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Income Tax - Case Laws
Showing 361 to 380 of 506 Records
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2021 (11) TMI 348 - ITAT KOLKATA
Delayed employee's contribution to provident fund - Whether same has been paid before filing of the return? - HELD THAT:- This issue is squarely covered by the decision of M/s. Vijay Shree Limited [2011 (4) TMI 63 - ITAT KOLKATA] which has been further followed in the case of Harendra Nath Biswas [2021 (7) TMI 942 - ITAT KOLKATA] wherein as held since assessee had deposited the employees contribution before filing of Return of Income - Decided in favour of assessee.
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2021 (11) TMI 347 - ITAT AHMEDABAD
Exemption claimed u/s 54 denied - assessee has not filed any documentary evidence establishing the fact that he has purchased any property within the time prescribed under the provisions of section 54F of the Act except the agreement for purchase of the property - whether the assessee has purchased the property within a period of 2 years from the date of transfer? - HELD THAT:- As perused the bank statement of the assessee name of the builder was appearing showing the payment of ₹ 50,51,000/- within the financial year under consideration. Moving further, the flat was handed over to the assessee after the expiry of 2 years which contravenes the provisions of section 54 of the Act. However we find that the Mumbai tribunal in the case of Kishore H. Galaiya [2012 (9) TMI 40 - ITAT, MUMBAI] has held that once the assessee booked flat with builder and started making payment of instalment - builder was to handover the possession of the flat to assessee on completion of construction. Then such act of the assessee is to be considered as construction of new residential house not the purchase of property. Accordingly the time limit will extend to 3 years from the date of transfer of property to complete the construction.
We hold that the assessee cannot be denied the benefit of exemption available to him under the provisions of section 54/54F of the Act on account of the delay on the part of the builder.
Whether the assessee has deposited a sum of ₹ 14 lakhs in the capital gain account scheme? - AR, at the time of hearing has not brought anything on record establishing the fact that the impugned amount represents the money deposited under the capital gain account scheme. However, the revenue has also not conducted any enquiry to disprove the contention of the assessee based on the cogent materials. Nevertheless, in the interest of justice and fair play we are inclined to remit this issue to the file of the AO to verify whether the impugned amount represents the deposits made under the capital gain account scheme or not.
Assessee was the co-owner in the property along with his brother. The claim of the assessee’s brother by the same AO was accepted and the deduction/exemption was allowed for the investment made by the co-owner with M/s Sharnam builders for the purchase of the property. In such a situation, we are of the view that the AO was to maintain the consistency. AO cannot reject the claim of the assessee whereas in the case of the brother of the assessee in the identical facts and circumstances, the same was accepted. Accordingly on this count, we are not convinced with the finding of the authorities below. Hence, we set aside the finding of the learned CIT (A) and direct the AO to delete the addition made- Appeal of the assessee is partly allowed for the statistical purposes.
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2021 (11) TMI 346 - ITAT AHMEDABAD
Penalty u/s 271E - violation of the provisions of section 269T - amount of loan was reduced by way of passing the journal entry - immunity under provisions of section 273B - HELD THAT:- As there appears no dispute with respect to the accounting entries made by the assessee in the accounts which has reduced the loan liability by ₹25 lakhs stood in the name of Shri Milap Jadeja. However, we find that the genuineness of the transaction was not accepted by the learned CIT (A) - CIT (A) held that there was no documentary evidence filed by the assessee justifying that the assessee has purchased any piece of land.
On the strength of the principles laid down in the case of CIT vs. Bombay Conductors & Electricals Ltd [2008 (2) TMI 114 - GUJARAT HIGH COURT] the assessee cannot be given the immunity from the penalty provisions as specified under provisions of section 271E of the Act. It is for the reason that the genuineness of the transaction has not been proved by the assessee by filing the necessary details in establishing the fact that the adjustment entry was made by the assessee for the purchase of the land. In the absence of, the necessary details we are not able to persuade ourselves with the contention of the learned AR for the assessee.
