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Income Tax - Case Laws
Showing 41 to 60 of 366 Records
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2020 (7) TMI 717 - ITAT AHMEDABAD
Addition u/s 14A r.w.r. 8D - investments from which the appellant has not earned any exempt income - assessee suo motu has disallowed an amount u/s 14A r.w.r. 8D - HELD THAT:- As relying on VIREET INVESTMENT (P.) LTD. [2017 (6) TMI 1124 - ITAT DELHI] we find substance in the argument made by the Ld. Senior Counsel appearing for the assessee to this effect that only those investments are to be considered for computing average value of investment which yielded exempt income during the year. In that view of the matter we find it fit and proper to restore the matter to the file of the Ld. AO for re-computing the disallowance under Section 14A in terms of the observation made hereinabove. Hence, this ground is allowed for statistical purposes.
Nature of expenses - river diversion expense and HT line shifting expense - revenue or capital expenditure - HELD THAT:- It became necessary for the appellant to shift the same for mining operation; similarly river diversion was also necessary to undertake the mining activities.
Assessee has not spreaded particular expenditure over a period of years as it reflects from the return filed by it and it has claimed the entire expenditure as deductable in the same year. The assessee has claimed the expenditure in this particular year in which it has been incurred and, therefore, when it has chosen to claim the entire expenditure spent it is justifiable to allow such claims for the year under consideration invoking the provision of Sec. 36(1)(iii) of the Act and also the ratio laid down by the judgment TAPARIA TOOLS LIMITED VERSUS JOINT COMMISSIONER OF INCOME TAX [2015 (3) TMI 853 - SUPREME COURT] - we allow the entire claim of the assessee. The addition is, therefore, deleted. - Decided in favour of assessee.
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2020 (7) TMI 716 - ITAT MUMBAI
Draft assessment order u/s 143(3) r.w.s. 144C - maintainability of the objection filed by the assessee under Form No. 35A - Form No. 35A filed by the assessee on 19.01.2018 was not verified as per the procedure laid down since the signature of the person on verification page in the said form was a copy of the original signature - dismissing the application in limine treating the Form No. 35A filed by the assessee as nonest held to be not sustainable - submitted by the appellant that at that relevant point of time since Mauritius was hit by a cyclone leading to heavy rainfall and causing devastating damage in the country, the Directors present in Mauritius were not available for signing and forwarding the original objections. To meet the deadline, therefore, the assessee got the original objections signed by one of its Director available at United States of America and filed the scanned copy
HELD THAT:- No observation as regards the reason explained by the assessee for filing the Form No. 35A with the scanned signature. Rather, we find that when the concerned Director was not available at Mauritius, the assessee with bona fide intention got the said form signed by the other Director of the company available in United States of America and filed the scanned document thereon in due date.
Even it is a defect in the eyes of law, according to us, it is procedural defects and curable in nature, since procedures are handmade of justice. On this issue we have considered the judgment passed by the Hon’ble Tribunal in the matter of MSM Satellite (Singapore) Pte. Ltd. vs. JCIT [2016 (10) TMI 1310 - ITAT MUMBAI]
Tribunal pleased to observe that when the Revenue is accepting the e-filing of documents then the rejection of the Form 35A submitted by the assessee is unsustainable in the identical issue. No merit in rejecting the Form 35A filed by the assessee and thus we quash the order impugned - we allow the submission of Form 35A filed by the assessee. The instant appeal is, thus, allowed with the direction upon the DRP to accept the original Form No. 35A submitted by the assessee - Assessee’s appeal is allowed for statistical purposes
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2020 (7) TMI 715 - ITAT DELHI
Deduction u/s 80P(2)(a)(i) - interest income earned from investment of funds in commercial banks and cooperative banks/societies - CIT-A upholding action of AO such interest income is not eligible for deduction under that section - HELD THAT:- Assessee is not a banking company and the expression “ business of banking” cannot be given a spacious meaning to unrealistically expand the term beyond, the assessee is not eligible for deduction u/ s 80P(2)(a)(i). Accordingly, we hereby hold that the interest earned from the fixed deposits made out of the surplus funds is not eligible for the claim of deduction u/s 80P(2)(a)(i).
