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Income Tax - Case Laws
Showing 181 to 200 of 787 Records
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2022 (11) TMI 1179 - SC ORDER
Chargeability of TDS on non-convertible debentures and FDR below - HELD THAT:- As gone through the judgment and orders passed by the Tribunal as well as the High Court, we are of the opinion that no error has been committed by the Tribunal and/or the High Court on the chargeability of TDS amount on non-convertible debentures and fixed deposit of the value less than Rs.5,000/-.
Both, the Tribunal as well as the High Court have concurrently found that on non-convertible debentures and fixed deposit of the value less than Rs.5,000/-, there shall not be any TDS leviable.
We are in complete agreement with the view taken by the Tribunal as well as the High Court. Once, there is no liability to deduct TDS on non-convertible debentures and fixed deposit of the value less than Rs. 5,000/-, there is no question of charging any interest. At the same time the issue whether the levy of the interest was time barred considering Section 201(1) / 201(1)(a) has not been dealt with and considered in High Court, we keep the question of law on the aforesaid open.
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2022 (11) TMI 1178 - CALCUTTA HIGH COURT
Validity of order of ITAT deciding the issue raised first time without proper notice to assessee - Deduction u/s 80IA - deduction was not claimed in the original return but was claimed in the revised return - whether the assessee was required to electronically upload the audit report in Form 10CCB before the due date prescribed under the Act? - HELD THAT:- As pointed out earlier the Tribunal has rightly taken note of the settled legal position and held that if the defect be procedural it can be cured at a subsequent stage namely at the stage of filing the revised return or even during the course of assessment proceedings. If that was the finding of the learned Tribunal the natural consequence that has to flow is to allow the appeal of the assessee. However, assessee’s appeal has been dismissed on the ground that the audit report has not been filed within the time prescribed under the statute. Tribunal though noted that such prescription of time limit was pursuant to an amendment it failed to take note of the fact as to whether such a amendment would apply to the assessment year under consideration namely A.Y. 2014-15. The amendment to the Act was brought about by the Finance Act 2020 (No. 12 of 2020) dated 27.3.2020.
In Section 35 of the Finance Act the amendment brought out to Section 80IA of the Act in sub Section (7) has been mentioned. It has to be noted that Finance Act, 2020 came into force on 1.4.2020. If that be so, Tribunal without examining as to whether such an amendment could apply to the assessee’s case had directed to the assessing officer to verify such a matter.
Advocate appearing for the appellant submitted that such an issue was never raised by the revenue at any earlier point of time. As could be seen from the materials available on record the assessing officer has not taken such a view, obviously he could not have done so because the assessment order was passed on 29th December, 2016, much earlier to the amendment. The CIT(A) also could not have taken note of the amendment because the order passed by the CIT(A) is dated 28th February, 2019.
Therefore, if an issue is to be raised by the learned Tribunal suo-motu for the first time then the assessee is entitled to notice of such an issue being raised and should have afforded an opportunity to the assessee to put forth their submission. We find that such procedure was not adopted by the Tribunal. In any event, the learned Tribunal in paragraph 18 of its order having rightly noted the legal position ought to have granted relief to the assessee. Failure to do so, would result in order passed by the learned Tribunal liable to be set aside.
Tribunal though noted the correct legal position has taken note of the subsequent amendment in the Act requiring the audit report to be filed in prescribed manner within the prescribed time. As mentioned by us above, this issue was never an issue pointed out to the assessee at any earlier point of time and it appears that the issue had been taken up for consideration when the case was heard and orders were reserved by the learned Tribunal. In any event, such point could not have been put against the assessee when the same was never the case of the revenue before the Tribunal.
The appeal filed by the assessee is to be allowed. The order passed by the learned Tribunal as well as order passed by the CIT(A) are set aside and also the order passed by the assessing officer dated 29.12.2016 in so far as it disallows the deduction claimed under Section 80IA of the Act are set aside and there will be a direction to the assessing officer to allow the said deduction claimed by the assessee under Section 80IA of the Act. Decided in favour of the assessee.
