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Income Tax - Case Laws
Showing 121 to 140 of 968 Records
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2019 (1) TMI 1787 - MADRAS HIGH COURT
Maintainability of appeal - Mixed questions of fact and law - appellant challenged the order of assessment under Section 143(3) - HELD THAT:- Admittedly, as against the order of assessment under Section 143(3) of the Act, an appeal lies to the Commissioner of Income Tax (Appeals) [for brevity, the CIT (A)] in terms of Section 246A of the Act. In our considered view, the appellant should not have by-passed the remedy, as the issues involved in the instant case are mixed questions of fact and law, which, obviously, a Writ Court cannot go into.
Maintainability is an issue between the appellant/writ petitioner and the Court. Therefore, the Court will be well justified in refusing to entertain the matter, for which, the concession or consent of the respondent is unnecessary.
We grant permission to the appellant to withdraw the said writ petition as well as this appeal. We also grant liberty to the appellant to file the appeal before the CIT(A) having jurisdiction over the matter. Accordingly, the writ petition as well as the writ appeal are dismissed as withdrawn.
We grant 30 days' time from the date of receipt of a copy of this judgment to file the appeal before the CIT(A) after taking note of the fact that immediately after the assessment was over and the notice was received, the appellant moved the Writ Court.
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2019 (1) TMI 1782 - ITAT KOLKATA
Disallowance of expenses u/s.14A r.w.r. 8D(2)(i)(ii) & (ii) - assessee alleged disallowance under section 14A read with Rule 8D on account of expenses incurred in relation to the said exempt income cannot exceed the amount of dividend income actually earned. - HELD THAT:- Since this issue is squarely covered by the decision in the case of Joint Investments Pvt. Limited –vs.- CIT [2015 (3) TMI 155 - DELHI HIGH COURT] wherein it was held that the disallowance under section 14A cannot exceed the actual amount of exempt income earned by the assessee, we allow the limited relief claimed on behalf of the assessee and restrict the disallowance made under section 14A read with Rule 8D to amount being the amount of dividend income actually earned. - Decided partly in favour of assessee.
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2019 (1) TMI 1780 - ITAT DELHI
Correct head of income - Characterisation of income - Issue of treatment of long-term capital loss as business loss by treating it as a business income - HELD THAT:- Respectfully following the precedents of the earlier years [2018 (8) TMI 1961 - ITAT DELHI] and as a principle of consistency, we uphold the order of the CIT(A) that long term capital gain/capital loss cannot be treated as business income or loss and also long-term capital gain cannot be treated as business income. Accordingly, ground No. 1 raised by the revenue stands dismissed.
Disallowance u/s 14A - HELD THAT:- CIT(A) following the order of the earlier year has deleted the said disallowance of interest this issue has come up for consideration before the Tribunal in the earlier years and in so far as disallowance of interest is concerned, Tribunal has held that once assessee has huge surplus funds which exceeds the investment then no interest can be disallowed. Accordingly order of the Ld. CIT(A) deleting the disallowance of interest is upheld. - Decided against revenue.
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2019 (1) TMI 1778 - BOMBAY HIGH COURT
Revision u/s 263 - deduction u/s 80IB(10) - HELD THAT:- Tribunal noted that the Assessing Officer had carried out the detailed inquiries about the satisfaction of the relevant condition. This was not a case where a claim was granted by the AO without inquiry.
Tribunal noted that the stand of the assessee in this regard was supported by the decisions of the Tribunal on the same point. Inter alia on such grounds the appeal was allowed upon which the revenue has filed the present appeal.
The materials on record would clearly suggest that the AO was conscious of the requirement of the area of the plot of land being not less than 1 acre. In this context, he had issued show cause notice to the assessee and called for his explanation. As noted, the assessee's explanation was twofold. Firstly, there was errors in the land documents which was corrected later on and second that the reduction in the area of land for road widening and such other public purposes should be ignored, in view of the fact that the assessee was allowed to utilize the full FSI. The assessing Officer accepted such explanations and granted the reduction. The view that the Assessing Officer adopted was at that time supported by the decisions of the Tribunal. The Assessing Officer having taken a plausible view, as is well settled to series of judgments of various High Courts and Supreme Court, the Commissioner could not have exercised Revisional power.
