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Income Tax - Case Laws
Showing 81 to 100 of 736 Records
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2021 (7) TMI 1241 - ITAT DELHI
Assessments in the name of non-existent entities - scheme of amalgamation conceived - assessee ceased to be in existence w.e.f. 29.11.2013 on account of amalgamation - HELD THAT:- Following the case of Maruti Suzuki India Ltd. case [2019 (7) TMI 1449 - SUPREME COURT] we are of the considered view that AO as well as ld. CIT (A) have erred in framing / confirming the assessments in the name of non-existent entities, namely, Haryana Gramin Bank and Gurgaon Gramin Bank which are not sustainable in the eyes of law being nullity, hence ordered to be quashed. Consequently, all the appeals filed by the assessee are allowed.
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2021 (7) TMI 1240 - ITAT DELHI
Deduction u/s 54F - primary requirements necessitating transfer u/s 53A of transfer of immovable property act are not satisfied - AO disallowed the deduction claimed u/s 54F of the Act on the ground that transfer of immovable property i.e. house property qua which deduction has been claimed by the assessee, is complete only by way of registered sale deed - HELD THAT:- We are of the considered view that benefit of deduction u/s 54F of the Act cannot be denied to the assessee merely on the ground that conveyance deed has not yet been got registered particularly when the assessee is proved to be in possession of the property in question out of which she was already owner in possession of 1/3rd share since 2008 after making a complete payment of the sale consideration to the vendors and has duly proved her possession over the property by way of electricity and water charges bills. So, we find no reason to interfere into the impugned order passed by the ld. CIT (A) allowing deduction to the assessee u/s 54F of the Act, hence appeal filed by the Revenue is dismissed.
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2021 (7) TMI 1239 - ITAT RAIPUR
Reopening of assessment u/s 147 - reasons to believe - HELD THAT:- There is no averment to the effect as to what material facts necessary for assessment were not disclosed by the assessee in the course of original assessment proceedings fully as well as truly. The reasons being justiciable, the AO is expected to record a finding to this effect in the reasons recorded itself. AO has failed on this score. Thus, the reasons recorded when seen on standalone basis do not pass the tests of basic requirement for assumption of jurisdiction u/s 147 of the Act. The notice issued for reopening a completed assessment on the basis of such reasons, is thus, time barred and merge in void. The re-assessment order framed on the basis of a time barred notice, thus, cannot be countenanced in law. Hence, we find merit in the ground raised by the assessee towards lack of jurisdiction u/s. 147 of the Act.
Consequently, in our considered opinion, the AO has mis- directed himself in reopening the completed assessment without legal foundation. In this view of the matter, the impugned assessment u/s143(3) r.w. s. 147 of the Act is liable to be set aside and cancelled.
As we have held that notice u/s 147/148 of the Act is not sustainable in law, we do not consider it necessary to go into all other legal grounds raised by the assessee in its appeal to support the plea for lack of jurisdiction and also other grounds on merits. - Appeal of the assessee is allowed and appeal of the Revenue is dismissed.
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2021 (7) TMI 1238 - ITAT DELHI
Accrual of Capital Gain - Surplus which arose on sale through the appellant, of the mortgaged plots of land by the mortgagee of the plots - CIT-A assessment long term capital gain - HELD THAT:- Assessee company has voluntarily sold the mortgaged property and has received the sale proceeds thereof through banking transactions at the market value, hence surplus arising on the sale of agricultural land declared as capital gain by the assessee has been rightly subjected to taxable income of the assessee for the year under assessment. So, finding no illegality or perversity in the impugned findings returned by the ld. CIT(A), ground nos.1, 2 & 3 are determined against the assessee.
Addition on account of bad debts written off not due to business exigencies but due to collusive nature of transaction as provided under section 36(1)(vii) - CIT (A) deleted the addition by thrashing the facts and settled principle of law on the issue in question - HELD THAT:- This issue has already been decided in favour of the assessee by the coordinate Bench of the Tribunal in assessee’s group company case WGF Financial Services Pvt. Ltd. [2021 (3) TMI 394 - ITAT DELHI] we are of the considered view that when the assessee has suffered losses in the ordinary course of business as a guarantor it has to be treated as a business loss which is eligible to be written off as bad debt due to business exigencies.
There is not an iota of evidence in the file if this business loss is due to collusive nature of transaction as provided u/s 36(1)(vii) of the Act. So, finding no illegality or perversity in the deletion of addition made by the ld. CIT (A), ground is determined against the Revenue.
