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Income Tax - Case Laws
Showing 401 to 420 of 508 Records
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2021 (11) TMI 256 - ITAT AHMEDABAD
Ad-hoc disallowance being 25% of certain outstanding creditors - HELD THAT:- It was not supposed to maintain the books of accounts and other details. If it was not having those details, how these sundry creditors appearing in the books of accounts of the assessee become bogus? It is an irregularity, if any, at the end of the manpower supplier. The existence of the party is not in dispute. Where is the necessity to take work in this year? It can be an outstanding sundry creditor from the earlier years out of which partly paid in this year.
We failed to appreciate the logic given by the learned First Appellate Authority. One of the observations made by learned CIT(A) is that a credit entry of ₹ 3,00,000/- was shown in the bank statement of M/s. Globe Trade followed by transferring the same amount back to the assessee. But this aspect has not been further elaborated by reproducing the bank statement and why the learned CIT(A) has not issued a notice for enhancement of disallowance. Because, in that case, the whole amount should be considered as bogus and not 25% of that. To our mind, both the authorities have not appreciated the facts in right perspective and, therefore, no disallowance is called for. We, therefore, delete the disallowance and allow the appeal of the assessee.
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2021 (11) TMI 255 - ITAT AHMEDABAD
Disallowance u/s 43B - custom duty expenditure not claimed as expenses in the year of actual payment as appellant was entitled to receive special benefits as per Custom & Excise Rules but said special benefits were not received hence expenses were claimed as revenue expenditure in year under consideration - HELD THAT:- As assessee has paid custom duty which was allowable deduction of the assessee under Section 43B of the Act in the year of payment itself. However, the assessee was expecting certain special benefits as per Custom and Excise Rules; therefore, the assessee did not claim it in that year. Ultimately, those benefits were not given to the assessee and, in this year, he has written off the alleged customs duty receivable in the accounts and claimed it as revenue expenditure in the profit and loss account. We find that the learned First Appellate Authority has rightly adjudicated this issue after putting reliance upon the decision of the ITAT in the case of ACIT Vs. Rangoli Industries Pvt. Limited [2013 (1) TMI 968 - ITAT AHMEDABAD] and no interference is called for.
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2021 (11) TMI 254 - ITAT CHANDIGARH
Exemption u/s 11 - rejecting the registration u/s. 12AA - Denial of principle of natural justice - main grievance of the assessee order passed by the Ld. CIT(E) without granting adequate opportunity of being heard - HELD THAT:- In the instant case it is not clear as to whether the Ld. CIT(E) raised the queries after receiving the reply from the assessee to the earlier queries raised on 19/08/2020. It is well settled that nobody should be condemned, unheard as per the maxim, "audi alteram partem".
Keeping in view the principles of natural justice deem it appropriate to set aside this case back to the file of Ld. CIT(E) to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee. Appeal of the Assessee is allowed for statistical purposes.
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2021 (11) TMI 240 - ITAT MUMBAI
Revision u/s 263 by CIT - CIT jurisdiction to revise the order passed by the A.O u/s 143(3) r.w.s 153A - AO had short assessed the assessee”s income by restricting the addition u/s 68 as regards the bogus transactions of sale of shares only to the extent of the capital gain instead of the alleged sale proceeds credited in his bank account; and short assessed the addition u/s 69C as regards the commission alleged to have been paid by the assessee to accommodation entry providers to facilitate the bogus sale transactions by quantifying the same on the basis of the capital gain and not the amount of sale consideration - HELD THAT:- As both the issues in question on the basis of which the Pr.CIT had assumed jurisdiction u/s 263 of the Act had been considered and decided in appeal by the CIT(A), therefore, the Pr.CIT was clearly divested of his jurisdiction to have exercised the revisional jurisdiction vested with him u/s 263 of the Act as regards the said issues. We, thus, in terms of our aforesaid observations set-aside the order passed by the Pr.CIT u/s 263 and restore the order passed by the A.O u/s 143(3) r.w.s 153A.- Decided in favour of assessee.
