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Income Tax - Case Laws
Showing 1 to 20 of 777 Records
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2022 (3) TMI 1637
Validity of assessment order u/s 143(3)/143(3A) & 143(3B) on the ground of violation of principle of natural justice and that the impugned assessment order is non-speaking order - HELD THAT:-Learned advocate appearing for the respondents was given opportunity to produce the records/documents to show that any opportunity of personal hearing was given to the petitioner which the respondents failed. On perusal of the impugned assessment order, find the same is non-speaking also. Though this Court is very reluctant to entertain any writ petition against any assessment order which is an appeallable order, but in view of patent violation of principles natural justice and assessment order being non-speaking, am inclined to entertain this writ petition.
Considering the submission of the parties, this writ petition is disposed of by setting aside the aforesaid impugned assessment order dated 26th March, 2021 with the direction upon the respondents/assessing officer concerned to pass the assessment order afresh in accordance with law after giving an opportunity of personal hearing to the petitioner within 12 weeks from the date of communication of this order.
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2022 (3) TMI 1636
Revision u/s 263 - Unaccounted and excess stock found during the course of search - whether be assessed as business income at the rate of 30% - whether Tribunal is correct in law in endorsing the erroneous order of the A.O as an order after taking one of the possible views? - as decided by HC [2021 (9) TMI 424 - ANDHRA PRADESH HIGH COURT] elaborate explanations were offered by the assessees, which were fortifiable by consistent views by various Benches of the Tribunal as well as the High Courts - Assessing Officer, upon consideration, accepted the explanation and taxed the additional income as ‘business income’ @ 30% instead of 60% as per Section 115BBE of the Act - no case of perversity or lack of enquiry on the part of the Assessing Officer is made out so as to render his decision erroneous under Explanation 2 of Section 263 of the Act.
HELD THAT:- Petitioner would point out the statement made by the Managing Director of the respondent- assessee which indicates that the amount in question (Rs. 7,60,53,000/-) is declared on account of unexplained investment in Tobacco stocks of Deccan Tobacco Company. He also refers to the answer given by the same employee that as he is not in a position to explain the source of excess stock of 6,01,672 Kgs valuing to Rs. 7,60,53,000/- (Rate @ 126.40/- per Kg) found in the godowns of the Deccan Tobacco Company, he voluntarily offered the same as undisclosed income in the hands of the company.
Petitioner also would point that it is after the search that the balance sheet relied upon by the assessee came to be finalized. Therefore, he would submit that it is not a case where two opinions were possible based on which reasoning both the ITAT and the High Court has interfered with the proceedings u/s 263 of the Income Tax Act, 1961.
Issue notice.
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2022 (3) TMI 1635
TP Adjustment - Comparable selection - HELD THAT:- Caliber Point Business Solutions Ltd. and R. Systems International Ltd. have been excluded on the ground that, the Companies are having different financial ending and also non availability of coverage and reliability of data necessary for application of the method. In our opinion, the said exclusion has been done by the TPO/DRP/AO in strict compliance with Rule 10B (4) and Rule 10C (2) (c) of the Rules and based on the settled principles of law, therefore the same requires no interference. Accordingly we reject the Assessee's Appeal Grounds No. 5 to 8.
BNR Udyog Ltd. be excluded as it provides medical transcription services, which is not comparable to ITeS Service Provider.
E-Clerx Services Ltd. had a different revenue recognition policy outsourcing expenditures having different business models and the same is non-comparable by applying principal laid down in the case of Rampgreen [2015 (8) TMI 931 - DELHI HIGH COURT] Thus we found that the E-Clerx Services Ltd. becomes non comparable while computing ALP.
Infosys BPO Ltd. company is having higher brand value and engaged in areas like insurance, banking, financial services, manufacturing and telecom which are in the niche areas unlike the assessee, thus be excluded.
TCS E-serve Ltd. Company deserves to be excluded, which provides KPO Services in the nature of core business processing services analytics and insides as well as support service for both data and voice process, therefore, the same is not a comparable.
Interest on inter-company receivables - Realization of sale/service proceeds - international transactions and not an international transaction per-se - HELD THAT:- Adjustment made by the TPO towards interest on receivables, which is well within the definition of international transaction. Therefore, we are not agreeing with the submission of the Ld. Counsel for the assessee.