Deduction u/s 80P(2)(d) - alternative plea for deduction - whether the co- operative bank wherein the assessee made deposits out of this surplus fund be considered as a co-operative society, for if a co-operative bank is considered to be a co-operative society than only the interest earned by the assessee on the deposits would be eligible for deduction u/s 80P(2)(d)? - HELD THAT:- We find that co- operative society is a broad and larger umbrella under which the co-operative banks do perform. All co-operative societies may not be banks but all co-operative banks are deemed to be co-operative societies. According to banking Regulations Act, a co-operative society bank as the same meaning of the co- operative society.
We have also given a thought as to the interest earned by the surplus funds. As per the Income Tax Act, there is no such stipulation or prerequisite as to the nature of the funds.
Section 80P(2)(d) of the Act allows whole deduction of an income by way of interest or dividends derived by the co-operative society from its investment with any other co-operative society. This provision does not make any distinction in regard to source of the investment because this section envisages deduction in respect of any income derived by the co-operative society from any investment with a co-operative society. The revenue is not required to look to the nature of the investment whether it was from its surplus funds or otherwise.
Referring to cases TOTAGARS CO-OPERATIVE SALE SOCIETY, [2017 (1) TMI 1100 - KARNATAKA HIGH COURT] and [2010 (2) TMI 3 - SUPREME COURT] we hereby hold that the assessee is eligible for deduction u/ s 80P(2)(d) on the income earned by the way of interest from the co-operative societies.
Expenditure u/s 57 - assessee has taken a plea that the expenditure incurred in earning of interest from the commercial banks be allowed while computing the taxable income - HELD THAT:- The assessee is eligible for the expenditure u/s 57 incurred in earning the interest income which is taxable under the head “income from other sources” as per Section 56.
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2020 (7) TMI 714 - ITAT MUMBAI
Capital gain - tenancy right available with the assessee or not? - the amount received for not interfering possessions - the parties of the family settlement that the assessee and her relatives were in possession of flat. - relinquishment of rights - capital receipt v/s capital gain - HELD THAT:- In the instant case, Smt. Saraswati Vithaldas Sahita occupied the said flat at 2nd floor of the building known as Gangasagar on license basis. This is crystal clear from the ‘Consent Term’ before the Hon’ble Court of Small Causes at Mumbai, quoted at length earlier. After demise of Mrs. Saraswati Vithaldas Sahita, her son Shri Vidyut Sahita occupied the said flat with his family. The said building Gangasagar was purchased by M/s H.M. Enterprises. For vacating the premises, M/s H.M. Enterprises filed suit against the occupier of Gangasagar building. An out of Court settlement was made so that occupier could not interfere with possession of M/s H.M. Enterprises. The appellant being daughter-in-law of Smt. Saraswati Vithaldas Sahita received ₹ 25,00,000/- for not interfering possessions of M/s H.M. Enterprises.
The distillation of precedents must now be applied to the facts of the present case.
CIT(A) erred in confirming addition on account of relinquishment of right. CIT(A) erred in treating capital receipt as capital gain - Decided in favour of assessee.
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2020 (7) TMI 713 - ITAT JAIPUR
Penalty u/s 271AAB - Addition u/s 69B - income shown suo-motto - additional income brought to tax by the Assessing Officer - Undisclosed income admitted and declared in the return of income - HELD THAT:- Penalty has been initiated in respect amount admitted by the assessee pursuant to search conducted on 13.08.2013. Given that the assessee had only disclosed a sum of ₹ 5.2 lacs in the revised return filed on 9.11.2013, subsequent to date of search and thereafter, in the return filed on 16.02.2015 in response to notice u/s 153A, the Assessing officer has brought the balance amount of ₹ 80,000/- to tax during the course of assessment proceedings. However, as far as initiation of penalty proceedings u/s 271AAB is concerned, the same has been initiated on the whole of the sum of ₹ 6 lacs admitted by the assessee pursuant to search.
Second contention of the ld AR that the assessee had cash in hand of ₹ 80,000/- as on 31.03.2013 and the same has been utilized in making the investment for purchase of land. What needs to be seen is the source of investment at the point in time when the investment was made. In the instant case, the sale deed has been registered on 5.4.2012, therefore, what needs to be seen is whether the assessee was having sufficient cash in hand on or before 5.4.2012 reflected in its books of accounts to make such investment, however, there is nothing on record to substantiate the same.
