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Income Tax - Case Laws

Showing 161 to 180 of 802 Records

• 2018 (6) TMI 1604 - ITAT MUMBAI
  

  Deduction u/s 54F - house purchased outside India - investment of capital gain in purchase of new residential house in Australia and thus allowing the shifting of tax base of India to a foreign country - whether provisions of Income-tax Act extends to India only and not extra territorial? - scope of amendment - HELD THAT:- As decided in LEENA JUGALKISHOR SHAH VERSUS ASSTT. COMMISSIONER OF INCOME TAX. [2016 (12) TMI 351 - GUJARAT HIGH COURT] The assessee invested the capital gains in a residential house within the stipulated time. There was no condition in section 54F of Act at the relevant time that the capital gains arising out of transfer of capital asset should be invested in a residential house situated in India. The language of section 54F of the Act before its amendment was that the assessee should invest capital gains in a residential house. It was only after the amendment to section 54F of the Act by the Finance (No. 2) Act, 2014, which came into force with effect from April 1, 2015 that the assesses should invest the sale proceeds arising out of sale of capital asset in a residential house situated in India within the stipulated period. When section 54F was clear and unambiguous, there was no scope for importing into the statute words which were not there.

  As in the instant case, as the assessee has invested capital gains in purchase of residential house prior to amendment to section 54F of the Act by the Finance (No. 2) Act, 2014, which came into force w.e.f. April 01, 2015, the exemption is allowable. - Decided in favour of assessee

  Assessee has not deposited the safe consideration amount in the capital gains bank account - due date for furnishing the return of income according to section 139(1) - HELD THAT:- In Humayun Suleman Merchant [2016 (9) TMI 70 - BOMBAY HIGH COURT] it has been held that where the amounts of capital gains is utilized before filing the return of income in purchase/construction of a residential house, then the benefit of exemption u/s 54F is available. Also in K. RAMACHANDRA RAO [2015 (4) TMI 620 - KARNATAKA HIGH COURT] held assessee having invested entire sale consideration in construction of a residential house within three years from the date of transfer, he could not be denied exemption u/s 54F on the ground that he did not deposit said amount in capital gains accounts scheme before due date prescribed u/s 139(1).

  In the instant case, the assessee filed her return of income for the impugned assessment year on 20.06.2011 declaring the total income of ₹ 6,90,42,239/-. Subsequently, she revised her return of income on 24.07.2012 at a total income of ₹ 3,37,72,410/-. In the revised return of income, the assessee claimed exemption u/s 54 of the Act. As per the details filed in the Paper Book (P/B) at page 10, the assessee remitted an amount of ₹ 9,00,000/- to Australia on 4th March 2011 and further remitted ₹ 2,90,00,000/- on 11 August 2011 and also remitted ₹ 2 crore on 4th June 2012 from her Standard Chartered Bank Account. - Decided in favour of assessee.

  Capital gain computation - Indexation year of cost of acquisition to be 1981-82 - house property at Chennai was inherited by the assesses on 10.06.2001 i.e. only after her mother's expiry - HELD THAT:- As decided in MANJULA J. SHAH [2011 (10) TMI 406 - BOMBAY HIGH COURT] by applying the deeming provisions contained in Explanation 1(i)(b) to section 2(42A) the assessee was deemed to have held the asset from January 29, 1993, to June 30, 2003, by including the period for which the asset was held by the previous owner and, accordingly, held liable for long-term capital gains tax. While computing the capital gains, the indexed cost of acquisition had to be computed with reference to the year in which the previous owner first held the asset and not the year in which the assessee became the owner of the asset. - Revenue appeal dismissed.

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• 2018 (6) TMI 1602 - ITAT MUMBAI
  

  Demand u/s 201(1) - Time limit as prescribed for initiation and completion of proceedings - order barred by limitation - scope of provisions of section 201 as amended by Finance Act, 2009 by insertion of sub–section (3) w.e.f. 1st April 2010 - HELD THAT:- As in NHK JAPAN BROADCASTING CORPORATION [2008 (4) TMI 182 - DELHI HIGH COURT] held that initiation of proceeding under section 201(1) after expiry of four years from the end of relevant financial year is barred by limitation. Thus, in view of the legal principal laid down in the decisions referred to above, the impugned order passed u/s 201(1) / 201(1A) is clearly barred by limitation as the initiation of proceedings under the said provision was after expiry of four years from the end of the relevant financial year i.e., financial year 2007–08. That being the case, the order passed under section 201(1) and 201(1A) of the Act deserves to be quashed.