Interest at LIBOR plus 400 bps - It would be noted that the decision of Hon'ble Delhi High Court in the case of Kusum Healthcare [2017 (4) TMI 1254 - DELHI HIGH COURT] is still the binding precedent on the issue of interest on outstanding receivables as held inclusion in the Explanation to Section 92B of the Act of the expression "receivables" does not mean that de hors the context every item of "receivables" appearing in the accounts of an entity, which may have dealings with foreign AEs would automatically be characterized as an international transaction and (ii) With the Assessee having already factored in the impact of the receivables on the working capital and thereby on its pricing/profitability vis-à-vis that of its comparables, any further adjustment only on the basis of the outstanding receivables would have distorted the picture and re-characterized the transaction. Ergo, Assessee's Grounds of Appeal No. 13 and 14 are being allowed.
Grant foreign taxes credit in accordance with law, after verifying the records.
Appropriate MAT credit in accordance with law after verifying the records.
Charging interest u/s. 234C is consequential and mandatory in nature, which does not requires adjudication.
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2022 (3) TMI 1634
Method of recognizing income on hire purchase contracts - HELD THAT:- For income tax purpose, the assessee continued to follow ESM method as done in earlier years. Such change resulted in hire purchase finance charges on ESM basis being higher than the income recognized on IRR method in the books to the tune. Accordingly, the same was added back by the assessee while computing the taxable income. As submitted that the finance charges on hire purchase transactions were taxed on IRR method in earlier assessment years and assessee’s appeal against the same was pending before Hon’ble High Court. However, for the sake of consistency in the assessments, the excess hire purchase income offered on ESM basis was to be deducted from the taxable income. However, rejecting the same, AO noted that the issue had not reached finality and further similar treatment was give in assessment order for AY 2005-06. Therefore, the plea to reduce the taxable income by Rs. 483.52 Lacs was not accepted. CIT(A), following the decision of Tribunal for AY 2001-02 confirmed the stand of Ld. AO against which the assessee is in further appeal before us.
We find that this issue is covered by the latest order of Tribunal [2019 (9) TMI 974 - ITAT CHENNAI] The bench, considering the decision of Hon’ble High Court of Madras in assessee’s own case [2019 (3) TMI 1068 - MADRAS HIGH COURT] directed Ld. AO to tax the interest income on EMI method or ESM method which has been consistently being followed by the assessee and allow consequential relief in accordance with law. Since facts as well as issue is pari-materia the same in this year, we issue similar directions to Ld. AO in this year. Reduction claimed by the assessee would not be allowed and continue to be added to the income in the computation of income. The grounds thus raised stand allowed for statistical purpose.
Provision for reversal of NPA - assessee made provision for non-performing assets (NPA) as per directions of RBI - HELD THAT:- We find that what the assessee is claiming is that the reversal should not be included in total income on the ground that provisions were not allowed in earlier years. We also find that this issue has been set-aside by Tribunal [2019 (9) TMI 974 - ITAT CHENNAI] The bench observed that the assessee’s claim would require verification and therefore, the matter has been remitted back to the file of AO for fresh consideration after affording opportunity of hearing to the assessee.
Recovery of Bad debts written-off in the books of amalgamating companies - assessee reduced taxable income being amount recovered out of bad-debts written-off in the books of amalgamating companies on the ground that it was exempt / nontaxable - HELD THAT:- As after amalgamation, the assessee has all the rights as well as liabilities of amalgamating company which were transferred to it. Such recoveries of bad-debts were nothing but business receipts for assessee and therefore, assessable in its hands. Respectfully, following the same, we dismiss the grounds urged by assessee, in this regard.
Business Origin Cost - We find that this issue has been dealt with by Tribunal in [2019 (9) TMI 974 - ITAT CHENNAI] chose to follow the decision of Taparia Tools Pvt. Ltd. [2015 (3) TMI 853 - SUPREME COURT] wherein it was held that normally revenue expenditure incurred in a particular year has to be allowed in that year and if the assessee claims the full expenditure, department could not deny the same. Finally, the claim was allowed. Therefore, this issue is covered in assessee’s favor.
Amortization of expenditure - AO denied the deduction. CIT(A) held that since the claim was rejected in earlier years, the reversal of the same during this year was to be given credit. Accordingly, AO was directed to entertain the claim. Aggrieved, the revenue is in further appeal before us. Since we have allowed the assessee’s claim in full in the year of incurrence as per assessee’s computation of income, the credit of reversal would not be available to the assessee in this year. Therefore, this ground raised by the revenue stand allowed.