None of the conditions for levy of penalty at the lower rate of 10%, under clause (a) of Section 271AAB (1), are satisfied. Accordingly, it is held that in respect of the income penalty is leviable at 30% under clause (a) of Section 271AAB(1) - Decided against assessee.
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2020 (7) TMI 712 - ITAT DELHI
Assessment on a non-existent entity - assessment in the name of the amalgamating company - Whether a curable defect as per Section 292B? - HELD THAT:- The amalgamating company i.e. Genpact India was not in existence at the time of conducting assessment proceedings as well as on the date of passing Assessment Order. Once it is found that assessment is framed in the name of non-existing entity, it does not remain a procedural irregularity of the nature which could be cured by invoking the provisions of Section 292B of the Act. Hence, the Assessment proceedings as well as the Assessment order itself are void ab initio. Therefore, assessment order is set aside. - Decided in favour of assessee.
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2020 (7) TMI 711 - ITAT JAIPUR
Non-grant of TCS credit - Rectification of mistak u/s 154 - Amount of TCS was not reflected (shown) in the name of assessee, but corresponding income declared by the assessee - HELD THAT:- In the return of income, though the assessee has claimed TCS, however, in absence of reflection of the TCS in the name of the assessee in Form No. 26AS, while processing the return of income, the credit of TCS has not been granted to the assessee.
During the rectification proceedings, the assessee has submitted before AO that though TCS has been collected in the name of Shri Bheru Singh Tak, the corresponding revenues have been offered by the assessee in his return of income - also not disputed the said fact that revenues have been offered by the assessee in his return of income but at the same time, has rejected the said claim stating that TCS was deducted in the name of Shri Bheru Singh Tak having different PAN and therefore, the credit of the same cannot be allowed to the assessee. It is a settled legal proposition that the TCS is a form of advance payment on behalf of the assessee and where the assessee has offered the income in particular assessment year and the income has been brought to tax in the hands of the assessee, the corresponding TCS should be allowed to the assessee.
Therefore, in the instant case, where there is no dispute that the income has been offered by the assessee and brought to tax, the assessee should be eligible for corresponding TCS subject to the fact that the same has not been claimed by Shri Bheru Singh Tak. See M/s Jai Ambey Wines vs ACIT, CPC [2017 (1) TMI 986 - ITAT JAIPUR].
We accordingly agree with the contention of the ld AR that where complete purchase and sale of main licensee have been considered in case of sub-licensee, i.e the assessee, the credit for TCS should also be granted to the assessee subject to the condition that no claim of such TCS have been made by the main licensee in his individual return of income.
TCS credit to be allowed, subject to verification of facts. - Matter remanded back.
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2020 (7) TMI 710 - ITAT JAIPUR
Correct year of assessment - Interest income was taxed in the earlier assessment year - interest income from partnership firms was included in the total income of the assessee for the year under consideration as well as for the assessment year 2014-15 - mistake on the part of the assessee is to declare and offer to tax the interest income - only reason for denial of exclusion of the income from the total income of the assessee is non filing of the revised return of income - HELD THAT:- Since the return of income was filed by the assessee belatedly, therefore, the assessee could not file a revised return of income. Undisputedly the said income on account of interest from the partnership firms has been taxed for the assessment year 2014-15 and it was again taxed for the year under consideration. It is a case of taxing the same income twice. It is duty of the AO to assess the correct income of the assessee permissible in law.
AO cannot take the advantage of any mistake on the part of the assessee to offer an excess income which is otherwise not taxable under law. In the case in hand, what is the mistake on the part of the assessee is to declare and offer to tax the interest income for the AY 2015-16 instead of 2014-15. Once, the interest income was assessed for AY 2014-15 and the assessee has not challenged the said order of the Assessing Officer then the consequent effect of the assessment for the assessment year 2014-15 would be to exclude the same income for the assessment year 2015-16.
Addition made for the assessment year 2014-15 would led to double taxation of the same income. AO has to remove the said anomaly in the assessment by excluding the said income for the assessment years 2015-16 as the income pertains to the assessment year 2014-15 and was also accordingly, taxed as per law. Once, the AO has treated the income in question as chargeable to tax for the assessment year 2014-15 the same cannot be charged to tax for the assessment year 2015-16. Even if the Assessing Officer is having limitation for not assessing income below the income declared in return of income the said bar is not applicable to the appellate authority.