Entries were duly reflected by the assessee in accounts of the parties involved in the impugned transaction of loan and purchase of the land. In our considered view, the genuineness of the transactions for the purchase of land cannot be proved without filing the necessary details. However, in the interest of justice and fair play, we are inclined to give one more opportunity to the assessee to prove the genuineness of the transaction. If it is proved, there will not be any penalty under the provisions of section 271E of the Act. Accordingly, we are setting aside the issue on hand the file of the AO for fresh adjudication as per the provisions of law. Hence the ground of appeal of the assessee is allowed for the statistical purposes.
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2021 (11) TMI 331 - TELANGANA HIGH COURT
Violation of the principles of natural justice - Availing remedy of appeal - Petitioner submits that it is a settled proposition of law that when there is violation of principles of natural justice, the aggrieved party can invoke the writ jurisdiction of the High Court under Article 226 of the Constitution of India notwithstanding availability of alternative remedy - HELD THAT:- Adverting to the facts of the present case, we are not convinced that it is a case of no notice or no hearing. Whether opportunity of hearing granted and availed was adequate or reasonable would depend upon the facts and circumstances of each case. There cannot be any straight jacket formula. If as the petitioner contends the opportunity of hearing was inadequate which affected his right to make a proper response, certainly the same can be gone into by the appellate authority, since it may require examination of facts which we are not inclined to do in exercise of our writ jurisdiction.
Petitioner is relegated to the forum of appeal before the first appellate authority i.e., Commissioner of Income Tax (Appeals) under Section 246A of the Income Tax Act, 1961. To enable the petitioner to effectively avail the remedy of appeal, we direct that for the next 30 days from today, no coercive steps shall be taken by the respondent against the petitioner in terms of the impugned assessment order dated 04.09.2021. It would be open to the petitioner to file necessary application either before the assessing officer or before the appellate authority for interim stay. Needless to say, if such application is filed, the same shall be considered on its own merit and in accordance with law. We express no opinion.
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2021 (11) TMI 330 - KERALA HIGH COURT
Penalty u/s 274 read with Section 270 - Appeal against the assessment order is pending - Scope to pursue the statutory remedies available - HELD THAT:- Order of assessment was passed on 26.03.2021 and the quantum of income for the relevant assessment year has already been assessed. Once the said assessment is completed, there is no prohibition in initiating proceedings for penalty under Section 274 read with Section 270A of the Act.
Merely because an appeal against the said assessment order is pending consideration, the same is not a reason to defer initiation of proceedings for penalty under Section 270A of the Act. If the contention of the petitioner is accepted, the same will unnecessarily delay the proceeding under Section 270A of the Act which is not contemplated under the scheme of the statute.
In matters of taxation, this Court would be loath to interfere especially when statutory forums are available to redress the grievance of the assessees. The parameters when interference can be made by this Court under Article 226 has been restated even recently in the decision in Assistant Commissioner of State Tax v. Commercial Steel Ltd. [2021 (9) TMI 480 - SUPREME COURT] The case of the petitioner does not come within those parameters.
If the petitioner is aggrieved by the order of penalty imposed, statutory remedies are available. The reasons put forth by the petitioner to overcome the statutory remedy of appeal is not tenable. Hence, the writ petition does not merit consideration and is dismissed leaving open the liberty of the petitioner to pursue the statutory remedies available.
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2021 (11) TMI 329 - ITAT BANGALORE
Disallowance being employees’ contribution to PF and ESI - scope of amendment to section 36(1)(va) and 43B - HELD THAT:- Since, the assessment year concerned in this case being 2018-2019, we hold that the amendment to section 36(1)(va) and 43B of the I.T.Act by Finance Act, 2021 does not have application - direct the A.O. to delete the disallowance being employees’ contribution to PF and ESI, since the same has been paid prior to the due date of filing of the return u/s 139(1).