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2022 (11) TMI 1177 - CALCUTTA HIGH COURT
Revision u/s 263 - PCIT may have information from the assessment file or through other sources - correctness of the exercise of power under section 263 - contention advanced before us by the revenue is that the assessee could not establish the genuineness of the transactions to prove that it had not indulged in any dubious share transactions meant to account for undisclosed income under the garb of long term capital against (LTCG) to claim exemption under Section 10 (38) - HELD THAT:- In the cases on hand there is nothing on record to show that such an exercise was done by the PCIT. Tribunal after noting several decisions on the subject rendered by the Coordinate Benches of the Tribunal had allowed the assessee’s appeal and set aside the order passed by the PCIT under Section 263 - Tribunal has proceeded to examine the merits of the matter and granted relief.
It is the submission that so far as the merit of the cases are concerned similar issue was tested by this Court in the case of Principal Commissioner of Income Tax Vs. Swati Bajaj [2022 (6) TMI 670 - CALCUTTA HIGH COURT] Though such may be the issue, as pointed out earlier the learned Tribunal had granted relief to the assessee on two grounds the first of which being that the exercise of power under Section 263 of the Act was not in accordance with law.
As could be seen from the substantial questions of law suggested by the revenue, the revenue has not raised any question on the said finding of the Tribunal which goes to show that the revenue had reconciled with the reasoning given by the learned Tribunal in that record. Therefore, a piecemeal challenge to the order passed by the learned Tribunal on one of the grounds on which relief was granted to the assessee is not maintainable.
In more or less identical circumstances in the case of Principal Commissioner of Income Tax, Durgapur Vs. M/s. Sinforte Pvt. Ltd. [2022 (1) TMI 1297 - CALCUTTA HIGH COURT] the court had dismissed the appeal filed by the revenue on the ground that the PCIT in order to exercise jurisdiction under section 263 of the Act exercised jurisdiction at the instance of the assessing officer which is against the provisions of the law. This decision supports the case of the respondent assessee. Hence, for the above reasons, we are of the view that the order passed by the learned tribunal on the first ground, namely with regard to the correctness of the exercise of power under section 263 of the Act has to be affirmed and, accordingly, the appeal filed by the revenue is dismissed.
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2022 (11) TMI 1176 - DELHI HIGH COURT
Reopening of assessment against company as struck off by the ROC from its register of companies - Later the name was restored - Section 248 of the Companies Act, 2013 - Respondent has filed its counter affidavit for restoration of the name of the Company in the register of companies, maintained by the ROC Delhi - HELD THAT:- The petitioner herein is the promoter and director of the Company and he has filed the present petition in his individual capacity -The Petitioner admits the Company stands restored by the order dated 25th September, 2019, passed by the NCLT. The defaulting Company has neither challenged the impugned Notice dated 28th March, 2019, nor the order dated 25th September, 2019, passed by the NCLT, which has therefore, attained finality in law. In our view, in these facts alone, the Petitioner herein has no locus standi to maintain the proceedings and even in alternative the present petition has become infructuous.
Impugned notice was issued at a point in time, when the Company was struck off from the ROC, the subsequent order passed by the NCLT restoring the Company, will not have the effect of curing the defect issuance of notice to the non-existent entity - Section 252(3) of the Companies Act, 2013 expressly states that the Tribunal’s order directing restoration of a company will have the effect of placing the company in the same position as if the name of the company has not been struck off from the register of companies. In other words, with the restoration order passed by the NCLT, even on the date of the issuance of the impugned notice, the Company is deemed to be in existence.
Section 250 of Companies Act of 2013 is a new provision and it declares that even where a Company is dissolved in consequence to it being struck off under Section 248, it shall be deemed to continue to be in existence for the purpose of discharging its liabilities. The said section recognizes the continuing liability of a struck off company, which is in addition to Section 248(7) of the Companies Act, 2013,
In the present proceedings, the Company has admittedly been restored and as it has been observed above that statutorily upon restoration, the Company under Section 252(3) of the Companies Act, 2013, is deemed to not have been struck off from the register of companies at all. Accordingly, the impugned notice dated 28th March, 2019, is valid and not non-est on the grounds urged in the present petition.