CIT(A) has also misunderstood the fact about the return of income for the year under consideration was filed much prior to the assessment framed by the AO for the assessment year 2014-15.
At the time of filing of the return of income it was not certain or known to the assessee that the AO would make an addition of the said income for the assessment year 2014-15. Even otherwise the assessee is liable to pay tax only on the income which is chargeable to tax as per law, if any excess amount of income offered to tax the AO is duty bound to correct the same and only income which assessable to tax as per law has to be assessed to tax
Assessee cannot be penalized only for the reason that he has not filed revised return of income for correcting the apparent mistake of double taxation of the income. In view of the above fact and circumstances of the case the income which is already charged to tax for the assessment year 2014-15 on account of interest from partnership firms is deleted from the total income of the assessee. - Decided in favour of assessee.
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2020 (7) TMI 709 - ITAT JAIPUR
Rectification u/s 254 - Sale of land - land in question were sold by the assessee in the capacity of power of attorney holder and AO has assessed the income in the hand of the assessee who sold the land - tribunal deleted addition - HELD THAT:- Assessee produced the relevant documentary evidence in support of the claim that he has executed the sale deeds in the capacity of power of attorney holder of the land owners namely, Hanuman Sahai, Chauthmal, Gyarsi Lal, Pachuram, Shankar Lal and Nanchi Lal.
Tribunal has given a finding of fact on merits after analyzing the documentary evidence. AO though did not accept the documentary evidence but also not conducted any enquiry and particularly by examination of the original land owners who have given a power of attorney in favour of the assessee.
The assessment order is silent about enquiry conducted by the AO. Now after passing the said order of the Tribunal the AO is coming up with a new stand that the issued summons U/s 131 of the IT Act to the land owners that being the case and nothing has come out from the alleged enquiry or attempt made by the AO it would support the case of the assessee.
The summons issued by the AO if served upon the land owners then non appearance of the land owners would not discharge the AO from conducting further enquiry. Assessee cannot be blamed for non appearance of the land owners in response to the summons if any issued by the AO.
AO is not allowed to setup a new case after the matter was decided by the Tribunal. The assessment order is completely silent about the alleged summons issued by the AO hence, the Tribunal decided the case based on the material available on record which cannot be recalled without any substantial fact or material relevant for the disposal of the case brought on record. Matter decided on merits and based on the analysis of fact and record cannot be reversed or reviewed. Even otherwise the scope of Section 254(2) of the Act is very limited and circumscribed and does not given the jurisdiction to the tribunal to re-evaluate the material/evidence hence, the Misc. Application filed by the Revenue deserves dismissed.
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2020 (7) TMI 708 - ITAT MUMBAI
Provision for labour demand - disallowance by taking view that it is contingent in nature - HELD THAT:- As in assessee’s own case for AY 2006-07 [2013 (9) TMI 522 - ITAT, MUMBAI] issue in question has already been decided in favour of the assessee in earlier years. Deduction is allowable in respect of the estimated liability regarding incremental wages before the final agreement was entered in to.
Addition being prorate premium payable on redemption of foreign currency convertible bond (FCCB) - AO disallowed the premium paid on FCCB holding that being capital and contingent - HELD THAT:- As decided in own case [2013 (9) TMI 522 - ITAT, MUMBAI] expenses incurred in connection with the issue of FCCB were revenue in nature.
Addition of expenses on FCCB - AO disallowed the expenses on FCCB holding it as capital - HELD THAT:- As decided in own case [2013 (9) TMI 522 - ITAT, MUMBAI] expenses incurred in connection with the issue of FCCB were revenue in nature.
Discount on employee stock ownership plan (ESOP) - HELD THAT:- As decided in own case [2020 (6) TMI 564 - ITAT MUMBAI] restored this issue to the file of the ld. AO to consider the claim of deduction in the light of the Special Bench decision in the case of Biocon Ltd. [2013 (8) TMI 629 - ITAT BANGALORE] - A specific direction need to be given to the ld. AO to allow deduction in respect of all options exercised during the year equal to the difference between the exercise price and the market price at the time of exercise of the option, as held in the case of Biocon Ltd, instead of the market price at the time of grant of option.
