- 2019 (7) TMI 1733 - ITAT MUMBAI
Penalty u/s 271(1)(c) - defective notice - non specification of charge - HELD THAT:- As decided in SMT. BAISETTY REVATHI [2017 (7) TMI 776 - ANDHRA PRADESH HIGH COURT] when the proceedings are penal in nature, resulting in imposition of penalty ranging from 100 per cent to 300 per cent of the tax liability, the charge must be unequivocal and unambiguous. When the charge is either concealment of particulars of income or furnishing of inaccurate particulars thereof, the revenue must specify as to which one of the two is sought to be pressed into service and cannot be permitted to club both by interjecting one or between the two. Considering the above factual and legal discussions narrated above, in our view the penalty order levied by assessing officer and confirmed by ld CIT(A) is not sustainable on factual as well as on legal aspect. Therefore, we direct the assessing officer to delete the entire penalty levied under section 271(1) (c) - Decided in favour of assessee.
- 2019 (7) TMI 1731 - ITAT COCHIN
Entitled for deduction u/s 80P on account of addition u/s. 68 - HELD THAT:- Since the assessee’s business is to accept deposits and lend advance inter alia with other activities, we are inclined to hold that income resulting on account of addition made u/s. 68 cannot be considered as income derived from business though it is income of the assessee. Even if the addition is made u/s. 68, it does not necessarily follow that such credit represents business income of the assessee as a general practice unless there is clear evidence that it represents business receipts. In the present case, it relates to granting of deduction with regard to profit/grain derived from business and unless it is proved that it is from business, deduction u/s. 80P cannot be granted. The contention of the assessee is not acceptable in view of the clear provisio....... + More
- 2019 (7) TMI 1729 - ITAT MUMBAI
Deduction u/s 80P - interest income earned - HELD THAT:- Assessee a cooperative society is eligible for deduction u/s.80P(2)(d) of the Act in respect of the interest income earned by the assessee from either any other cooperative society or from a cooperative bank. Grounds raised by the assessee are allowed. See KSHATRIY GADKARI MARATHA COOPERATIVE CREDIT SOCIETY LTD. [2019 (4) TMI 1932 - ITAT MUMBAI] and KALIANDAS UDYOG BHAVAN PREMISES CO-OP SOCIETY LTD. [2018 (4) TMI 1678 - ITAT MUMBAI] - Appeals of the assessee are allowed.
- 2019 (7) TMI 1728 - ITAT MUMBAI
Reopening of assessment u/s 147 - Non disposing off appellant’s objections - HELD THAT:- The fact that the assessee had raised objections against the reopening of the assessment and the same was not disposed-off by Ld. AO, remain uncontroverted. Nothing on record would establish that the assessee’s objections against reopening of assessment were ever considered and rejected by Ld. AO at any point of time, during reassessment proceedings. Thus the action of Ld. first appellate authority in upholding the reassessment proceedings, could not be said to be in accordance with law. Therefore, we quash the reassessment order - Decided in favour of assessee.
- 2019 (7) TMI 1726 - ITAT MUMBAI
TP Adjustment - adjustment to the arm's length price of international transaction with the Associated Enterprises (AEs) relating to export of finished goods - Whether or not learned DRP is empowered under the Act to enhance the income in respect of a transaction for which neither any variation has been proposed in the draft order nor the assessee has raised any objection? - HELD THAT:- In respect of an assessee availing the DRP route, power of enhancement would be restricted only to the variations objected to by the assessee. In our humble opinion, this cannot be the intention of the legislature while enacting the provision of section 144C(8) of the Act. The power of enhancement conferred upon the DRP under section 144C(8) of the Act cannot be interpreted in a manner to restrict it only to the variations objected by the assessee - any....... + More
- 2019 (7) TMI 1725 - ITAT MUMBAI
Addition u/s 68 - bogus share application money and share premium received as bogus accommodation entries provided by Shri Mukesh Choksi and Shri Shirish Shah - CIT-A deleted the addition - HELD THAT:- In the present assessment year assessee has submitted that it has submitted all the information and documents. Not specific defect in the same has been pointed out by the assessing officer. Assessing officer has solely gone on the investigation done in the case of third parties. As a matter of fact, no summons were issued by the assessing officer to the share applicants the present case. For assessment year 2006-07, even notice under section 133(6) were not issued. As assessee has discharged its onus and no addition under section 68 is warranted. Accordingly we uphold the order of learned CIT-A. - Decided in favour of assessee.