Disallowance u/s 40(a)(i) - assessee did not deduct tax at source on the ground that the expenses were incurred by overseas branch and the payments were not taxable in India - As there was no obligation of withholding tax liability - HELD THAT:- As submissions of DR were that the services in that year was utilized outside India which is not the case in this year. Considering the rival submissions, we remit this issue back to the file of Ld. AO to bring on record correct factual matrix and re-adjudicate the same after affording opportunity of hearing to the assessee.
Broken period interest on sale of securities - assessee was in regular sale and purchase of Government securities - transactions were classified as investment - HELD THAT:- We find that this issue is subject matter of Tribunal order [2019 (9) TMI 974 - ITAT CHENNAI]. The coordinate bench, at para 9.5 of the order, observed that CIT(A) did not appreciate the facts of the issue properly. The courts have held that if the securities are regularly purchased and sold, they could be stock-in-trade. Therefore, the matter was remitted back to the file of AO for fresh examination with a direction to the assessee to place all the material before Ld. AO. Since facts are similar in this year and with a view to enable revenue to take consistent stand in the matter, we remit this issue back to the file of AO on similar lines. As per chart placed before us, this issue also arises in revenue’s appeal.
Depreciation on UPS - assessee claimed depreciation on UPS system @60% considering the same to be part of computer block - HELD THAT:- CIT(A), following the decision of this Tribunal [2014 (2) TMI 224 - ITAT CHENNAI] in the case of Sundaram Asset Management Co. Ltd., directed Ld. AO to allow depreciation @60%.
Grant of indexation benefit by CIT(A) to the assessee on government securities holding that Bonds and Debentures are distinguishable from government securities - AO denied the same on the ground that all capital assets which are in the nature of debt instruments, excluding capital indexed bonds issued by Government, was not eligible with the insertion of third proviso to Sec. 48 - HELD THAT:- The bench observed that government securities are not excluded from the definition of capital assets. As per Sec. 2(42A), the expression ‘securities’ shall have the meaning as assigned in Clause-11 of Securities Contract Regulation Act, 1956 which includes government securities. It was thus concluded by the bench that bonds and securities are distinguishable. The bonds are not freely tradeable whereas the securities are freely tradeable. The Bonds could not be equated with securities. Further, from plain reading of 3rd proviso to Sec. 48. government securities were not excluded for indexation benefit and only bond or debentures were excluded. Accordingly, the revenue’s grounds were dismissed. We find that similar is the issue in both the appeals of the revenue.
Disallowance u/s 14A - HELD THAT:- As submissions of Ld. AR are two-fold i.e., own funds are more than the investment and therefore, no interest disallowance should be made. Secondly, the 0.5% as per Rule 8D(2)(iii) should be computed only on those investments which have yielded exempt income during the year. We concur with both the submissions. AO is directed to verify whether assessee’s own funds are sufficient enough to cover the investment. If so, interest disallowance would not be justified. The indirect disallowance of 0.5% should be computed only on those investments which have yielded exempt income during the year. The grounds, in all the three years, stand allowed for statistical purposes.
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2022 (3) TMI 1633
Deduction u/s 80P(2)(d) - interest income earned by the Appellant, a co-operative housing society, from co-operative banks - HELD THAT:- As decided in Totgars Cooperative Sale Society Ltd. [2010 (2) TMI 3 - SUPREME COURT] the benefit of Section 80P(2)(a)(i) would not be available in respect of interest income as the same is not in the nature of “profits and gains of business”. However, unlike Section 80P(2)(a) of the Act wherein expression “profits and gains of business” has been used, Section 80P(2)(d) of the Act uses the expression “any income by way of interest or dividend” for the purpose of granting benefit of deduction under Section 80P(2)(d) of the Act what is relevant is that the income should be by way of interest/dividend, and that the same should have been derived by a co-operative society from investment in another co-operative society. The fact that such interest income is in the nature of “profits and gains” or “income from other sources” is not relevant for the purpose of granting benefit of deduction under Section 80P(2)(d) of the Act.
In conclusion, we hold that the judgment of Totgars Cooperative Sale Society Ltd. (supra), rendered in the context of Section 80P(2)(a) of the Act (wherein expression “profits and gains of business” has been used), is distinguishable on facts. The aforesaid judgment is not applicable to the facts of the present case as deduction has been claimed under Section 80P(2)(d) of the Act (wherein expression “any income” has been used).
