- 2020 (11) TMI 959 - ITAT PUNE
Non granting registration u/s 12AA - CIT-A denied the registration primarily on the ground that the object of the trust prima-facie appears to be religious in nature and there was no dissolution clause in the instrument creating the trust - HELD THAT:- The reasoning of the ld. Commissioner of Income Tax (Exemptions) that in the absence of dissolution clause the appellant trust does not entitle for registration u/s 12AA of the Act is also required to be adjudged in view of the decision in the cases of (i) DCIT vs. Vanchhara Thirthadhipati Chintamani Paraswaprwabhu [2015 (5) TMI 5 - GUJARAT HIGH COURT] AND TAPAGACHHA SANGH MOTA [2015 (5) TMI 87 - GUJARAT HIGH COURT] Provisions of section 13(1)(b) of the Act had carved out exception to the exemption available u/s 11 and 12 of the Act. One of those exception is that the exemption u/s 11 and 1....... + More
- 2020 (11) TMI 958 - ITAT BANGALORE
TP Adjustment - comparable selection - HELD THAT:- Assessee is engaged in the business of development and technical maintenance work in certain intellectual property and knowhow related to certain products and systems thus companies functionally dissimilar with that of assessee need to be deselected . Secondary and higher education cess is deductible as business expenditure under section 37 (1) -Additional ground raised by assessee - HELD THAT:- Nothing is discernible from the record to establish that assessee has raised the claim by way of revised return before Ld.AO. However we are of considered opinion that this is an allowable expenditure and has of assessee’s. Accordingly we remand this issue back to Ld.AO to consider the claim of assessee in accordance with law. Needless to say that proper opportunity of being heard must be granted to assessee. Accordingly this ground raised by assessee stands allowed for statistical purposes.
- 2020 (11) TMI 944 - ITAT ALLAHABAD
Disallowance of godown rent - assessee has neither filed copy of rent agreement in support of tenancy nor filed a confirmation in support of the claim - CIT(A) noted that the confirmation has been filed without the details of PAN No., complete address and identity of the person, thus confirmed addition - HELD THAT:- The entire claim of payment of rent cannot be denied when the assessee is utilizing godown for his business purposes. Though the godown has been owned by the father of the assessee however the liability to pay rent cannot be denied merely because of relationship between the tenant and the landlord being son and father. Thus without conducting any enquiry either by the AO or by the CIT(A) through remand report, the disallowance of the entire claim of godown rent is not justified. Once the assessee has produced the confirmation ....... + More
- 2020 (11) TMI 943 - ITAT MUMBAI
Disallowance u/s.14A r.w.r. 8D - Computation of deduction - HELD THAT:- AO had duly recorded his satisfaction as to why the computation mechanism provided by the assessee is incorrect and also had applied the computation mechanism provided in Rule 8D(2)(iii) of the Rules by considering all the investments. Special Bench of Delhi Tribunal in the case of Vireet Investments vs. ACIT [2017 (6) TMI 1124 - ITAT DELHI] categorically held that only those investments which had actually yielded exempt income should be considered for the purpose of working out the disallowance under third limb of Rule 8D(2) of the Rules. Assessee had furnished the workings for the same on without prejudice basis in page 7 of the paper book. The ld. AO is directed to go through the same and re-compute the disallowance u/s.14A by considering only those investments whi....... + More
- 2020 (11) TMI 942 - ITAT ALLAHABAD
Excess rent paid to the related party - Scope of the term Relative - Disallowance invoking the provision of section 40A(2)(b) - Whether expenditure incurred by the assessee is purely for the purpose of business and payment of Rent has not been found to be excessive or unreasonable? - HELD THAT:- As assessee has contended that the recipient at Serial No.(1) and (3) namely Alka Bajaj and Preeti Bajaj are sister-in-law of the assessee and therefore do not fall in the definition of relative as provided u/s 2(41). This fact is not disputed by the Revenue and therefore, the payment to these two persons would not fall in the ambit of provisions of section 40A(2) when the transaction is not with the relative of the assessee as provided u/s 40A(2)(b)(i) -There is no dispute that the definition of the term “relative” provided u/s 2(41) ....... + More
- 2020 (11) TMI 941 - ITAT DELHI