Disallowance of GST - An identical figure has been disallowed by the assessee voluntarily in the return of income filed u/s 40A(3) of the I.T.Act. If an identical amount has been disallowed inadvertently u/s 40A(3) then further disallowance u/s 43B of the I.T.Act by the A.O. would amount to double taxation. Therefore, restore this issue to the files of the A.O - AO is directed to examine whether the assessee has voluntarily made disallowance of GST since the same was not paid before the due date of filing of return u/s 139(1) of the I.T.Act. If the assessee has voluntarily made disallowance of the said amount (though inadvertently u/s 40A(3) the same needs to be deleted because the disallowance by A.O. u/s 43B of the I.T.Act tantamount to double taxation, which is impermissible in law. With these observations, I direct the A.O. to examine the issue afresh and pass an order after affording a reasonable opportunity of hearing to the assessee
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2021 (11) TMI 328 - ITAT PUNE
Penalty u/s. 271B - non filing the tax audit report - reasonable cause for not obtaining the audit report - HELD THAT:- Whether the explanation offered in response to the show cause notice constitutes a reasonable cause for not obtaining the audit report. The explanation of the appellant is that it was under bona-fide belief that there is no requirement under law to obtain the audit report u/s.44AB as its income was exempt u/s.80P(2) of the Act and its books accounts were subject to audit by Government Auditor. This explanation was not found to be false by the lower authorities. The lower authorities merely rejected the explanation and proceed with levy of penalty.
There is nothing on record to doubt the explanation offered by the appellant society. Therefore, when the assessee entertained bona-fide belief that its account were not subject to audit u/s. 44AB, it would certainly constitute reasonable cause for not obtaining the audit report and, therefore, the question of imposing of the penalty u/s. 271B does not arise. Further, we find audit report under the provisions of Maharashtra Co-operative Society was obtained only 27th June, 2017 and, therefore, occasion for filing the tax audit report along with the return of income does not arise. In the circumstances, we find that the lower authorities was not justified in confirming the levy of penalty and accordingly we direct the Assessing Officer to delete the penalty levied u/s. 271B - Decided in favour of assessee.
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2021 (11) TMI 327 - ITAT PUNE
Revision u/s 263 by CIT - HELD THAT:- Section 263 of the Act confers power on the CIT to revise an assessment order, subject to certain conditions. Instantly, we are confronted with a situation in which the revision was initiated on the basis of the AO sending a proposal to the CIT and not on the CIT suo motu calling for and examining the record of the assessment proceedings and thereafter considering the assessment order erroneous and prejudicial to the interests of the revenue. AO recommending a revision to the CIT has no statutory sanction and is a course of action unknown to the law. If AO, after passing an assessment order, finds something amiss in it to the detriment of the Revenue, he has ample power to either reassess the earlier assessment in terms of section 147 or carry out rectification u/s 154 of the Act. He can’t usurp the power of the CIT and recommend a revision.
No overlapping of powers of the authorities under the Act can be permitted. As the revision proceedings in this case have triggered with the AO sending a proposal to the ld. CIT and then the latter passing the order u/s 263 of the Act on the basis of such a proposal, we hold that it became a case of jurisdiction deficit resulting into vitiating the impugned order.
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2021 (11) TMI 326 - ITAT JAIPUR
Rejection of application seeking registration u/s 12AA - AR submitted that the appellant is a company incorporated under the provisions of Section 8 of the Companies Act, 2013 and promoted by IIS (Deemed to be University) Trust which is also solely engaged in imparting education having necessary approvals u/s 12AA - main object of the appellant company is to set up high class incubation facility to foster entrepreneurial culture - HELD THAT:- Merely because the assessee company has been registered u/s 8 of the Companies Act, we are not saying that the same by default mean that it shall be eligible for grant of registration u/s 12AA of the Act as the legislation is currently not worded to support the said proposition.
Where another arm of the Government administering the company law legislation has examined through its designated authority the objects and intended application of profits and has granted the registration to the assessee company as section 8 company, the said registration allows the assessee company to take necessary steps to seek separate and independent registration u/s 12AA and where such an approval is placed on record, as part of assessee’s application u/s 12AA and supporting documentation as required under law, it shall provide an additional level of comfort to the ld CIT(E) in terms of examining the true intent behind its objects of setting up/incorporation and also for the purposes of examining compliance of other laws material for achievement of its objectives under section 12AA(a)(ii) of the Act.