Impact of insertion of Section 80P(4) of the Act is that a co-operative bank would no more be entitled for claim of deduction under Sec. 80P of the Act, however, the interest income derived by a co-operative society from a co-operative bank would continue to be eligible for deduction u/s 80P(2)(d) of the Act irrespective of the fact that such interest income is in the nature of “profits and gains of business” or “income from other sources” as Section 80P(2)(d) uses the expression “any income” and not “profits & gains of business).
Accordingly, the Appellant is entitled to claim deduction u/s 80P(2)(d) of the Act in respect of interest received from co-operative banks derived from a co-operative bank. However, benefit of Section 80P(2)(d) would not be available in respect of saving bank interest of INR 41,446/-. Accordingly, Ground No. 1 is partly allowed and addition made by the AO stand deleted.
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2022 (3) TMI 1630
Bogus purchases - bogus accommodation bills - estimation of income - hawala transactions from certain parties who were only providing accommodation sale bills - HELD THAT:- Substantial question of law in these appeals are squarely covered in the order of M/s. Moammad Haji Adam & Co. [2019 (2) TMI 1632 - BOMBAY HIGH COURT] and M/s. Paramshakti Distributors Pvt. Ltd.[2019 (7) TMI 838 - BOMBAY HIGH COURT] as held purchases cannot be rejected without disturbing the sales in case of a trader. Tribunal, correctly restricted the additions limited to the extent of bringing the G.P. rate on purchases at the same rate of other genuine purchases - therefore the appeals can be disposed.
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2022 (3) TMI 1627
Permission to file paper return of income - Petitioner states that the last date to file return is 15th March, 2022 and therefore for the moment petitioner should be permitted to file paper return of income for A.Y. 2021-22 subject to final outcome in the petition - HELD THAT:- In our view, this interim relief stated by petitioner has to be granted. Therefore, Ad-interim relief, in terms of prayer clause – (e) is granted which reads as under :
(e) that pending the hearing and final disposal of this petition, the Petitioner be permitted to file a paper return of income for the assessment year 2021-22, subject to the final disposal of the Petition.
Stand over to 22nd March, 2022.
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2022 (3) TMI 1621
Reopening of assessment u/s 147 - demand of personal hearing for the petitioner - HELD THAT:- The advantage of giving a personal hearing is, this doubt that the concerned officer had that he was unable to discern from return of income what petitioner has submitted, would not have arisen. Therefore, we, without making any observations on merits of the case set aside the order which is impugned in the petition. The matter is remanded for de novo consideration and all rights and contentions of petitioner are kept open.
Jurisdictional Assessing Officer (JAO) shall also give a personal hearing to petitioner with atleast 7 working days advance notice. JAO shall permit petitioner to also make written submissions following the personal hearing.
If in the order, the JAO proposes to rely on any judgments or order passed by any Court or Tribunal, he shall provide a list thereof to petitioner alongwith the notice for personal hearing and give them an opportunity to deal with those judgments or distinguish those judgments and those submissions during the personal hearing.
JAO shall pass a well reasoned order by 30th June 2022 dealing with every submissions of petitioner and give complete reasons for the conclusions that he will be arriving at. The assessment proceedings will not be proceeded with for at least 30 days after passing the order on objections.
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2022 (3) TMI 1618
Assessment u/s 153A - addition u/s. 68, disallowance of interest u/s 37, disallowance of commission expenses and also ad hoc disallowance @30% on labor charges and professions fee paid during the year - HELD THAT:- The addition made in these assessment orders passed by the assessing officer under section 153A without reference to any incriminating material found in search is not sustainable. Hence, we set aside the orders of authorities below and allowed the claim of the assessee and delete the addition. Since we have already directed to delete the addition of loan itself, the addition of commission and interest thereon disallowed are also directed to be deleted as the same are also without reference to any material foundering search. The appeal of the assessee allowed.
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2022 (3) TMI 1613
Failure of the liquidator to reply to the intimation for assessment - petitioner company is under liquidation and that there is no dispute that no notice was issued to the petitioner by the respondent after there was a transfer to liquidator under Section 127 - as submitted petitioner company is under liquidation and eventually wound up and there is no threat of any recovery proceedings - HELD THAT:- All through the period during the course of assessment even prior to the above order passed on 15.3.2021 by the National Company Law Tribunal for liquidating the petitioner, the petitioner was represented by the liquidator in the capacity of an IRP and later as an RP. The petitioner company is located in Union Territory of Puducherry whereas the liquidator is operating from Chennai.
