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2023 (3) TMI 1366
Delayed employees’ contribution to PF/ESIC - Disallowance u/s 36(1)(va) in the order passed u/s 143(1) - HELD THAT:- While processing the return of income that was filed u/s 139 or section 142(1) of the Act and computing the total income or loss, the adjustment need not be confined to the disallowance of expenditure or increase in income, indicated in the audit report, but not taken into account in the total income under clause (iv), but law permits such adjustment could also be in respect of an incorrect claim which is apparent from the information in the return under clause (ii). With the law declared in the case of Checkmate Services Pvt. Ltd. [2022 (10) TMI 617 - SUPREME COURT] any claim for deduction under section 36(1)(va) of the Act wherein the assessee fails to credit the sums received from the employees to which the provisi....... + More
2023 (3) TMI 1364
Penalty u/s 271B - owing to the cash deposits in the bank account and the sales turnover in the ITR the revenue levied penalty considering the deposits as turnover of the assessee - assessee is a commission agent of Gujarat Milk Cooperative Federation having milk booth at Darya Ganj, Delhi and earning a commission margin @ 0.55% to 12.16% per unit on butter milk to paneer HELD THAT:- Since, the assessee only a commission agent and earns margin as prescribed in Gujarat Milk Cooperative Federation rules as reflected in column 5 above , we hold that the penalty levied u/s 271B obliterated. Appeal of the assessee is allowed.
2023 (3) TMI 1353
Agricultural income - assessee produced agricultural income certificate from the Village Revenue Officer (VRO) in support of his claim before the AO - CIT(A) restricted the agricultural income for the agricultural land to the extent of Ac.23.91 cnts, taking into account the proposition that any agricultural land with commercial / cash crop will fetch net income of Rs.20,000/- per acre - AR contended that the AO without verifying the records and without bringing any contrary facts on record, rejected the agricultural income of the assessee - HELD THAT:- CIT(A) viewed that it is an accepted proposition that any agricultural land with commercial / cash crop would fetch net income of Rs.20,000/- per acre. The agricultural land of the assessee, being Ac.23.91 cnts, the CIT(A) viewed that it is reasonable to earn Rs.4,78,200/- (i.e. Rs.20,000/-....... + More
2023 (3) TMI 1352
Rectification of mistake u/s 154 - disallowance u/s 40A(3)which was in turn endorsed by the CIT(A) in the first appeal and decided against the assessee - assessee contended that the cash payments were made on Holiday/Sunday and is thus covered by extant clause (J) of Rule 8DD of the Income Tax Rules as well as by considerations of business expediency - assessee further contends that provisions of Section 154 confer a very narrow and limited power to rectify any mistake which is apparent from record - HELD THAT:- We agree. The Rule 6DD(J) at the relevant time provided for inapplicability of Sect ion 40A(3) where the payments were made in cash on bank Holidays. The Assessing Officer has questioned the intention of cash payments shown on Sunday of every month and thus rejected the explanation. While, the explanation of payments on Holidays a....... + More
2023 (3) TMI 1351
Levy of late filing fee on account of delay in filing of TDS statements u/s. 234E - contention of the assessee before the ld. CIT(A) was that the assessee is a Government Authority working under the Department of Law, State of Gujarat - HELD THAT:- As from the language of section 200A of the Act, it is clear that responsibility of preparing statement of TDS is on the person who has deducted any sum u/s. 200 of the Act. However, in the instant facts, it is unclear to us as to how the assessee is under an obligation to file TDS return in respect of taxes deducted at source by the Government of Gujarat, specially when the remuneration to the public prosecutors have been given directly by the Gujarat State in their bank accounts. CIT(A) while upholding the levy of fee u/s. 200A of the Act did not enquire into the aspect whether the assessee w....... + More
2023 (3) TMI 1350
Deduction u/s 80IB - disallowance of interest income derived from assessee’s business advances and derived on fixed deposits placed by the assessee for availing credit facility, performance guarantees, bank guarantees, bid bonds etc. exclusively for the purpose of business in computing eligible profit and gains - HELD THAT:- Interest income related to FD interest, interest from customer’s receipts and interest income from business advances, the said issue has been allowed by the Tribunal in A.Ys. 2008-09, 2009-10 & 2010-11. The facts are identical in the present assessment year as well. DR could not point out any distinguishing facts and the decisions relied upon by the Ld. DR are on different facts altogether. As regards scrap sale income and currency swap income, the same is also identical as referred by the assessee to ....... + More
2023 (3) TMI 1349
Fixed Place PE - Taxability of offshore supply of goods - Attribution of profits - AO was of the view that the presence of the assessee in India for the purpose of securing the contract and the presence of its employees and equipment indicates a Permanent Establishment (PE) in India - whether DCIT erred in holding that the assessee has a fixed place PE in India and is not following the directions passed by the DRP, wherein the DRP held that the appellant does not have a fixed place PE in India? - HELD THAT:- In the instant case, the reasoning for making the addition in the final assessment order by the ld. AO is by treating the assessee as a Fixed Place PE, which has already been nullified by the ld. DRP. AO in the final assessment order is bound to complete the assessment in conformity with the directions of the ld. DRP as per the provis....... + More