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2019 (1) TMI 1770 - MADRAS HIGH COURT
Reopening of assessment u/s 148 - issues raised on the merits by the writ petitioner are pending before the Income Tax Appellate Tribunal, which is a Second Appeal - HELD THAT:- Though the learned counsel for the writ petitioner argued various points with reference to Section 148 this Court is of an opinion that the present writ petition is filed at the stage when the notice under Section 148 of the Income Tax Act, 1961, was issued. Thereafter, the writ petitioner submitted explanations / objections and the Assessing Officer adjudicated the issues and passed an order. Thus, the question of considering the grounds raised with reference to the notice issued under Section 148 does not arise at this length of time.
Final assessment order passed by the Assessing Officer was taken by way of an appeal to the Appellate Authority and thereafter, to the Income Tax Appellate Tribunal and the said appeal is now pending adjudication.
All the grounds raised in the present writ petition as well as the additional grounds, if any, shall be raised before the Appellate Tribunal by the writ petitioner by producing documents or other materials.
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2019 (1) TMI 1765 - ITAT KOLKATA
Deemed dividend addition u/s 2(22)(e) - Receipt of advances from banks - HELD THAT:- Assessee had to mortgage all his assets to the bank in order to increase the credit facility of the company and therefore, advance taken by the assessee should not be treated as deemed dividend. For that we rely on the judgment of the jurisdictional Kolkata High Court in the case of Pradip Kumar Malhotra vs. Commissioner of Income Tax [2011 (8) TMI 16 - CALCUTTA HIGH COURT] on similar identical facts has held that “for retaining the benefit of loan availed of from the bank, if decision is taken to give advance to the assessee, such decision was not to give gratuitous advance to its shareholder but to protect the business interest of the company. That is, if such loan or advance is given to such share holder as a consequence of any further consideration which is beneficial to the company received from such a shareholder, in such case, such advance or loan cannot be said to a deemed dividend within the meaning of the Act.
Therefore, we do not find any infirmity in the order of ld CIT(A).That being so, we decline to interfere with the order of Id. C.I T.(A) deleting the aforesaid addition.
Reopening of assessment u/s 147 - validity of reopening of assessment - HELD THAT:- Reassessment proceedings were initiated by AO after four years without bringing and tangible material on record. The issue on which the reassessment proceedings were initiated by AO was already existed during the original assessment. Loan interest was paid by assessee and the said interest was claimed and during the original assessment the same was disallowed by AO while passing the original assessment under section 143(3) - in the assessee's case under consideration the reassessment proceedings was based on review of the same set of facts/details which were already on record before AO at the time of completion of original assessment under section 143(3) - AO has merely reviewed the same set of documents and concluded that that there was escapement of tax which is not tenable.
AO cannot reopen a concluded assessment merely on reviewing the documents which are already filed before the AO during the original assessment. See CIT -vs.- Kelvinator of India [2010 (1) TMI 11 - SUPREME COURT]
We quote section 147 1st proviso to conclude that the Revenue has not made out a case of the assessee having not “fully” and “truly” disclosed all particulars at the first instance as per Hindusthan Lever Ltd. vs. R.B. Wadker [2004 (2) TMI 42 - BOMBAY HIGH COURT] - Decided in favour of assessee.
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2019 (1) TMI 1764 - ITAT AHMEDABAD
Accrual of income - undisclosed contract receipt - difference in income declared by the assessee and income represented in form 26AS - Liquidated Damages for belated execution of the contract - Whether should be allowed as an expense from the alleged contract receipt - HELD THAT:- Difference above is representing the liquidated damages deducted by the Gujarat Council of primary education.
AO was very much aware of the address of Gujarat Council of primary education. In case of any doubt, it was the duty of the AO to take the confirmation from the Gujarat Council of primary education. But we note that none of the authorities below has used the powers given under section 133(6) and 131 of the Act to verify the contention of the assessee.
As referred the bank statement of the assessee and found that the exact amount of payment received as approved in the bills was reflecting therein. Thus it is clear that there was nothing received by the assessee over and above the bills approved by the Gujarat Council of primary education.
No allegation of the Revenue that the assessee has received the amount of difference as discussed above outside the books of accounts.
