India - USA DTAA - attribution of profit to the PE whether the receipts from IPLC/link charges are taxable as royalty in India or not? - HELD THAT:- As all the issues relating to existence of PE and attribution of profit have been decided/resolved in assessee’s own case in earlier assessment years. Therefore, the decision of the Tribunal, as referred will squarely apply to the present appeals as well. Though, learned counsel for the assessee attempted to make out a case that there was no fixed place PE in the year under consideration, however, we are not convinced as the arrangement between the assessee and PE remains identical with earlier years. As regards attribution of profit to PE, we direct the Assessing Officer to follow the d....... + More
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2023 (1) TMI 1232
Disallowance of transport expenses - HELD THAT:- We may clarify that while the law provides for disallowance u/s. 37(1) even if an expenditure, though incurred, is not wholly and exclusively for the purpose of the assessee’s business, the disallowance in the instant case is for the reason of it having not been incurred, i.e., to that extent. We may here also add that a disallowance would be sustainable on the assessee being unable to prove an expenditure, and it is not necessary for the Revenue to actually disprove the same. That we have found the same as, besides being unsubstantiated, grossly inflated and, further, in examining its genuineness, considered it from various angles, including its quantum, inasmuch the two were found inter-related, would not make it any less a disallowance s.37(1). And, further, not convert it into a c....... + More
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2023 (1) TMI 1228
Revision u/s 263 - no notional rent is offered to tax in respect of unsold flats lying vacant held as closing stock - As submitted Assessing Officer has taken one of the possible view - HELD THAT:- We find that in the case of Osho Developers vs. ACIT [2020 (11) TMI 218 - ITAT MUMBAI] after considering judgment rendered in the case of CIT vs. Ansal Housing Finance & Leasing Company Ltd. [2012 (11) TMI 323 - DELHI HIGH COURT] and various other decisions, which inter-alia, includes decision in the case of CIT vs. Gundecha Builders [2019 (1) TMI 112 - BOMBAY HIGH COURT], CIT vs. Sane & Doshi Enterprises [2015 (4) TMI 882 - BOMBAY HIGH COURT], CIT vs. Neha Builders [2006 (8) TMI 105 - GUJARAT HIGH COURT] and K. Subramanian, ITO & Another vs. Siemens India Ltd. [1983 (4) TMI 3 - BOMBAY HIGH COURT] concluded that the annual letting v....... + More
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2023 (1) TMI 1227
Additions on account of special reserve - amount transferred to the capital reserve account - AR submits that the amount transferred to capital reserve fund represents the entrance fees collected from its shareholders, unclaimed deposit represents capital receipts, cannot be taxed as “income” - HELD THAT:- We are of the considered opinion that the entrance fees or subscription fees received by the members is on capital account does not form part of the revenue receipts. Similarly, as regards to the old balance of DD payable to sundry creditors, there is no cessation of liability and mere write off of the DD payable to sundry creditors etc and never the unilateral act on the part of the appellant by writing off of the amount and credit to Profit & Loss Account neither amount to cessation of liability or income. In the circu....... + More
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2023 (1) TMI 1226
Income deemed to accrue or arise in India - amount received by the assessee on account of Time Charter of its ship as “royalty‟ and taxing the same u/s 9(1)(vi) - assessee is a company incorporated in and tax resident of UAE and is engaged in the business of shipping operation as entered into Time Charter contract with M/s Poompuhar Shipping Corp. Ltd. (PSCL) for transporting coal from Paradeep port to Tutucorine in Tamil Nadu, through its ship ‘MV Eastern View’ - whether the income earned by the assessee is to be taxed u/s 44B of the Act on the presumption basis as claimed by the assessee in the return of income; or whether the receipt should be taxed as ‘royalty’ for use of an equipment in terms of clause (iva) to Explanation 2 to section 9(1)(vi)? HELD THAT:- As payment was subject to load of the car....... + More
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2023 (1) TMI 1219
Reopening of assessment u/s 147 - unexplained cash credits - suspicious transactions carried out against Late Shri Chhotalal V. Doshi (Prop. of Abhi Enterprise) and it was found that he used to lend his bank account to other persons for commission - HELD THAT:- As the Revenue has not brought on record any corroborative evidence to demonstrate that the money deposited in the Bank Account operated by Late Shri Chottalal Doshi belong to the assessee, the Co-ordinate Bench has been pleased to delete the addition made by the authorities below. We, under the identical facts and circumstances of the case as relied upon by the assessee in the case of Shri Mukeshkumar Vrajlal [2022 (9) TMI 1115 - ITAT RAJKOT] do not find any reason to deviate from such stand taken by the Co-ordinate Bench. Hence, respectfully, relying upon the same, we delete the addition made by the authorities below. The appeal preferred by the assessee for A.Y. 2010-11 is, thus, allowed.