TP adjustment - notional interest on delayed collection of receivable amount from AE - HELD THAT:- During the year under consideration, we have noted that export package credit rate furnished by assessee before the TPO at 2%. Therefore, considering the ratio of the decision of Tribunal in assessee’s own case for A.Y. 2004-05 we direct the AO to re-compute the TP Adjustment by adopting the rate of 2% in place of 6.75%. In the result, this ground of appeal is partly allowed.
Disallowance u/s 40A(9) - expenditure incurred on employee welfare and payment made to Mahindra Academy, which runs educational institution, where children of assessee’s employee and others take education - HELD THAT:- We have further noted that similar relief was granted by Tribunal in appeal for A.Y. 2002-03, 2003-04 & 2004-05. We have further noted that so far as second amount is concerned, the similar issued (claim) was restored by Tribunal to the file of AY in AY 2006-07. However, the second round of litigation, the ld. CIT(A) has allowed the same claim of assessee -therefore, following the principle of consistency, the AO is directed to allow both the claim. In the result, this ground of appeal is allowed.
Provision for warranty disallowance - HELD THAT:- As relying on assessee's own case [2014 (5) TMI 322 - BOMBAY HIGH COURT] we direct the AO to delete the entire addition on account of provision for warranty.
Expenditure relating to Joint Venture with Renault, expenditure relating to Joint Venture with Jiangling Tractors - HELD THAT:- Treated as expenditure of capital expenditure and confirmed the same as to be a part of cost of improvement in order [2020 (6) TMI 564 - ITAT MUMBAI]
Expenses of professional fee are allowed as revenue expenses.
Travel expenses related with mergers and acquisitions - Treated as expenditure of capital expenditure and confirmed the same as to be a part of cost of improvement in order [2020 (6) TMI 564 - ITAT MUMBAI]
Expenses written off - HELD THAT:- Considering the decision of Tribunal for AY 1999-2000 (on the issue of expenditure of acquisition which could not materialized), which was affirmed by Bombay High Court, thus, on similar principles, when no new asset is created for deriving enduring benefits, the expenses of written off are allowed as revenue expenses.
Euro IV Project expenses - HELD THAT:- CIT(A) affirmed the action of AO by following the order of Tribunal for A.Y. 2006-07. However, we have noted that the Tribunal while treating the expenses as capital in nature allowed the depreciation to the assessee in para 3-4 of the order; similar order was followed in A.Y. 2001-02 & 2002-03. Therefore, we direct the AO to allow the depreciation by following the order of Tribunal for A.Y. 2006-07 [2013 (9) TMI 522 - ITAT, MUMBAI].
Treat the Consultancy fees as capital in nature and allowed the depreciation. Allow the Staff cost as a revenue expenditure to the assessee.
Waiver of liability on Prepayment of SICOM loan - assessee submits that the Package Scheme of Incentives introduced by the Government of Maharashtra from time to time, provide for deferral of sales tax for 10 years in respect of Nasik unit - HELD THAT:- As decided in Sulzer India Limited [2014 (12) TMI 267 - BOMBAY HIGH COURT] it was a capital receipt and could not be termed as a remission or cessation of liability.
Interest on Income Tax Refund - HELD THAT:- AO held that income received in A.Y. 2005-06 is taxable in the same year. CIT(A) confirmed the action of AO by following the order of A.Y. 2003-04 & 2004-05. The ld. AR of the assessee fairly submits that this ground of appeal was decided against the assessee in A.Y. 2004-05. Considering the admission of assessee that similar ground of appeal was held against the assessee in A.Y. 2004-05, therefore, this ground of appeal is dismissed.