Decision as distinguishable in Shrikishen Dhoot & Others [1964 (11) TMI 38 - HIGH COURT OF ANDHRA PRADESH] has held that a suit is not maintainable against a company which was struck off from the register of companies. However, the Court in the said case has clarified that the existing liability of any director or member prior to the dissolution of the company will continue in spite of the dissolution. Also Sharvan Kumar Swarup [1994 (9) TMI 2 - SUPREME COURT] and Mrs. Suseela Sadanandan [1964 (10) TMI 6 - SUPREME COURT]
Company was initially struck off by the Ministry of Corporate Affairs due to its default in filing its statutory return with the ROC and the Company was, therefore, struck off due to its own defaults. The NCLT upon realizing that the detriment caused to the interest of the Income Tax department due to the striking off, restored the Company to enable the Department to recover its dues. However, the conduct of the Petitioner in persisting with the present petition even after the Company has been restored and also his action in opposing the appeal before the NCLT for restoration evidences that the petitioner is abusing the process of law to obstruct the assessment proceedings. The resort to present petition by the Petitioner herein is therefore, not bona fide and is being done to avoid legal processes. We, accordingly, dismiss the present petition with costs.
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2022 (11) TMI 1175 - DELHI HIGH COURT
Validity of Faceless assessment - maintainability of the that writ petition on the ground of territorial jurisdiction since the PAN AO, was located outside Delhi - Penalty proceedings u/s 271AAC (1) - HELD THAT:- View expressed by a co-ordinate bench of this Court in RKKR foundation [2021 (5) TMI 496 - DELHI HIGH COURT] has not taken into account the entire conspectus of the legal position in assignment proceedings with reference to the hierarchy of appellate authorities under the Act, 1961 and that the matter requires a deeper consideration.
We are also of the view that applying the doctrine of forum non-conveniens as laid down by a Full bench of this Court in Sterling Agro [2012 (6) TMI 76 - DELHI HIGH COURT - LB] this Court can refuse to entertain the writ petitions where the jurisdictional assessing officer i.e. JAO is based outside the NCT of Delhi. It would be appropriate to refer this matter to a larger bench for a conclusive view as this issue will arise repeatedly in many cases.
Keeping in view the complexity of the legal issues involved and since we have doubted the correctness of the view expressed by a coordinate bench of this Court in RKKR Foundation [2021 (5) TMI 770 - DELHI HIGH COURT] wherein this Court had decided to exercise its jurisdiction in a similar matter where the jurisdictional assessing officer was located outside the NCT of Delhi, we are of the considered view that the aforesaid questions of law requires to be settled and decided by way of an authoritative pronouncement by a larger bench of this Court.
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2022 (11) TMI 1174 - ITAT PANAJI
Deduction u/s. 80P(2)(a)(i) and 80P(2)(d) - Failure to file its returns for the impugned assessment years before the prescribed due date u/s.139(1) of the Act as on 31.08.2018 and 31.08.2019 assessment year wise, respectively - HELD THAT:- No merit in Revenue’s arguments seeking to invoke section 139(1) Explanation-2 (c) of the Act. A perusal thereof makes it clear that it is in the nature of residuary clause dealing with “any other assessee” whereas this taxpayer is found to be covered u/s. 139(1) Explanation-2(a)(ii) thereof as applicable in case of “a person [other than company] whose accounts are required to be audited under this Act or under any other law for the time being in force” since it is liable to be audited under the state cooperative law. Faced with the situation, reverse both the lower authorities action applying section 80AC of the Act in assessee’s cases in principle and restore this sole substantive grievance back to the Assessing Officer for his afresh adjudication as per law on merits.
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2022 (11) TMI 1173 - ITAT KOLKATA
Exemption u/s 11 - non-furnishing of audit report in Form 10B through electronic mode - whether willful or intentional delay on the part of assessee? - HELD THAT:- CBDT’s Circular No. 2/2020 stated that CIT(A) has power for condoning belated application in filing Form No. 10B wherever the assessee was prevented by reasonable cause for filing of such applications within the stipulated time.