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2021 (7) TMI 1237 - ITAT DELHI
Penalty u/s. 271 (1)(c) - expenditure incurred on construction of Bus Queue Shelter - Revenue or capital expenditure - HELD THAT:- Penalty was initiated and levied in earlier years but was deleted by ld. CIT (A) and his order has been confirmed by the coordinate Bench of the Tribunal on the ground that when the assessee has brought on record all the true and material facts in the return of income, it is merely a difference of opinion if these expenses are to be treated as capital or revenue in nature and is not a case of furnishing of inaccurate particulars of income.
Hon’ble Apex Court in case of CIT vs. Reliance Petro Products Pvt. Ltd. [2010 (3) TMI 80 - SUPREME COURT] held that merely making a claim which is not sustainable in law by itself would not amount to furnishing of inaccurate particulars.
We are of the considered view that by claiming expenditure incurred by the assessee on construction of BQS for and on behalf of New Delhi Municipal Corporation (NDMC) and Mumbai Metropolitan Region Development Authority (MMRDA) as capital in nature does not amount to furnishing of inaccurate particulars of income. So, ld. CIT (A) has rightly deleted the penalty and finding no illegality or perversity in the impugned order, the appeal filed by the Revenue is dismissed.
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2021 (7) TMI 1236 - ITAT AHMEDABAD
Assessment u/s 153C - Addition u/s 69 - CIT-A deleted the addition - HELD THAT:- As decided in DHARMEN MARBLE & STONE VERSUS ACIT, CENT. CIR. 1 (2) (3) AHMEDABAD. [2021 (7) TMI 1163 - ITAT AHMEDABAD] addition made by the AO has already been deleted by the CIT(A) on merit. The order of the CIT(A) has not been challenged by the Revenue in further appeal. Therefore, adjudication of legal issue at this stage would only an academic exercise. It is not going to materially affect the assessee in any manner. No other proceedings, in consequence to this proceeding qua the assessee are pending. Therefore, we do not deem it necessary to devote time energy for resolving an academic litigation
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2021 (7) TMI 1235 - ITAT ALLAHABAD
Addition u/s 50C - sale of land by four co-owners - applicability of the provisions of Section 50C for adoption of deemed full value consideration, while computing the capital gain arising from the sale of land in question - assessee has claimed that the land in question is a Bhumidari land and the ownership is vested with the State Government, hence, the assessee has transferred only the tenancy rights in the land - HELD THAT:- In the case in hand as per the sale deed dt. 26th May 2004 the parties have specifically stated that the land in question is free from any encumbrance and does not fall in the category of ceiling, nazul or leasehold. Therefore, what is transferred by the assessees as per sale deed dt. 26th May 2004 is the ownership of the land for a consideration of ₹ 9,50,000/- whereas the land was valued for stamp duty purpose at ₹ 53,00,000/-. Neither the AO has conducted any inquiry regarding any change in the status of the land in question after the same was purchased in the year 1961 till it was sold in the year 2004 nor the assessee has brought on record any material to say that the land still remains Bhumidari land and the assessee was having only a tenancy rights in the land in question.
Therefore, this factual aspect is required to be verified after conducting a proper inquiry particularly from the Revenue department of the State Government in respect of the status of the land at the time of sale on 26.06.2004. Hence, in the facts of circumstances the case and in the interest of justice, this issue is set aside to be record of the Assessing Officer for fresh adjudication after conducting a proper inquiry regarding the status of the land on the date of sale, and then decide the same as per law.
Determination of fair market value as on 01.04.1981 - AO has accepted the fair market value of the land as on 01.04.1981 in the case of assessee whereas in the case of co-owner the Assessing Officer has adopted a different valuation.
It transpires from the record that the Assessing Officer has accepted the fair market value as on 01.04.1981 in case of Mahendra Singh whereas the different valuation was adopted in case of Rajendra Singh. There cannot be two valuation of the same land when the land was jointly owned by the assesses and sold by one sale-deed. Accordingly addition made by the Assessing Officer by adopting a different fair market value as on 01.04.1981 in case of Rajendra Singh is deleted.