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2021 (11) TMI 239 - ITAT JAIPUR
Unexplained cash deposits - No source of cash deposits given during the year in the two bank accounts maintained by the assessee - whether any on-money received by the assessee in cash over and above the declared sale consideration? - HELD THAT:- As per cash flow statements and find that the assessee has sufficiently explained the source of deposits in form of salary and other retirement benefits which have been duly declared and withdrawals towards household expenses which are partly funded by him and partly by his wife and therefore, availability of cash in hand at the beginning of the year has been sufficiently explained. In the result, we hereby direct the Assessing officer to delete the addition so made in the hands of the assessee towards unexplained cash deposits - Decided in favour of assessee.
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2021 (11) TMI 238 - ITAT PUNE
Depreciation on intangible assets - HELD THAT:- As per our orders in the earlier assessment years 2010-11 & 2014-15 [2021 (5) TMI 252 - ITAT PUNE] AND 2012-13.[2021 (8) TMI 1243 - ITAT PUNE] in respect of the assessee, the issue of depreciation on intangible assets is allowed for statistical purposes whereas the issue of depreciation on other assets is allowed. Thus, Ground Nos. 1 to 4 raised in appeal by the Revenue are partly allowed for statistical purposes.
TP adjustment - method of benchmarking royalty payment merging with transactions of purchase of raw materials - HELD THAT:- CIT(Appeals) has accepted the receipts of services and going through the various evidences placed before us annexed in the paper book, there is no dispute regarding such receipt of services. DR could not place any evidences contrary to these facts on record. That only for determination of arm's length price of the transaction payment of royalty has to be benchmarked separately and cannot be aggregated with the payment for purchase of raw materials. This exercise has to be done by the Assessing Officer/TPO. Ground are restored to the file of Assessing Officer/TPO for adjudication as per law and as per aforesaid observations.
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2021 (11) TMI 237 - ITAT CHANDIGARH
Disallowance u/s 14A r.w.r. 8D - contention of the Ld. counsel is that since the AO had computed the disallowance in a mechanical manner, the Ld. CIT(A) ought to have deleted the addition made by the AO - HELD THAT:- Send the issue back to the AO to decide the issue afresh affording a reasonable opportunity of being heard to the appellant/assessee.
Disallowance of the interest paid on working capital limit on CC Account - company had its own sufficient funds - HELD THAT:- Send the issue back to the AO to decide the issue afresh affording a reasonable opportunity of being heard to the appellant/assessee.
Addition on proportionate basis on loan given to its sister concern - HELD THAT:- This issue is covered in favour of the assessee by the decision of the coordinate Bench in assessee's own case [2018 (5) TMI 2093 - ITAT CHANDIGARH] we find no reason to take a different view. Hence, respectfully following the decision of the coordinate Bench, we allow this ground of appeal and set aside the findings of the Ld. CIT(A).
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2021 (11) TMI 236 - ITAT AHMEDABAD
Disallowing the exemption claimed u/s 54/54F - sale of the bungalow as well as the land - Assessee was owner of more than one residential property as on the date of transfer of the Bungalow as well as the land - HELD THAT:- Exemption on sale of bungalow - On perusal of the above statement of income of the assessee, it is nowhere clear whether the assessee has claimed deduction under section 54/54F of the Act. Rather, it shows the deduction claimed under section 54EA of the Act which deals with the capital gain on sale of capital assets invested in specified securities. However, we find that none of the authorities including the principal CIT has disputed that the assessee has claimed the deduction under section 54EA of the Act. Rather the issue revolves for the exemption claimed under section 54 or 54F of the Act. Thus, the statement of income of the assessee does not give any information to decide the issue on hand.
The exemption under section 54 and 54F of the Act are computed in a different manner. As such under the provisions of section 54 of the Act the amount of capital gain is considered for the purpose of making the investment in another residential property whereas under the provisions of section 54F of the Act the amount of net consideration is considered for the purpose of making the investment in another residential property.
On perusal of the direction of the learned principal CIT we find that it was directed to the AO to make a fresh assessment in accordance with the provisions of law in terms of section 54F of the Act. Thus, it was clear that the AO was authorized to make a fresh assessment as per the provisions of law after the necessary verification in terms of section 54F of the Act.