In the present case before us, the delay is due to bonafide mistake on the part of the assessee which could be condoned as there is a strong reason on the part of assessee. Since the assessee is neither negligent nor willful defaulter in filing Form No. 10B within stipulated time prescribed under law and it was happened due to bonafide mistake on the part of the assessee. Hence, we reverse the orders of lower authorities, condone the delay in filing Form No. 10B and direct the AO to accept the audit report in form No. 10B. Appeal of the assessee is allowed.
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2022 (11) TMI 1172 - ITAT PANAJI
Deduction u/s 80P - Exemption of interest income received from other cooperative society u/s 80P(2)(d) - AO was of the opinion that the interest income so received is not eligible for exemption u/s 80P(2)(a)(i), as the said income was received from non-members of the society - HELD THAT:- Reasoning of the Assessing Officer as well as the ld. CIT(A) was overruled by the Co-ordinate Bench of this Tribunal in the case of The Ugar Sugar Works Kamgar & Dr. Shirgaokar Shaikshanik Trust Nokar Co-op Credit Society vs. ITO [2021 (11) TMI 1117 - ITAT PANAJI] in favour of the appellant society.
Thus interest income is eligible for deduction u/s 80P(2)(d) - we direct AO to allow the same. Hence, the ground of appeal no.1 stands allowed.
Additions u/s 40(a)(ia) and section 36(1) - HELD THAT:- As inflated profits on account of such disallowances, would also qualify for deduction u/s 80P(2)(a)(i) - Hence, direct the AO to allow the above disallowances which form part of the business income of the appellant society for exemption u/s 80P. Accordingly, ground of appeal nos.2 and 3 stands allowed.
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2022 (11) TMI 1171 - ITAT DELHI
Validity of assessment u/s 153C - HELD THAT:- We find that the A.O. in the instant case has failed to demonstrate that seized document belongs to the assessee company and no seized documents were found as a result of search and have bearing on the determination of total income of the assessee company. Therefore, we find that the above imperative three jurisdictional conditions for issuance of notice under section 153C of the Act are not satisfied.
We rely on the Judgment in the case of Sinhgad Technical Education Society[2017 (8) TMI 1298 - SUPREME COURT] wherein as held that the nexus between issue of notice under section 153C and the incriminating material found as a result of search must exist. Since in the instant case no incriminating material was found and seized during the course of search which belonging to the assessee company, the Judgment of Sinhgad Technical Education Society (supra), is squarely applicable to the facts of the present case. Further, the Hon’ble Jurisdictional Delhi High Court also in the case of CIT vs., Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT]. - Decided against revenue.
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2022 (11) TMI 1170 - ITAT DELHI
Penalty proceedings u/s 271D - contravention of provisions of section 269SS - recording of satisfaction for penalty proceedings - HELD THAT:- We find considerable force in the contention of the assessee that the penalty order passed u/s 271D of the Act is void ab initio and bad in law as there was no satisfaction recorded by the AO as to the contravention of provisions of section 269SS while framing the assessment order under section 143(3) - On perusal of the assessment order the AO initiated penalty proceedings u/s 271(1)(c) and there is no satisfaction recorded for initiation of proceedings u/s 271D nor given any finding that there is any contravention of provisions of section 269SS of the Act.
Following the decision of the Hon’ble Supreme Court and various Tribunals held that in the absence of recording of satisfaction in the assessment order for initiation of penalty proceedings under section 271D/271E of the Act, the penalty order is bad in law. Respectfully following the decision of the Hon’ble Supreme Court in the case of CIT Vs. Jai Laxmi Rice Mills [2015 (11) TMI 1453 - SUPREME COURT] we hold that the penalty order passed under section 271D of the Act is bad in law and accordingly the same is quashed. Ground No. 1 of the grounds of appeal of the assessee is allowed.