Though it would have been ideal on the part of the liquidator to give a suitable intimation to the respondent Income Tax Department even prior to order of the liquidation that the petitioner company was represented by the liquidator in the capacity of an IRP and later as an RP, the fact remains that there was some failure on the part of the liquidator.
The liquidator has given only postfacto intimated after the assessment order dated 25.6.2021 came to be passed by the respondent. Since the assets of the petitioner company is to be distributed among the creditors in terms of the provisions of the Companies Act, 2013, it would be unfair to deny legitimate dues that may be payable to the secured and unsecured creditors, if indeed, tax due from the petitioner was much lesser.
Therefore, to meet the ends of justice, we quash the impugned order and remit the case back to the respondent to pass a fresh assessment order preferably with in a period of 90 days from the date of receipt of a copy of this order. The petitioner represented by its liquidator shall file necessary reply to the notices and intimations in a period of 30 days. The impugned order stands quashed by this order and it shall be treated as a corrigendum to the show cause notice, if any, issued earlier to the petitioner. All issues on merits are left to be canvassed before the respondent.
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2022 (3) TMI 1607
LTCG included in taxable income - HELD THAT:- Paragraph no.6 of the order [2017 (1) TMI 1765 - ITAT PUNE] reads as under -“6. The assessee has requested vide the above mentioned submissions that the amount of Rs. 9,90,20,875/- may now be included in his taxable income for the A.Y. 2014-15. In view of these facts and as per the directions of the ITAT discussed above, the amount being balance consideration on account of sale of land at Wagholi is being taxed in the hands of the assessee in the A.Y. 2014-15 as Long Term Capital Gains.”
In view of paragraph no.6 above, appeals do not survive. Appeals disposed.
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2022 (3) TMI 1605
Nature of receipts - proceeds of maturity of insurance policy - whether life insurance policy is a capital asset? - whether proceeds of a maturity of a single/double premium life insurance policy are to be assessed as “Long-term capital gain” (LTCG) or under the head “Income from other sources”? - HELD THAT:- As per section 2(24) of the Act, capital asset means property of any kind held by an assessee, including any unit linked insurance policy to which exemption under clause (10D) of section 10 does not apply on account of the applicability of the fourth and fifth provisos thereof except stock in trade, personal effects etc., the agricultural land and gold bonds and special bearer bonds as mentioned therein.
The Parliament while substituting section 10(10D) and inserting section (2A) to section 88 has denied the benefit of exemption and deduction in respect of policies, which are similar to deposits/investments and also has treated the premium paid over and above of 20% of the sum assured towards investment and not towards insurance or hedging of life risk.
The amount of premium paid by the assessee, which was more than 20% of the sum assured was, in fact, investment made by the assessee. However, it is pertinent to note here that as per section 10(10D)(d), entire maturity amount received including sum assured has been excluded of the policies in respect of premium payable for any of the years exceeds 20% of the sum assured.
Meaning thereby, the exclusion is not for any amount received over and above the sum assured, rather the entire amount received under the policy has been excluded. Therefore, the entire maturity value/gains at the time of extinguishment of the rights of the assessee in the said policy i.e. on the date of maturity are liable to be treated as capital gains.
While computing the capital gains, the cost of acquisition will be taken the amount paid towards premium minus 20% of the sum assured, which amount shall be treated as not part of the investment rather towards the cost of hedging of risk under the insurance policy, for which a deduction is already available to that extent under sub section (2A) to section 88 and thereafter, indexation is to be allowed accordingly.
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2022 (3) TMI 1604
TP Adjustment - adjustment of interest on receivables - HELD THAT:- The issue of interest on receivables stands adjudicated by the orders of the Co-ordinate Bench of ITAT in assessee’s own case [2021 (11) TMI 1090 - ITAT DELHI] and [2020 (6) TMI 712 - ITAT DELHI] as folliwing case KUSUM HEALTH CARE PVT. LTD. [2017 (4) TMI 1254 - DELHI HIGH COURT] find no merit in making any adjustment on account of interest due on receivable from its AE.
In the absence of any material change in the factual matrix and the legal proposition, we direct that the addition made of “adjustment on interest due receivables” be deleted. Decided in favour of assessee.