Without prejudice to the above, we also note that, assuming the assessee has claimed deduction under section 54F of the Act, then it was the duty of the revenue to provide the rightful claim of the assessee which is available under the provisions of law but the same was not claimed by the assessee under the wrong believe. As such, the Revenue cannot take the benefit of the ignorance of the assessee rather it was duty-bound to extend the benefit available to the assessee under the provisions of law.
Exemption u/s 54F of the Act on the sale of land by the assessee - There is no dispute to the fact that the assessee has claimed the exemption under section 54F of the Act on the sale of land. As such the assessee can claim the deduction under section 54F of the Act on the sale of long-term capital asset being land in the present case. Furthermore, this fact was also admitted by the assessee before the authorities below. However, the authorities below have denied the exemption claimed by the assessee under section 54F of the Act on the sale of land on the reasoning that the assessee on the date of transfer of land was the owner of more than one residential property. The contention of the assessee was that one of the assessee residential property was used as business asset as staff quarters. Therefore, as per the assessee the same cannot be held as residential property owned by the assessee as on the date of transfer.
Admittedly, the onus lies upon the assessee to prove that its residential property was used for the business purposes. For this purpose, we have perused the depreciation chart of the assessee to see whether the assessee has claimed depreciation on such alleged building used for the purpose of the business. But we find that there was no depreciation claimed by the assessee on the alleged building rather the depreciation was claimed by the assessee only on the factory building along with other assets. Thus, the assessee failed to provide any documentary evidence in support of his contention. Accordingly, we hold that the assessee is not eligible for exemption under section 54F of the Act on the sale of land, as the assessee was holding more than one residential unit. Hence, the ground of appeal of the assessee is partly allowed.
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2021 (11) TMI 224 - ITAT DELHI
Penalty u/s 271(1)(c) - Defective notice u/s 274 - non specification of charge - as argued inappropriate words in the penalty notice has not been struck off - HELD THAT:- The inappropriate words in the penalty notice has not been struck off and the notice does not specify as to under which limb of the provisions, the penalty u/s 271(1)(c) has been initiated, therefore, we are of the considered opinion that the penalty levied u/s 271(1)(c) is not sustainable and has to be deleted. Although the Ld. DR submitted that mere non-striking off of the inappropriate words will not invalidate the penalty proceedings, however, the decision of the Hon’ble Karnataka High Court in the case of SSA’S Emerald Meadows [2015 (11) TMI 1620 - KARNATAKA HIGH COURT] where the SLP filed by the Revenue has been dismissed [2016 (8) TMI 1145 - SC ORDER] is directly on the issue contested herein by the Assessee. Further, when the notice is not mentioning the concealment or the furnishing of inaccurate particulars, the ratio laid down by the Hon’ble High Court in case of M/s. Sahara India Life Insurance Company Ltd. [2019 (8) TMI 409 - DELHI HIGH COURT] will be applicable in the present case.- Decided in favour of assessee.
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2021 (11) TMI 223 - ITAT DELHI
Depreciation claim of assessee trust - Assessee earned net surplus from hostel activity - HELD THAT:- Depreciation in respect of hostel facilities the same was granted to the assessee and was never disputed by the Revenue since 2009-10 till 2014-15 except for these years i.e. 2011-12. Thus, in light of the decision cited by the Ld. AR as well as the consistency in respect of the Revenue’s application of the said claim in earlier as well as subsequent years should have been taken into consideration by the CIT(A), but the CIT(A) failed to do so. The Hon’ble Supreme Court in case of CIT vs. Rajasthani & Gujarati Charitable Foundation Poona [2017 (12) TMI 1067 - SUPREME COURT] held that the depreciation in respect of cost of the assets allowed to the assessee as expenditure is allowable. Thus, the issue is squarely covered in favour of the assessee
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2021 (11) TMI 222 - ITAT JAIPUR
Exemption u/s 11 - rejection of application seeking registration u/s 12AA - profit of charitable object u/s 2(15) - 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 the objects and intended application of profits and has granted the registration 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)
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. - Decided in favour of assessee.
