- 2019 (2) TMI 1901 - ITAT MUMBAI
Disallowance u/s 14A r.w.r. 8D - Suo moto disallowance by assessee - HELD THAT:- As the assessee itself had offered a disallowance under Sec.14A, therefore, the CIT(A) had in all fairness restricted the disallowance upto the said amount. We thus not finding any infirmity in the order of the CIT(A) who as observed by us hereinabove had restricted the addition to the extend as offered by the assessee in its return of income, uphold the same to the said extent. Adjustment made by the A.O to the ‘book profit’ under Sec. 115JB on account of expenses relatable to exempt income under Sec.14A. - HELD THAT:- As relying on VIREET INVESTMENT (P.) LTD. [2017 (6) TMI 1124 - ITAT DELHI] the adjustment made under Sec. 14A is not to be considered for computing the ‘book profit’ under Sec. 115JB - We thus uphold the order of the CI....... + More
- 2019 (2) TMI 1900 - ITAT PUNE
Addition u/s. 41(1) - cessation of liability - AO observed from the schedule of sundry creditors that there were creditors whose outstanding balances as on 31/03/2012 & 31/03/2013 had remained the same - HELD THAT:- CIT(Appeals) observed that the assessee has not filed single submission to controvert the findings of the AO. In the statement of facts, the assessee has filed only the order of Assessing Officer without any new supporting documents to represent her case. This fact shows that the matter needs to be remanded to the file of Ld. CIT(Appeals) for adjudication on merits. Accordingly, in the interest of justice, we set aside the order of Ld. CIT(Appeals) and restore this issue i.e. with regard to the addition made u/s.41(1) of the Act back to the file of the Ld. CIT(Appeals) to adjudicate on merits after providing reasonable opp....... + More
- 2019 (2) TMI 1899 - ITAT SURAT
Reopening of assessment u/s 147 - capital gain computation - assessee had not shown any long term capital gain under the provision of section 45(2) r.w.s. 2(47) and section 55(2)(b)(i) - CIT(A) has assigned the rate for land at ₹ 900/- per sq. mt. on the date of transfer of the aforesaid land as to the firm - HELD THAT:- We observed there was no material on record which could have clarified the impugned discrepancy of incorrect reporting of income by the assessee. AO was having reasons of to believe that income chargeable to tax has escaped assessment for the year under consideration. After considering the above facts and circumstances as elaborated supra we justify the findings of the ld. CIT(A) that the assessing officer reopened the assessment with valid reason. Therefore, the appeal of the assessee on this issue is dismissed. Ca....... + More
- 2019 (2) TMI 1897 - ITAT HYDERABAD
Disallowance u/s 14A r.w. Rule 8D(2)(iii) - HELD THAT:- This issue is covered in favour of the assessee in various decisions of the ITAT and one of such decisions is the decision of the Special Bench of Delhi ITAT in the case of Vireet Investments Private Limited [2017 (6) TMI 1124 - ITAT DELHI] wherein it has been held that the disallowance under Rule 8D(2)(iii) can be only of the average of investments which have yielded exempt income. Respectfully following the same, the additional grounds of appeal are allowed. Computation of income u/s 115JB - This issue is also covered in favour of the assessee by the Special Bench, ITAT Delhi decision in the case of Vireet Investments Private Limited (supra) wherein it was held that the computation u/s 115JB should be made without resorting to the computation as contemplated u/s 14A r.w. Rule 8D of the IT Rules, 1962. Accordingly, grounds raised by the assessee are allowed.
