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Income Tax - Case Laws
Showing 1 to 20 of 670 Records
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2021 (8) TMI 1434
Vivad se Vishwas Scheme - settlement of pending disputes - Assessee submitted that the Department has accepted application filed by the assessee and issued Form 3 quantifying amount of taxes payable under VSVS scheme, therefore, assessee submitted that the appeal filed by the Revenue may be dismissed as withdrawn.
DR, on the other hand, has no objection for dismissing the appeal as the Designated Authority has issued Form 3.
HELD THAT:- Considering the fact that the assessee has filed application for withdrawal of appeal and has also filed Form 3 issued by the Department, we dismiss the appeal filed by the Revenue as withdrawn. However, a liberty is given to the assessee to restore the appeal, in case the application filed by the assessee before the Designated Authority, is rejected for any reason.
Appeal filed by the Revenue is dismissed as withdrawn.
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2021 (8) TMI 1433
Unjust adjustment of excess refunds - petitioner submits High Court [2013 (10) TMI 117 - SUPREME COURT] has granted interest on refund at the rate of 15% per annum which is contrary to the provisions of Section 244A and reliance placed on the judgment of Gujarat Fluoro Chemicals [2013 (10) TMI 117 - SUPREME COURT]
HELD THAT:- Issue notice, returnable in twelve weeks.Dasti, in addition, is permitted.
Counter affidavit be filed within a period of six weeks from the date of service of the notice.
Till the next date of listing, there shall be a stay of the direction of the High Court insofar as it pertains to the award of interest in excess of 6% per annum.
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2021 (8) TMI 1430
Validity of assessment order passed without issuing notice u/s 143(2) - HELD THAT:- No notice u/s 143(2) was issued before finalizing the assessment order u/s 147. We find that the assessee is hesitated this issue before CIT(A) as well that in absence of notice u/s 143(2) the assessment is invalid.
It is an admitted position under the law that assessment order passed without issuing notice u/s 143(2) is invalid. Therefore, subsequent assessment proceedings and the subsequent addition made therein is void ab-initio.
We have accepted the preliminary contention of the submission of assessee. The assessment order is passed without issuing notice u/s 143(2), therefore discussion on other grounds of appeal have academic. Appeal of the assessee is allowed.
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2021 (8) TMI 1428
Notice u/s 153C against deceased person - liability of legal heir of late assessee - as decided by HC [2021 (3) TMI 892 - GUJARAT HIGH COURT] only proposition of law that is applicable in the present litigation is that a notice, be it under Section 148 of the Act or Section 153C of the Act, issued to a dead person, is unenforceable in law. If such is the legal position, the Revenue cannot contend that as they had no knowledge about the death of the assessee, they are entitled to plead that the notice is not defective.
It is true that although the father passed away in the year 2017, yet the legal heir did not inform the department upto October 2019. However, at the same time, we should not overlook the fact that even after coming to know about the demise of late Bhupendrabhai, the department could have issued a valid notice to the legal heir as the period of limitation of 21 months had not expired. We fail to understand what prevented the department from issuing a valid notice to the legal heir within the prescribed time period.
HELD THAT:- We are not inclined to interfere with the impugned order.
Special Leave Petition is, accordingly, dismissed.
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2021 (8) TMI 1425
Non-compliance with statutory provisions of Section 144B - Non adhering mandatory procedure prescribed under the “Faceless Assessment Scheme” - whether provisions of Section 144B of the Act would apply to even those proceedings, which were pending, on 1st April 2021?
HELD THAT:- Circular dated 31st March, 2021 issued by CBDT, Section 144B of the Act would apply to even those assessment proceedings which related to assessment years prior to 2021 provided they were pending disposal on 1st April, 2021.
This Court is also of the view that Section 144B(1)(xvi)(b) mandatorily provides for issuance of a prior show cause notice and draft assessment order before issuing the final assessment order.
Since in the present case no prior show cause notice as well as draft assessment order had been issued, there is a violation of principles of natural justice as well as mandatory procedure prescribed under the “Faceless Assessment Scheme”.