The appellant company’s application seeking registration u/s 12AA for undertaking the aforesaid objects of general public utility deserve to be accepted as falling within the purview of charitable purpose u/s 2(15) of the Act. In terms of examining the allowability of benefit u/s 11, 12 r/w section 13, it is a settled position that the same can be examined on year to year basis by the Assessing officer and he shall be free to take action, as per law including under section 13(8) as so provided in the statue, during the course of regular assessment proceedings. We accordingly direct the ld CIT(E) to grant approval to the assessee company u/s 12AA of the Act - Appeal of the assessee company is allowed.
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2021 (11) TMI 325 - ITAT LUCKNOW
Penalty u/s 271(1)(c) - Defective notice u/s 274 - whether for concealment of income or for furnishing of inaccurate particulars of income? - HELD THAT:- The notice has specified both charges i.e. concealment of income and furnishing of inaccurate particulars of income and has not specified the charge for which action has been taken against assessee. The non specific nature of notice indicates non application of mind by AO. It is a settled position of law that if notice u/s 274 read with 271(1)(c) is not specific about the charge or limb under which penalty is being levied u/s 271(1)(c) of the Act, then any penalty levied on the basis of such notice is bad in law and liable to be deleted.
The law mandates that the authority, who is proposing to impose penalty, shall be certain as to what basis penalty is being levied and notice must reflect that specific reason so that assessee, to whom such notice is given, can well prepare himself regarding defence, which he likes to take to support his case. This is even enshrined in the principles of natural justice and as has been upheld by Hon'ble Apex Court and other High Courts.
In the present cases, unlike in the case of Sundram Finance Ltd [2018 (5) TMI 259 - MADRAS HIGH COURT] the assessee has taken this argument before learned CIT(A) and before us also whereas in Sundram Finance Ltd., the issue was raised for the first time before Hon'ble Supreme Court therefore, this case law is distinguishable from the facts of the present cases and therefore, is not applicable
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2021 (11) TMI 324 - ITAT SURAT
Deduction 10AA(9) - Interest and remuneration to partners - Claim allowable on net income or gross income - AO while passing the assessment order restricted the deduction under section 10AA by making allowance of remuneration to partners and interest @ 12% on their capital contribution - CIT(A) deleting the disallowance by invoking provisions of Section 80(IA)(10) r.w.s. 10AA(9) in giving deductions of interest on Capital and Remuneration to partners of the assessee firm after finding that the assessee had taken undue benefits of Section 10AA by not claiming interest on Capital and Remuneration to partners which resulted increase in exempted profit of the assessee - HELD THAT:- CIT(A) while granting relief to the assessee followed the decision of Alidhra Taxspin Engineers [2017 (5) TMI 1684 - GUJARAT HIGH COURT] wherein it was held that mere incorporation of interest on partner’s account and remuneration does not signify that same are mandatory in nature
CIT(A) also considered the CBDT’s Circular No.739 of 1996 dated 25.03.1996 wherein it has been clarified that no deduction under section 40(b)(v) of the Act is admissible under partnership deed either specified the amount of remuneration payable to each individual working partners or laid down the manner quantify of such remuneration.
In the present case, the clauses of partnership deed specifically restrict not to charge payment of interest to partners on their capital contribution as well as remuneration. We find that ld. CIT(A) has decided the issue after proper appreciation of fact and following the decision of Alidhra Taxspin Engineers (supra). Appeal raised by the revenue are dismissed.
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2021 (11) TMI 323 - ITAT JAIPUR
Excess stock found during the search - one of the partner of the firm categorically admitted the excess stock in the statements recorded during the search u/s 132(4) of the IT Act - CIT- A deleted the addition - HELD THAT:- We found that in search proceedings the authorized officer found no excess stock in quantity and no excess stock in quantity was determined. Total value of stock of all the items of gold jewellery and gold jewellery studded with precious semi-precious stones was determined by the valuer at the prevailing rate of gold and precious stones as on 28-01-2016 i.e. as on the date of search.