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2023 (1) TMI 1218
Characterisation of income - interest on the compensation received by the assessee -compensation exempt from tax u/s 10(37) or taxable u/s 56(2)(viii) - interest received on enhanced compensation treated as Income of the appellant - assessee was owner of agricultural land and the same was taken under compulsory acquisition by Government of Haryana - assessee claimed the entire enhanced compensation inclusive of interest as residual part of compulsory acquisition of agricultural land and claimed it as exempted u/s 10(37) - AO did not accept the contention of the assessee and held that the interest income as taxable income under the head “income from other sources u/s 56(2)(viii) - HELD THAT:- As decided in SHRI SATBIR, SHRI VED PAL, SHRI SHEO CHAND, SHRI KARAMBIR, SHRI DHARAM PAL AND SHRI CHANDGI RAM [2018 (7) TMI 1163 - ITAT CHANDIG....... + More
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2023 (1) TMI 1217
CIT(Appeals) dismissed the appeals of the assessee ex parte - Reopening of Assessment u/s 147 - reassessment pursuant to search proceedings conducted against the assessee as per the provisions of Section 153A - unexplained investments by the Assessing Officer in the absence of any response from the assessees - assessee contended that there is a petition pending before the Settlement Commission in the case of company wherein assessee made investment and the outcome of the decision of the Settlement Commission will have bearing on the appeals of the assessee - HELD THAT:- Taking the totality of facts and circumstances into consideration and since the assessments were made under 144 r.w.s. 147 of the Act and the Ld. CIT(A) also passed ex parte order rejecting the submission of the assessees to keep the appeal proceedings in abeyance and in t....... + More
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2023 (1) TMI 1216
Assessment u/s 153A - Addition u/s 68 - bogus LTCG - As argued no incriminating material found during the course of search and therefore, no addition can be made in the hands of the assessee - HELD THAT:- During the course of search, the long-term capital gain earned by the assessee claimed as exempt under section 10 (38) of the act was found recorded in the books of account of these non-genuine companies. The statement recorded of the assessee under section 132 (4), assessee himself has explained whole modus operandi of the scheme and admitted that long-term capital gain claimed by the assessee and his family members and the companies is bogus, non-genuine and all out of many political and fraudulent transactions. Nothing is required to be unearthed during the course of search as more than enough incriminating material was already availa....... + More
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2023 (1) TMI 1215
Addition u/s 40A - Cash purchases - assessee argued addition made relying on third party statement without giving opportunity to the assessee to rebut such statement - HELD THAT:- It is stated by the assessee that requisite sale was duly reflected in the statutory return filed before the Excise and Sales-tax authorities. The assessee has stated that sales are duly supported by the requisite evidences. The fact that the sale was made and it is supported by the evidences, is required to be verified by the assessing authority. Therefore, the issue is restored to the file of the Assessing Officer to verify the correctness of the claim of the assessee that he had sold the material to M/s Haryana Traders and also reflected the sales in Excise/WAT returns. The Assessing Officer will verify from the record of the assessee whether such return was ....... + More
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2023 (1) TMI 1214
Penalty u/s 271(1)(c) - as submitted there is a confusion in the mind of AO about which limb penalty is to be levied - as per assessee A.O. has not applied his mind and non striking of charge in the penalty notice i.e. whether the charge is for concealment of income or furnishing of in accurate particulars of income - HELD THAT:- We find the Jurisdictional Hon’ble High Court of Bombay in Mohd Farhan A Shaikh [2021 (3) TMI 608 - BOMBAY HIGH COURT] has dealt on this disputed issue of not striking off charge in the penalty notice would vitiate the penalty proceedings. Thus we are of the view that in the present case the A.O has not has not strike off the charge for levy of penalty for concealment of income or for furnishing of inaccurate particulars of income. Accordingly, we set aside the order of the CIT(A) and quash the penalty notice. And allow the grounds of appeal in favour of the assessee.
