- 2020 (9) TMI 1156 - ITAT INDORE
Penalty u/s 271AAB(1)(a) - additional income surrendered by the assessee u/s 132(4) - income disclosed in the return of income filed after search & seizure action - HELD THAT:- Additional income surrendered by the assessee have been accepted by the Department on the basis of the explanation given by the respondent and on the basis of offering the same as business income which is even clearly discernable from the assessment order. It is also not in dispute that the assessee company has no other source of generating income other than the business carried out by it as per the objects for which it is registered. This fact was not in dispute and method and manner of additional income offered was duly explained to the Investigation Wing and also during the course of assessment proceedings which is well evident from the assessment order itse....... + More
- 2020 (9) TMI 1155 - ITAT BANGALORE
TP Adjustment - comparable selection - HELD THAT:- Assessee is into services rendered under the title “Technical Support Services” and “Research and Development Services”. Both these services have been clubbed together as “Software Development Services” segment for bench marking.The assessee adopted TNM method as most appropriate method and Operating Profit/Operating Cost as Profit level indicator (PLI). We direct the AO/TPO to apply the upper turnover filter and exclude comparable companies, which are having turnover of more than ₹ 200/- crores. Companies functionally dissimilar with that of assessee need to be deselected from final list.
- 2020 (9) TMI 1153 - ITAT DELHI
Validity of reopening of assessment - information is received by AO from the investigation wing - Addition u/s 68 - assessee was identified as one of beneficiaries who had received bogus/accommodation entries in the form of share capital by entry provider S.K Jain - HELD THAT:- Merely using the expression ‘failure on the part of the assessee to disclose fully and truly all material facts’ is not enough. The reasons must specify as to what is the nature of default or failure on the part of the assessee. Hon’ble Bombay High Court in the case of Anand Developers [2020 (2) TMI 995 - BOMBAY HIGH COURT] has held that a mere bald assertion by the AO that the assessee has not disclosed fully and truly all material facts is not sufficient. AO has to give details as to which fact or the material was not disclosed by the assessee l....... + More
- 2020 (9) TMI 1151 - ITAT MUMBAI
Disallowance u/s 40(a)(ia) of short deduction of tax at source - Disallowance u/s.40(a)(ia) - TDS u/s 194C OR 194J - HELD THAT:- As relying on M/S. TV18 HOME SHOPPING NETWORK LTD [2020 (2) TMI 1397 - ITAT MUMBAI] when there is a short fall in deduction of TDS there cannot be any disallowance u/s.40(a)(ia) of the Act - we uphold the order of the Ld.CIT(A) and reject the ground raised by the revenue.
- 2020 (9) TMI 1149 - ITAT HYDERABAD
TP Adjustment - Addition relating to Arm’s Length Price Adjustment towards interest on receivables from AE’s - Finding on the No.of days delay in receivables - HELD THAT:- The assessee is following the TNMM method and there is no dispute with regard to the method followed by the assessee. TPO has made economic analysis and given a finding that no adjustment is required and the transactions were at ALP. On going through the order of the TPO, though it was stated that there were outstanding trade receivables TPO has not given any finding on the No.of days delay in receivables. As submitted by the learned AR, the delay was less than 90 days and the industry acceptable period of average is 90 days. The Coordinate Bench of the ITAT in assessee’s own case for the A.Y 2013-14 [2020 (7) TMI 282 - ITAT HYDERABAD] has taken view t....... + More
- 2020 (9) TMI 1147 - ITAT BANGALORE
Exemption u/s 10(38) denied - Denial of an opportunity of fair hearing by providing copy of the statement and related details - HELD THAT:- In our opinion, the issues are squarely covered by the decision of Bangalore Bench of ITAT in the case of Ranjit Kumar Bothra Vs. ITO. [2020 (4) TMI 50 - ITAT BANGALORE] as held that since the petitioner has been denied an opportunity of fair hearing by providing copy of the statement and related details, the matter is required to be reconsidered by the AO by providing fair and reasonable opportunity of hearing to the assessee after furnishing details / copy of the statement based on which the impugned assessment order has been passed. From the above it is seen that matter was restored back to the file of the AO for fresh decision - Assessee’s appeal is allowed for statistical purposes.