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2021 (11) TMI 221 - ITAT AHMEDABAD
Bogus LTCG - Unexplained cash credit u/s 68 - Reliance on information unearthed from third party - HELD THAT:- We hold that in absence of any specific finding against the assessee in the investigation wing report, the assessee cannot be held to be guilty or linked to the wrong acts of the persons investigated as far as long term capital gain earned on sale of share of both companies is concern.
Co-ordinate bench Mumbai Tribunal in case of DCIT vs. M/s Jiana Investments [2021 (3) TMI 50 - ITAT MUMBAI] CIT(A) deleted the addition by observing that information received from investigation only a general modus operandi employed by the various entry operators but no evidences available that the particular assessee was involved in such scam. Without bringing cogent material establishing the assessee earned or incurred bogus gain or losses the AO cannot made addition merely on the basis of suspicion or assumption. The view taken by the learned CIT was confirmed by the Hon’ble bench of Mumbai ITAT. It is pertinent to mentioned that the script involve in the above case is also in the present case. Thus we also find support and guidance from the finding given in aforesaid case.
We hold that the capital gain earned by the assessee cannot held bogus merely on the basis of some report which was unearthed in case of third party/parties unless cogent material brought against particular assessee. - Decided in favour of assessee.
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2021 (11) TMI 220 - ITAT KOLKATA
Delay in deposit of employees contribution to PF and ESI u/s 36(1)(va) read with Section 2(24)(x) - assessee contributing/depositing the same before the due date of filing of return of income u/s 139(1) - CIT-A allowed deduction - HELD THAT:- As relying on M/S. VIJAY SHREE LIMITED [2011 (9) TMI 30 - CALCUTTA HIGH COURT] and HARENDRA NATH BISWAS VERSUS DCIT, CIRCLE-29 KOLKATA [2021 (7) TMI 942 - ITAT KOLKATA] CIT(A) has rightly allowed the deduction in respect of employee's contribution to PF & ESI which had been admittedly remitted on or before the due date for filing the return of income u/s. 139(1) of the Act. We therefore do not find any infirmity in the order of the Ld. CIT(A) and, we confirm the same and dismiss this ground of appeal of revenue.
Disallowance of discount & brokerage debited to the Profit & Loss Account - HELD THAT:- As decided in [2018 (11) TMI 1877 - ITAT KOLKATA] adopt judicial consistency in this facts and circumstances to affirm the CIT(A)'s findings under challenge deleting discount and brokerage disallowance -Decided against revenue.
Disallowance u/s 14A r.w.r. 8D - HELD THAT:- As decided in own case [2018 (5) TMI 420 - ITAT KOLKATA] we remand this issue to the file of A.O. with the direction to consider only the investment which yielded dividend income to the assessee for computing the disallowance under section 14A of the Act read with Rule 8D(2)(ii) of the Rules.
Transfer pricing adjustment made by the TPO to the claim of deduction u/s 80-IA - arm’s length price of power transferred by the three CPPs at Vasavdatta, Karnataka to the cement unit - HELD THAT:- Even if the Ld. CIT, DR’s contention is accepted at its face value and the eligible unit is taken as the ‘tested party’, we still find that there was reliable internal CUP data available to benchmark the transfer price of power supplied by the CPPs to the cement unit. If the rates at which the CPPs sold power to IEX, GEPL (₹ 6.24/unit) is taken as the benchmark ALP rate, even then the transfer price of power adopted by the assessee (₹ 5.96 - ₹ 6.23/unit) was comparable and accordingly no adjustment was permissible in this regard. We find that, on same set of facts and circumstances, the Revenue had categorically accepted this manner of application of internal CUP Method in respect of power supplied by the CPPs at Karnataka in the immediately preceding AY 2013-14 and accordingly no transfer pricing adjustment was made in relation thereto. When enquired in this regard, the Ld. CIT, DR fairly agreed with the Ld. CIT(A)’s above findings qua the CPPs at Vasavdatta, Karnataka. For the reasons as aforesaid, we do not find any infirmity in the order of the Ld. CIT(A) deleting the transfer pricing adjustment of ₹ 40,03,60,133/- made by the TPO to the transfer value of power supplied by the CPPs at Vasavdatta, Karnataka to the noneligible cement unit.