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2023 (1) TMI 1213
Revision u/s 263 - PCIT has held that the A.O. has not made proper verification as to the cash deposits during the demonetization period for which the assessee is said to have not furnished the documentary evidence in support of its claim - PCIT also stated that the A.O. has failed to call for the complete details of cash deposits (old and legal notes) from the banks and has also failed to make a comparative analysis of deposits of earlier year and subsequent year from the respective banks and also from the assessee - PCIT held that in view of the audit objection raised by the IAP as well as the direction received from CCIT, Pune, the assessment order passed by the A.O. u/s. 143(3) is held to be erroneous insofar as it is prejudicial to the interest of the Revenue - HELD THAT:- A.O. has sought for details pertaining to all the issues rais....... + More
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2023 (1) TMI 1212
Disallowance of depreciation on purchase of assets from its holding company - HELD THAT:- CIT(A) has recorded a finding that though the transfer of assets was between holding company and subsidiary company, the exemption provided u/s 47 was not availed by the transferor company and the transferor company has offered capital gains on such transfer - we notice that the fifth/sixth proviso as the case may be, relates to the case of apportionment of depreciation between the transferor-company and transferee company. We also agree with the analysis made and decision given by CIT(A) holding that the provisions of Explanation 4A, 3 and 6 of Sec.43(1) shall not be applicable to the facts of the present case. The provisions of sec. 43(6)(c)(i)(C) was related to the computation of WDV and it is not applicable, since the assessee has purchased the a....... + More
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2023 (1) TMI 1211
Estimation of income - Deposits in the bank accounts - undisclosed turnover - Addition made @ 8% of the undisclosed turnover by applying the provisions of Section 44AD - As argued prevailing margin ranges from 0.75% to 1% of the turnover - HELD THAT:- We note that the assessee is doing the business of jute bag trading. We have also examined the Annual Report for 2018-19 of M/S Ludlow Jute & Specialties Ltd wherein the net profit margin was only 0.42% in 31.03.2019 vis-à-vis 0.53% in 31.03.2018. We also note that in the current year, the assessee’s profit margin on sale was also around 1%. Therefore we deem it fit and reasonable to apply the rate of 1.25% on the undisclosed turnover of the assessee. We accordingly set aside the order of Ld. CIT(A) and direct the AO to apply the rate of 1.25% on undisclosed turnover instead of 8%. Accordingly the appeal of the assessee is partly allowed.