The impugned assessment order is set aside and the matter is remanded back to the Assessing Officer, who shall issue a show cause notice and draft assessment order and thereafter pass a reasoned order
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2021 (8) TMI 1424
Validity of faceless assessment - non-following the procedure laid down u/s 144B - Assessment Order passed u/s 143(3) read with Section 143(3A) and 143(3B) questioned - Denial of principles of natural justice - HELD THAT:- This Court is of the view that Section 144B(1)(xvi)(b) of the Act mandatorily provides for issuance of a prior show cause notice and draft assessment order before issuing the final assessment order.
Since in the present case no prior show cause notice as well as draft assessment order had been issued, there has been a violation of the mandatory procedure prescribed in law.
This Court is also of the view that once the assessment has been done by the respondent No. 1 in accordance with Section 144B of the Act, it has to be done in accordance with the procedure prescribed therein alone.
It is settled law that when power is given to do a certain thing in a certain way, the thing must be done in that way or not at all and other methods of performance are forbidden.
Consequently, even if it is assumed that the principles of natural justice have been complied with in the present case, then also the mandate of the statute would have to be complied with.
Keeping in view the aforesaid, the impugned assessment order passed under Section 143(3) read with Section 143(3A) and 143(3B) of the Act and disputed demand raised under Section 156 of the Act, are set aside.
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2021 (8) TMI 1423
Addition on account of difference in ALP of international transactions of payment of trademark fee entered into by the assessee with its Associated Enterprise (“AE”) in USA - HELD THAT:- There is no change into the facts and circumstances of the case in the present year. Therefore, taking a consistent view, we hereby direct the Assessing Officer to delete the addition in the light of decisions of the Tribunal pertaining to Assessment Years 2007-08 to 2009-10 [2016 (7) TMI 21 - ITAT DELHI] 2011-12 to 2012-13 [2018 (1) TMI 1716 - ITAT DELHI] and 2014-15 [2019 (2) TMI 2111 - ITAT DELHI] in assessee’s own case wherein concluded that there exists a direct nexus between the revenue earned by the assessee and the payment of royalty made to the associated enterprise for using brand name, and therefore, it would be incorrect to analyze the transaction of payment of royalty in isolation.
DR had raised a contention that the assessee has not demonstrated how the payment for royalty beneficial to the taxpayer. We are of the opinion that, ascertaining whether a service has actually benefitted the assessee is not within the prerogative of the tax authorities.
The Hon'ble Delhi High Court in CIT v. Cushman & Wakefield (India) (P.) Ltd. [2014 (5) TMI 897 - DELHI HIGH COURT] has held that the authority of the TPO is limited to conducting transfer pricing analysis for determining the ALP of an international transaction and not to decide if such services exist or benefits did accrue to the assessee. Such later aspects have been held to be falling in the exclusive domain of the AO.
Accordingly,nwe are of the opinion that since the operating margin of the assessee at 6.96% is higher than the comparables at 2.77%, the international transaction of payment of royalty entered into by the assessee are to be considered being at arm’s length applying TNMM as the most appropriate method. Thus, direct the assessing officer to delete the adjustment on this account.
Adhoc disallowance being 30% of the total expenditure incurred by the assessee on advertisement and publicity - assessee was show-caused as to why the expenditure incurred on advertisement should not be disallowed being in nature of brand building activity - HELD THAT:- We find that the similar issues arose in earlier years as well and the Tribunal was pleased to decide the issue in favour of the assessee [2019 (2) TMI 2111 - ITAT DELHI] held that the advertisement expenditure incurred by the assessee is incurred wholly for the purpose of its business and profession and ought to be allowed deduction in entirety. AO has clearly made an ad-hoc disallowance of advertisement expenditure incurred by the assessee, which is not permissible under the law. We are of the considered view that AO was not justified in making such ad-hoc disallowances and therefore, direct the assessing officer to delete the adjustment on this account - Decided in favour of assessee.