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2021 (7) TMI 1233 - ITAT AHMEDABAD
Disallowance of deduction u/s 80IAB - income derived from 'Operation and Maintenance Activities' of SEZ - HELD THAT:- A combined reading of provisions of section 80IAB of the Act with section 2(g) and Section 3(10) of the Special Economic Zone Act that a person would be considered as a developer with the grant of letter of approval from competent authority, if the approval has been granted for development, operating and maintaining the SEZ. Therefore, activities of the assessee being a developer, include operation and maintenance of SEZ, and therefore entitled for deduction under section 80IAB of the Act. DR has not disputed or point out any material difference in this year from that of earlier years, so that the Tribunal can take a different view on the issue of claim of deduction under section 80IAB of the Act.
Therefore, respectfully following orders of the Tribunal in the assessee’s own case cited. [2018 (2) TMI 2040 - ITAT AHMEDABAD],. [2017 (10) TMI 1578 - ITAT AHMEDABAD] and [2016 (8) TMI 696 - ITAT AHMEDABAD] based on which the ld.CIT(A) has allowed the claim of the assessee, we uphold order of the ld.CIT(A) and dismiss the ground of appeal of the Revenue.
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2021 (7) TMI 1232 - ITAT DELHI
Addition u/s 68 - accommodation entry in the name of the Assessee - assessee was asked to produce parties who invested in the Assessee company to prove the genuineness of the transaction but he has shown its inability to produce - CIT-A deleted the addition - HELD THAT:- There is no reference in the order of ld CIT(A) that how he has dealt the requirement of the ld AO of personal examination of the investor which the Assessee has reportedly failed to produce before the ld AO. CIT(A) has categorically mentioned that on account of independent enquiry, no adverse information came to the knowledge of the share holders that those are non- existent or do not have any capacity. He merely deleted the addition on the basis of the confirmation.
He ignored the finding of the ld AO that there were a search in case of Shri S. K. Jain, where he confirmed that these accommodation entries and the assessee is one of the beneficiary therefore the genuineness of the transaction was completely shrouded. To examine the genuineness AO made several attempts for examination of the share holder which the Assessee either expressed inability or completely thwarted the investigation of the ld AO. CIT(A) did not address this issue at all.
The onus u/s 68 is always swinging from Assessee to AO and AO to Assessee. In this case, now the onus rests with the assessee to produce the depositors before the ld AO who have invested in the share capital of the company.
Assessee failed to do so. The assessee is a private limited company and therefore, it could not have given share subscription to the public at large. It has issued shares to the private parties which are known to the assessee only. It is not the case of the public limited company where the non production of the share holder could not have visualized in isolation against the Assessee. See NRA IRON & STEEL PVT. LTD. [2019 (3) TMI 323 - SUPREME COURT] and NDR PROMOTERS PVT. LTD. [2019 (1) TMI 1089 - DELHI HIGH COURT]
As the ld CIT(A) has failed to answer the several observation of the ld AO as stated above, we set aside the both the grounds of appeal of the ld AO back to the file of ld CIT(A) with a direction to the Assessee to produce the share holders before him - Decided in favour of revenue for statistical purposes.
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2021 (7) TMI 1230 - ITAT MUMBAI
Penalty u/s 271(1) (c) - Addition on ad–hoc basis - HELD THAT:- AO imposed penalty under section 271(1)(c) of the Act on ad–hoc basis without adducing any evidence on record for concealment of income. Penalty under section 271(1)(c) of the Act is liable to be imposed only where the assessee has concealed its particulars of income or furnished inaccurate particulars. Action of making addition on ad–hoc basis does not result into imposition of penalty u/s 271(1)(c) and hence cannot be termed as either concealment or furnishing of inaccurate particulars of income. We find support from the series of decisions by different High Courts as well the decision of the Co–ordinate Benches of the Tribunal, wherein it was held that when addition is made on estimate basis, penalty is not sustainable in the eyes of law.
Departmental Authorities has not brought any cogent material to prove otherwise warranting interference at the instance of the Revenue. In this view of the matter, we are of the considered view that the learned CIT(A) was indeed justified in deleting the penalty, as there was no concealment of income on the part of the assessee have been proved by the Revenue and additions made on estimation by the Assessing Officer do not call for initiation of penalty - Decided against revenue.
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2021 (7) TMI 1229 - ITAT MUMBAI
Addition on account of Short Deduction of TDS - Intimation u/s. 200A - HELD THAT:- As per the provisions of Sec.201(1), where the assessee, inter-alia, fails to deduct whole or any part of the tax then such persons shall be deemed to be an assessee-in-default. However, as per the first proviso, the assessee shall not be deemed to be assessee-in-default in respect of such tax if the payee has furnished his return of income u/s 139 and has taken into account such payment for computing income and has paid tax due on income declared by him in such return of income.