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2023 (1) TMI 1210
Rectification u/s 154 - disclosures made in the return were wrongly picked up or missed out while the return was processed u/s 143(1) - HELD THAT:- Assessee had filed the Income Tax Return for the year under consideration with assessed income and the same was processed u/s 143(1) of the Act on 20-07-2014. Thereafter, the assessee submitted an application dated 08-09-2017 with a request to allow the loss on depreciation on building which was claimed in the Income Tax Return and to make rectification u/s 154 to reduce the demand raised on processing of Income Tax Return u/s 143(1) dated 20-07-2014. From the material placed on record, it is found that the assessee has not been able to confirm that the disclosures made in the return were wrongly picked up or missed out while the return was processed u/s 143(1). The AO had only denied the reli....... + More
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2023 (1) TMI 1209
Income from house property - Addition of notional income on property [flat which was vacant, calculated @8.5% of the cost price of the flat - determination of annual letting value of the property - As the assessee owned a flat at Bandra Breeze in addition to its self-occupied property in Capri Tower AO computed the deemed rent from the 2nd property by considering 8.5% of the value of the flat as appearing in the balance sheet - HELD THAT:- In the present case, it is evident that the lower authorities have determined the annual letting value by considering 8.5% of the value of the flat as appearing in the balance sheet. CIT(A) also upheld the findings of the AO on the basis that standard rent under the Bombay Rent Control Act is to be fixed @8.5% of the total investment. As noted above, in Tip Top Typography [2014 (8) TMI 356 - BOMBAY HIGH....... + More
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2023 (1) TMI 1208
Levy of penalty u/s 271(1)(c) - addition u/s 36(1)(iii) - appellant had failed to discharge the onus of demonstrating that the loans and advances are made for the business purpose - HELD THAT:- It is an admitted fact that the appellant had not agitated the additions in the appellate proceedings. It is clearly settled position of law that when an assessee not agitated the addition in the appellate proceedings does not amount to either concealment of income or furnishing of inaccurate particulars of income. We have carefully gone through the assessment order and find that the addition u/s 36(1)(iii) was made by the AO because the appellant had failed to demonstrate the advances to sister concern were made for the business purpose. A mere making claim which is not sustainable by law itself will not amount to furnish inaccurate particulars of....... + More
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2023 (1) TMI 1207
Income deemed to accrue or arise in India - TSIS Service Fee received by the assessee is taxable as royalty- India France DTAA - HELD THAT:- We find that the taxability of income arising from similar services rendered by the assessee’s group concern, namely, Edenred PTE Ltd came up for consideration before the coordinate bench of the Tribunal in Edenred PTE Ltd [2021 (1) TMI 76 - ITAT MUMBAI] for the assessment year 2013-14. The coordinate bench of the Tribunal after considering the facts of the case decided the similar issue in favour of the assessee’s group concern and held that income arising from the provision of services by the assessee cannot be treated as royalty either under the provisions of the Act or under the India Singapore DTAA. An the present case, from the nature of services provided by the assessee, it is evid....... + More
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2023 (1) TMI 1206
Income from other sources - netting method - assessee had earned interest on fixed deposits with IDBI Bank and assessee had set off the same against the interest expenditure incurred for construction etc. and the net amount was capitalized - as argued interest by the assessee was earned during the course of its business and as such the same has been correctly been capitalized after netting off - HELD THAT:- As in assessee’s own case for assessment years 2012-2013 and 2013-2014 [2021 (2) TMI 1328 - ITAT HYDERABAD]Tribunal in the above case, by following the judgment of ACG Associates Capsules Pvt. Ltd. v. CIT [2012 (2) TMI 101 - SUPREME COURT] had directed the A.O. to adopt the netting method. Thus we direct the A.O. to allow the netting off of interest.
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2023 (1) TMI 1205
Reopening of assessment u/s 147 - unexplained money u/s 69A - Validity of notice issued - HELD THAT:- It is pertinent to note that to meet the emergency situation of additional expenses by the assessee the assessee has obtained cash not only from assessee’s father and mother but also the close relative i.e. the maternal uncle, maternal aunt as well as paternal uncle and paternal aunt and the said relation cannot be doubted by the Assessing Officer. The gift offered by this relatives are appears to be genuine and therefore, the CIT(A) was not right in confirming the addition of the extent of Rs. 4,00,000/-. Validity of notice - date of approval and date of issuance of notice was identical - As regards, the legal ground of the assessee merely that date of approval is identical to the issuance of notice cannot be treated as the time ba....... + More
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