The books of accounts of the assessee during the relevant period were audited, and no defect of whatsoever was pointed out by the auditor of the assessee. There cannot be any addition merely on account of the difference between the income shown by the assessee in its financial statements and income shown in the form 26AS. In holding so, we find support and guidance from the order of Ravindra Pratap Thareja [2015 (10) TMI 1487 - ITAT JABALPUR] wherein held that merely because a payment is reflected in AS-26 and is shown to have been made to the assessee, it cannot be brought to tax in his hands when the said money is not received by the assessee.
Even if the said difference is treated as the income of the assessee, then also it is entitled to claim the same amount of liquidated damage as expenses under section 37(1) resulting no tax liability in the hands of the assessee. See MAZDA LTD. [2017 (9) TMI 1038 - GUJARAT HIGH COURT] - addition deleted - Decided in favour of assessee
Disallowance of payment made to the subcontractor - notices issued under section 133(6) of the Act were not either served to them or there was no compliance - AO held that the payment made by the assessee was not representing the genuine transactions - HELD THAT:- Assessee has furnished the copies of the PAN of all the parties along with the jurisdiction. Thus we are of the view that the AO before holding that the payment made by the assessee is not genuine, he should have verified from the respective AO having jurisdiction over the assessee. But the AO failed to do so.
Assessee has filed the copies of income tax return acknowledgment along with the computation of income in the case of Shri Mahammed Husen Syed
Assessee has made payment to Nimesh builders and Mahammed Husen Syed after deduction of the TDS. The assessee in respect of these parties has also filed the confirmation.
Addition was made by the AO on the ground that notices under section 133(6) of the Act were either not served or served, but no compliance was made - AO was in possession of the PAN of all the parties along with the jurisdiction then before making any disallowance it was the duty of the AO to verify the same from the AOs having jurisdiction over the assessee.
AO did not doubt the reasonableness of the expenses. Thus in our considered view, the other details filed by the assessee cannot be just brushed aside without any cogent reasons to conclude that the expenses claimed by the assessee are not genuine. In view of the above, we reverse the order of authorities below. Accordingly, we set aside the order of learned CIT (A) and direct the AO to delete the addition made - Decided in favour of assessee.
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2019 (1) TMI 1763 - ITAT MUMBAI
Deduction u/s.35(1)(ii) - assessee has made donations to the “The School of Human Genetics and Population Health” - HELD THAT:- As observed by the survey team that this institute in connivance with donors, brokers and accommodation entry providers has indulged in a duvious scheme of tax evasion, under which bogus donations were received from donors and money used to be returned back to the donors in lieu of commission, even while the donor availed of deductions u/s.35(1)(ii) of the Act. The registration of the institution was cancelled by the Government of India with retrospective effect and it was held that the institution has misused the exemption. However, under similar facts and circumstances, various coordinate benches have taken the view that mere admission on the part of the office bearers of the body/trust, the assessee cannot be penalized and the amount of donations claimed by the assessee on account of payment to the said school cannot be denied.
As decided in NARBHERAMVISHRAM GUA VERSUS DCIT, CENTRAL CIRCLE-4 (2) , KOLKATA [2018 (11) TMI 1314 - ITAT KOLKATA] no provision for withdrawal of recognition u/s 35(l)(ii) of the Act. Hence we hold that the withdrawal of recognition u/s 35(l)(ii) of the Act in the hands of the payee organizations would not affect the rights and interests of the assessee herein for claim of weighted deduction u/s 35(1 )(ii) - Decided in favour of assessee.
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2019 (1) TMI 1762 - ITAT AHMEDABAD
Disallowance of Bad Debts written off - allowability of Bad Debts u/s 36(1)(vii) r.w.s. 36(2) - Whether limited to the head of income from business and profession even though such amount earlier taxed as a capital gain? - HELD THAT:- Entries being routed through P&L account does not entitle to be claimed as a bad debts or business loss for the simple reason that irrespective of whether these entries in the revenue field or capital field in terms of requirements of the Companies Act, it is to be routed through P&L account nevertheless.
It is only elementary that what can be allowed as bad debts or business loss is only put in the revenue filed in connection with the business operation.
Substance in the actions of the authorities below and concur with the views so taken by the authorities below that the loss in question cannot be allowed as a bad debts or business loss. Having said that, however, we see merits in the plea of the learned counsel that once it is not in dispute that loss has indeed incurred even if it is not in the revenue field or bad debts, the same should be considered by the AO for being allowed in the capital filed.