Part disallowance of deduction under section 80IC - AO restricted the claim of assessee by taking view that the only profit earned after substantial expansion can be said to be eligible for the benefit under the said section and not the profit of the full year - CIT(A) upheld the action of AO and also held that the assessee has not demonstrated the substantial expenses - HELD THAT:- Deduction is eligible on the basis of annual profit and not for any split/broken period. We are also in the agreement with the contention of ld. AR of the assessee on the ratio of decision of Hon’ble Bombay High Court Godrej Soaps Pvt. Ltd. [1987 (3) TMI 45 - BOMBAY HIGH COURT] which is based on erstwhile section 80J wherein incentive deduction was allowed @ 6% of capital employed in the eligible undertaking with regard to the period for which undertaking worked. In view of the aforesaid deduction, we direct the AO to allow the deduction for whole of the year. In the result, this ground of appeal is allowed.
Disallowance of capital loss on sale of R&D assets - HELD THAT:- AO said sale of R&D assets has to be treated as per the special provisions of section 41(3). The ld. CIT(A) confirmed the action of AO by following the order of Tribunal for A.Y. 2006-07. The ld. AR of the assessee fairly considered that the similar issue was decided against the assessee in A.Y. 2006-07 [2013 (9) TMI 522 - ITAT, MUMBAI] .
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2020 (7) TMI 694 - SC ORDER
Withholding of Refund - as per respondents since huge outstanding demand has been pending against the petitioner, the AO has initiated proceedings u/s 241A against the petitioner to withheld the refund after following prescribed procedure laid down in the Act - As per HC respondents are directed to refund to the petitioner within two weeks from the date of uploading of this order without fail - HELD THAT:- SLP dismissed.
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2020 (7) TMI 693 - DELHI HIGH COURT
Adjustment of resulting demand against the refunds arising to the petitioner pursuant to disposal of rectification applications - HELD THAT:- Issue notice.
Mr.Deepak Anand, Advocate accepts notice on behalf of the respondents.
Keeping in view the limited prayer sought in the present writ petition, this Court disposes of the same by directing respondent No.2 to dispose of the petitioner’s aforesaid rectification application within six weeks by way of a reasoned order and to allow adjustment of resulting demand against refunds arising in previous and subsequent assessment years, if any, in accordance with law.
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2020 (7) TMI 692 - MADRAS HIGH COURT
Exemption u/s 54 - Whether date Viz., 27.02.2002 cannot be considered as the date of acquisition, while remitting the matter back to the Commissioner of Income-tax (Appeals) for fresh consideration? - HELD THAT:- Since the tribunal has remanded the matter for fresh consideration to the CIT(A), and in the meantime, the Hon'ble Supreme Court in Sanjeev Lal's case [2014 (7) TMI 99 - SUPREME COURT] has rendered a decision, it would be just and proper to permit the CIT(A) to take a decision on merits in its entirety instead of remanding the matter for a limited purpose. We do not propose to render any finding as regards the effect of decision in the case of Sanjeev Lal [cited supra] on the assessee's case and leave it to the decision of the CIT(A) to consider the same and take a decision, in accordance with law.
Tax Case Appeal is allowed and the observations made by the tribunal that the date of acquisition cannot be taken as 27.02.2002, is set aside and the matter is remanded to the CIT(A), to take a fresh decision on merits and in accordance with law.
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2020 (7) TMI 691 - MADRAS HIGH COURT
Eligibility for deduction u/s.10AA - qualification as 'manufacture' - as per revenue assessee is not carrying on any manufacturing at its SEZ Unit - Tribunal allowed deduction - Whether the Tribunal was right in holding that the assessee is carrying on manufacturing activity even though a new product having a distinctive name, character or use was not brought into existence at its SEZ Unit by the assessee as per Special Economic Zone Act 2005? - HELD THAT:- Revenue carried the matter by way of appeal to the tribunal and the tribunal once again re-appreciated the factual position and found that there is a process of 'manufacture' as defined under the SEZ Act, which takes place in the SEZ unit and also pointed out that the AO himself has accepted that the assessee's unit, processed the raw materials by removing 10 to 20% impurities. Cost comparison of the semi finished product with that of the raw material was also referred to and it was also pointed out that the AO could not establish that the assessee has suppressed the purchase cost of semi-finished goods in order to claim higher deduction under Section 10AA of the Act.
Certificate issued by the Assistant Development Officer was accepted on the ground that the revenue could not prove the same to be not genuine. Therefore, the tribunal sustained the factual finding recorded by the CIT(A).
Entire factual matrix has not only been analyzed by the CIT(A), but, also by the tribunal. Therefore, we are convinced to observe that no question of Law much less any Substantial Question of Law arises for consideration in this appeal.