CPP at Hooghly, West Bengal - As from the data provided by the assessee, it is noted that both the CPP and SEB have supplied power in all the months of the year and therefore there are no timing differences as well. In the circumstances, we find merit in the findings of the Ld. CIT(A) that the transaction involving purchase of power by the non-eligible unit from the SEB, fulfilled the internal CUP parameters and thus the landed cost paid by the rayon unit to the SEB represented internal comparable arm’s length rate.
CIT(A) had indeed taken into account the amendment made by the Legislature to Explanation to Section 80-IA(8) by the Finance Act, 2012 introducing the transfer pricing regulations, and had held that the ‘open market value’ as determined by this Tribunal in the earlier years in relation to the power transferred by the CPPs to the non-eligible units was in adherence to the arm’s length principle enunciated in Section 92C
Referring to the decisions of this Tribunal in assessee’s own case for earlier years, we uphold the order of the Ld. CIT(A) deleting the transfer pricing adjustment made in relation to the transfer price of power supplied by the CPP at Hooghly, West Bengal to the rayon unit.
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2021 (11) TMI 219 - ITAT CHANDIGARH
Special audit u/s 142 (2 A) - Period of limitation - reasons for change in accounting system - method of valuation of closing stock - HELD THAT:- Query raised asking explanation of how figures of industrial activity upto 31.03. 2013 were incorporated in the impugned years balance sheet, the assessee had explained that it had switched over from cash system of accounting done upto 31/03/13 to accrual system and had also explained the manner of doing so as also furnishing year wise bifurcation of expenses and recoveries in the IA account as on 31.03. 2013. AO notes that no explanation has been furnished as to how cumulative calculations were made no break up of certain details provided and site wise break also not provided.
Similarly the assessee explanation regarding why income be not computed as in earlier years the assessee justified the change in system of accounting as being in compliance with accounting standard issued by the ICAI and also in accordance with government notifications, to which the AO merely brushes aside the explanation as not being tenable without assigning any reason for stating so.
On the query regarding method valuation of closing stock for year ending 31/03/2013 and 31/03/2014 the assessee replied that upto 31/03/13 since it was following cash system of accounting no stock was accounted for while thereafter it followed the Percentage Completion Method (PCOM) for accounting for inventory, valuing it at cost or net realizable value which ever was less. To this the AO notes that no calculation of working of inventory has been provided by the assessee.
To the query raised regarding how PCOM method was applicable to the assessee, the assessee replied that its activities fell under the scope of transactions covered By the guidance note issued by ICAI on Accounting for real estate transactions which recommended PCOM method. It was also explained as to how its activities fell under the said guidance note. To this the AO noted that why this method was not adopted in earlier years also.
On being asked to explain basis of ascertaining revenue from operations, due reply explaining the same was filed. To this the AO notes simply that it is not verifiable since assessee passes through various stages and no specific information/no detailed working has been provided by the assessee.
To the query as to why ₹ 1050 crores has been reduced from the income of the assessee in the revised return filed. the assessee explained in detail that the department had already collected taxes on the same in earlier years when it had rejected its cash basis of accounting and taxed income on accrual basis. To this the AO notes that the assessee has filed appeal against the said additions made by the department and therefore by reversing the income in the impugned year it was taking a contradictory stand.
After so stating the AO notes that considering the facts and circumstances and the nature and complexity of accounts of the assessee, volume of transactions and multiplicity of transactions, special audit u/s 142 (2 A) of the Act is proposed.
AO does not point out a single complexity in the accounts of the assessee. On the contrary he has only pointed out certain information still lacking in the reply submitted by the assessee. With regard to each explanation he has stated that the assessee has either not given certain explanation required by him or certain working or calculations had not been explained. It is not coming out from the notice, therefore, that there was any complexity in the nature of the accounts of the assessee which had come to the notice of the AO. Nor has the Ld.DR been able to enlighten us as to what complexity was pointed out by the AO in the accounts of the assessee for enabling reference to a special audit.