For the same, the payee is required to furnish a prescribed certificate to that effect. Thus, if the assessee could demonstrate the fulfilment of all these requirements, he could not be treated as assessee-in-default. To get the benefit of the proviso, the assessee is directed to demonstrate the fulfillment of these requirements before Ld. TDS officer who shall consider the same. If the same are found in order, the assessee could not be treated as assessee-in-default and the demand raised for short deduction of TDS shall stand deleted. We order so. The ground thus raised stands allowed for statistical purposes.
Computation of interest u/s 201(1A) - As per clause (i), The assessee is liable to pay simple interest on short payment of tax from the date on which tax was deductible to the date on which tax was deducted. Clause (ii) provides for interest on the amount of such tax from the date on which the tax was deducted to the date on which the tax was actually paid.
As been provided that in case the assessee is not treated as assessee-in-default in terms of first proviso to sub-section (1) then interest under clause (i) shall be payable from the date on which tax was deductible to the date of furnishing of return of income by the payee.Therefore, the statutory provisions are quite clear. The payment of interest shall be mandatory and the period shall run from the date on which tax was payable to the date of furnishing of return of income by the payee. Payment of interest is mandatory but the same may be re-computed at correct rates after ascertaining the fact that whether the assessee could be treated as assessee-in -default or not. The grounds, thus raised, stand partly allowed for statistical purposes.
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2021 (7) TMI 1228 - ITAT HYDERABAD
Assessment u/s. 144 - Cash deposits into Citizen Co-operative bank account as income of the assessee under the head 'income from other sources' - HELD THAT:- AO has proceeded on the assumption that the cash deposits are after the death of assessee's father, and the assessee could not file all the details before the AO and the CIT(A), we deem it fit and proper to remit the issue to the file of the AO with a direction that AO shall reconsider the issue afresh in light of material filed by the assessee in accordance with law. The assessee is directed to cooperate with the AO by giving all details, failing which, AO can take necessary decision as per law.
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2021 (7) TMI 1227 - ITAT HYDERABAD
LTCG - registered sale deed was executed by the legal heirs of late Sri G. Sattiah - Assessee along with her sister and 6 brothers, sold 12 plots of land and the assessee's 1/8th share in S.R.O. value (after applying the provisions of section 50C - HELD THAT:- Undisputed facts are that the assessee's father, late Sri G. Sattaiah during his lifetime had sold certain piece of land to various vendees and some of the vendees have also passed away and at the request of the vendees and the legal heirs of deceased vendees, the LRs of the vendor, late Sri Sattaiah, have executed registered documents in their favour. In the light of such circumstances, the assessee and her brothers have executed the sale deed, in respect of properties, whose possession of the property was already given. In view of provisions of section 53A of the Transfer of Property Act, the properties have already been transferred in favour of the vendees except for the execution of the registered sale deeds. As rightly contended by the assessee, the transfer has taken place in the earlier assessment years when late Sri G. Sattiah was alive.
As regards the finding of the AO that LTCG has arisen out of retention of 500 square yards by assessee's brothers, find that the assessee has stated before the CIT(A) that 500 square yards vested with late Sri G. Sattiah and after his demise, his sons received the property and constructed house thereon and that it was not received by assessee's brothers by virtue of gentleman agreement.
CIT(A) has not verified this fact but has merely gone by the presumption that the assessee had relinquished her right over the 500 sq. yards plot retained by assessee's brothers. Since the land retained by the assessee's brothers cannot be treated as transfer in their favour, there cannot be any relinquishment or right by the assessee in such property. Therefore, there is no incidence of any LTCG in favour of the assessee during the alleged assessment year when the registered sale deed was executed by the legal heirs of late Sri G. Sattiah, with regard to the transaction which had taken place during the earlier assessment year. Thus, the assessee's grounds of appeal are allowed.
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2021 (7) TMI 1226 - ITAT AMRITSAR
Penalty u/s. 271(1)(c) - Non specification of specific charge - irrelevant portion in the notices were not striked off and contended that such a levy of penalty was void ab initio and requested to be deleted - additions pertain to bank deposits and deduction claimed u/s. 80C - HELD THAT:- CIT(A) had observed that the A.O. records satisfaction for imposition of penalty was for concealment of income, however, he omitted to strike off the irrelevant part of the blank printed format notice u/s. 274 r.w.s. 271(1)(c) and thus without striking off the irrelevant portion in the notice contemplates in vitiating the penalty proceedings.