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2022 (11) TMI 1169 - ITAT DELHI
Addition on account of sundry creditors - CIT(A) noted in his order that the AO himself has admitted in the remand report that there were 05 parties whose names and amounts were same in the two lists submitted by the assessee and the total amount of creditors is also not disputed by the AO - HELD THAT:- Since the Ld. CIT(A) has deleted the addition after calling the remand report from the A.O. which fact has not been disputed by the D.R, we find no fallacy in the findings of the CIT(A). We, therefore, confirm the order of the Ld. CIT(A) on this issue. Accordingly, ground of appeal no.1 of Revenue is dismissed.
TDS u/s 194C - addition on account of freight expenses - HELD THAT:- We find that in the instant issue the A.O. had failed to point out where the TDS was not deducted by the A.O. and also not treated the freight expenses in question as bogus. Therefore, we find force in the submissions for the Assessee. CIT(A) after calling the remand report from the A.O deleted the addition.
From the careful perusal of the order of the CIT(A), we have noticed that he had deleted the addition after examining the remand report submitted by the AO - CIT(A) noted that the A.O. could not come up with even a single case where TDS was to be deducted as per law and there is no allegation of freight expenses in question were bogus. CIT(A) deleted the impugned addition - In absence of any contrary material brought to our notice by the D.R, we find no fallacy in the findings of the CIT(A). We, therefore, confirm the order of the Ld. CIT(A) on this issue. Ground of appeal no.2 of Revenue is accordingly dismissed.
Addition on account of loading and unloading expenses - assessee had not deducted the TDS on account of loading and unloading expenses - HELD THAT:- We find that the Ld. CIT(A) had only restricted the addition to the extent TDS which was deductible and deleted the balance addition out of the total addition made by the A.O. Since the order of the CIT(A) on this issue is in accordance with the provisions of Income Tax Act, we find no infirmity in the order of the CIT(A) and we, therefore, confirm his order and dismiss the ground of appeal of the Revenue.
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2022 (11) TMI 1168 - ITAT SURAT
Unexplained investment u/s 69 - Advance receipt against sale of land - Transfer yet to be registered - Addition made on the basis incriminating documents - Dumb Document - "Saudha Chithi" found and seized during the course of search and seizure action - unaccounted land transactions - CIT(A) deleted the additions - HELD THAT:- We see no reasons to take any other view of the matter than the view so taken by the Division Bench of this Tribunal in in the case of Shri Pravinchandra Dahyabhai Umriger [2022 (5) TMI 1479 - ITAT SURAT] as held ‘sauda chithi’ is a dumb document as far as the assessee is concerned. Hence, the additions cannot be made on the basis of such dumb documents.
As the issue is squarely covered in favour of the assessee by the decision of the Coordinate Bench(supra) and there is no change in facts and law and the Revenue is unable to produce any material to controvert the aforesaid findings of the Coordinate Bench (supra). We find no reason to interfere in the said order of the Coordinate Bench, therefore, respectfully following the binding judgment of the Coordinate Bench, we dismiss the appeal of the Revenue.
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2022 (11) TMI 1167 - ITAT KOLKATA
Addition u/s 40A(3) - assessee firm had made cash purchase exceeding permissible limit - CIT-A deleted the addition - HELD THAT:- CIT(A) has categorically mentioned that the cash book, purchase register and all individual invoices where cash transaction had taken place have been thoroughly checked and it is found that not a single such transaction actually exceeded the threshold limit of Rs.20,000/-. In view of the aforesaid factual finding given by the CIT(A) there is no violation of the provisions of section 40A(3) of the Act, we do not find any reason to interfere with the order of the CIT(A) and the same is upheld. - Decided against revenue.
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2022 (11) TMI 1166 - ITAT KOLKATA
Addition u/s 68 - Unexplained cash credit - assessee has failed to produce the alleged shareholders before the ld. AO for identity, creditworthiness and genuineness of the transaction - HELD THAT:- The assessee was asked to explain the cash credit received by it during the year. Assessee has failed to file necessary details to explain alleged cash credit and also unable to provide identity and creditworthiness of the cash creditors as well as genuineness of the transaction as per the provisions of law. The assessee has miserably failed to explain the source of alleged cash credit if the assessee has sufficient details to explain the alleged sum it could have certainly filed those details before the authorities below.