Addition u/s 68 and 69 - CIT-A deleted addition admitting additional evidence - HELD THAT:- There is no proper averment by the Assessing Officer with regard to the admission of additional evidences particularly when huge additions have been made which included the amount added u/ss. 68 & 69 which are carried forward from the earlier years, and this fact is clearly borne out from the material already on record before Assessing Officer. The additional evidences were in the form of confirmed copy of ledger accounts, confirmations and bank statement, etc. Since, as brought on record by the Ld. CIT(A) there was a clear violation of natural justice by the Assessing Officer, therefore, we hold that Ld. CIT(A) was justified in not only admitting the additional evidence but has also given due opportunity to the Assessing Officer to examine the....... + More
- 2020 (11) TMI 940 - ITAT DELHI
Deduction u/s 80I & 80 IA - whether as appellant is engaged in manufacture of LPG for which 80%(appx.)of gas was processed, the authorities below erred in holding that appellant is not an industrial undertakings engaged in manufacture or production of different article or thing? - disallowance of 50% of LPG profits on an estimated basis -HELD THAT:- As decided in own case [2020 (10) TMI 1125 - ITAT DELHI] issue in favour of assessee. Amortization of leasehold expenses - amortization of leasehold expenses paid by the assessee to various local government authorities for lease on rent. The AO was of the firm belief that the same is of capital in nature and hence, not allowable - HELD THAT:- We find that this issue is no more res integra as the same has been decided against the assessee and in favour of the revenue by the Hon’ble De....... + More
- 2020 (11) TMI 939 - ITAT DELHI
TP Adjustment - adjustment on account of adjustment of software development services segment for exclusion of only two comparables namely Infosys technologies Ltd and Tata Elexi Ltd - HELD THAT:- Infosys technologies Ltd - In view of huge turnover of the comparable company, relying on the decision of Pentair water private limited [2016 (5) TMI 137 - BOMBAY HIGH COURT] and Agnity India technologies Ltd [2013 (7) TMI 696 - DELHI HIGH COURT] the above comparable is directed to be excluded. Tata Elxis Ltd - comparable company is a design company that blends technology, creative and engineering to help customers transform ideas into world-class products and solutions. DRP though has considered the above functions of the comparable company however it is directed that the comparable company provides software development services which are simila....... + More
- 2020 (11) TMI 938 - ITAT VISAKHAPATNAM
Exemption u/s 10A - denial of exemption as no evidence for software export made through STPI and clearance received from STPI given - HELD THAT:- Assessee has discharged the burden with regard to software development and export of software services by furnishing necessary information to the STPI and also before the AO. Merely because of some defects, the same cannot be brushed aside and deny the exemption claimed by the assessee u/s 10A - It is for the department to establish that the assessee has not made software exports or prove that the information furnished by the assessee is false or incorrect. No such exercise was done by the department. No adverse observations were made by the STPI with regard to exports. Though PF, ESI payment does not establish the salary payments, they definitely show that the assessee has engaged the personnel....... + More
- 2020 (11) TMI 937 - ITAT MUMBAI
Addition u/s 68 - Loan taken from shell company - HELD THAT:- Assessee is engaged in the business of providing security personals consisting of security guards to provide security to various industries, individuals etc. During this year, Assessee has taken unsecured loans from 7 parties to the extent of ₹ 6 crores and the details are already placed on record. All these companies gave the unsecured loans through the banking channel and the assessee has already declared the details of the parties in its tax audit report with the details like address, PAN and details of loan taken. In order to verify, the assessing officer issued the show cause notice and summons to all the parties. Assessee has submitted all the relevant information required to substantiate that the transactions are genuine. The assessee has received the funds through....... + More
- 2020 (11) TMI 936 - ITAT VISAKHAPATNAM
Penalty @30% on undisclosed income u/s 271AAB - No search was conducted u/s 132 but only survey u/s 133A was conducted - HELD THAT:- From plain reading of section 271AAB, it is observed that for invoking penalty u/s 271AAB, search u/s 132 is required to be initiated, whereas in this case, there is no evidence put forth by the department initiating search u/s 132 of the act Since no search was conducted u/s 132 and only survey u/s 133A was conducted and the assessment order was passed u/s 153C r.w.s. 143(3) of the act. Therefore, we hold that the Ld.CIT(A) has rightly cancelled the penalty levied u/s 271AAB of the Act and we do not find any reason to interfere with the order of the Ld.CIT(A) and the same is upheld. - Decided in favour of assessee.