AO having rejected the case of the assessee for the loss in the revenue field, it is only corollary thereto that as long as it is a genuine loss, as undisputed facts of the present case clearly indicate, the loss is to be treated as loss in the capital field, and the matter is to be examined further from that angle - this aspect of the matter is not at all examined by the Assessing Officer - we remit this issue to the AO for examination of the alternative claim of the assessee that the loss be allowed as capital loss - Assessee's appeal is allowed for statistical purposes
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2019 (1) TMI 1761 - BOMBAY HIGH COURT
Addition u/s 41 - Cessation of liability - sundry creditors towards whom the assessee had not repaid - Tribunal deleted the addition and noted that the assessee was unable to repay the creditors because of weak financial position and further that the assessee had never completely stopped making repayments - HELD THAT:- It is well settled through series of judgments that merely because a debt has not been repaid for over three years, would not automatically imply cessation of liability. Exhaustion of period of limitation may prevent filing of recovery proceedings in a Court of law, nevertheless it cannot be stated by itself that the liability to repay the amount had ceased.
Going by this logic itself, the Assessing Officer, in our opinion, committed an error invoking Section 41(1) of the Act. Further the assessee had produced additional evidence on record before the Appellate Authority after following the procedure and pointed out that substantial portion of the debt was cleared in later assessment years. - Decided agaist revenue.
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2019 (1) TMI 1760 - KERALA HIGH COURT
Stay of demand - petitioner point out that the petitioner has not raised some of the relevant grounds in the appellate memorandum and permission may be granted to ensure that additional memorandum of grounds is filed by the petitioner in pursuance of the appeals filed as per Exts.P7 and P9 - HELD THAT:- Petitioner may file additional memorandum of grounds in support of their Exts.P7 and P9 appeals as well as Exts.P8 and P10 stay applications, which the petitioner may appropriately file before the 2nd respondent appellate authority without much delay preferably within a period of ten days from the date notified for receiving a certified copy of this judgment.
Additional memorandum of grounds is duly filed by the petitioner as aforestated, then the 2nd respondent appellate authority shall treat those additional grounds as part and continuation of the appeals and stay applications as already filed. 2nd respondent may afford reasonable opportunity of being heard to the petitioner on the matters raised in Exts.P8 and P10 stay applications and orders may be passed on those stay applications without much delay preferably within a period of six weeks from the date of filing of the aforestated additional memorandum of grounds. It is only for the purpose of preservation of the subject matter of the lis, it is ordered that until orders are passed on Exts.P8 and P10 stay applications as aforedirected, further coercive steps for enforcing the impugned order may be kept in abeyance.
Aforesaid directions have been issued by this Court only for the purpose of preservation of the subject matter of the list and shall not be construed in any manner as an opinion on the part of this Court.
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2019 (1) TMI 1757 - ITAT AMRITSAR
Levy of fees charged u/s 234E - intimations issued u/s 200A - HELD THAT:- Finding ourselves as being in agreement with the view taken by the Tribunal in the case of Tata Rice Mills [2017 (10) TMI 1504 - ITAT AMRITSAR] hence are of the considered view that the ACIT-TDS, CPC Ghaziabad in the case before us had erred in levying fees under Sec.234E in respect of tax deducted at source for the four quarters prior to 01.06.2015 in respect of A.Y. 2015-16. We thus not being persuaded to subscribe to the view taken by the CIT(A) who had upheld the levy of fees by the A.O, thus set aside his order and vacate the demand raised by the A.O under Sec.234E in the hands of the assessee for all the four quarters for the year under consideration.
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2019 (1) TMI 1756 - ITAT AHMEDABAD
Unexplained credits u/s 68 - Whether assessee has discharged its onus of proving necessary ingredients of section 68 i.e., the identity, genuineness and credit worthiness of the depositors? - HELD THAT:- As perused the information on record in respect of the aforesaid 17 parties from whom the assessee had claimed cash loans. It is noticed that in respect of some of the parties the assessee has filed only confirmation letters. On perusal of the material on record it is noticed that assessee has not filed complete information i.e. in respect to cash loan from Madhu Kedia it is stated that she has been serving in a company at Kharshila (Rajasthan) however vague address of the lender was given as station Road Kharshila Chhatigarh. As observed that because of incomplete information, it is not feasible for the assessing officer to carry out verification and investigation to prove the genuineness of the transactions. These material facts demonstrate that assessee has failed to prove the basic requirement of section 68 by not establishing the identity, genuineness and creditworthiness of the impugned transaction with relevant basic material.