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2020 (7) TMI 690 - JHARKHAND HIGH COURT
Effect of application of Section 43CA of the Act and Section 56(2)(vii)(b) of the Income Tax Act, 1961 substituted by Finance Act, 2013 w.e.f 01.04.2014 - scope of ‘total income’ be substituted by ‘the Valuation assessed by any Authority of a State Government for the purpose of payment of stamp duty’ - discrimination in application of Section 43CA and Section 56(2)(vii)(b)(ii) of the Act as it is known fact that the levy of stamp duty is a state subject - ‘valuation of the Stamp Valuation Authority’ - HELD THAT:- Learned counsel for the petitioner Mr. Deepak Kumar Sinha at the outset seeks permission to withdraw this writ petition in order to move before the appropriate Forum.
Learned counsel for the Income Tax Department does not object to the prayer. Petition dismissed as withdrawn.
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2020 (7) TMI 689 - DELHI HIGH COURT
Certificate u/s 197- refusal to grant a certificate of deduction of tax at source at NIL rate, on payments to the petitioner company by its customers - petitioner prays to reconsider the petitioner’s application and grant Certificate under Section 197 of the Income Tax Act, 1961 for deduction of tax at source at NIL rate - petitioner contends that the impugned order is contrary to the principle of rule of consistency as the 0.9% rate specified in the impugned order is higher than the 0.7% rate of tax deduction at source determined in the immediately preceding year - HELD THAT:- Ms. Lakshmi Gurung, learned counsel accepts notice on behalf of the respondent. She states that the respondent while issuing the impugned certificate has placed detailed reasons on record.
Since detailed reasons are stated to be available on record, the present writ petition and the pending application are disposed of with a direction to the respondent to furnish a copy of the reasons to the petitioner within a week.
In the event the petitioner is aggrieved by the said reasoned order, it shall be open to the petitioner to file appropriate proceedings in accordance with law.
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2020 (7) TMI 688 - MADRAS HIGH COURT
Nature of expenditure - expenditure incurred in the renovation and redecoration of rooms in a hotel - capital expenditure or revenue expenditure - appellant is engaged in the business of running a three star hotel - HELD THAT:- Revenue does not dispute the fact that the number of rooms in the assessee’s hotel remained at 57 and that there was no increase in the number of rooms and only 18 rooms out of 57 rooms were renovated and repaired - assessee specifically contended that the renovation and repairs neither increases their capacity nor does it empower to revise the basic room tariff because it can be done only after considering further facts such as market condition remaining in Madurai City and with the concurrence of M/s.ITC Limited, as they only have a franchisee agreement with the assessee.
Granite and marble used by them will not last long and there is no guarantee and they may develop cracks and lose their shine and even become obsolete in a couple of years. These facts were never disputed before the Assessing Officer or before the CIT(A).
As rightly contended by assessee,Tribunal did not consider the issue, but was of the opinion that it was neither the case of the assessee nor that of the Revenue that the claim was for current repairs.
Assessment is for the year 2012-13 and the facts are not in dispute. It is only an application of legal principle to the given facts. Therefore, we hold that there is no justification in remanding the matter to the Tribunal or to any other Lower Authority.
We hold that the expenditure incurred by the assessee is a revenue expenditure and not a capital expenditure. - Decided in favour of assessee.
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2020 (7) TMI 687 - ITAT MUMBAI
Disallowance u/s 14A r.w.r. 8D - AO made the addition under Rule 8D(2)(iii) - total quantum of exempt income earned by the assessee was much higher than that of the disallowance made by the Ld. AO - HELD THAT:- We have carefully considered the judgment passed by the Hon’ble Delhi Bench in the matter of ACIT vs. Vireet Investment Pvt. Ltd. [2017 (6) TMI 1124 - ITAT DELHI] as relied upon by the Ld. AR. However, we find that the ratio laid down in the said judgment has not been followed in its true spirit.
As we find that while making addition of.5% of the average investment under Rule 8D(2)(iii) the Ld. AO considered the entire investment made by the assessee instead of only those investment which yielded exempt income during the year. Thus, having regard to the entire facts and circumstances of the case we dispose of the appeal by restoring the issue to the file of the Ld. AO for re-computing the disallowance under Section 14A of the Act on the basis of investment which yielded exempt income in the year under consideration as observed by us hereinabove. Assessee’s appeal is thus allowed for statistical purpose.