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2021 (8) TMI 1421
Penalty u/s 271(1)(c) - suppression of income - difference in lodging receipts was treated as suppression in lodging receipts and the same was treated as concealment of income - HELD THAT:- In this case, the AO has levied the penalty by taking into consideration only five months of the lodging receipts and estimating for the remaining seven months and the addition is made.
In our opinion, penalty u/s. 271(1)(c) cannot be levied on the basis of estimation. AO has failed to prove that the Assessee had either concealed the income or filed inaccurate particulars. Therefore, Section 271(1)(c) has no application in this case. Accordingly, we reverse the order passed by CIT(A) and we cancel the penalty levied by the AO. Appeal of assessee allowed.
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2021 (8) TMI 1419
Income Tax demands post insolvency proceedings concluded - assessee submitted that in the case of the company resolution order has been passed by the Hon’ble National Company Law Tribunal under Insolvency and Bankruptcy Code, 2016 and held that demands of any payable to Central Government will be deemed to be permanently extinguished - HELD THAT:- Instant appeals of the Revenue are dismissed as no useful purpose would be served by adjudicating the matter involved in appeals as dues of the Income Tax Department stands permanently extinguished.
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2021 (8) TMI 1418
Income Tax demands post insolvency proceedings - application of the waterfall mechanism mentioned in section 53 of the Code, the liquidation value due to unsecured financial creditors, operational creditors and other creditors of the assessee becomes nil - HELD THAT:- It is clear that in terms of the resolution plan as approved by the NCLT, all claims or demands or liabilities or obligations owed or payable to or assessed by or assessable by the Central Government/State Government in relation to any period prior to the acquisition, will be written off in full and will be deemed to be permanently extinguished. This position of law is clear in view of the decision of Hon’ble Supreme Court in the case of Ghanashyam Mishara and Sons vs. Edleweiss Assets Reconstruction Company Ltd. (2021 (4) TMI 613 - SUPREME COURT).
We are of the considered opinion that the dues to the Income-tax Department for the assessment year 2013-14, which are reflected in the list-B appended to NCLT order stood fully extinguished and no useful purpose would be served by adjudicating this matter. With this view of the matter, we dismiss the appeal of the Revenue.
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2021 (8) TMI 1414
Depreciation attributable to capitalization of exchange rate fluctuations loss in respect of indigenous assets purchased in India - fixed assets as acquired in India out of foreign currency loan - HELD THAT:- The facts in the present Assessment Year i.e. 2012-13 [2021 (6) TMI 609 - ITAT DELHI] are identical and no distinguishing facts were pointed out by the Ld. DR. The assessee has attributed the liability in the present Assessment Year to the fixed assets which were acquired in India out of foreign currency loan.
Since the fixed asset was acquired by utilizing foreign currency loan and on account of currency fluctuation, the loan liability was added to the fixed assets. Thus, the assessee is entitled to depreciation on exchange loss. Therefore, we direct the AO to allow the depreciation attributable to capitalization of exchange rate fluctuation loss. Thus, the appeal of the assessee is allowed.
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2021 (8) TMI 1411
Appeal against appropriate party - Revised appeal substituting the name of the parties or grounds of appeal - assessee originally had filed appeal against the ITO, Ward-11(4), Kolkata passed u/s 144 r.w.s 263 and assessee subsequently filed revised form of appeal whereby the name of the respondent has been changed as PCIT-4, Kolkata - DR pointed out that the assessee even revised Form No.36 through grounds of appeal has only assailed the assessment order and the assessee by way of revised appeal form cannot change the nature of the appeal in toto by not only substituting the name of the parties but also grounds of appeal - HELD THAT:- Appeal of the assessee is dismissed as withdrawn with liberty to file afresh against the appropriate party. The time consumed in prosecuting the present appeal i.e. from the date of filing of the present appeal till receiving of the copy of this order will not be taken into consideration for the purpose of limitation period. However, the assessee will be liable to explain about the delay period, if any, in filing the appeal minus time period consumed in prosecuting the present appeal as observed above. Appeal of the assessee is dismissed as withdrawn.