The assessee consistently escaping from appearing before the ld. AO and the appellate authority plausible explanation to explain the source of alleged sum of share capital and security premium. If the assessee is unable to explain the alleged cash credit and consistent escaped, the provisions of section 68 are attracted. Thus, it is held that the assessee has routed its unaccounted income in the books of account in the form of share capital and security premium by arranging bogus share capital and share premium through accommodation entry provider.
Therefore, we find no infirmity in the finding of the CIT(A) confirming the addition made u/s. 68 of the Act and the same is confirmed. Thus, instant grounds of appeal raised by the assessee are dismissed.
Addition as undisclosed commission income from the share capital and share premium raised during the year - We after perusing the material available on record and findings of the authority below in respect of addition made by the AO on account of undisclosed commission income and same has been confirmed by the ld. CIT(A) in its order. We are of the considered view that since the assessee could not demonstrate any irregularity in the order passed by the AO at the time of hearing before the ld. CIT(A) and even before us also and the assessee completely failed to substantiate its claim before the authorities below, therefore, we find no infirmity in the findings of the CIT(A) on this issue and thus this ground of appeal is dismissed. The other grounds raised by the assessee are general and consequential in nature therefore need not required to be adjudicated.
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2022 (11) TMI 1165 - ITAT SURAT
Estimation of income - Bogus purchases - HELD THAT:- Since, the issue is squarely covered by the judgment of Pankaj K. Chaudhary [2021 (10) TMI 653 - ITAT SURAT] wherein Tribunal has sustained the addition @ 6% of bogus purchases.
Revenue submitted before us that u/s 37 the entire bogus purchases should be disallowed as the bogus purchase would not for the purpose of the business and therefore the 100% addition made by Assessing Officer may be sustained.
DR relied on the judgment of Co-ordinate Bench of ITAT, Mumbai in the case of Urmila & Co. Ltd. [2013 (11) TMI 477 - ITAT MUMBAI] However, we note that the judgment cited by Ld. DR is on different footing and does not applicable to the facts of the assessee’s case under consideration. Therefore, respectfully following the binding precedent of the Co-ordinate Bench of ITAT, Surat in the case of Pankaj K. Chaudhary [2021 (10) TMI 653 - ITAT SURAT] we partly allow the appeal of the Revenue.
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2022 (11) TMI 1164 - ITAT MUMBAI
Unexplained expenditure - HELD THAT:- Revenue has not brought on record any material to show that there is any change in the facts or in nature of transactions in the impugned assessment year. The Commissioner of Income Tax (Appeals) in the impugned order has deleted the addition following its own order for assessment year 2011-12 - The CIT(A) has categorically mentioned that the facts are identical in both assessment years. Following the order of Co-ordinate Bench in assessee’s own case, ground No. 1 to 3 of appeal by the Revenue are dismissed.
Claim of ESOP expenses - Allowable revenue expenses u/s 37(1) - HELD THAT:- The Delhi Bench placing reliance on Biocon Ltd. [2013 (8) TMI 629 - ITAT BANGALORE] held that the discount under ESOP is allowable deduction u/s 37(1) of the Act. The CIT(A) in the impugned order deleted the addition following the order of CIT(A) in the case of M/s. Indiabulls Financial Services ltd (now merged with the assessee Co.) for the A.Y. 2011-12. The CIT(A) categorically observed that there is no change in the facts. The Revenue has not been able to rebut the above observations of the First Appellate Authority. We find no reason to interfere with the finding of the CIT(A) on this issue. Accordingly, ground No. 4 and 5 of the appeal are dismissed.
Deduction of education cess - HELD THAT:- We find that the Co-ordinate Bench has held that the Explanation 3 inserted by the Finance Act 2022 is effective retrospectively from 1st April 2005, hence, the assessee is not entitled for deduction of education cess. In light of above and the statement made by AR of the assessee, the Revenue succeeds on ground No. 6 of the appeal.