- 2019 (2) TMI 1895 - ITAT DELHI
Correct head of income - service charges and furniture hire charges received by the assessee -“income from other sources” or “profit and gains of business and profession” - HELD THAT:- There is no error in the order of the Ld. CIT(A) on the issue in dispute and accordingly we uphold that no business activity was carried out by the assessee during the year under consideration and the income from service charges and hire charges is assessable under the head “income from other sources”. The ground No. 1 of the appeal is accordingly dismissed. Disallowance of the various expenses claimed - in absence of any business activity same cannot be allowed to the assessee except expenses incurred relevant to the income assessed under the head “income from other sources”- HELD THAT:- CIT(A) has examined e....... + More
- 2019 (2) TMI 1893 - ITAT DELHI
Legality of the order being passed by AO on a non-existing entity - Cairn India Ltd is an amalgamated company, which has seized to exist in the eyes of law pursuant to amalgamation with Vedanta Ltd.- HELD THAT:- Assessment on a company, which has been dissolved/amalgamated u/s 391 and 394 of the Companies Act 1956 is invalid and further held that framing assessment on a non-existing entity is a jurisdictional defect which cannot be cured u/s 292B of the Act. See DIMENSION APPARELS PVT. LTD. [2014 (11) TMI 181 - DELHI HIGH COURT] We have no hesitation in holding that the assessment order and the order of the TPO are non est. Since the foundation has been removed, the super structure must fall. See MARKETING SERVIEING PVT. LTD. [2009 (9) TMI 917 - DELHI HIGH COURT] - Decided in favour of assessee.
- 2019 (2) TMI 1890 - ITAT BENGALURU
TP Adjustment - Determination of arm’s length price of international transactions - comparable selection - TPO applying arbitrary filters to arrive at a fresh set of companies as comparable to the Appellant - HELD THAT:- Companies functionally dissimilar with that of assessee need to be deselected from final list. TP adjustment of charging mark up of recovery transaction with its AE - HELD THAT:- AR filed the details on this aspect which were overlooked by the TPO. Whereas the learned DR supported the orders of the lower authorities and could not controvert the submissions of the learned AR. We, on perusal of the material filed and the arguments of the learned AR and learned DR , are of the opinion that on the principles of natural justice, when the decision is being taken by TPO on mark-up in respect of the assessee-company, the su....... + More
- 2019 (2) TMI 1889 - ITAT AHMEDABAD
Deduction u/s 10AA - Eligibility of deduction of interest on fixed deposit for the purposes of Section 10AA - AO took a view that interest on fixed deposits is not akin to ‘profits derived’ as laid down in section 10AA (7) of the Act and consequently such interest income do not form part of the business operation of the SEZ unit - CIT(A) accordingly held that the AO was not justified in excluding the interest income earned from fixed deposits but in the nature of business income for the purposes of computation of deduction under section 10AA - HELD THAT:- For determining the scope of section 10AA(7), the reference to the expression ‘derived from’ is not material. To expound further ‘profits of the business of the undertaking’ is wider than ‘profits and gains derived by an undertaking’ - prof....... + More
- 2019 (2) TMI 1888 - ITAT AHMEDABAD
Disallowance u/s 14A r.w.r.8D - suo moto disallowance made by assessee - HELD THAT:- Reference to the financial statement that the own funds held by the assessee are nearly 100 times of the corresponding investment and therefore, in view of the decision in India Gelatine & Chemicals [2015 (11) TMI 392 - GUJARAT HIGH COURT] no disallowance towards proportionate interest is justified. We are in total agreement with the plea on behalf of the assessee in view of the long line of judicial precedents on the issue. We thus direct the AO to restrict the disallowance under s.14A to the extent of ₹ 3,65,416/- as per Rule 8D(2)(iii ) of the ITAT Rules, 1962. The issue accordingly stands allowed. Maintainability of disallowance computed u/s 14A of the Act under normal provisions for the purposes of adjustments in book prof it as determined ....... + More
- 2019 (2) TMI 1881 - ITAT MUMBAI
Penalty us 271(1)(c) - addition to the extent of 12.5% of the bogus purchases - AO levied the penalty @ 100% of tax sought to be evaded - CIT(A) directed the Assessing Officer to restrict the levy of penalty to the extent of addition confirmed in the appeal - HELD THAT:- In appeal in quantum assessment, the co-ordinate bench of this Tribunal in cross appeal for Assessment Year 2009-10 & 2011-12 [2017 (10) TMI 523 - ITAT MUMBAI]of both the parties, restricted the disallowance of alleged bogus purchases @ 12.5% of the alleged bogus purchases. It is settled legal position that no penalty under section 271(1)(c) is leviable on adhoc disallowance. Considering the peculiar facts and circumstances of the case, we direct the Assessing Officer to delete the entire penalty levied under section 271(1)(c) of the Act. - Decided in favour of assessee.