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2021 (8) TMI 1408
Certificate u/s 197(1) of the Act at Nil rate - petitioner’s Form 13 application for Nil/lower withholding tax certificate was rejected - As now in the writ petition the petitioner has clarified that the provision creating slow and ageing inventory in relation to the relevant AY has not been claimed as a deduction in the said year, the matter can be sent back to the AO for re-examination - HELD THAT:- Though in rejoinder, learned senior counsel for the petitioner disputes the contention advanced by learned counsel for the respondent, yet he has no objection to the matter being remanded back to the AO.
Accordingly, in view of the statement made by learned counsel for the respondent, the impugned order under Section 197(1) of the Act for the Assessment Year 202122 is set aside and the matter is remanded back to the AO to determine the said application afresh in accordance with law. Respondent no. 2 shall pass a reasoned order in accordance with law after giving an opportunity of hearing to the authorised representative of the petitioner within four weeks.
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2021 (8) TMI 1407
Reopening of assessment against non existent company - notice issued to company amalgamated - HELD THAT:- As decided in TAKSHASHILA REALTIES PVT LTD VERSUS DY COMMISSIONER OF INCOME TAX CIRCLE 4 (1) (2) [2016 (12) TMI 872 - GUJARAT HIGH COURT] as per the scheme of amalgamation sanctioned by the Court, the transferor Company shall not be in existence, and therefore, the impugned notices against the transferor Company (non-existent Company) shall not be permissible.
Writ petition is allowed and the impugned notice is quashed solely on the ground that the impugned notice was issued in the name of non- existing company in spite of revenue having notice and knowledge of non-existence of such Company. Decided in favour of assessee.
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2021 (8) TMI 1405
Accrual of income in India - sale of Novell Software Products as 'Royalties' on substantive basis both under the Income-tax Act, 1961 as well as the India-USA DTAA - PE in India or not? - AO held that Novell Software Development India Private Limited ('NSDIPL') is a Dependent Agency Permanent Establishment ('DAPE') of Appellant in India - whether there is "Principal to Principal" arrangement between Novell Inc. and NSDIPL under the Distribution Agreement - HELD THAT:- So far as taxability of software sale by the US entity to Indian entities is concerned learned representatives fairly agree that the said issue is now covered by Hon’ble Supreme Court’s judgement in the case of Engineering Analysis Centre of Excellence (P.) Ltd[2021 (3) TMI 138 - SUPREME COURT]
Existence of the dependent agency permanent establishment [DAPE] or not? - In the light of Hon'ble jurisdictional High Court's judgment in the case of Set Satellite (2008 (8) TMI 96 - BOMBAY HIGH COURT), so far as profit attribution of a DAPE is concerned, the legal position is that as long as an agent is paid an arm's length remuneration for the services rendered, nothing survives for taxation in the hands of the dependent agency permanent establishment. Viewed thus, the existence of a dependent agency permanent establishment is wholly tax neutral.
As transactions in question were at arm’s length price, no taxability survives in the hands of the assessee. Once basic taxability under the DAPE itself comes to an end, all other issues raised in the appeal are rendered academic and infructuous.
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2021 (8) TMI 1399
Validity of faceless assessment passed u/s 144B - Denial of natural justice - Petitioner submits that the impugned assessment order has been passed without observing the principles of natural justice, inasmuch as, due to launch of new income tax e-filing portal, the existing portal was discontinued from 01st June, 2021 and the new income tax e-filing portal did not work after the launch and, therefore, compliance till 07th June, 2021 could not be made and the impugned assessment order was passed on 11th June, 2021 - On 26th July, 2021, this Court had issued notice to the Respondents who sought time to obtain instructions, and till today - HELD THAT:- We are of the view that the Respondents have had more than sufficient time to obtain instructions. Consequently, the request for adjournment of respondents is declined.
Having perused the paperbook, we are of the view that the impugned assessment order has been passed without providing adequate opportunity to submit reply in response to the show cause-cum-draft assessment order dated 23rd May, 2021.