In the case of Shivam Patel from whom the cash loan was shown the assessee has not furnished any detail.
For the reasons stated above in this order for want of proper relevant material the assessee failed to prove the identity of the persons genuineness of the transactions and creditworthiness of the persons therefore unexplained deposits ( ₹ 158,500+ ₹ 1,68,000 + 13,300) to the amount of ₹ 3,39,800 is treated as unexplained and added to the total income of the assessee.
Four persons from whom the assessee has claimed loan of ₹ 66,500/- the assessee has furnished confirmation letters and PAN of the depositors. The assessing officer had not allowed the claim of the assessee on the ground that copies of return of income, bank statement , source of income were not furnished to prove the identity of the person, genuineness of the transactions and creditworthiness of the depositors. We observe that in these four cases the assesse has taken loan of Rs. (18500, 10,000, 19000 & 19000) totaling to ₹ 66,500/- and the PANs of the depositors have been furnished. In the cases of these four persons, assessing officer should have made further verification as the identity and addresses of the persons were available in the PAN of such persons. Considering these facts, we allow the claim of the assessee in respect of the loan amount ₹ 66,500/-.
In respect of unsecured loan of ₹ 98,000/- claimed to be received from Shri Harish Soni, it is noticed that the aforesaid person has confirmed the granting of unsecured loan to the extent for ₹ 49,000/- only as against ₹ 98,000/- claimed by the assessee.
In respect of Rashmin Patel the assessee has claimed loan advance of ₹ 1,97,000/- and ₹ 49000/ respectively. However, the said party has not confirmed the advance to the amount of ₹ 49,000/-
After considering the contention of the assessee that the depositors have inadvertently mentioned the wrong amount in the confirmation letters we consider it appropriate to restore this issue to the file of the assessing officer for deciding afresh after examination of the information to be produced by the assessee.
In respect of advance of ₹ 1,81,000/- form Shri Harin Pandit Soni in cash against sale of car in support of which the assessee has submitted a confirmation letter from Harish P Soni showing cash receipt of ₹ 1,81,000/- on 15/07/2010 and payment back on 05-03-2011 due to cancelation of deal. It is noticed that assessing officer has not disproved these material fact with any cogent material and disallowed the impugned amount on assumption basis, therefore, the claim of the assessee on this issue is allowed. - Decided partly in favour of assessee.
Disallowance of expenses - assessee has failed to produce the books of accounts and supporting evidences to substantiate the claim of expenses - HELD THAT:- The assessee has claimed various expenses to the amount of ₹ 2,01,357/- against the gross income of ₹ 6,60,768/-. In the absence of supporting details, the assessing officer has disallowed 100% of these expenses, however, the ld. CIT(A) has restricted the disallowance to the extent of 50% of such expenses. After considering the gross income and nature of business of the asssessee, we observe that it would be reasonable to disallow 25% of such expenses for want of proper supporting material in the case of assessee, therefore, we restrict the disallowance to the extent of ₹ 5,04,00/-. Accordingly, the appeal of the assessee on this issue is partly allowed.
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2019 (1) TMI 1740 - ITAT MUMBAI
Rectification of mistake - Disallowance u/s 14A read with Rule 8D to the Book Profit while computing the MAT u/s 115JB - disallowing interest being proportionate interest expenditure which was alleged to be incurred towards extending interest free loans and advances to sister concerns - disallowance of employees contribution to Provident Fund as the payment in respect of the same was not made within the due date specified in the Act - disallowing expenses by alleging the same to be prior period expenditure have not been decided by the Tribunal, which amounts to mistake apparent from record - Accordingly, we recall the order with a limited scope of deciding the ground 5,6,7 & 8.
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2019 (1) TMI 1739 - ITAT INDORE
Late fees u/s 234E - processing the statement of tax deducted at source u/s 200A - amendment brought in the Finance Act 2015 w.e.f. 01.06.2015 paved the way for levying the fee u/s 234E of the Act in the statement processed u/s 200A - HELD THAT:- Following the decisions given by us in the case of State Bank of India, Genda Chowk and others [2018 (12) TMI 1229 - ITAT INDORE] and M/s. Madhya Pradesh Power Transmission Ltd. & others [2018 (12) TMI 1323 - ITAT INDORE] are of the opinion that Ld. CIT(A) erred in confirming the levy of late fees u/s 234E of the Act by the assessing officer. Accordingly findings of ld. CIT(A) in all these 93 appeals are set aside and revenue is directed to delete the levy of fees u/s 234E of the Act in all these 93 cases. Thus, common issue raised in these bunch of appeals is decided in favour of the assessee.