- 2019 (2) TMI 1879 - ITAT INDORE
Addition u/s 68 for alleged gifts - HELD THAT:- We find that the assessee is a member of same group and the alleged gift of ₹ 5,00,000/- has also been claimed to have been received by the company named Rajat Gems & Jewellers Pvt. Ltd. We are therefore inclined to sustain the addition u/s 68 of the Act for the alleged gifts as the assessee failed to explain its source and thus no interference is called for in the finding of Ld. CIT(A). Ground No.1 of the assessee’s appeal stands dismissed. Addition u/s 69C - unexplained expenses in marriage - HELD THAT:- On going through the submission made by Ld. Counsel for the assessee before the lower authorities as well as the loose papers impounded during the course of search we observe that and list of tentative invitees were 1589 persons but in the very same set of seized documents ....... + More
- 2019 (2) TMI 1875 - ITAT BANGALORE
Unexplained investment in construction of a property by the assessee u/s. 69A/56(2) (vii) (b) - difference between the actual value and the value for which the assessee purchased the property - As per the provisions of the 69A read with Sec.50C and 56(2)(vii)(b)(ii) the following income shall be charged to tax under the head Income from other sources - HELD THAT:- Pune Bench of the Tribunal rendered in the case of Smt. Ratnakanta B. Agarwal [2017 (9) TMI 176 - ITAT PUNE] is applicable to the facts of the present case. Without going into the objections of the assessee with regard to the report of the DVO, find that the difference in valuation as adopted by the DVO and the price paid for the property by the assessee is less than 5%. In the given circumstances, as held by the coordinate Bench of Pune Bench in the case of Smt. Ratnakanta B. A....... + More
- 2019 (2) TMI 1873 - ITAT MUMBAI
TP Adjustment - expenses claimed to have reimbursed to its AEs during the year under consideration - disallowance of claim of administrative expenses claimed by the assessee to have been reimbursed to its AE i.e. UTi- USA - HELD THAT:- As the contractual liability of the assessee to reimburse its share of cost and expenses for the intra-group services to its AE i.e UTi-USA was not dependant merely on the availing of the services of the AE, therefore, the determination of the ALP of the administrative expenses reimbursed to the said AE at Nil by the TPO/DRP for the reason that the assessee had failed to satisfy the benefit test as well as failed to justify the quantity of the services utilized and their commensurate cost etc. cannot be sustained and on the said count itself is liable to be vacated. Alternatively, we are also not impressed ....... + More
- 2019 (2) TMI 1867 - ITAT PUNE
Addition under the head ‘income from house property’ on the four unsold flats/ godowns by the assessee - HELD THAT:- It is an undisputed fact that assessee is in the business of Civil Engineers, Builders and Developers and had in the closing stock the four unsold flats. It is also an undisputed fact that these four flats were vacant throughout the year under consideration and no rental income was derived by the assessee during the year. We find that on identical issue, the Co-ordinate Bench of Mumbai Tribunal in the case of Runwal Constructions [2018 (2) TMI 1707 - ITAT MUMBAI] after considering the decision of Neha Builders (P) Ltd. [2006 (8) TMI 105 - GUJARAT HIGH COURT] the decision of Mumbai Tribunal in the case of C.R. Developments Pvt. Ltd., [2015 (8) TMI 317 - ITAT MUMBAI] the decision in the case of CIT Vs. Ansal Housi....... + More
- 2019 (2) TMI 1866 - ITAT CHANDIGARH
Addition u/s 36(l)(iii) on account of certain advances given - assessee had made investment by way of advance for purchase of plots/flats - HELD THAT:- Assessee has demonstrated availability of sufficient own funds by pointing out that while the interest free advances given the assessee had made profits during the year which was more than sufficient for making the impugned advances. These facts have remained uncontroverted before us - assessee has all along contended that the Cash Credit account from which advances were made contained mixed funds with interest free funds being deposited immediately before the impugned advances being made. CIT(A) has taken a microscopic view of the entire issue resting his findings only on the fact that CC account is an interest bearing account. The fact that sufficient own funds were available with the as....... + More