Order being pronounced after ninety (90) days of hearing - COVID-19 pandemic and lockdown - HELD THAT:- Taking note of the extraordinary situation in the light of the COVID-19 pandemic and lockdown, the period of lockdown days need to be excluded. See case of DCIT vs. JSW Limited [2020 (5) TMI 359 - ITAT MUMBAI]
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2020 (7) TMI 686 - ITAT MUMBAI
Exemption of capital gain u/s 54EC being investment made in National High way Authority of India (NHAI) bonds - AO disallowed the exemption as investment in Long Term Specified Asset should be made within six month from the date of transfer of asset - when the transaction of transfer of asset was completed and if the assessee invested the capital gain within six months from the date of transfer of capital asset? - CIT(A) affirmed the action of assessing by taking the view that the transfer deed of the asset is in Guajarati and not readable and thus assessee has not proved - HELD THAT:- In view of the provisions of Registration Act and TP Act, the transfer of immoveable property is complete only when the registration of sale is completed. Though, as per section 47 of Registration Act it may relate back from the date of execution of document. In the present case, initially the document was executed on 8.10.2012, though; it was ultimately registered on 16.01.2013. The date of registration is not disputed by lower authorities. The lower authority denied the claim of assessee on the ground that the document was initially executed on 8.10.2012. No investigation was conducted by the assessing officer to disbelieve the contention of the assessee that finally transaction of transfer of asset was completed only on 16.01.2013.
There is no distinction between the transfer of title and the completion of sale; and the title passes only when the document is registered under the Registration Act. The mere fact that such transfer operates from the date of execution is not sufficient to conclude that the title itself passes on the date of execution. Consequently, the transfer in the instant case could not be deemed to have been expected on the date of execution of the document.
As we have already held that the sale of the immovable property is complete only on registration of transfer deed as mandated under section 54 of the Transfer of Property Act. There is no dispute that the assessee has invested ₹ 25,00,000/- on 31.05.2013 and ₹ 25,00,000/- on 31.07.2013. Therefore, in view of the aforesaid discussion we are in agreement with the contention of the ld. AR for the assessee that the assessee invested the LTCG in NHAI bond within six month of transfer of asset and is eligible for exemption under section 54EC. - Decided in favour of assessee.
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2020 (7) TMI 685 - ITAT JAIPUR
Rejection of books of accounts - Trading addition - GP Estimation - HELD THAT:- Assessee has claimed shortage of 0.55% in Petrol during the year as against 0.60% in the past two years and similarly, the assessee has claimed 0.18% in Diesel during the year which is comparable to A.Y 2011-12 and better than 0.20% claimed in A.Y 2010-11. The same provides a more realistic and rationale basis as compared to monthly comparison and will factor-in the climatic and other factors prevailing throughout the year resulting in such shortages.
Even where the Assessing officer intends carrying out monthly comparison, then the shortages claimed in the month of June 2011 should have been compared with shortages in the month of June 2010 and likewise, for other month which however, has not been done in the instant case.
Comparative shortages for two months is not reflective of any inconsistent claim of such shortages for the whole year and it is even not the case of the Revenue that similar discrepancies are found in remaining months. Shortages so claimed by the assessee are lower than what has been claimed and allowed by the Revenue in past two years for which the requisite data is available on record and therefore, the same being found comparable cannot be form a rational basis for rejection of books of accounts so maintained by the assessee. Rejection of books of account is hereby set-aside and the consequent trading addition is hereby deleted.
Disallowance of various expenses - CIT(A) has restricted such disallowances to 10% which is consistent with the disallowances made in the past years and which has been accepted by the assessee. In the result, we are not inclined to interfere with the findings of the ld CIT(A) and the same is hereby confirmed.
Disallowance of salary expenses - claim of the assessee is that the same is fully verifiable for ESI, PF records and has been duly offered to tax, where applicable in their personal tax returns. The matter is accordingly remitted to the file of the Assessing officer to verify the same and where the same is found to be in order, allow the necessary relief to the assessee.
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