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2019 (1) TMI 1732 - ITAT CHENNAI
Product development expenses incurred in foreign currency - CIT(A) has taken a view that expenditure for development of products cannot be reduced from export turnover as against the view taken by the Assessing Officer otherwise - HELD THAT:- CIT(A) has deleted this addition by following the Tribunal orders by the time the decision of Special Bench in M/S ZYLOG SYSTEMS LIMITED VERSUS THE INCOME TAX OFFICER [2010 (11) TMI 76 - ITAT, CHENNAI] has also come, which confirms the finding of the ld. CIT(A) that development of product is different from rendering of technical services and therefore, it is not required to be excluded from the export turnover. Consequently, by respectfully following the Special Bench decision(supra)we cannot allow the grounds raised by the Revenue.
Reopening of assessment u/s 147 - HELD THAT:- We are in agreement with the ld. CIT(A) as the Assessing Officer has formed the opinion that income to that extent has escaped assessment.
Expenses claimed by the assessee with regard to taking over of contracts with clients alongwith their business as claimed by the assessee (at 1/5th) - CIT(A) failed to note that the expenditure incurred by the assessee is for the purpose of warding of competition and hence the same is to be disallowed as capital in nature - HELD THAT:- We find that the facts of this issue are incomplete and further investigation of facts regarding application of 35DD or otherwise is required. The Tribunal being the final fact finding body, it becomes imperative that the issue should be churned afresh to cull out the exact facts of an issue. Hence, we restore this issue to the file of the Assessing Officer. The decisions relied on by both the parties on the issue shall be taken into consideration by the Assessing Officer. The Assessing Officer shall decide the issue anew after giving opportunity of hearing to the assessee. The grounds raised by the Revenue are allowed for statistical purposes.
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2019 (1) TMI 1723 - MADRAS HIGH COURT
Disallowance u/s 14A - expenditure incurred in relation to the income not includible in total income - as urged that in the absence of any actual dividend income earned by the assessee during the year in question, there was no question of any disallowance of debenture interest and finance charges to be made u/s 14A - HELD THAT:-There is no merit in this appeal filed by the Revenue and the entire edifice of the argument of the Revenue is without any foundation. The assessing authority misapplied the provisions of section 14A of the Act, which, in clear terms, stipulates that no deduction can be allowed in respect of expenditure incurred in relation to income, which does not form part of total income under the Act.
In view of the clear fact found in the present case that the assessee did not earn any exempted income or dividend income on the equity shares held by it during this year, there was no question of disallowing any part of the debenture interest or finance charges, since the provisions under section 14A of the Act were not attracted at all. - Decided in favour of assessee
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2019 (1) TMI 1722 - ITAT AMRITSAR
Penalty levied u/s 271(1)(c) - Defective notice - non specification of charge - HELD THAT:- As decided in AMAN MEHTANI VERSUS DCIT CENTRAL CIRCLE-1 FARIDABAD [2017 (11) TMI 1759 - ITAT DELHI] Assessing Officer was not sure under which provisions of Section 271 of the Income Tax Act, 1961, the assessee is liable for penalty. The issue is squarely covered by the decision of the Hon'ble Supreme Court in case of M/s SSA’ Emerald Meadows [2016 (8) TMI 1145 - SC ORDER] - Decided in favour of assessee.
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2019 (1) TMI 1721 - ITAT AMRITSAR
Penalty levied u/s 271(1)(c) - Defective notice - non specification of charge - HELD THAT:- As decided in AMAN MEHTANI VERSUS DCIT CENTRAL CIRCLE-1 FARIDABAD [2017 (11) TMI 1759 - ITAT DELHI] Assessing Officer was not sure under which provisions of Section 271 of the Income Tax Act, 1961, the assessee is liable for penalty. The issue is squarely covered by the decision of the Hon'ble Supreme Court in case of M/s SSA’ Emerald Meadows [2016 (8) TMI 1145 - SC ORDER] - Decided in favour of assessee.