What is clearly evident is that the reference for special audit was merely made for obtaining certain explanation and information which were further required by the AO for the purposes of assessment of income of the assessee. In effect,the AO, was shifting his responsibility to the special auditor. This is surely not the purpose for which special audit can be referred to under law.
Assessee filed a detailed reply to the show cause notice explaining at length all doubts and queries raised by the AO in its previous reply and furnishing all information which he found lacking (P. B 222 - 252), but despite the same, the AO sought approval of the PCIT for special audit on the same day the reply was filed by the assessee and after obtaining the same ordered special audit on the very same day.
The only inference which can possibly be drawn in the facts of the present case as narrated above, is that the reference to special audit was made only to buy further time for completing the assessment, having been made at the fag end of the period for completion of assessment that too merely for obtaining further details and information and not because any complexity was noted in the accounts of the assessee. The reference to special audit, therefore we hold, is an invalid reference, contrary to law.
Assessment order passed therefore in the extended period, as a consequence of the invalid reference, we hold, is barred by limitation and hence void. Appeal of assessee allowed.
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2021 (11) TMI 218 - ITAT RAIPUR
Enhancement of total income by CIT-A - Procedure to be followed - HELD THAT:- Enhancement for the assessment year in question was carried out by the CIT(A) without giving any formal intimation to the assessee in this regard and without communicating the basis for arriving at the said figure of enhancement to the assessee. Such approach of the CIT(A) is contrary to statutory protocol as well as law codified in S. 251(2).
Power of enhancement conferred under s. 251(1) of the Act is restricted to the subject-matter of assessment or the source of income which have been considered expressly or by clear implication by the AO from the point of view of the taxability of the assessee. Besides, the enhancement proceedings are intrinsically a serious exercise undertaken independently by the CIT(A). Hence, for making any comments adverse to the assessee, it is bounden duty of the CIT(A) to follow due process of law before coming to his own conclusions on unverified facts and before making comments thereon. CIT(A) is bound to confront the assessee with material evidence, if any, in his possession. The statutory obligations in case of enhancement are far wider. As alleged, the impugned enhancement has apparently been made without giving notice to the assessee and without confronting him with his process of reasoning for doing so. The impugned enhancement is thus wholly unsustainable in law. The direction for enhancement is thus quashed and set aside. - Decided in favour of assessee.
Enhancement of income to the AO for the earlier assessment years which are not in appeal before him - HELD THAT:- Findings of the CIT(A) seeks to travel beyond the A.Y. 2012-13 in question and seeks to displace the completed assessment of the other years (some of which have already become time barred at the time of passing of original assessment order in appeal) by giving directions to the AO to take remedial actions towards service tax allowed in earlier assessment years. Such findings and directions are outside the scope of powers entrusted under S. 251 as well as S. 150(1) of the Act. To reiterate, Section 150(1) does not permit issue of such directions to the AO without showing as to how such findings/directions are necessary for the purposes of adjudicating the issue of allowability of service tax in the year in question.
In the instant case, the issue of allowability of service tax was also examined by the AO under s. 143(3) of the Act for AY 2010-11. The appeal on the point was filed before the CIT(A). The order of the AO thus stood merged with the first appellate order. Such assessment already merged in the order of the higher authority cannot be distributed by the authority of equal rank. Hence, action of the CIT(A) can not be upheld from this perspective as well.
As a sequel to such delineation, the directions to the AO to examine the service tax issue in relation to earlier assessment years require to be quashed and expunged. We do so accordingly. Ground No. 3 of the assessee's appeal is thus allowed.