- 2020 (9) TMI 1130 - ITAT BANGALORE
Rectification u/s 254 - part of income which was not accounted on the basis of accrual system of accounting had been offered to tax in the very same assessment year i.e., AY 2012-13 - plea of assessee that the sum added by the AO on the basis of mercantile system of accounting was offered by the assessee to tax in a later assessment year as income and therefore the addition made will amount to taxation of the same income twice - HELD THAT:- We are of the view that the words “either in this year or” should be added to line 6 of para 14 of the order of Tribunal, after the words “how the income offered” so that the 6th line of para 14 reads as under:- “how the income offered either in this year or in a later assessment year was income which was” We hold and order accordingly. Absence of insertion of the af....... + More
- 2020 (9) TMI 1129 - ITAT BANGALORE
Rectification of mistake u/s 254 - Capital gains chargeable to tax - sum was received by the assessee on his retirement from a partnership firm - Tribunal said that right of a partner in the firm is a capital asset and when that is relinquished, the consideration paid on such relinquishment, over and above the sum credited to the capital account of the concerned partner should be regarded as capital gain and brought to tax. Goodwill was not an asset which was subject matter of transfer and therefore the provisions of section 55(2)(a) of the Act will not apply - HELD THAT:- What was subject matter of transfer was right of partner in the partnership firm which comprises of several components, goodwill being one of the components. Apart from the above, we are also of the view that the issue that is sought to be agitated by the revenue in thi....... + More
- 2020 (9) TMI 1128 - ITAT MUMBAI
Revision u/s 263 - addition in respect of notional annual letting value on unsold flats held as stock in trade - assessee contended that notional annual letting value of unsold flats held as stock-in-trade is a debatable issue - HELD THAT:- In the present case we are of considered view that the assessment order sought to be revised does not suffer from error as pointed by the PCIT. Merely for the reason that PCIT does not agree with one of the possible view taken by the AO, would not make the assessment order erroneous. PCIT has erred in invoking the provisions of section 263 therefore, the impugned order is liable to be quashed. We may also like to add here that sub-section (5) to Section 23 has been inserted by the Finance Act, 2017 w.e.f. 01-4-2018, whereby notional annual value of property/part of property held has stock-in-trade has ....... + More
- 2020 (9) TMI 1127 - ITAT DELHI
Unaccounted cash receipt for sale of property - during the course of examination by the Investigation Wing, the assessee was confronted with a receipt and the assessee was never asked for any further amount received by him - cancelled receipt which the Investigation Wing considered proper not to confront with the assessee - HELD THAT:- A perusal of the receipt which is placed shows that it is a cancelled one. AO has not confronted the contents of the said receipts from Shri Shashi Kant Aggarwal, although his complete address was mentioned in the said sheet of paper. Since the Investigation Wing after considering this cancelled cheque has never confronted the assessee regarding the receipt of ₹ 50 lacs, therefore, in absence of any other corroborative material before the AO, he is not justified in making the addition. A perusal of th....... + More
- 2020 (9) TMI 1126 - ITAT CUTTACK
Revision u/s 263 - CIT directing AO for re-examination of the audited accounts and examine the genuineness of unsecured loan, Sundry Creditors/ details of payable and also Sundry Debtors shown under current assets of the balance sheet - Also re-examine the valuation of stock recorded in the books of account of the assessee which has reported to the bank - HELD THAT:- Pr.CIT has observed that there is stock statement on record which has been submitted by the assessee to the Punjab National Bank in inflated value, therefore, the difference shall be treated as unaccounted sales. In respect of other findings of the ld.Pr.CIT, the AO did not enquire in depth which ought to have been done for competing the assessment proceedings as per the provisions of I.T.Act. Even before the proceeding u/s.263/143(3) of the Act before the AO, the assessee di....... + More
- 2020 (9) TMI 1125 - ITAT LUCKNOW
Reopening of assessment u/s 147 - non issue of notice u/s 148 on correct address - Applicability of section 292 BB - plea of the assessee that notice u/s 148 was wrongly issued to the assessee, as he had duly complied AIR notice and explained the source of deposit - whether the notice issued u/s 148 of the Act was served upon the assessee or not? - HELD THAT:- As clearly held that notice has to be issued either on the address available in PAN database or address available in the income tax return and has clearly held that the AO was circumscribed and bound by the express mandate of Rule 127. As held in this case that is the notice could not be served on the address available in the PAN data base or at the address mentioned in Income Tax Return only then the notice can be issued on the address mentioned in banking company or post office. N....... + More
- 2020 (9) TMI 1124 - ITAT MUMBAI
Levy of penalty u/s 271(1)(c) - whether the assessee is entitled for depreciation on properties which were let out, income from which is taxed under the head ‘income from house property’? - CIT(A) had disallowed the said depreciation on the ground that since the rental income derived from those properties were taxed under the head ‘income from house property’ and assessee would be entitled for statutory deduction @30% towards repairs alone and no further deduction is permissible under the head ‘ income from house property’ - HELD THAT:- This is a case where penalty has been initiated on one limb of the offence and penalty levied ultimately on a different limb of the offence. In these type of cases, the Hon’ble Jurisdictional High Court had held that when there is no satisfaction recorded by the ld....... + More
- 2020 (9) TMI 1123 - ITAT MUMBAI
Disallowance of selling and marketing expenses paid - Commission on sale - receipt from the sale of FSI was not offered to tax, therefore, the expenses was not liable to be allowed - As argued that the commission or brokerage expenses are accrued and the liabilities towards such expenses are created as soon as the deal takes place between the assessee company and the party and accordingly the brokerage/commission is due, hence, the claim of the assessee is liable to be allowed - HELD THAT:- The assessee company has paid 2% commission on sale of FSI 53.33 crores for the year under consideration. The commission has been booked against these transactions in the year under consideration. Since the FSI was not offered in the current year, therefore, the AO has declined the claim. It nowhere seems justifiable in view of the decision in the case....... + More
- 2020 (9) TMI 1122 - ITAT MUMBAI
Estimation of income - bogus purchases - addition made on account of @8% on the value of alleged bogus purchases - HELD THAT:- Assessee had disclosed total gross profit of 3.6%. Since, assessee is engaged in the business of export of cut and polished diamonds, there is no question of any VAT portion incurred by the assessee on the purchases. Gross profit disclosed by the assessee on the disputed purchases was 2.42%. These facts were not controverted by the revenue before us. Profit element determined @8% is on the much higher side and we deem it fit to estimate the profit @3% on the value of purchases treated as non-genuine by placing reliance on Ralf Jems Pvt. Ltd [2019 (9) TMI 1402 - ITAT MUMBAI]. Ground raised by the assessee is partly allowed.