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2019 (1) TMI 1720 - ITAT DELHI
Condonation of delay - HELD THAT:- As perused the facts stated by the assessee in its application for condonation of delay which is also supported by the affidavit of the authorised officer and it is apparent that no sooner did the assessee came to know about the assessment order it took immediate steps for filing of the appeal. It is also fact that assessee is not benefited by causing delay in filing of the appeal. As relying on MST. KATIJI AND OTHERS [1987 (2) TMI 61 - SUPREME COURT] we condone the delay in filing the appeal.
Existence of permanent establishment - Income accrued in India - taxability of offshore supply and disallowance of expenses on account of non deduction of tax - HELD THAT:- Identical issue has been examined in case of the assessee with respect to the same contract by the coordinate bench in earlier years wherein it has been held that the assessee has a permanent establishment in India and the activities carried on to the extent of the project office of the assessee is required to be attributed as income accruing and arising to the assessee in India. To this extent, the order challenged by the assessee of the coordinate bench before the honourable High Court has been upheld.
As relying on own case [2013 (12) TMI 1594 - UTTARAKHAND HIGH COURT] it is apparent that for that assessment year also the existence of the permanent establishment was upheld and only for the purpose of the profit attribution the matter was set aside to the file of the learned assessing officer.
Attribution of income where the learned assessing officer has upheld 25% of the gross revenue build by the appellant during the relevant previous year in respect of activity carried out outside India - HELD THAT:- As in the earlier years the coordinate bench set aside the issue back to the file of the learned assessing officer as well as for assessment year 2007 - 08 and 2008 - 09 the issue has been set aside to the file of the learned assessing officer for the purpose of determining the profit attribution, we also respectfully following the decision of the coordinate bench as well as the honourable High Court set aside the issue back to the file of the learned assessing officer with a direction to the assessee to submit the profit attribution report with respect to assessment year 2009 - 10 and 2010 - 11 containing the exhaustive functions performed by the project office in relation to the offshore supply. The assessee is also directed to produce the site of the sale of goods with respect to the supply. Assessee is also directed to produce all the documents as decided by the learned assessing officer duly translated in English language along with the invoices and the nature of activities carried out by the assessee in accordance therewith. Accordingly ground number 4 and 5 of the appeal of the assessee is allowed with above direction.
Disallowance under section 40 (a) (i) and (ia) - amount represents the reimbursement of the expenditure - HELD THAT:- As the above amount is reimbursement there is no requirement of tax deduction at source on the above sum. Even otherwise the assessee is a non-resident however the recipient of the income is a resident company. Therefore if the recipient company has incorporated the above amount in its income and assessee fulfils the necessary condition as laid down under section 201 (1) of the income tax act the above amount cannot be disallowed. In view of this we set aside these disallowance back to the file of the learned assessing officer with a direction to the assessee to produce necessary detail with respect to the above company. The AO may examine the same and if the necessary conditions are satisfied in terms of the retrospective amendment made by the finance act 2012, the disallowance may be deleted.
Amount paid to M/s Terras transporters PTE Ltd Singapore - assessee has claimed that is the recipient of the income is a resident of Singapore and according to article 8 of the double taxation avoidance agreement the income is chargeable to tax only in Singapore and not in India - HELD THAT:- Assessee has not addressed article 24 of the double taxation avoidance agreement which is limitation of the benefit available to the resident of Singapore company. In view of this the disallowance with respect to above payment is also set aside to the file of the learned assessing officer with a direction to the assessee to prove before the assessing officer that recipient of the income is eligible for benefit of double taxation avoidance agreement with respect to article 8 and 24 of the double taxation avoidance of India and Singapore. Accordingly ground number 6 of the appeal of the assessee set aside to the file of the learned assessing officer.
Adhoc disallowance of the expenditure incurred under the head construction expenses - HELD THAT:- As assessee could not produce the bills, in the interest of the justice 1 more opportunities given to the assessee to produce the necessary bills as submitted by the learned authorised representative before the assessing officer. The learned assessing officer may examine the details in the bills produced by the assessee, if any, and then decide the whole issue afresh. Accordingly ground number 7 -8 of the appeal of the assessee are set aside to the file of the learned assessing officer. Accordingly these grounds are allowed with above direction.
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