- 2019 (7) TMI 1722 - ITAT PUNE
Registration u/s 12AA denied - Proof of charitable activities u/s 2(15) - scope of inquiry by CIT(A) for the registration u/s 12A and 12AA - HELD THAT:- Sec.12AA(1) requires the Commissioner to whom an application is made for the registration of a Trust or Institution to satisfy himself about the genuineness of the activities of the Trust or the Institution as well as the objects of the Trust or Institution and for that purpose Commissioner is vested with power to call for documents or information and is also empowered to make such inquiries as he may deem necessary in that behalf. The Commissioner is thereupon empowered to pass an order in writing either registering an Institution or if he is not satisfied about the objects of the Trust or Institution and of the genuineness of its activities, to pass an order in writing refusing to regis....... + More
- 2019 (7) TMI 1719 - ITAT DELHI
TDS u/s 195 - assessee failed to deduct tax at source on payments made to Non-resident parties on account of professional fee - AO rejected the contention of the assessee that services rendered by the 6 non-resident entities are not in the nature of independent personal services - CIT-A deleted the addition - HELD THAT:- DR could not controvert the finding of the Ld. CIT(A) that the article on “ independent personal services” is applicable on income derived by a person who is an individual or firm of individuals or by an individual, whether in his own capacity or any member of a partnership firm. Further in the DTAA with Netherland, the word resident has been used for the benefit of independent personal services, which is wider than individual and the firm, who has rendered services is entitled to benefit of said provision. No....... + More
- 2019 (7) TMI 1718 - ITAT CHENNAI
Bogus LTCG - Exemption u/s 10(38) disallowed by AO on the ground that the company in which the assessee invested is a penny stock company - Long term capital gains on the sale of shares denied - HELD THAT:- It is not brought on record how the assessee is involved in promoting the penny stock company and how the assessee involved in inflating the shares of the company. Moreover, the copy of the investigation report said to be received from the Directorate of Investigation at Kolkata was not furnished to the assessee. On identical circumstances, this Tribunal in the case of Kanhaiyalal & Sons (HUF) v. ITO [2019 (2) TMI 1640 - ITAT CHENNAI] has remitted back the matter to the file of the Assessing Officer for reconsideration. Matter needs to be re-examined by the Assessing Officer. Accordingly, orders of both the authorities below are se....... + More
- 2019 (7) TMI 1708 - ITAT MUMBAI
Disallowance u/s 36(1)(iii) interest paid on loan - Interest on loans taken from director wholly and exclusively for the purpose of business activities - HELD THAT:- Dichotomy between the borrowing of the loan and actual application thereof in the purchase of a capital asset, seems to proceed on the basis that a mere transaction of borrowing does not, by itself, bring any new asset of an enduring nature into existence, and that it is the transaction of investment of the borrowed capital for the purchase of a new asset which brings that asset into existence; the transaction of borrowing is not the same as the transaction of investment and if this dichotomy is kept in mind, it becomes clear that the transaction of borrowing attracts the provisions of section 36(1)(iii). Assessee filed before the AO the confirmation of loan from the director....... + More
- 2019 (7) TMI 1698 - ITAT CHENNAI
Expenditure claimed u/s.36(1)(iii) - difference between interest received and interest paid - HELD THAT:- Assessee has been considered as an investment company and making investments was part of its business. In the case of CIT vs. Shriram Investments (Firm) [2013 (11) TMI 1656 - ITAT CHENNAI] held that deduction u/s.36(1) (iii) of the Act had to be allowed in respect of interest paid, if capital was borrowed for the purpose of business or profession. As already mentioned there is no finding by any of the lower authorities that disparity between interest receipts and payments arose on account of charging of lower rate of interest on loans advanced when compared to interest paid on loans received. AO was not justified in making a disallowance for the difference between interest received and interest paid by the assessee. Disallowance stands deleted.- Decided in favour of assessee.
- 2019 (7) TMI 1693 - ITAT MUMBAI
Disallowance u/s 14A r/w rule 8D - AO noticed that during the year the assessee has earned exempt income by way of dividend on mutual fund and shares - HELD THAT:- Disallowance made by the Assessing Officer is far in excess of the total expenditure claimed by the assessee. Therefore, under no circumstances, the disallowance made by the AO could have been sustained. Therefore, following the decisions of the Tribunal and the Hon'ble Jurisdictional High Court [2014 (1) TMI 1183 - ITAT MUMBAI] in the preceding assessment years we hold that the disallowance under section 14A r/w rule 8D, should be restricted to the amount already disallowed by the assessee under section 14A. - Decided in favour of assessee.