- 2020 (9) TMI 1103 - ITAT PUNE
Allowability of deduction u/s 80IA(4)(iii) - as per revenue no single entity or its related enterprise can occupy more than 25% of the allocable area was violated - CIT-A allowed deduction - whether CIT(A) was justified in holding that the assessee is eligible for deduction while the condition that minimum number of 30 units should be operational for availing the benefit was not met since by 31.03.2010 only 16 units were operational? - HELD THAT:- When there is no counter findings placed on record by the Department, we do not find any reason to deviate from the view taken in assessee’s own case for A.Y. 2011-12 [2018 (4) TMI 1821 - ITAT PUNE] and following the same, we are of the considered view that the relief provided by the learned Commissioner of Income Tax (Appeals) to the assessee allowing the claim of deduction u/s 80IA(4)(iii) of the Act was done correctly and the said relief provided to the assessee is sustained.
- 2020 (9) TMI 1102 - ITAT BANGALORE
Computation of deduction u/s.10A - reducing the impugned expenses both from the export turnover as well as from the total turnover - HELD THAT:- The issue raised is squarely covered in favour of assessee by the judgment in the case of CIT v. HCL Technologies Ltd. [2018 (5) TMI 357 - SUPREME COURT] had categorically held that when expenses are reduced from export turnover, the same needs to be reduced also from the total turnover, while computing deduction u/s. 10A - DRP is justified in its direction that the impugned expenditure that is reduced from the export turnover need to be reduced also from the total turnover, while computing deduction u/s. 10A - Decided against revenue. Set off of brought forward losses - AO has reduced the brought forward losses from Bangalore (10AA unit) and Mumbai (10A unit) before computation of deduction u/s ....... + More
- 2020 (9) TMI 1101 - ITAT MUMBAI
TP Adjustment - adjustment arising out of performance guarantee provided by assessee to an entity - HELD THAT:- The bank guarantee was given by Bank of India. The bank utilized the guarantee facility sanctioned to assessee while sanctioning aforesaid bank guarantee to assessee’s AE. The assessee, based on letter obtained from the bank, charged guarantee commission of 0.60% from its subsidiary. The Ld. TPO estimated the same @1%. We find that this issue is contained in assessee’s own case for AY 2010-11. [2019 (9) TMI 437 - ITAT MUMBAI] as concluded that internal CUP in the shape of commission charged by the bank, would be most direct and reliable way to apply Arm’s Length Principle. Further, when there was absolutely no loss to the assessee and entire cost was recovered from the AE, no further adjustment would be require....... + More
- 2020 (9) TMI 1100 - ITAT MUMBAI
Addition u/s 40(a)(ia) - Non-deduction of TDS u/s 194H - discount versus commission - Held that:- the assessee was not required to deduct TDS on the amounts of discount on sale of Set-top box and hardware, discount on sale of recharge coupon and vouchers, bonus or credit provided by assessee to subscribers, sales promotion expenses and distribution channel support expenses. - transaction between the company and distributor is on principal to principal basis and all the risk, loss, damages are transferred to distributor on delivery. Distributors are free to sale at any price below maximum retail price. In this regard, the assesse has filed the sample copy of invoices for sale of Set Top Box (STB) and other recharge coupons to prove that it is a sale but not services to come within the ambit of the definition of commission as defined under ....... + More
- 2020 (9) TMI 1099 - ITAT MUMBAI
TP Adjustment - comparable selection - functional dissimilarity - HELD THAT:- Assessee provided investment advisory services, in respect of listed Indian securities to its overseas AE. Investment Advisory Services refer to the support services provided by the Indian firms to the overseas fund managers in equity and general business research. Further, equity research relates to building and maintaining valuation models, ratio analysis, competitor analysis, comparable valuation method etc. Business research includes services, such as study and analysis of the industry of the target company, company profiles and study of the macroeconomic environment of the target country, thus companies functinally dissimilar with that of assessee need to be deselected from final list. ICRA Management Consulting Services Ltd. (‘IMCSL’), Informed....... + More