- 2019 (2) TMI 1862 - ITAT CHENNAI
Disallowance u/s 36(1)(iii) - interest on borrowed capital on the ground of diversion of borrowed funds - Addition holding non business purpose - HELD THAT:- perused the joint development agreement entered between appellant and the said M/s. TIPL, wherein we do not find any stipulation that appellant has to pay interest free advances to the said company. Furthermore, the said joint development agreement is not a registered document. It is also a matter of record that the said payment was treated as a deemed dividend in the hands of M/s. TIPL. However, the contention of the ld. Counsel that it result in double taxation in the hands of both cannot be accepted, as in the present case, what was disallowed was only the interest claim. Thus, the appellant had failed to establish the business expediency in advancing the money to the holding comp....... + More
- 2019 (2) TMI 1848 - ITAT JAIPUR
Assessment u/s 153A - additions u/s 68 on account of share application money, special deposits against the issue of preferential equity shares treating the same as accommodation entries - HELD THAT:- Addition made by the A.O. u/s 153A of the Act is not sustainable and liable to be deleted when the assessment for the A.Y. 2010-11 was completed u/s 143(3) of the Act and was not pending as on the date of search on 02/7/2015. This ground of the assessee’s appeal stands allowed. Violation of principles of natural justice due to non-allowing the cross examination of the witness, whose statement was relied upon by the assessee - HELD THAT:- Where the assessee has repeatedly requested and demanded the cross examination of the witnesses whose statements were relied upon by the AO in the assessment order and further the report of the DDIT Inv....... + More
- 2019 (2) TMI 1846 - ITAT DELHI
Validity of Reopening of assessment u/s 147 - non- application of mind by all the authorities involved in the process of recording reasons and providing satisfaction u/s 151 - addition u/s. 68 on account of unexplained cash credit - HELD THAT:- Conditions laid down in proviso to section 147 need be strictly full filled as this power is an exceptional power and in the absence of strict compliance of conditions of proviso, the exercise of power held to be unsustainable in law. The order is bad in law because the reason recorded are vague and without application of mind and are based on the information of the Enforcement Directorate with no incriminating material which is coming to the possession of the AO for the first time and which was not there with him at the time of original proceedings. In the reasons recorded in instant case the AO h....... + More
- 2019 (2) TMI 1842 - ITAT CUTTACK
Ascertaining the taxable income of the assessee in absence of registration u/s.12A - Revenue taxing the entire amount of receipts without allowing claim of expenditure - determining the income by not giving the credit of the application of funds for charitable purposes - HELD THAT:- In view the principles laid down by the Hyderabad Benches of the Tribunal in the case of Nirmal Agricultural Society [1998 (12) TMI 106 - ITAT HYDERABAD-B] no hesitation to hold that even in absence of registration u/s.12A of the Act, the Assessing Officer could assess only net income of the assessee and not the entire receipts because in absence of registration u/s.12A the assessee should be assessed in the capacity of AOP on the commercial principles, wherein, the total gross receipts/income cannot be treated as income of the assessee without allowing revenu....... + More
- 2019 (2) TMI 1840 - ITAT BANGALORE
Exemption u/s 11 - assessee was granted registration u/s 12A - voluntary contributions received for a specific purpose - whether cannot be regarded as income u/s 2(24)(iia) since they are capital receipts to be utilised for specific purpose? - assessee has pleaded that the amount received by the assessee was a tied up grant or an amount received for a specific purpose as being capital in nature - HELD THAT:- Voluntary contributions received for a specific purpose cannot be regarded as income under section 2(24)(iia) of the Act since they are capital receipts to be utilised for specific purpose. Respectfully following the decision of ITO Vs. Vokkaligara Sangha [2015 (8) TMI 920 - ITAT BANGALORE] where we find the factual matrix therein to be similar to that of the case on hand and the decision therein squarely applicable to the instant cas....... + More