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2022 (3) TMI 1602
Substantial question of law - Admissibility of additional ground without raising the issue of jurisdiction before the AO and CIT (A) - ACIT jurisdiction - HELD THAT:- The appeal is admitted on the substantial questions of law which reads as under :
I. Whether on the facts and in the circumstances of the case, the Tribunal was justified in admitting the additional ground when the assessee had not raised issue of jurisdiction of the Assessing officer before the Assessing officer and CIT (A) ?
II. Whether on the facts and in the circumstances of the case, the Tribunal was justified in coming to the conclusion that the Additional Commissioner of Income Tax, Range 2(3), Mumbai, had no jurisdiction to pass the assessment order ?
Respondent waives service. This appeal to come up in due course.
Registrar (Judicial) / Registrar, High Court, Original Side, Bombay to ensure that the original record in relation to this Appeal is summoned from the tribunal and offered for inspection of the parties. This paper book is treated sufficient for the purpose of admission of this Appeal. However, the Registry must further ensure preparation of complete paper book in accordance with the Rules.
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2022 (3) TMI 1598
Validity of Reopening of assessment - petitioner has challenged the impugned notice u/s 148 as it did comply with the formalities under the newly introduced amended Section 148A - violation of principles of natural justice - Preliminary jurisdictional objection rejected and order passed - HELD THAT:- Since the issue involved, prima facie, has been settled by this Court and different High Courts in favour of the Assessee/petitioner, find petitioner has been able to make out a case for entertaining this writ petition and prima facie for an interim order.
Considering the facts and circumstances as appears from record, the impugned assessment order is stayed for a period of 12 weeks from date or until further order whichever is earlier.
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2022 (3) TMI 1595
Delay in filling of an appeal before ITAT - appeal is time barred by 627 days - sufficient and reasonable cause for delay or not? - HELD THAT:- In the instant case, the Ld. CIT(A) has passed ex-parte order. It has come to knowledge of the assessee when the assessee was informed to comply with the penalty notices that the appeal filed before the Ld. CIT(A) has been rejected. Then at the instance of the assessee, the previous A.R. visited the income tax site and came to the know that the order has already been passed by the Ld. CIT(A), on ex-parte basis. The assessee has not received any notice for hearing of the appeal as well as the order passed by the CIT(A). The assessee was not aware about the passing of CIT(A)'s order. However, as soon as assessee came to know of penalty notices, being issued against her, she consulted present Counsel and on the basis his advice, the present appeal has been filed though with a delay of 627 days.
No culpable negligence or mala fide on the part of the assessee in delayed filing of the present appeal and it does not stand to benefit by resorting to such delay. Therefore we find that there exists sufficient and reasonable cause for condoning the delay in filing the present appeal and as held by the Hon'ble Supreme Court, where substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserved to be preferred. Another contention raised that due to the outbreak of COVID-19 pandemic in March, 2020, the Hon'ble Supreme Court took Suo Motu cognizance of the difficulties faced by the litigants in filing petitions/applications/suits/appeals/all other proceedings within the period of limitation prescribed under the general law.
We are of the view that the order was passed ex parte without considering the submissions of the assessee. Hence, the assessee was not provided proper opportunity to putforth her case. There is merit in the submissions of the assessee. The assessee has been cheated by the Ld. Counsel/ld. AR and therefore the assessee has submitted that the assessee in the instant case has not got the natural justice and therefore we are of the view that the assessee should not suffer because of gross negligence of the Ld. AR.
Remit the case back to the file of the Ld. CIT(A) to decide the appeal afresh - Appeal of the assessee is treated as allowed for statistical purposes.
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2022 (3) TMI 1594
Writ petitions dismissed as withdrawn - As petitioner submits that during the pendency of these Writ Petitions, before it is moved for admission, assessment orders since have been passed, on instructions, the petitioner counsel wants to withdraw these Writ Petitions, of course, with a liberty to workout the remedy as against the assessment orders now passed.
With the said liberty, these writ petitions are dismissed as withdrawn. No costs. Consequently, connected miscellaneous petitions are closed.