Correct excess value of closing stock as on the date of search works out to ₹ 2,83,49,302/- in place of ₹ 5,64,20,450/- determined and mentioned in the statement recorded u/s 132 (4) - statement of assessee recorded u/s 132 (4) is wrong to the above extent i.e. instead of correct excess stock of ₹ 2,83,49,362/- the wrongly calculated excess stock of ₹ 5,64,20,450/- by authorized officer in search was admitted as excess stock as additional income of the year and surrendered to tax. Thus there is no retraction but what assessee firm did is simply to correct calculation mistake and accepted his statement u/s 132 (4) in toto.
AO is wrong in not allowing gross profit margin @ 9.50% which was claimed as per last year G.P. rate. The assessee has not specifically asked for allowance of discount element but as a general trade practice referred to bargaining discounts being allowed which Ld. A.O. not accepted. As for reduction of G.P. margin from market value of stock the. A.O. has not stated any thing in assessment order which is allowable in law to assessee and in fact the authorized officers in search and A.O. in assessment themselves in various similar cases (Bhura Mal Raj Mal Surana P. Ltd., Bhuramal Raj Mal Surana (Mfg.). Chandra Kumar Surana A.Y. 2015-16 passed by same AO - appeals heard by ld. CIT(A)-iv, Jaipur has allowed deduction of margin of G.P. from valuation made by approved valuer. A.O. is therefore wrong and incorrect in law in not allowing the said deduction of said G.P. margin of 9.50% from valuation of stock done by valuer at market value on the date of search. The allowance of said G.P. margin will result in excess stock as on date of search as given above which assessee declared as its additional income in return filed and paid tax.
AO has not held that there was any difference in quantity of stock as per valuation report and as per hooks of accounts. There can be no addition simply on the basis of valuation unless excess quantity of stock is found. If such addition is somehow made on account of said valuation of stock and sustained in assessment than credit of same has to be allowed in year end while computing profit at year end which has not been allowed and as assessing officer accepted declared closing stock as on 31-3-2016 in books of accounts the addition of difference in value as on 28-01-2016 will got set off the assessee carried forward the closing stock of this year end as declared in books of accounts as on stock for next year. A.O. neither allowed credit of difference while accepting closing stock at year end but accepted closing stock declared by the assessee which has been taken as op. stock in next year. In next year also no credit allowed for enhanced stock and even if it is done it will be revenue neutral exercise. Considering the totality of facts and circumstances, we are of the view that the ld. CIT(A) has passed a well-reasoned order and no new facts or circumstances have been brought before us by the ld DR in order to controvert or rebut the factual findings so recorded by the ld. CIT(A), therefore, we see no reason to interfere into or deviate from the findings so recorded by the ld. CIT(A) qua this issue and we uphold the same.
A.O. has not held that there was any difference in quantity of stock as per valuation report and as per hooks of accounts. There can be no addition simply on the basis of valuation unless excess quantity of stock is found. If such addition is somehow made on account of said valuation of stock and sustained in assessment than credit of same has to be allowed in year end while computing profit at year end which has not been allowed and as assessing officer accepted declared closing stock as on 31-3-2016 in books of accounts the addition of difference in value as on 28-01-2016 will got set off the assessee carried forward the closing stock of this year end as declared in books of accounts as on stock for next year - A.O. neither allowed credit of difference while accepting closing stock at year end but accepted closing stock declared by the assessee which has been taken as op. stock in next year. In next year also no credit allowed for enhanced stock and even if it is done it will be revenue neutral exercise. CIT(A) has passed a well-reasoned order and no new facts or circumstances have been brought before us by the ld DR in order to controvert or rebut the factual findings so recorded by the ld. CIT(A), therefore, we see no reason to interfere into or deviate from the findings so recorded by the ld. CIT(A) qua this issue and we uphold the same. - Decided against revenue.
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2021 (11) TMI 322 - ITAT SURAT
Assessment u/s 153A - Addition on account of alleged suppressed profit at Unit-1, Vapi and alleged exaggerated profits at Unit-11, Baddi - HELD THAT:- The figures for the three years as submitted by the production manager match with the figures submitted by the assessee independently. The department has curiously alleged suppression of sales, just on the basis of change of Units (without assigning any basis) of the figures supplied by the assessee. CIT(A) observed that all these data has been submitted to AO during assessment proceedings. These have been reproduced in the assessment order. The same difference in Units (strips vs. numbers of capsules/tablets) exists for the other four years also vis-a-vis the sale record.