  Hon'ble Gujarat High Court in Tata Teleservices Ltd. v/s Union of India [2016 (2) TMI 414 - GUJARAT HIGH COURT] have held that in respect of financial year 2007–08 and earlier years, only proceedings that were pending could be completed by 31st March 2011 and as such no fresh proceedings to be commenced for the said period.

  Undisputedly no proceedings under section 201 were pending before the AO. By the time the proceedings under section 201 of the Act were initiated by issuing notice under section 201 on 27th January 2014, it has already become barred by limitation. That being the case, looked at from any angle, the impugned order passed under section 201(1) and 201(1A) of the Act being barred by limitation has to be quashed. Accordingly, we do so. Consequently, the impugned order of the learned Commissioner (Appeals) is reversed and set aside.

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• 2018 (6) TMI 1601 - ITAT HYDERABAD
  

  Disallowance u/s. 14A - HELD THAT:- AO also has not established that assessee has diverted the borrowed funds for the purpose of investments and unnecessarily invoked Rule 8D(2), which only applies to certain interest payments where the use of funds could not be established for the purpose of business.

  If there is any diversion of funds borrowed for the purpose of business, the provisions of Section 36(1)(iii) will directly apply wherein the disallowance is 100% and not proportionate, as provided in Rule 8D(2). Since no nexus is established, the disallowance per se under Rule 8D(2) does not apply. Moreover, similar issue was considered in assessee’s own case by the Coordinate Bench in the AY. 2011-12, wherein the Tribunal has confirmed the order of CIT(A), in restricting the disallowance to the amount claimed as exempt, following the principles laid down by the various Hon'ble High Courts.

  We modify the order of CIT(A) and direct the AO to restrict the disallowance to the amount of dividend earned and claimed as exemption. - Appeal of assessee is partly allowed.

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• 2018 (6) TMI 1599 - ITAT KOLKATA
  

  Order passed by CIT(A) ex-parte - DR contented no compliance on the part of the assessee even during the course of assessment proceedings before the AO and the matter therefore may be sent back to the AO in order to give him an opportunity to examine the claim of the assessee of having received share capital and share premium amount - HELD THAT:- The impugned order of the Ld. CIT(A) passed ex-parte is accordingly set aside and the matter is restored to the file of the AO for deciding the same afresh on merit in accordance with law after giving one more opportunity of being heard to the assessee. As undertaken by the learned counsel for the assessee, the assessee shall make due compliance before the AO and shall extend all the possible cooperation in order to enable the AO to complete the assessment afresh expeditiously. - Appeal of the assessee is treated as allowed for statistical purpose.

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• 2018 (6) TMI 1598 - ITAT NEW DELHI
  

  Addition on account of expenditure incurred for acquiring an intangible asset in the form of technical know-how - AO treated the same as capital expenditure and the first appellate authority treated them as revenue expenditure - HELD THAT:- The assessee obtained a technical know-how in respect of manufacturing of paper maker felts and other industrial fabrics. According to the agreement entered into by the assessee the remuneration was paid for at the rate of 5% on the sale price of the product.

  CIT (A) has considered the various clauses of the agreement and held that the know-how was to remain the sole and exclusive property of the provider and the appellant company is required to fully exploit the same. The technical know-how was also in relation to the sales affected by the assessee company. It is also required to be noted that assessee is engaged in the same business for which technical know-how is by the assessee and it is not at its an altogether a new line of business which is developed. DR could not point out any infirmity in the order of the CIT (A).

  No reason to disturb the finding of the CIT (A) in allowing the claim of the assessee of technical know-how fees paid to its parent company as revenue in nature. - Decided against revenue.

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• 2018 (6) TMI 1596 - BOMBAY HIGH COURT
  

  Appeal admitted on the following substantial questions of law:

  “(a) Whether on the facts and in circumstances of the case and in law, the Tribunal is justified in holding that ₹ 2,31,62,114/is capital expenditure?