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2022 (3) TMI 1592
Reopening of assessment u/s 147 - reopening beyond period of 4 years - mandation to get prior approval of the Commissioner of Income Tax - challenge is to a notice u/s 148 which has been issued after approval by the JCIT and not the CIT - HELD THAT:- As following the order of this Court in M/S. AMBIKA IRON AND STEEL PVT. LTD., SUNITA DALMIA, NIRU AGARWAL, BIDESH BARAN ROY and others [2022 (1) TMI 1291 - ORISSA HIGH COURT] wherein held Officer authorized to record the necessary satisfaction had to be the Chief Commissioner of Income Tax / Commissioner of Income Tax. The impugned notice and all consequential proceedings are hereby quashed. The writ petition is disposed of.
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2022 (3) TMI 1576
Validity of ITAT orders - allegation of orders as arbitrary in nature and contrary to the applicable rules and Regulations - Petitioner seeks a direction to the respondent to restore the appeal of the petitioner as was filed initially and to pass a reasoned, lawful and valid order - petitioner states that though the petitioner’s proxy counsel had prayed for an adjournment and even filed an adjournment application, yet the Tribunal in the impugned order had recorded the concession of the appellant’s proxy counsel to the impugned order being set aside with a direction to the CIT(A) to decide the appeal on merits
HELD THAT:- On the last date of hearing respondent had prayed for some time to obtain instructions. Today he states that the Assessing Officer has no objection to the present matter being remanded back to the ITAT for a fresh decision.
Consequently, with the consent of learned counsel for the parties, the impugned orders dated 16th January, 2020 and 18th November, 2021 are set aside and the matters are remanded back to the ITAT to decide the matter afresh. The rights and contentions of all the parties are left open.
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2022 (3) TMI 1573
TDS u/s 194A - finance charges paid to NBFCs without deducting TDS - Addition u/s 40(a)(ia) - assessee in default u/s 201(1) - As Certificate of Chartered Accountant filed certifying that the finance charges paid by the appellant had been considered by deductees in Return of Income, have paid the taxes and filed the Return of Income - HELD THAT:- As law laid down in CIT Vs Ansel Landmark Township [2015 (9) TMI 79 - DELHI HIGH COURT] and M/s Hindustan Coca Cola Beverages Pvt Ltd [2007 (8) TMI 12 - SUPREME COURT] and in the context of circular number Circular No. 275/201/95-IT(B) dt 29/1/1997 issued by CBDT the Hon’ble Lordships have observed that, once it is proved on record that, the payee has accounted the amount in question as income and discharged the due taxes thereon then, no recovery of tax demand be enforced against the assessee.
Applying the same analogy to the case at hand, the assessee placed on records a certificate from a chartered accountant showcasing the income accounted and due discharge of taxes paid thereon by one of the resident payee. Consequently, for the said amount of certificate the assessee cannot be held as “the assessee-in-default” within the meaning of Section 201(1) and resultantly, such amount shall distant from application of provisions of section 40(a)(ia). Thus, in the light of aforesaid observations, the ground number 1 & 2 are partly allowed in terms of above.
Disallowance in case of travelling & vehicle maintenance - allowable business expenditure u/s 37(1) - HELD THAT:- Neither of the lower tax authorities had pointed any such voucher, the genuineness of the expenditure therein claimed to have been incurred by the assessee wholly and exclusively for the purpose of its business did not inspire any confidence, nor it was the case of the revenue that any part of the expenditure in question was either found to be bogus or fictitious, nor was found to have not been incurred by the assessee wholly and exclusively for the purpose of his business. Indeed, it showcased an exercise of running around the circle by both the lower tax authorities while dealing with the present case.
We neither could come across any provision in the present Income Tax Statute nor it has been brought to our notice by either parties to dispute, which subscribes vis-à-vis authorises the tax authorities to arrive at this logic of subscribing ad-hoc disallowances.
Evidently, there has been no clear findings as to number of vouchers requiring denial of allowances with the amount of expenditure and nature of defects therein or therewith, moreover department could not bring out any deprecative material on record to substantiate its logical conclusion. We couldn’t also see remotely there is any mention of rationale in arriving at the percentile of disallowance in the present case, consequently we find substantial force in the claim of the assessee that devoid of any specific infirmity qua the assessee’s claim for deduction of the aforementioned expenditure by the lower tax authorities, and hence the ad-hoc disallowance carried out in a most arbitrary manner could by no means be held to be justified.
We, do not find favour with the view taken by the lower tax authorities, consequently we set-aside the impugned order of CIT(A) on this score and vacate the ad-hoc disallowance in its entirety and thereby allow the ground number 3 of the appeal
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