If the numbers of capsules/tablets in lakhs as given by the assessee are compared with strips in the sale data for other years also; same absurd and erroneous additions could have been made for these years too. Therefore, ld CIT(A) held that this demonstrates the arbitrariness and travesty of the approach of the AO.
Not an iota of evidence of any excess raw material purchase, out of books expenses, labour and other manufacturing expenses or receipt of unaccounted sales proceeds, has been found or brought on record even after a detailed search. The additions for alleged suppression have been made purely on selective misinterpretation, without dealing with the explanations/clarification of the production manager and the assessee, completely ignoring the record including audits/inspection by third party and in absence of any incriminating evidence.That being so, we decline to interfere with the order of Id. CIT(A) in deleting the aforesaid additions. His order on this addition is, therefore, upheld and the grounds of appeal of the Revenue are dismissed.
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2021 (11) TMI 321 - ITAT MUMBAI
Bogus LTCG - unexplained credit u/s 68 - HELD THAT:- Backed by the substantial documentary evidence filed by the assessee which beyond doubt substantiates the genuineness of the transaction of purchase and sale of shares of M/s Splash Media Ltd. by her, we are afraid that the unsubstantiated claim of the A.O that the assessee had converted her unaccounted money by taking fictitious LTCG in a pre-planned manner does not merit acceptance. Our aforesaid view that in the absence of any evidence, whatsoever, to allege that money had changed hands between the assessee and the broker or any other person, or that some person provided the entry to convert unaccounted money for getting benefit of LTCG, the uncorroborated claim of the department that the assessee had taken recourse to a structured transaction for evading taxes and laundering her unaccounted money in the garb of exempt LTCG u/s 10(38) of the Act cannot be accepted is supported by the judgment in the case of Pr. CIT & Ors. Vs. Krishna Devi & Ors. [2021 (1) TMI 1008 - DELHI HIGH COURT].
There is no material with the department which would falsify the assessee’s claim of having carried out genuine purchase/sale of shares of M/s Splash Media Ltd., we are unable to persuade ourselves to concur with the disallowance of the assessee’s claim for exemption of LTCG u/s 10(38) of the Act. As we have held that the assessee had carried out genuine transaction of purchase/sale of shares, therefore, as a consequence thereto the addition u/s 69C of commission expenditure would also meet the same fate and is accordingly vacated. - Decided in favour of assessee.
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2021 (11) TMI 320 - ITAT MUMBAI
Bogus LTCG - unexplained credit u/s 68 - HELD THAT:- There is no material with the department which would irrefutably falsify the assessee’s claim of having carried out genuine purchase/sale of shares of M/s Sunrise Asian Limited, we are unable to persuade ourselves to concur with the disallowance of the assessee’s claim for exemption of LTCG u/s 10(38) of the Act. As we have held that the assessee had carried out genuine transaction of purchase/sale of shares, therefore, as a consequence thereto the addition u/s 69C of commission expenditure would also meet the same fate and is accordingly vacated.
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2021 (11) TMI 319 - ITAT INDORE
Assessment of trust - Anonymous donation addition u/s 115BBC(3) - assessee society was established on 12.04.1996 as granted registration u/s 12AA(1)(B)(i) AND also granted approval u/s 80G(5)(vi) - HELD THAT:- Assessee had provided complete details of name and address of the donors giving alleged donation and complete detail of all such donation are entered in the regular books of accounts which have been audited, the book results have not been disputed by the Revenue Authorities except for the alleged donation and further where the assessee had provided identity proof of most of persons which were summoned by the ld. AO and have also filed the confirmation letters from such donors and the assessee society being undisputedly carrying out the charitable and educational activities, applying the funds received through voluntary contribution for achieving the object of the society and also providing free medical facility from its 1200 bed facility hospital running consistently in the Rural area, near Indore, find no infirmity in the finding of Ld. CIT(A) appreciating the fact of the case, details of name and address of 27746 donors from A.Y. 2013-14 & 38625 donors for A.Y. 2015-16 alleged to have given donation of ₹ 14,06,75,754/- for A.Y. 2013-14 and ₹ 17,23,85,000/- for A.Y. 2015-16 and also rightly holding that the assessee has provided the details of donation of ₹ 4,35,00,000/- received from other persons giving their name address and Permanent Account No.. Therefore, the alleged sum undisputed before us by the revenue for A.Y. 2013-14 & 2015-16 cannot be held to be “anonymous donation”.