  (b) Whether on facts and in circumstances of the case and in law, Tribunal erred in not alternatively directing Respondent to grant depreciation on foregoing capital expenditure?”

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• 2018 (6) TMI 1595 - GUJARAT HIGH COURT
  

  Bogus purchases - Tribunal restricting the addition to 25% of the value of alleged purchases after categorically finding it to be bogus - HELD THAT:- Revenue cannot be said to be aggrieved by the said decision of the Tribunal. However, the same shall be without prejudice to the rights and contentions of the Revenue in other appeals in which it is the case on behalf of the Revenue that in fact, there shall be disallowance of 100% of the total bogus purchases.

  Appeal admitted to consider the following question of law:-

  “Whether the Appellate Tribunal has erred in law and on facts of the case in restricting the addition to 25% of the value of alleged purchases after categorically finding it to be bogus?”

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• 2018 (6) TMI 1592 - KARNATAKA HIGH COURT
  

  Substantial question of law - perversity in order of Tribunal - Transfer Pricing adjustment - exclusion of depreciation & interest for determination of operating profit - HELD THAT:- This court in Pr. CIT v. Softbrands India P. Ltd. [2018 (6) TMI 1327 - KARNATAKA HIGH COURT] decided on June 25, 2018, has held that in these type of cases, unless an ex facie perversity in the findings of the learned Income-tax Appellate Tribunal is established by the appellant, the appeal at the instance of an assessee or the Revenue u/s 260A of the Act is not maintainable. Relevant portion of the said judgment is quoted below

  This court cannot be expected to undertake the exercise of comparison of the comparables itself which is essentially a fact finding exercise. Neither the sufficient data nor factual informations and any technical expertise is available with this court to undertake any such fact finding exercise in the said appeals under section 260A of the Act. This court is only concerned with the question of law and that too a substantial one, which has a well-defined connotations as explained above and findings of facts arrived at by the Tribunal in these type of assessments like any other type of assessments in other regular assessment provisions of the Act, viz., sections 143, 147 etc. are final and are binding on this court. While dealing with these appeals under section 260A of the Act, we cannot disturb those findings of fact under section 260A of the Act, unless such findings are ex facie per verse and unsustainable and exhibit a total non-application of mind by the Tribunal to the relevant facts of the case and evidence before the Tribunal.

  Otherwise if the High Court takes the path of making such a comparative analysis and pronounces upon the questions as to which filter is good and which comparable is really a comparable case or not, it will drag the High Courts into a whirlpool of such data analysis defeating the very purpose and purport of the provisions of section 260A of the Act. Therefore what we observed above appears to us to be the sustainable view that the key to the lock for entering into the jurisdiction of the High Court under section 260A of the Act is the existence of a substantial question of law involved in the matter. The key of ex facie perversity of the findings of the Tribunal is duly established with relevant evidence and facts. Unless it is so, no other key or for that matter, even the inconsistent view taken by the Tribunal in different cases depending upon the relevant facts available before it cannot lead to the formation of a substantial question of law in any particular case to determine the aspects of determination of 'arm's length price' as is sought to be raised before us.

  This court is satisfied that no substantial question of law would arise in the present case and the appeal filed by the Revenue is therefore, liable to be dismissed

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• 2018 (6) TMI 1591 - ITAT PUNE
  

  Reopening of assessment u/s 147 - taxability of receipts for Management Service Fee ("MSF") - no Permanent Establishment (PE) in India - DTAA between India and Sweden - as per AO management service fees falls within the ambit of section 9(1)(vii) as well as India and Sweden Treaty and was taxable as fees for technical services - transaction were disclosed by the assessee company in its form No.3CEB and in the Notes to the return which was filed along with return of income

  HELD THAT:- we hold that in the absence of live link between reason to believe of escapement of income with the tangible material and even in the present case where the assessment order was passed u/s 143(1), the requirement of section is for the AO to come to a finding on the basis of tangible material to establish his case of reason to believe of escapement of income and in the absence of the same, re-assessment proceedings initiated were both invalid and bad in law. Accordingly, we hold so. We cancel the re-assessment proceedings initiated against the assessee and consequent order passed under section 143(3) r.w.s. 147 does not stand.