Enhanced claim of service tax on actual payment basis before the due date of return - HELD THAT:- Mere admission on the part of the assessee with respect to an addition/disallowance in its original return or in revised return would not ipso facto bar an assessee from claiming an expense or disputing an addition if it is otherwise permissible under law. It is thus well settled that if a particular income is not taxable under the Act, it cannot be taxed on the basis of estoppel or any other equitable doctrine. Revenue authorities cannot enforce untenable actions of the assessee against it which led to declaration of income of higher amount incorrectly. It is thus open to assessee to show that it was over assessed under erroneous impression of law or facts even if it is attributable to the mistake of assessee.
We do see potency in the argument laid on behalf of the assessee that both AO and CIT(A) committed error in denying the relief claimed. In our considered view, the action of the revenue authorities is in defiance of the judicial precedents on the issue and thus cannot be countenanced. In our view, the assessee can not be prevented from raising such additional claim merely because the ROI could not be revised. The factual matrix towards actual payments however does not appear to have been verified by the AO. It would thus be in fitness of things to remit the issue back to the file of AO. AO shall allow the higher claim of service tax in accordance with law on being satisfied with the actual payments. Ground no. 4 of the assessee is allowed for statistical purposes.
Lump sum disallowances out of wages and 'transportation charges & site expenses' - HELD THAT:- As the assessee could not seriously dispute the rationale for indulging in estimations of disallowance in the facts of the case. A part relief has been granted by the CIT(A) out of estimations under the head 'wages'. No relief has been granted on 'transportation charges and site expenses'. In the absence of any attendant circumstances on record, some estimations cannot be entirely condemned. However, having regard to nature of business and totality of circumstances, a further relief of Rs. One lakh each from two expense heads in question appears just and benign and would meet the ends of justice.
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2021 (11) TMI 217 - ITAT MUMBAI
Income accrued in India - Royalty receipts - receipts from Indian customers - receipts from CAS division as well as from PUBS division - India-USA DTAA - HELD THAT:- As relying in assessee's own case [2019 (4) TMI 1818 - ITAT MUMBAI] we would hold that receipts from CAS division as well as from PUBS division could not be held to be royalty and hence, not taxable in the hands of the assessee. - Decided in favour of assessee.
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2021 (11) TMI 216 - ITAT HYDERABAD
Deduction u/s 10A computation - export turnover disallowance - HELD THAT:- We find force in the assessee's ground No. (i) to be specific wherein its case is that whatever revenue item is excluded from export turnover, the very course of action applies to the total turnover as well.
DR fails to dispute that not only the hon'ble apex court's landmark decision in CIT Vs. HCL Technologies Ltd. [2018 (5) TMI 357 - SUPREME COURT] has settled the instant issue but also the CBDT has issued its circular No. 4/2018, dt. 14-08-2018 that such an item; excluded from the export turnover, is not included in the total turnover as well.
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2021 (11) TMI 215 - ITAT BANGALORE
Exemption u/s 11 - exemption u/s 12AA - Seeking benefit of registration granted under section 12AA of the Act with retrospective effect from assessment year under consideration - HELD THAT:- CIT(A) observed that, due to the removal of section 10(22) with effect from 01/04/1999, the entitlement of exemption and under the relevant provisions was not available to assessee he has also observed that assessee has not made any application seeking exemption under section 10(23C) of the act. And subsequently assessee applied for exemption under section 12 AA of the Act vide application dated 21/09/2006 with effect from 10/01/1980. CIT(A) observed that due to the intervention of this Tribunal which was also approved by Hon'ble High Court the exemption was granted from assessment a 2002-03 onwards. The Ld. CIT(A) also denied exemption claimed under section 11 of the act for year under consideration.
Before as also assessee seeking retrospective effect of the exemption granted with effect from assessment a 2002-03, for the relevant assessment years. This in our view is a far-fetched argument that cannot be entertained such tests by this forum.
There is no fault in the view taken by the Ld. CIT(A). Assessee has been rightly sent under the normal provisions of the act by the authorities Assessee appeal dismissed.