Ground of appeal as emanate from the additions made in the assessment order passed under section 143(3) read with section 153A - claim of ESOP expenses - HELD THAT:- A perusal of the assessment orderassed under section 143(3) read with section 153A of the Act, reveals that there is no discussion in respect of ESOP expenses. However, while computing total income, the AO has taken total income as determined in the assessment order passed u/s 143(3) - AR has pointed that in assessment order passed u/s 143(3) of the Act, the AO had made addition, the assessee carried the issue in appeal before CIT(A). The CIT(A) decided the issue in favour of assessee. Department has accepted the some as no further appeal was filed by the Department on this issue. We find that CIT(A) in the impugned order has granted relief to the assessee on the ground that the issue of ESOP expenditures stands concluded in proceedings arising out of original assessment order. The Department has not furnished any contrary material. Since, the issue does not emanate from assessment proceedings u/s 143(3) read with section 153 of the Act, ground No. 5 and 6 of appeal are liable to be rejected
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2022 (11) TMI 1163 - ITAT PUNE
Genuine business expenditure - allowability of referral fees paid to doctors and nursing home by the appellant company - AO was of the opinion that the payment of referral fees to doctors and nursing home would amount to violation of the provisions of Medical Council (Professional Conducts, Etiquettes and Ethics) Regulation Act, 2002 - HELD THAT:- Issue squarely hit by the Explanation 1 to section 37 of the Act. We find that an identical issue was dealt in the case of Apex Laboratories (P.) Ltd. vs. DCIT, [2022 (2) TMI 1114 - SUPREME COURT] wherein, the Hon’ble Apex Court held that gifting freebies, and payment of referral fees etc. is clearly prohibited by law and cannot be allowed as deduction u/s 37(1) of the Act.
We are of the considered opinion that referral fees paid to doctors and nursing home cannot be allowed as deduction while computing the business income of an assessee. Accordingly, we confirm the orders of the lower authorities. Thus, we do not find any merit in the ground of appeal filed by the appellant-assessee.
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2022 (11) TMI 1162 - ITAT INDORE
Unexplained investment in purchase of agriculture land u/s 69C - value determined by stamps authority - addition on the basis of difference in “actual purchase price” and “valuation made by stamps authority” - HELD THAT:- There is no evidence or basis available to the lower authorities for making this addition. On a careful reading of section 69C, we observe that the said section empowers the assessing authority to make addition where unexplained expenditure is found but then the unexplained expenditure has to be real and not notional. Had there been any evidence in the possession of revenue authorities which could establish that the assessee has actually expended a sum on purchase of the property, the authorities would have been within power to treat the difference as income of assessee but this is not so in present case.
The authorities do not have any evidence whatsoever by which it can be said that the assessee has expended a sum on purchase of the impugned property.
From the decision of Bharat Sanchar Nigam Limited [2022 (7) TMI 1350 - SUPREME COURT] that the value determined by stamps authority is merely for collection of stamps duty.
Also find merit in the submission of Ld. AR that the realising the absence of provision, the Parliament has introduced newer section 56(2)(x) but that section does not support revenue’s case for AY 2013-14. With this discussion, we do not hesitate in concluding that the revenue authorities are not justified in making addition u/s 69C in this case. Ground raised by assessee is allowed.
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2022 (11) TMI 1139 - ITAT BANGALORE
TP Adjustment - comparable selection - HELD THAT:- We direct the TPO to exclude (i) Infosys BPO Limited, (ii) SPI Technologies India Private Limited, and (iii) Eclerx Services Limited from the list of comparables and recompute the ALP of the international transaction.
Informed Technologies India Limited and Crystal Voxx Limited - As we find that the Tribunal in assessee's group case in the case of EIT Services Private Limited v. DCIT [2022 (8) TMI 1309 - ITAT BANGALORE] had restored the matter to the TPO to examine whether the above two companies can be considered as comparable company. Thus we direct the AO/TPO to examine afresh whether the above two companies, namely, Informed Technologies India Limited and Crystal Voxx Limited can be included as comparable companies.