  The second aspect of the issue is that while recording reasons for reopening the assessment, the AO had relied on earlier order of Assessing Officer / DRP relating to assessment years 2007-08, 2008-09 and 2004-05 and held that since the issue has been decided against the assessee in earlier years, reasons were being recorded for reopening assessment for the year under appeal also. Once the issue has been decided in favour of assessee in earlier year [2018 (2) TMI 249 - ITAT PUNE], on which reliance was placed by the Assessing Officer while reopening the assessment, then also reasons recorded for reopening of assessment do not stand. Hence, re-assessment proceedings initiated against the assessee are invalid and bad in law.

  Before parting, we may also refer to the appeal of assessee in [2017 (12) TMI 1684 - ITAT PUNE] relating to assessment year 2010-11, wherein the Tribunal vide order dated 20.12.2017 considered not only the earlier decision of Tribunal in assessee’s own case but also decided the alternate argument of the Revenue that receipts for Management Service Fees are treated in the nature of dividend and taxed under clause 10 of the Tax Treaty between India and Sweden as well as under section 9(1)(iv) of the Act. Following the same parity of reasoning, we decide the issue on alternate plea also in favour of assessee and allow the claim of assessee in entirety.

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• 2018 (6) TMI 1590 - ITAT MUMBAI
  

  Claim of deduction u/s. 80IA(4) - HELD THAT:- where assessee is carrying out CGS activities which is nothing but infrastructure facility as defined under section 80IA(4). Accordingly respectfully following the same, we confirm the order of the CIT(A) and direct the AO to allow the deduction under section 80IA(4). Thus, ground raised by the revenue does not stand and as such we dismiss the same. Resultantly, appeal of the revenue stands dismissed. See M/S ALL CARGO GLOBAL LOGISTICS LTD VERSUS DEPUTY COMMISSIONER OF INCOME TAX [2012 (7) TMI 222 - ITAT MUMBAI(SB)].

  Disallowance u/s. 14A - HELD THAT:- As regards the disallowance u/s. 8D(2)(iii), it is noted that earlier the assessee has not pressed this issue and, hence, the addition @ 0.5% of the average value of the investment was confirmed by the ITAT in the earlier year. Now, the ld. Counsel of the assessee has prayed that the assessee needs to be granted relief in this regard with reference to the decision of the ITAT Special Bench in the case of ACIT vs. Vireet Investment P. Ltd. [2017 (6) TMI 1124 - ITAT DELHI] wherein it was expounded that the investment which did not yield exempt income should not enter into the computation while arriving at the average value of investment. The inference hence is that the disallowance u/s. 8D(2)(iii) should be made only with reference to the investment which earned exempt income. Hence, assessee pleaded that while making the disallowance in this regard, the ratio from the Special Bench decision should be followed.

  We find ourselves in agreement with the submissions of the assessee. We direct the Assessing Officer to make the computation of disallowance u/s. 8D(2)(iii) of the Act by excluding the investment which have not earned any exempt income during the year in the computation in accordance with the afore-said Special Bench decision.

  MAT computation - Computation of section 115JB - HELD THAT:- Disallowance u/s. 14A cannot be made in computing the deduction u/s. 115JB of the Act. The assessee accepted that the disallowance u/s.115JB in this case should also be made in accordance with the computation hereinabove and accepted the same. The Assessing Officer is directed accordingly.

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• 2018 (6) TMI 1588 - GUJARAT HIGH COURT
  

  Release of FDR and the jewellery seized in search u/s 132 - assessment u/s 153A - Adjustment of outstanding demand - HELD THAT:- Entire cash amount seized during the search proceedings was adjusted against various demands raised during the assessment proceedings and even the details of adjustment has been provided to the assessee by a letter dated 21.06.2018. Thus, it appears that there is no question of return and/or release of cash seized during the proceedings as the same were already adjusted earlier in the year 2014.