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2021 (11) TMI 214 - ITAT HYDERABAD
Disallowance u/s 14A r.w.r. 8D - Mandation of receipt of exempt income received by the assessee - HELD THAT:- We observe that there is no exempt income received by the assessee during the impugned AY. Therefore, the disallowance made by the AO u/s 14A r.w.r. 8D is not correct. It is a settled law that if there is no exempt income, no disallowance can be made as there are Catena of judgements of Hon’ble Tribunal that if there is no exempt income, no disallowance can be made u/s 14A of the Act. Therefore, we uphold the order of CIT(A) in deleting the disallowance made u/s 14A rwr 8D of the Act. Thus, the grounds raised by the revenue on this issue is dismissed.
Disallowance u/s 68 - Share application money pending allotment - HELD THAT:- Amount received in the previous year cannot be taxed in the current AY. Accordingly, the assessee gets relief. Further, on perusal of the above table, the assessee received ₹ 60 lakhs from the Yashoda Energy Pvt. Ltd. during the year and assessee has filed only confirmation letter indicating PAN with the address at Secunderabad, but, no other documents were filed. Whereas the CIT(A) has allowed the addition of ₹ 60,00,000/- without examining the issue in detail as per section 68 of the Act. The AR of the assessee also did not prove the genuineness of the transactions and credit-worthiness of the share applicant, namely, Yashoda Energy Pvt. Ltd. as per section 68 of the Act. The address provided by the assessee is vague as merely quoting the address as Secunderabad, how the department can trace the share applicant whereabouts. In view of the above observations, we deem it fit and proper to remit this issue to the file of the AO with a direction to decide the issue afresh. The assessee is directed to substantiate its claim as per section 68 of the Act before the AO. Thus, the ground raised by the revenue is partly allowed for statistical purposes.
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2021 (11) TMI 213 - ITAT BANGALORE
Condonation of delay - inordinate delay of 508 days - “sufficient cause” - whether 508 days was excessive or inordinate? - HELD THAT:- Under the scheme of Constitution, the Government cannot retain even a single pie of the individual citizen as tax, when it is not authorised by an authority of law. Therefore, if we refuse to condone the delay, that would amount to legalise an illegal and unconstitutional order passed by the lower authority. Therefore, in our opinion, by preferring the substantial justice, the delay of 508 days has to be condoned.
Whether 508 days was excessive or inordinate? - There is no question of any excessive or inordinate when the reason stated by the assessee was a reasonable cause for not filing the appeal. We have to see the cause for the delay. When there was a reasonable cause, the period of delay may not be relevant factor.
The Madras High Court in the case of Sreenivas Charitable Trust [2005 (10) TMI 36 - MADRAS HIGH COURT] held that no hard and fast rule can be laid down in the matter of condonation of delay and the Court should adopt a pragmatic approach and the Court should exercise their discretion on the facts of each case keeping in mind that in construing the expression “sufficient cause” the principle of advancing substantial justice is of prime importance and the expression “sufficient cause” should receive a liberal construction. Therefore, this Judgment of the Madras High Court (supra) clearly says that in order to advance substantial justice which is of prime importance, the expression “sufficient cause” should receive a liberal construction.
In case the delay is not condoned, it would amount to legalise an illegal and unconstitutional order. The power given to the Tribunal is not to legalise an injustice on technical ground but to do substantial justice by removing the injustice. The Parliament conferred power on this Tribunal with the intention that this Tribunal would deliver justice rather than legalise injustice on technicalities.
Therefore, when this Tribunal is empowered and capable of removing injustice, in our opinion, the delay of 508 days has to be condoned and the appeal of the assessee has to be admitted and disposed of on merits. In view of the above, we condone the delay of 508 days in filing the appeal and admit the appeal for adjudication.
Disallowance being PF & ESI contribution of employees paid beyond the due date u/s. 36(1)(va) r.w.s. 43B - HELD THAT:- As contribution is deposited within the due date of filing return u/s. 139(1) - As relying on M/S JANA URBAN SERVICES FOR TRANSFORMATION PVT. LTD. VERSUS THE DY. COMMISSIONER OF INCOME TAX, CPC, BENGALURU. [2021 (10) TMI 842 - ITAT BANGALORE] we allow this ground taken by the assessee and there cannot be any disallowance by invoking the provisions of section 36(1)(va) r.w.s. 43B - Decided in favour of assessee.
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