- 2020 (11) TMI 935 - ITAT VISAKHAPATNAM
Levy of penalty u/s 271D - assessee had received the amounts in cash as loan from HUF - CIT(A) found that the transactions between the assessee company and the HUF were trade transactions and the same cannot be held as loan between the assessee and the HUF - sufficient and reasonable cause for receiving the cash from HUF - HELD THAT:- It is undisputed fact that HUF is undertaking gold savings scheme and has been collecting the subscriptions from subscribers and advancing amount to the company for jewellery redemption purchases made by scheme subscribers. Though it is placed under the unsecured loans, prima facie, it is business transaction since, HUF has deposited the amounts with the assessee company for redemption of jewellery purchases under the scheme. Therefore, though the assessee has placed the same as unsecured loans, the cash rec....... + More
- 2020 (11) TMI 934 - ITAT VISAKHAPATNAM
Revision u/s 263 - scrutiny assessment - as per CIT undisclosed income, the excess stock and excess cash required to be brought to tax @60% as per section 69 r.w.s. 115BBE, however AO taxed the same at normal rates - HELD THAT:- On going through the assessment order, we find that though the AO made the addition of as undisclosed income, no addition was made u/s 69 - AO did not invoke section 68/69 separately in the assessment order. The income required to be taxed @60% in case the undisclosed income representing section 68 to section 69C of the Act. In this case, the AO has not invoked any such section. AO called for the information regarding excess stock and excess cash and also called for explanation of the assessee as to why both the items should not be taxed u/s 69 applying the tax rate @60%. The assessee furnished explanation and exp....... + More
- 2020 (11) TMI 933 - ITAT VISAKHAPATNAM
Denying deduction u/s 54F(3) - as per the joint development agreement dated 29/07/2010, the transfer of land given for development purpose amounts to transfer within the meaning of section 2(47) and thus development agreement dated 29/07/2010 is antivirus to the provisions of section 54F(3) - assessee stressed that she has purchased only land to construct a residential house and transferred the said land to the developer, therefore ld.AR argued that the assessee has not violated any of the provisions of section 54 F(3) - HELD THAT:- From combined reading of the development agreement, MoU and facts placed before us it is understood that the assessee has sold the 03 pieces of land and constructed a residential unit within the time specified in section 54F - As per the statement of facts placed before CIT(A) the entire transaction was comple....... + More
- 2020 (11) TMI 932 - ITAT MUMBAI
Bogus purchases u/s 69C - CIT-A restricted the addition to 25% of the alleged bogus purchases - HELD THAT:- As relying on own case [2018 (2) TMI 346 - ITAT MUMBAI] we direct the ld. AO to adopt the profit percentage @12.5% minus gross profit already declared by the assessee with regard to the disputed purchases. No arguments by way of any contrary decisions were submitted by the ld. DR before us with regard to the impugned issue. Accordingly, the grounds raised by the assessee as well as by the revenue on merits are disposed off in the aforesaid manner.