  Revenue has stated at the Bar that after adjustment of the outstanding demand in the case of Saritha Gupta, the balance of fixed deposit receipts will be released at the earliest. At this stage, it is required to be noted that there is no demand of outstanding reported in the case of Sandeep Gupta. Thus, after adjustment of outstanding demand of ₹ 9,24,501/= shown as outstanding in the case of Saritha Gupta, the balance fixed deposit receipt as well as the jewellery seized during the course of search conducted on 08.09.2010 is required to be returned.

  There is no justification to continue with the seizure of such fixed deposit receipts, jewellery and national savings certificates etc. [after deducting ₹ 9,24,501/= (with interest under the law)], shown to be outstanding in the case of one of the assessees – Smt. Saritha Gupta.

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• 2018 (6) TMI 1585 - ITAT CHENNAI
  

  Income recognition - addition in the hands of the assessee for not having recognized the revenue income in accordance with Mercantile System of Accounting - recovering the dues from the clients of the assessee - postponement of revenue recognition - AS-9 - amount uncertain to recover - appellant company has also filed a suit to recover the amount - significant uncertainty in the ultimate collection of the revenue - HELD THAT:- The entire amount has to be collected from a foreign government undertaking over which Indian Judicial Authorities does not appears to have direct jurisdiction. It has become a complicated affair to recover the amount through negotiations and International Courts of Justice.

  In this fluid situation, there is a substantial uncertainty for recovering the amount from the clients of the assessee. Considering these facts, it is evident that Accounting Standard 9 has to be squarely applied in the case of the assessee, while determining the real income of the assessee. Further there is no point in recognizing the income which cannot be recovered and subsequently write it off as bad debts in the subsequent years. Therefore, we find merit in the arguments advanced by the Ld.AR.

  Considering the Accounting Standard 9 issued by the Institute of Chartered Accountants of India which is duly recognized by the Central Government, we are of the view that in the case of the assessee, revenue need not be recognized for ₹ 18,94,96,500/- for the year ending 31.03.2013 viz., the relevant assessment year 2013-14 as it is substantially uncertain to recover. Accordingly we hereby direct the Ld.AO to delete addition - decided in favour of assessee

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• 2018 (6) TMI 1584 - ITAT SURAT
  

  Unexplained investment in factory shed by applying provision of section 69A - Whether addition made on assumption, imagination and pure guess work? - admission of additional evidence - HELD THAT:- Assessee had filed additional evidence in support of his claim that the expenditure on colour, plaster and flooring of shed was incurred by labour contractor Shri Rameshbhai Nishad proprietor of B. Shah & Co for which payment on account of plaster, clear and flooring of ₹ 1,50,000 was made by cheque No. 506224 dtd. 13.07.2007 and ₹ 1,05,000 by cheque no. 506229 dtd. 19.09.2007. These evidence were not filed before the AO and CIT (A) as manifests from assessment order as well as from appellate order.

  Therefore, the assessee urged before us to admit the same in exercise the powers under Rules 29 to 31 of Income Tax Appellate Tribunal Rules, 1963, as the omission to furnish these additional evidence in form of account ledger account, bank account statement, copy of bills of plaster, colour and flooring of shed and bills raised by contractor was neither willful nor unreasonable. Looking to the facts and circumstances of the case and law, we are of the view that these additional evidences filed under Rules 28 to 31 of Income Tax Appellate Tribunal Rules 1963, before the Tribunal by the assessee are necessary for proper appreciation of the issue under appeal and would cause of substantial justice - restore this appeal to the file of Ld. AO for allowing proper opportunity of being heard in accordance with law - Decided in favour of assessee for statistical purposes.

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• 2018 (6) TMI 1583 - DELHI HIGH COURT
  

  The following two questions of law are framed for consideration:-

  “1. Did the Income Tax Appellate Tribunal (ITAT) fall into error in upholding the disallowance of the depreciation claimed to the extent of ₹ 5,10,79,752/- on account of asset reconstruction cost in holding that it was a contingent liability?

  2. Did the ITAT fall into error in upholding the disallowance u/s 49(a)(ia) of the Income Tax Act, 1961 with respect to the discount offered by the assessee to the prepaid SIM Card distributor as commission?”