The admitted fact that the A.O. has issued blank printed format notices, without striking off irrelevant portion u/s. 274 r.w.s. 271(1)(c) duly signed under its signature. We understand that the A.O. while issuing Notice under section 271(1)(c) of the Income-tax Act, 1961 is under statutory obligation that the assessee must be informed of the grounds of the penalty proceedings only through statutory notice. These notices primarily suffered from ambiguity and the vice of vagueness, thus, vitiated the penalty proceeding.
Decided in favour of assessee.
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2021 (7) TMI 1225 - ITAT DELHI
Penalty levied u/s. 271(1)(c) - transfer of agricultural land were subjected to capital gain tax and as the assessee did not offer the gains in his return of income - As strongly contended that when the assessee sold the impugned piece of agricultural land said land was beyond the distance of 8 KMS from the municipal limits and this was confirmed by the Tehsildar of Sohana - CIT(A) deleted the penalty levied by the AO - HELD THAT:- It is an undisputed fact that the distance of the land sold on the date of CBDT notification No. 9447 dated 06.01.1994 was more than 8 KMS. As equally true that on the date of sale the said distance was less than 8 KMS. We are of the considered view that the chargeability of capital gain tax under such circumstances is a debatable issue. We further find that the appellant claim is well supported by the certificate of the Tehsildar, Sohna which was also confirmed by the A.O. in his remand report.
Hon'ble Supreme Court in the case of Reliance Petro Chemicals Limited [2010 (3) TMI 80 - SUPREME COURT] has held that merely making an incorrect claim would not tantamount to furnishing of inaccurate particulars unless it was established that appellant had acted with mala fide intention. In totality in the light of certificates of the Tehsildar, Sohna we are of the considered view that the CIT(A) has rightly deleted the penalty levied u/s. 271(1)(c) of the Act and calls for no interference. Appeal filed by the revenue is dismissed.
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2021 (7) TMI 1224 - ITAT MUMBAI
Levy of penalty u/s. 271(1)(c) - HELD THAT:- Penalty proceedings u/s. 271(1)(c) of the Act has been initiated by the Ld. AO for concealment of income, but ultimately the penalty has been levied by the Ld. AO for furnishing inaccurate particulars of income. This is a classic case wherein penalty has been initiated under one limb of Section 271(1)(c) of the Act and ultimately levied for another limb of Section 271(1)(c) of the Act.
In the case of CIT vs. Samson Perinchery [2017 (1) TMI 1292 - BOMBAY HIGH COURT] had held that concealment of income and furnishing of inaccurate particulars of income in Section 271(1)(c) of the Act carry different meanings/connotations and therefore, the satisfaction of the AO with regard to only one of the two breaches mentioned u/s. 271(1)(c) of the Act, for initiation of penalty proceedings will not warrant/permit penalty being imposed for the other breach. The order imposing penalty has to be made only on the ground of which penalty proceedings has been initiated, and it cannot be on a fresh ground of which the assessee has no notice. Therefore, where the Assessing Officer initiated penalty proceedings u/s. 271(1)(c) for furnishing inaccurate particulars of income, the order imposing penalty for concealment of income was not valid - we hereby direct the Ld. AO to delete the penalty levied u/s. 271(1)(c). - Decided in favour of assessee.
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2021 (7) TMI 1223 - ITAT MUMBAI
Reopening of assessment u/s 147 - Bogus purchases - information gathered from DGIT (Investigation) Mumbai that Sanjay Choudhary group persons had floated various companies which are engaged in the business of providing accommodation entries in the form of bogus unsecured loans, bogus purchases, bogus capital gains and assessee also was one of the beneficiaries by obtaining bogus purchases - HELD THAT:- Admittedly this information was obtained by the Ld. AO based on search and seizure action carried out in the case of Shri Sanjay Choudhary group wherein it was found that the said group was engaged in providing accommodation entries without actual supply of goods, which had ultimately triggered the reopening of assessment in the case of the assessee.
CIT(A) had observed that from the information so received, the assessee's name appeared in the list of beneficiaries who had taken accommodation entries. Obviously this would result in formation of belief in the mind of the AO that income of the assessee had escaped the assessment as the said information constituted tangible material. We find that the Ld. CIT(A) had also placed reliance on the decision of the Hon'ble Gujarat High Court in the case of Peass Industrial Engineers Pvt. Ltd.[2016 (8) TMI 280 - GUJARAT HIGH COURT]in support of its contentions, while upholding the validity of reopening. Hence, we do not find any infirmity in the order of the Ld. CIT(A) upholding the validity of reopening of the assessment in the instant case. Accordingly, the ground No. 1 raised by the assessee for both the years is hereby dismissed.