2023 (3) TMI 1348
Reopening of assessment u/s 147 - addition u/s 68 - absence of cross-examination of a person on the basis of whose statement proceedings had been launched in the hands of the assessee - HELD THAT:- A.O had grossly erred in law and facts of the case, both in withholding the copies of the complete statements of the aforementioned persons, viz. S/Shri Narendra Jain and Champak Mandal; and also by refusing to allow their cross-examination to the assessee despite its persistent requests for the same. Although the Ld. AR by drawing support from the aforesaid judicial pronouncements had tried to impress upon us that the failure on the part of the A.O to facilitate cross-examination of the aforementioned persons; and also making available complete copies of their statements would be fatal to the validity of the assessment in hand, but we are unab....... + More
2023 (3) TMI 1347
Unexplained payment - Rejection of books of accounts - CIT (Appeals) as well as the Assessing Authority fails to cross-examine the deponent of the affidavits submitted before the CIT(A) - HELD THAT:- When the assessee stated on oath by way of an affidavit, the Assessing Authority ought to have cross-examined and also made further inquiry with regard to the correctness of the contents of such affidavit. When the Assessing Authority failed to avail this opportunity, Ld.CIT(A) ought to have deleted the entire additions. We therefore, allow Ground raised by the assessee and direct the AO to delete the remaining impugned addition. Appeal filed by the assessee is allowed.
2023 (3) TMI 1346
Revision u/s 263 by CIT - Cash deposited in bank account unexplained - As per CIT assessee failed to provide explanation in respect of sources of funds introduced as capital and creditworthiness of the lender - HELD THAT:- AO specifically called for the details in the specified format as per the CBDT Circular to examine the cash deposits made by the assessee and the assessee had given a detailed reply explaining the circumstances and the sources for cash deposits by producing details of purchases, sales, cash book, stock registers, VAT return etc., and the increase in demand of gold during that period being wedding season when compare to the corresponding previous year. All these details and explanation were also produced before the Ld. Pr.CIT, however, the Ld. Pr.CIT in her order observed that even during the revision proceedings assesse....... + More
2023 (3) TMI 1345
Allowability of interest expenses under “Income from Other Sources” - interest paid to SBI loan - assessee has not shown any income from the said property - assessee was requested to show cause as to why the said interest expenses should not be disallowed u/s. 57 - HELD THAT:- During the appellate proceedings assessee could not demonstrate as to how the professional income was “Income from Other Sources” and how the loan taken from the bank was utilized exclusively for the purpose of earning said income. Thus the assessee has not proved allowability of interest expenses either u/s. 57 or u/s. 37 of the Act. In the absence of evidence from the assessee, the disallowance made by the AO does not require any interference. Even before us, no materials placed by the assessee, neither written submission nor Paper Book fil....... + More
2023 (3) TMI 1344
Non deduction of TDS - Addition u/s 40(a)(ia) - disallowance of the ocean freight, survey expenses, testing charges and legal charges - HELD THAT:- In the case of Om Sri Nilamadhab Builders (P) Ltd [2022 (11) TMI 1337 - ITAT CUTTACK] the coordinate bench of the Tribunal restricted the disallowance to 30% as against 100% - Thus disallowance u/s.40(a)(ia) as made by the AO and as confirmed by the ld. CIT(A) stands restricted to 30%. Appeal of the assessee is partly allowed.
2023 (3) TMI 1343
Allowability of expenditure related to the project or running of the company - business of the assessee was not set up, therefore, the expenses debited in P&L account were not eligible for allowing as revenue expenditure u/s. 37(1) - whether the business of the assessee of Developing “Real Estate Park” was set up in the year under consideration/in prior year or not? - HELD THAT:- As the issue in dispute of set up of the business is emanating from the earlier assessment years 2012-13 and 2013- 14 which has already been allowed in favour of the assessee by the Tribunal [2018 (12) TMI 1566 - ITAT DELHI] therefore, respectfully following the findings of the Tribunal the finding of the Learned CIT(A) of the issue in dispute is upheld. The grounds raised by the revenue are accordingly dismissed.
2023 (3) TMI 1342
Expenditure under the head expenses on “Social & Rural Development Programme”- Allowable revenue expenditure or not? - whether fulfill the condition of Section 37(1)? - HELD THAT:- As no distinguishable facts or features are neither available on record nor brought to our knowledge by the Revenue Department, to contradict the findings of the authorities who have passed the orders in favour of the Assessee by holding the said expenditure as revenue in nature. Hence we are inclined not to interfere in the order passed by the learned Commissioner, as the same does not suffer from any perversity or impropriety or illegality. Appeal filed by the revenue department stands dismissed.