  Proportionate interest claimed on account of Section 36(1)(iii) - HELD THAT:- The Court is of the opinion that the assessee’s argument that the improved efficiency within the circle if it was allowed for operation of its licences, did not amount to extension of business, is unpersuasive. The facts are that the assessee is a license holder in respect of three telecom circles. At the relevant time, it sought to install cell-site towers claiming that they would merely improve its efficiency. The lower authorities discerned that materials on record clearly show that the object of such exercise was to reach the greater number of customers and thus increase subscriber base. In these circumstances, the finding of the lower authorities cannot be faulted. No substantial question of law arises.

  Addition of advertising, marketing and promotion (AMP) expenses - HELD THAT:- Having regard to the fact that all materials were available with it, the ITAT is directed to consider the transactions involving AMP expenditure as well as the issue of royalty. In this regard its observations with respect to the comparables used by the assessee vis-a-vis the two foreign parties shall not be treated conclusive. The ITAT shall carry out necessary inquiry if need be by resorting to a limited remand to the TPO or DRP as the case may be having regard to the overall facts and circumstances and decide whether AMP expenses required in the present case involve international transaction, if so, to what extent.

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• 2018 (6) TMI 1581 - ITAT PUNE
  

  Deduction 80IB(10) - claim allowable for the profits of the project as a whole OR part of the project on a prorata basis - concept of proportionate deduction u/s.80IB(10) for the completed building or block of the project - whether Section 80IB(10)(a) stipulates the condition for the project as a whole and not individual units or flats of buildings? - CIT-A allowed proportionate claim - HELD THAT:- CIT(A) has rightly allowed the deduction u/s.80IB(10) to the assessee as it is undisputed fact that the assessee completed construction of 108 flats and obtained completion certificate for the same.

  As per the Valuation Officer’s report, the assessee has complied with the conditions provided in section 80IB(10) and AO ignored the same and failed to comment on the eligibility of section 80IB(10) of the Act. AO failed to appreciate the judgment of jurisdictional High Court in the case of CIT Vs. Brahma Associates (2011 (2) TMI 373 - BOMBAY HIGH COURT ) in the right perspective and chose to reproduce part of the judgment to his convenience to deny the claim of the assessee.

  It is a settled legal proposition that the claim of deduction is allowable on pro-rata basis qua the complete part of the project. Considering the above, we are of the opinion that the assessee is entitled to pro-rata deduction u/s.80IB(10) of the Act for the buildings B, C and D. We therefore, uphold the order of CIT(A). The grounds raised by the Revenue are dismissed.

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• 2018 (6) TMI 1580 - GUJARAT HIGH COURT
  

  Penalty levied u/s 271 [1](c) - addition on account of capital gain wrongly claimed as exempt by the assessee? - assessee had not offered the amount of tax on the basis of artificial dispute with mala fide intention and mere disclosure in notes did not protest the assessee from penal action provided under Section 271 [1](c) - HELD THAT:- Issue pertains to penalty. Quantum additions have been confirmed upto the stage of the Tribunal. The Department desired to levy penalty from the assessee. The Tribunal, however, deleted the penalty principally on the ground that the full disclosures were made and the issue was not free from doubt. In the opinion of the Tribunal, thus, the claim was not free from doubt or devoid of any basis.

  We further notice that the assessee in addition to having made full disclosure, also claimed that he had been under legal advice. The Tribunal also noted that even in quantum additions, the appeal is entertained by the High Court and is pending. No question of law arises.

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• 2018 (6) TMI 1577 - GUJARAT HIGH COURT
  

  Disallowance u/s. 80IA(4) - infrastructure development projects for and on behalf of the Government or local authorities - assessee undertaken road development project, for which, it had entered into an agreement with Gujarat State Road Development Corporation which was incorporated by the Government for the special purpose - HELD THAT:- As in AYs 2009-10, 2010-11 and 2011-12 [2018 (5) TMI 1174 - GUJARAT HIGH COURT] confirmed the orders passed by ITAT deleting disallowance and deduction made by the AO u/s 80IA(4) stating condition( b) of subsection (4) of section 80IA requires the assessee to have entered into agreement with the Central Government or a State Government or a local authority or any other statutory authority. However, rigid interpretation of this provision as canvassed by the Revenue would only result into the assessee involved in genuine infrastructure development projects for and on behalf of the Government or local authorities would be denied the deduction merely on the ground that the State Government had created a nodal agency for working out the finer details and nittygritty of such infrastructure development.