Bogus purchases - In the instant case, the sales made by the assessee within the disputed purchases had not been doubted by the Revenue. Hence, it could be safely concluded that assessee could have made purchases from grey market in order to have some savings in indirect taxes and incidental profit element thereon by making cash purchases. Hence, it would be just and fair to bring to tax only profit element embedded in the value of such disputed purchases. We find based on the report of the task group for diamond sector published by the Government of India, Ministry of Commerce and Industry, in this regard, wherein the benign/presumptive taxation threshold was set at 2.5%. We hold that profit percentage embedded in the value of disputed purchases estimated at 2.5% thereon, would meet the ends of justice. The Ld. AO is directed accordingly.
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2021 (7) TMI 1222 - ITAT DELHI
Assessment u/s 153A - Non-service of notice - HELD THAT:- There is no dispute of the fact that the search & seizure operation in this case took place on 20.06.2014, by which date the time period to issue notice u/s. 143(2) for assessment year 2009-10 stood expired. There is also no dispute that no incriminating material was found during the search and seizure operation to base any addition qua this assessment year.
In CIT vs. Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT] Hon'ble Delhi High Court held that the assessment cannot be made arbitrarily without any relevance or nexus with the seized material and the assessment in such cases has to be made only on the basis of incriminating material found during the search and completed assessments cannot be interfered with arbitrarily. In such circumstances, the finding of the ld. CIT(A) cannot be interfered with. - Decided against revenue.
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2021 (7) TMI 1221 - ITAT DELHI
TDS u/s 194I - rent paid to five person - Addition u/s. 40(a)(ia) - HELD THAT:- In so far as the payment to four persons is concerned, none of such persons received an amount exceeding ₹ 1,80,000/- in the financial year and therefore, under proviso to section 194-I, no deduction need be made. This is the reason why the ld. CIT(A) did not confirm such an addition and she confined her discussion to the addition of ₹ 3,36,000/-. Though it is implied from the order of the ld. CIT(A), now we expressly state that the addition made by the Assessing Officer in respect of payments made to four individuals is unsustainable and shall stand deleted.
Amount paid to one Sh. Chandra Kant Adrekar - The record reveals that Form 26A dated 10.01.2017 was issued by the assessee and it was countersigned by the Chartered Accountant and inasmuch as it was not submitted to DCIT(Systems), the ld. CIT(A) held that there was no sufficient compliance with the Rules. Be that as it may, the leaned CIT(A) was not sure as to the fact whether the income of the payee was below the maximum amount not chargeable to tax.
As submitted before the ld. CIT(A) that the assessee was required to file the details of expenses, on which TDS was deducted and the Assessing Officer did not seek any explanation for non-deduction of TDS in respect of this amount. According to the assessee before the ld. CIT(A), this prevented the assessee from producing Form 26A before the Assessing Officer. In these circumstances, when once form 26A was produced before the CIT(A), the fact of income of the payee below the maximum amount not chargeable to tax assumes importance, and in the absence of any finding on this aspect, the addition cannot be sustained. In the circumstances, we find it difficult to sustain the orders of the authorities below and accordingly allow the grounds of appeal. - Decided in favour of assessee.
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2021 (7) TMI 1219 - ITAT AMRITSAR
Addition u/s 40A(7) - contribution towards the gratuity funds - HELD THAT:- It is the case of the assessee that the assessee had made contribution towards the gratuity funds during the assessment year under consideration and therefore the assessee is entitled to the dedication liable under section 40A(7) of the Act.
Once the assessee had made the payment during the year under consideration then the same is required to be allowed. However, the above said fact have not been considered by the lower authorities and therefore we deem it appropriate to remand back the matter to the file of the concerned AO to verify whether the contribution towards the gratuity funds were paid by the assessee during the year under consideration or not. If on verification the AO comes to the conclusion that the contribution were made in the year under consideration then the AO is directed to allow the benefit of 40A(7) to the assessee - while verifying above set back of contribution the AO shall afford the opportunity to the assessee and also permit him to support the contention on the basis of the documents/evidence may be advised. Accordingly, the appeal of assessee is allowed for statistically purposes.
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