Ace BPO Services Private Limited - Restore the comparability of Ace BPO Services Private Limited to the files of the TPO.
Disallowance of ESOP expenses u/s. 37 - employees of the assessee was eligible to participate in share based compensation scheme of the ultimate holding company, whereby the shares of the ultimate holding company are granted to the employees of the assessee on satisfying certain conditions - HELD THAT:- In assessee's group case, namely, EIT Services India Pvt. Ltd. v. DCIT [2022 (8) TMI 1309 - ITAT BANGALORE] had held that the ESOP expenditure is to be allowed as a deduction u/s. 37 of the I.T. Act. The Tribunal had followed the judgment of the Hon'ble jurisdictional High Court in the case of CIT v. Biocon Limited [2020 (11) TMI 779 - KARNATAKA HIGH COURT]
TDS u/s 195 - The assessee has raised grounds with regard to the issue that the assessee is not liable for TDS u/s. 195 of the I.T. Act - We are of the view that these grounds need not be adjudicated, since, on perusal of the final assessment, it is clear that the disallowance of ESOP expenses has made under the provisions of section 37 of the I.T. Act (though there was some discussion in the draft assessment order with reference to disallowance u/s. 40(a)(i).
Payment towards leave encashment - HELD THAT:- In the light of the decision of the Hon'ble Supreme Court in the case of Exide Industries [2020 (4) TMI 792 - SUPREME COURT] assessee will not be entitled to claim deduction on leave encashment on the basis of the provision. Taking into consideration the circumstances under which the assessee did not claim a sum being leave encashment actually being paid during the previous year relevant to Assessment Year 2016-2017 we are of the view that the assessee should be allowed leave encashment actually paid as per provisions of section 43B(f) of the Act. We remit the issue to the AO to verify the claim of the assessee and allow deduction to the assessee as per law after affording assessee opportunity of being heard.
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2022 (11) TMI 1138 - DELHI HIGH COURT
Reopening of assessment u/s 147 - accommodation entries entry transactions - entity Mridul Securities is involved in providing accommodation entries and the Assessee is the beneficiary of the specified alleged transaction - HELD THAT:- As Petitioner contends that it has duly purchased the said 32,000 shares from Mridul Securities but there are no relevant or contemporaneous documents evidencing the said purchase, i.e. bank statement etc., placed on record in this petition. As regards the disclosure, if any, of the purchase of the shares, in its earlier ROI, it was clarified by the learned counsel for the Petitioner that since the shares were bought in the same financial year, it is only the transaction with respect to sale of shares which is reported in the ROI. Thus, it is only the sale of shares which is documented by the Assessee in its ROI.
SCN and impugned order states that the entity Mridul Securities is involved in providing accommodation entries and the Assessee is the beneficiary of the specified alleged transaction, in respect whereof, information has been received by the AO and the said transaction is not disputed by the Petitioner.
In light of the information which forms the basis of the initiation of the inquiry and in view of the fact that the transactions with Mridul Securities are admitted by the Petitioners, we do not find any case for interfering in the writ proceedings. This Court finds that the Petitioners have not brought on record anything to suggest that the reassessment proceedings are being undertaken in an arbitrary manner.
With respect to the contention raised on the issue of limitation and the arguments of learned counsel for the Petitioners that the notice has been issued beyond limitation has already been rejected by this Court in Touchstone case [2022 (9) TMI 892 - DELHI HIGH COURT]
The Supreme Court in Commissioner of Income Tax v. Chabildas and Anr. [2013 (8) TMI 458 - SUPREME COURT] has held that as the Act of 1961 provides an able machinery for assessment/reassessment of tax, the Assessee is not permitted to abandon with the machinery and invoke writ jurisdiction of the High Court under Article 226 of the Constitution of India.
This Court is of the view that the present cases do not fall under the exceptional ground on which a writ jurisdiction of the High Court can be invoked. WP dismissed.
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