  The purpose of creating such nodal agencies as well as the legislative intent of granting deduction to the assessee engaged in developing, maintaining or operating any infrastructure projects for Central or State Government or local or statutory authorities would frustrate. - Decided against revenue.

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• 2018 (6) TMI 1576 - ITAT PUNE
  

  Deduction u/s 80P - respect of certain receipts, i.e. Electricity Commission, Bank Interest - HELD THAT:- Electricity Commission held allowable following BANGANGA NAGRI SAH. PATSANSTHA LTD. [2016 (4) TMI 473 - ITAT PUNE] - Bank Interest has already been settled by the Apex Court in the case of CIT Vs. Nawanshahar Central Cooperative Bank Ltd.[2005 (8) TMI 28 - SUPREME COURT OF INDIA] allowed in favour of assessee.

  Allowability of deduction u/s 80P - interest receipts received out of deposits with MSEB and the Advertisement Income earned by the assessee, it is the claim of assessee that the said receipts are also entitled to the deduction - HELD THAT:- Considering the principle of parity with that of Electricity Commission and Bank Interest as such, there are no case laws filed by the assessee in respect of his claim for deduction in these receipts, nobody has examined the principle of parity as claimed by the assessee. The issues of MSEB Deposit Interest and Advertisement Income are set-aside to the file of AO with a direction to verify the nexus and admissibility of the claim of assessee in the light of above cited decisions by the assessee and adjudicate the same afresh. AO shall afford reasonable opportunity of hearing to the assessee while deciding the issues. Appeal of the assessee is partly allowed for statistical purposes.

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• 2018 (6) TMI 1574 - ITAT DELHI
  

  Reopening of assessment u/s 148 - AO resorted to the re-assessment on account of one reason - addition so consequently made stood deleted in the first appeal - HELD THAT:- The use of words ‘and’ between the income escaping assessment forming reasons to believe for issuing notice u/s 148 and other income chargeable to tax which escaped assessment and comes to the notice of the AO in the course of the proceeding, amply shows that the existence of the former is a pre-condition for taxing the latter.

  To put it simply, if the grounds set out in the re-assessment notice are nonexistent, i.e., either no addition is made on such grounds or the addition so made does not pass the scrutiny by the appellate forums, then, obviously, no further addition can be made for income which comes to the notice of the AO during the course of proceedings u/s 147.

  Without there being such a deterrent, the AO would acquire an unhindered power to initiate reassessment at the drop of a hat without any legally sustainable reasons and then make other additions resulting in multiplicity of proceedings, which the legislature has sought to curb. Any lawful jurisdiction to make addition on account of other incomes coming to the notice of the AO during the course of proceedings u/s 147 can be acquired only on the foundation of a validly acquired jurisdiction on legally sustainable items of income escaping assessment forming reasons for issuing notice u/s 148.

  If the AO fails to acquire a valid jurisdiction to make reassessment on the basis of his reasons, then, he is also debarred from making additions for other incomes chargeable to tax which escaped assessment and come to his notice subsequently in the course of proceedings u/s 147 - Decided in favour of assessee.

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• 2018 (6) TMI 1573 - ITAT AGRA
  

  Reopening of assessment - reasons to believe escapement of income - Information of Non PAN AIR through CIB has been received that assessee has deposited cash- HELD THAT:-No such inquiry is evincible from the reasons recorded, as reproduced hereinabove. The AO, squarely, has not applied his mind to the information received, before recording the reasons.

  There is no quarrel, as none can be, regarding immunity of the sufficiency or otherwise of material from examination by the Court. This matter stands adverted to in the preceding para. Next, concerning the nexus between the material and the formation of the belief, the reasons recorded do not show such a nexus. Inquiry by the AO is this nexus and perusal of the reasons shows this nexus or link to be missing in the present case. So, ‘M/s Ginni Filaments’ [2011 (3) TMI 1756 - ALLAHABAD HIGH COURT] works in favour of the assessee, rather than against him.

  The grievance of the assessee by way of ground is found to be justified. It is accepted as such. The reasons recorded by the AO are, thus, held to be null and void.

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