- 2019 (7) TMI 1689 - ITAT MUMBAI
Reopening of assessment u/s 147 - non supply of reasons and not qua the change of opinion - HELD THAT:- In this case the assessee has not filed any return of income despite the issue of notice under section 148 due to the fact that all the records of the assessee were seized by the various government agencies and assessee was not having any access to such records at the relevant point of time. This fact was brought to the notice of the AO. Assessee requested by various letters during course of the assessment proceedings to supply the reasons but AO did not supply any reasons recorded for re-opening. Even after completion of the assessment, the assessee again requested vide letter dated 30.05.2018 and 01.05.2019 to supply copy of reasons but some were not supplied to the assessee. Once it has established that assessee has not been supplied....... + More
- 2019 (7) TMI 1682 - ITAT JAIPUR
Levy of penalty u/s 271(1)(c) - addition made during the course of assessment, which were confirmed by the appellate authority - non specification of charge - assessment was framed u/s 153A r.w.s. 143(3) of the Act wherein addition was made on account of undisclosed income as well as low household withdrawals - HELD THAT:- It is only when the authority invested with the requisite power is satisfied that either of the two events existed in a particular case that proceedings u/s. 271(1)(c) are initiated. This pre-requisite should invariably be evident from the notice issued u/s. 274 r.w.s. 271 which is the jurisdictional notice, for visiting an assessee with the penal provision. The intent and purpose of this notice is to inform the assessee as to the specific charge for which he has been show caused so that he could furnish his reply witho....... + More
- 2019 (7) TMI 1681 - ITAT CHENNAI
Contribution to Pension Fund Trust - HELD THAT:- As decided in own case [2014 (8) TMI 1199 - ITAT CHENNAI] bare reading of section 36(1)(iv) makes is amply clear that the sum should be contributed by the employer towards a recognized provident fund or approved superannuation funds subject to such limits as may be prescribed for recognizing provident fund or approving the superannuation fund. The section does not lay down any specific condition that the fund should be approved by the jurisdictional Commissioner or Chief Commissioner only. In the present case, the assessee is contributing in the Pension Fund Scheme jointly floated by twelve State Transport Corporations operating in different districts of the state of Tamil Nadu. All the State Transport Corporations are signatories to the Trust Deed for setting up of joint State Transport Em....... + More
- 2019 (7) TMI 1678 - ITAT INDORE
Levying late fees u/s 234E - Late filing of TDS returns / statement - statement processed u/s 200A - HELD THAT:- From going through the provisions of sections 234E and 200A of the Act we find that the provision for levying fee for default in furnishing statement was inserted w.e.f 01.07.2012. The power to process the statement of tax deducted at source are provided in section 200A of the Act. The date of CPC order is the yardstick to examine the applicability of the amendment brought by the Finance Act 2015 w.e.f 01.06.2015. If the default is committed by a person in delivering the TDS statement within the time prescribed in sub-section (3) of section 200 of the Act or proviso to sub-section (3) of section 206C of the Act, from 01.07.2012 provision of section 234E of the Act comes into operation and if the default continues and the CPC or....... + More
- 2019 (7) TMI 1675 - ITAT SURAT
Reopening of assessment u/s 147 - estimating the income of the assessee firm at 25% on the advance received by the assessee from its customer - HELD THAT:- The words 'reason to believe' cannot mean that the Assessing Officer should have finally ascertained the facts by legal evidence. They only mean that he forms a belief from the examination he makes or from any information that he receives. If he discovers or finds or satisfies himself that the taxable income has escaped assessment, it would amount to saying that he has reason to believe that such income had escaped assessment. The justification for his belief is not to be judged from the standards of proof required for coming to a final decision. A belief though justified for the purpose of initiation of the proceedings under section 147, may ultimately stand altered after the ....... + More
- 2019 (7) TMI 1674 - ITAT CUTTACK
Rejection of books of accounts - NP estimation - HELD THAT:- As noticed that the assessee is engaged in various sectors of business wherein the rate of net profit may not be at a similar line. We also notice that the assessee could not produce complete bills and vouchers and sector-wise books of accounts before the AO. Looking to the voluminous nature of the business carried on by the assessee and considering the arguments advanced by both the sides, we restrict the net profit to 6% on the gross turnover of the assessee of ₹ 40,10,71,312/- as against 6.5% applied by the CIT(A) on gross receipts. We further make it clear that from the net profit of 6%, no further any depreciation shall be allowed.
- 2019 (7) TMI 1665 - ITAT DELHI
TDS u/s 194I - Disallowance u/s 40(a)(ia) - short deduction of tds - default u/s 201 - HELD THAT:- Assessee’s case is squarely covered by the judgment of the Hon’ble Calcutta High Court in the case of CIT vs. S.K. Tekriwal [2012 (12) TMI 873 - CALCUTTA HIGH COURT] had held that in case of any shortfall due to any difference of opinion as to the taxability of any item or nature of payments falling under the various TDS provisions, the assessee can be declared to be the assessee in default u/s 201 of the Act but no disallowance can be made by invoking provisions of section 40a(ia). The Hon’ble High Court of Calcutta observed that the provisions of section 40a(ia) have two limbs; one is where, inter alia, the assessee has to deduct tax and second where after deducting tax, inter alia, the assessee has to pay the same into g....... + More
- 2019 (7) TMI 1663 - ITAT DELHI
TP Adjustment - comparable selection - selecting good comparables to the assessee on several ground including the functional dissimilarity, non availability of segmental data and diversified activities besides high end use brand worth - HELD THAT:- Companies unrelated to service of export of data processing and back office support undertaken by the assessee need to be deselected from final list of comparability. Services rendered by the assessee are only back office operations falling in the category of ITES and not KPO. eClerx is not a good comparable at all to the assessee. Apart from that no segmental information is also available. The reasoning given by the ld. DRP in respect of AY 2011-12 equally applies to the facts obtaining in this year also. We, therefore, find eClerx not a good comparable and have to be deleted from the list of ....... + More