Difference in interest income as per the form 26AS and offered to tax - HELD THAT:- Under the given circumstances wherein there are different claim by both the sides on the same issue i.e. 26AS form available on the wave site of the Income Tax Department then in such situation Ld. CIT(A) has rightly restored the matter to the Ld. Assessing Officer to carry out necessary reconciliation with the help of the documents to be placed by the assessee society before Ld. AO and the documents relied on by the ld. Assessing Officer to make the impugned addition. Thus, no interference is called for in the finding of Ld. CIT(A) as the ld. Assessing Officer can decide accordingly on the basis of 26AS statement for A.Y. 2013-14 available on the wavesite of the Income Tax and the explanation/reconciliation given by the assessee with respect to the interest on Bank FDR.
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2021 (11) TMI 318 - ITAT INDORE
Addition u/s 68 - unexplained share application money - undisclosed income - As per AO assessee failed to prove the identity of the alleged lenders, the credit worthiness of the lenders and the genuineness of the transactions - HELD THAT:- In the course of assessment proceedings, confirmation letters were filed, affidavit of directors are also filed. The full addresses of the companies were also given - bank accounts of the creditors were also furnished. In the said bank accounts, there are also no cash deposits by the creditors before issuing cheque to the assessee. No cogent material or any other incriminating material was found which showed that it is the assessee’s money which has gone to the aforesaid share applicants in cash and then it came back to the assessee in the form of share capital - there are no findings of the A.O. that the creditors’ bank accounts are the benami bank accounts of the assessee. There are also no evidences which show the various credits in the bank accounts of the creditors are the undisclosed income of the assessee deposited in those bank accounts and, therefore, the receipt of share application from the aforesaid share applicants could not be assessed as a deemed income of the assessee u/s.68 - We find that all transactions are from the regular banking channel verifiable from the bank account of the assessee as well as the bank accounts of the share applicants
It is not a case that the assessee had filed merely a confirmatory letters of share applicants but it is a case that the assessee had filed affidavit of the director, certification of incorporation of the share applicants, full particulars of directors of the share applicant companies, bank account of the share applicants, PAN of share applicants, tax returns of the share applicants, audited final accounts i.e. balance sheet & profit & loss account of the share applicants. All these documents proved the identity of the share applicants, creditworthiness of the share applicants and genuineness of the transactions - We also find that the assessee’s case is on strong footing as by the Finance Act, 2012, the provision for source of source was inserted w.e.f. 1.4.2013 but the present matter pertains to the assessment year 2012-13.
Hence, the insertion of that provision is also not applicable in the present matter. Thus assessee in these circumstances had duly discharged its burden lay upon it u/s.68. The case-laws referred by the Revenue Authorities are distinguishable on facts and they are not applicable on the facts of the assessee’s case. Therefore, the addition made u/s.68 in assessment year 2012-13 is bad in law and unjustified and, therefore, we delete the addition. Decided in favour of assessee.
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2021 (11) TMI 317 - ITAT DELHI
Nature of receipt - suppliers credit received from various suppliers of aircraft - capital ad revenue receipt - HELD THAT:- As decided in own case [2017 (2) TMI 630 - ITAT DELHI] the supplier’s credit received by the assessee from various suppliers of aircrafts is a capital receipt. Accordingly, ground number 1 of the appeal of the learned assessing officer is dismissed.
Whether the above receipt constituted receipt from exploitation of valuable commercial rights and chargeable to tax u/s 28 (iv)? - In view of the above findings of the special bench that credit receives are also not taxable either u/s 28 (i) or u/s 28(iv) of the act we dismiss ground number 2 of the appeal of the learned AO.
Disallowance u/s 37 (1) of the lease rent payable - HELD THAT:- No disallowance u/s 37 (1) of the lease rent payments could be made. Accordingly, the AO is directed to delete the same.