- 2020 (11) TMI 931 - ITAT DELHI
Denial of carry forwarding of short-term capital loss - assessee’s case is that the assessee was never heard on this aspect and was never asked to produce any material in support of their claim - HELD THAT:- Refering to submission on behalf of the assessee that given an opportunity, the assessee would cooperate with AO for verification of the claim of the assessee in respect of carry forward short term capital loss thus the assessee is entitled to an opportunity to submit the material, if any, for verification of the entitlement to carry forward short term capital loss and therefore, we set aside the impugned finding of the ld. CIT(A) and remand the matter to the file AO for verification of the claim - Decided i favour of assessee for statistical purposes. Unexplained investment - assessee has been contending before the authorities ....... + More
- 2020 (11) TMI 930 - ITAT MUMBAI
Dismissal of appeal for non prosecution by CIT(A) - as argued CIT-A failed to apply his mind to the issues which arose from the impugned order - HELD THAT:- We are not impressed with the dismissal of the appeal by the CIT(A) for non-prosecution, without application of mind by him to the issues which were assailed by the assessee by preferring the appeal before him. Once an appeal is preferred before the CIT(A) then it is obligatory on his part to dispose off the same on merits. We are of a strong conviction that it is not open for the CIT(A) to summarily dismiss the appeal on account of non-prosecution of the same by the assessee. Rather, a perusal of Sec.251(1)(a) and (b), as well as the Explanation to Sec. 251(2) reveals that the CIT(A) remains under a statutory obligation to apply his mind to all the issues which arises from the impugn....... + More
- 2020 (11) TMI 929 - ITAT DELHI
Penalty u/s 271(1)(c) - defective notice u/s 274 - non striking of irrelevant words in notice - Addition u/s 68 - HELD THAT:- In notice, irrelevant words in the penalty notice have not been struck of and, thus, the notice does not specify as to under which the limb of section 271(1)(c) was the penalty being proposed to imposed. Right from the assessment proceedings, AO has been inconsistent in his approach regarding the imposition of penalty. In the assessment order AO has recorded satisfaction for imposition penalty for furnishing of inaccurate particulars of income whereas in the notice dated 03.03.2014 issued u/s 274 penalty proceedings have been initiated for concealing particulars of income/furnishing inaccurate particulars. In the penalty order, the penalty has been imposed for furnishing inaccurate particulars of the income as the ....... + More
- 2020 (11) TMI 928 - ITAT MUMBAI
Correct head of income - treatment of interest income earned by the assessee - business income or income from other sources - Disallowance u/s 14A since assessee earned exempt dividend income - assessee is stated to be a resident corporate entity and a non-banking financial company (NBFC) -HELD THAT:- We concur with Ld. AR’s submissions that the assessee was registered as NBFC with RBI and would earn interest income by advancing loans. The activity of advancing loans, in such a case, would become assessee’s business and naturally, the interest earned thereupon would constitute Business Income for the assessee. In fact, it is the plea of Ld. AR that such income was always offered to tax as Business Income and the said treatment was never disturbed. The rule of consistency would demand that their being no change in facts or circ....... + More
- 2020 (11) TMI 927 - ITAT DELHI
Investment from undisclosed source, USL, interest disallowance - additions are made on the facts of the case and the documentary strength impounded during the survey u/s.133A - HELD THAT:- No separate addition on account of unsecured loans is warranted as the income of the assessee has been estimated for the year is found to be on incorrect interpretation of the ratio laid down by the Hon'ble Courts. CIT(A) misread the judgments and combined, transplanted, bamboozled herself in considering the items of P&L account with that of balance sheet items interchangeable. The case laws referred pertains to purchases, disallowances u/s. 40A(3) and on account of expenses on trading account. Extrapolation of judgments rendered in connection with the items of trading account cannot be extended to the addition of unsecured loans which is balanc....... + More