2023 (3) TMI 1341
Allowability of Provision for discount - whether allowable as expense in the current year? - as contended that said provision for discount was in respect of crystallised liability and the same is to be allowed as deduction since the assessee was consistently following mercantile system of accounting - HELD THAT:- Tribunal for AY 2009-10 had accepted the claim of the assessee for provision for discount as an allowable expenditure Further the Department has filed appeal against the said order of the Tribunal for AY 2009-10 before the Hon'ble High Court of Karnataka [2017 (8) TMI 1699 - KARNATAKA HIGH COURT] wherein the issue relating to provision for discount was not assailed. In the light of the orders of the Tribunal in assessee’s own case for AY 2004-05 and AY 2009-10 which is identical to the facts of the instant case, we reje....... + More
2023 (3) TMI 1340
Jurisdiction of Single Member Bench of the Income Tax Appellate Tribunal - Monetary limit Rs.50 lakhs for hearing Appeal - appeals where total income determined by AO does not exceed Rs.50 lakhs - question for determination here is as to what is the impression left on the mind by the use of the clause “total income" as computed by the AO - HELD THAT:- It may be noted here that the criterion adopted for determining the jurisdiction of Single Member Bench is not the quantum of addition but the quantum of assessed addition. In the present case, the assessee returned loss of (-)Rs.1,05,73,207/-. AO made addition of Rs.1,06,13,329/- (disallowance of interest at Rs.99,02,829/- and disallowance of expenses at Rs.7,10,500/-) and finally he determined the income of (+) Rs.40,120/-. Thus, assessed income in this case is only Rs.40,120/- ....... + More
2023 (3) TMI 1339
Expenses by pharma companies - expenditure incurred towards freebies to doctors by the Pharma Agencies as disallowable u/s.37(1) - expenditure made towards selling and marketing as well as travelling and conveyance as held to be in contravention of the Circular No.5/2012 issued by the CBDT - HELD THAT:- After hearing both the parties, we are of the opinion that this issue required to be re-examined by the AO in the light of the earlier order of the Tribunal in the assessee’s own case [2023 (3) TMI 1299 - ITAT BENGALURU] wherein held A.O. has not critically examined the nature of expenditure incurred by the assessee. In the larger interest of justice, in view of the latest judgment of the Hon’ble Apex Court, which has examined the very same issue, it becomes necessary to examine the exact nature of expenses incurred by the asse....... + More
2023 (3) TMI 1316
Exemption u/s 11(1) - Denial of the claim of exemption u/s 11 was for the reason that the assessee had belatedly filed Form No.10B by 5 days (i.e. on 26.09.2018) - HELD THAT:- The due date of filing of return u/s 139(1) was 30.09.2018. The return of income was filed on 21.09.2018. Audit Report in Form No.10B was e-filed on 26.09.2018. Audit Report has been filed 5 days after filing of the return. CPC has denied the claim of exemption u/s 11 for the reason that the Audit Report was not filed along with the return of income. The assessee has placed on record the order of the CIT(E), wherein he has condoned the delay of 5 days in furnishing the Audit Report in Form No.10B. Since the CIT(E) has condoned the delay in filing the Audit Report, the assessee is entitled to exemption u/s 11 of the I.T.Act, provided other conditions are satisfied for claiming exemption u/s 11. Appeal filed by the assessee is allowed.
2023 (3) TMI 1315
Addition u/s 68 - unexplained cash credit - assessee failed to prove genuineness of the transactions and creditworthiness of the subscribers - CIT(A) allowed the appeal of the assessee by holding that the assessee has proved all the three ingredients of Section 68 - HELD THAT:- In the present case the assessee has filed all the evidences before the AO and AO in stead of carrying of further investigation only harped on the plea that summons u/s 131 of the Act were not complied with and thus the transactions remained unexplained. CIT(A) appreciated all these facts and after discussing and relying on the various decisions allowed the appeal of the assessee. We observe from the facts before us that all the share applicants were existing assessees under the Act and in some of the cases assessments were framed u/s 143(3) and the assessment orde....... + More
2023 (3) TMI 1314
Unexplained money u/s 69A r.w.s. 115BBE - during demonetization period, the assessee made a cash deposit - HELD THAT:- On careful perusal of bank statement, find that cash was clearly available from self-withdrawal with the assessee, therefore, the assessee has clearly explained the deposit in part. So far as remaining sum find that the assessee also made cash withdrawal of Rs. 60,000/- on 21/10/2016. Now only a small amount of Rs. 30,000/-is left, considering the smallness of amount that the assessee was having regular withdrawal in his bank account and Rs. 30,000/- is not a big amount which can be doubted on the basis of facts and circumstances of the case and financial transactions of the assessee. Therefore no justification in treating Rs. 6.00 lacs as unexplained cash credit. In the result, the grounds taken by the assessee are allowed.