Disallowance u/s 40 a (i) on account of payment of supplementary rent for non-deduction of the tax - HELD THAT:- Respectfully following the decision of Tribunal for A.Y. 2007- 2008 which has also been followed in subsequent years, we hold that payment of Supplementary Rent is exempt from tax in hands of Lessors as per provisions of section 10(15A) and hence, disallowance under section 40(a)(i) is not called for. However, the above figure is subject to verification by the AO.
Disallowance of supplementary rent for lease agreements executed after 1 April 2007 - HELD THAT:- Profits from rental of Aircrafts is taxable only in state of residence of Lessor. We, therefore, find merit in the arguments of the Learned Senior Counsel for the Assessee that as per Articles 12 and 8 of the Tax Treaty with Ireland, profits derived by an enterprise of a contracting State from rental of Aircraft are taxable “only” in Ireland. Supplementary Rent paid for Lease Agreements executed after 01.04.2007 are, therefore, not chargeable to tax in India. However, the above figure is subject to verification by the A.O.
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2021 (11) TMI 316 - ITAT CHANDIGARH
Rectification of mistake u/s 154 - Assessee seeking rectification of intimation claiming that an amount received as gratuity is not exigible to tax in view of the judgement of Avinash Chand Puri & Others [2013 (7) TMI 1179 - PUNJAB AND HARYANA HIGH COURT] - AO rejected the application on the ground that mistake is not apparent from record. - Thereafter the assessee filed a second revised return in physical form again claiming refund on the basis of his contention but d. CIT(A) dismissed the appeal filed by the assessee and confirmed the action of the AO holding that the issue has not attained finality and, therefore, there is no mistake apparent from record - assessee submitted before us that this issue is covered in favour of the assessee by the decision of the Delhi Bench of the Tribunal in ACIT, Circle- 33(1) New Delhi Vs Pearls of Beauty [2017 (7) TMI 999 - ITAT DELHI] wherein the Tribunal has upheld the findings of the ld. CIT(A) directed the AO to allow the claim of deduction u/s 80IB and 80IC in the ROI of the relevant assessment year with the consequential relief
HELD THAT:- As perused the material on record including the decision of the Delhi Bench of the Tribunal aforesaid relied upon by the ld. counsel. We notice that the facts of the case relied upon by the assessee are not identical to the facts of the present case, therefore the decision is not applicable to the assessee’s appeal. Moreover, as pointed out by the Ld. DR, the coordinate Bench of the Tribunal has mentioned in the order sheet dated 08.10. 2020 that the Hon'ble High Court has already heard the case involving the identical issue and the Bench has directed the assessee to produce the copy of order or status of the said case.
Since, the assessee has not filed the said order/ status till date, we do not deem it appropriate to decide the present appeal or to keep this appeal pending. Hence, we set aside the impugned order passed by the Ld. CIT(A) and send the file back to the AO to decide the issue afresh in accordance with the order of the Hon'ble High Court in CWP referred above after affording a reasonable opportunity of being heard to the assessee. We further direct the assessee to produce the copy of the Hon'ble High Court before the AO. Appeal of the assessee is allowed for statistical purposes.
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2021 (11) TMI 315 - ITAT MUMBAI
Assessment of trust - grants to be considered as eligible income for section 11 - Whether grants received from various organisations are in the nature of voluntary contributions? - HELD THAT:- The issue involved has rightly been claimed to be covered by case of CIT v Gem & Jewellery Export Promotion Council [1982 (6) TMI 28 - BOMBAY HIGH COURT] - Despite the same being before Ld.CIT(A), he has not followed the same. Not only not follow, he has not bothered to refer or distinguish the same. Despite that he has referred to non jurisdictional High Court decision and rejected assessee’s plea. This is absolute violation of judicial discipline. It is settled law that decision of Hon’ble jurisdictional High Court is binding upon subordinate Tribunal and courts. Hence, in our considered opinion, this decision of Hon’ble High Court is applicable fully in the facts of this case. Nothing has been provided before us to show that this decision is not applicable. Hence decide the issue in favour of assessee.
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