We also feel that as the timeframe set out in the show cause notice dated 23rd May, 2021 was extremely narrow and since the e-filing portal was allegedly dysfunctional, there are good enough reasons to set aside the impugned assessment order, with liberty to the Assessing Officer to continue the assessment proceedings from the stage at which they were positioned when the show cause notice dated 23rd May, 2021 was issued.
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2021 (8) TMI 1396
Validity of Revision u/s 263 - CIT noted difference of sale consideration and value determined by Stamp Valuation Authority in respect of 12 such persons and that the AO failed to verify and applying the correct law - PCIT set aside the assessment order and directed to verify the sale deed for the year under consideration and pass the assessment order afresh by giving adequate opportunity to the assessee - assessee argued No fair and proper opportunity was given by CIT - HELD THAT:- It is an admitted fact that ld. PCIT issued show-cause notice u/s 263 dated 13/03/2021 for fixing the date of hearing on 31/03/2021. PCIT passed the order on 31/03/2021 itself.
We find that assessee filed copy of reply dated 31/03/2021 before the ld. PCIT.
We find that ld. PCIT has not recorded the contents of reply filed by the assessee. We, instead of going on the merit and demerit of the issues identified by ld. PCIT for revision find that the ld. PCIT passed the order in a hasty manner and without giving fair and proper opportunity. Therefore we deem it appropriate to restore the case back to the file of ld. PCIT to decide the issues identified by him afresh after giving opportunity of hearing to the assessee.
Appeals filed by the assessee are allowed for statistical purpose.
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2021 (8) TMI 1395
Revision u/s 263 - As per CIT there is failure on the part of the AO to assess the income of the assessee u/s. 144/147 of the Act and found it erroneous as it is prejudicial to the interest of the revenue - HELD THAT:- The impugned order has been passed by the Ld. PCIT without affording proper opportunity of being heard to the assessee. Though the three (3) notices were issued by the Revenue fixing the date of hearing, but finally, the adjournment application as part of the record before us, though suggests the request for adjournment on behalf of the assessee before the ld. PCIT made, the same is not reflecting in the order passed by the ld. PCIT dt. 13-03-2020, issued after four(4) days from the date of making such request.
In that event, we find that the principle of natural justice has not been properly adhered to. Therefore, for the ends of justice, we find it fit and proper to set aside the issue to the file of the PCIT with a further direction upon him to adjudicate the matter on merits positively upon granting an opportunity of being heard to the assessee and upon taking into consideration the evidences. Appeal of the assessee is allowed for statistical purpose.
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2021 (8) TMI 1391
Rectification of mistake - mistake being apparent on the face of record - Ground 11 to 13 - Transfer pricing adjustment on account of payment of service fees to Cadbury Holding Limited - method followed by TPO for making adjustment was not a method prescribed under the Act.
HELD THAT:- We find that the related facts and circumstances of the issue raised by the assessee in the grounds no.11 to 13 of the present appeal is materially identical to the issue decided by us vide grounds no.8 to 11, in Para–14, 15 and 16, wherein we have allowed the issue while following the decision of the Co–ordinate Bench of the Tribunal rendered in Kodak India Pvt. Ltd. [2013 (11) TMI 667 - ITAT MUMBAI]. Since the issue raised in these grounds no.11 to 13, are identical to the issue decided by us in grounds no.8 to 11 vide Para–14, 15 and 16, as aforesaid, consistent with the view taken therein, we set aside the impugned order passed by the learned CIT(A) and allow these grounds.
Corporate tax adjustment on account of alleged excess deduction u/s 80-IC of the Act - We notice that the Co–ordinate Bench has accepted the method of allocation with regard to interest, VRS decrease in stock, direct expenses, direct marketing cost and selling & distribution expenses, royalty and technical fees. The bench has remitted back to AO only the other overhead for verification. Now before us, it is brought to our notice that all operational and establishment expenses were uniformly allocated and there is no separate category of “Other Overheads”. Accordingly, we also deem it fit to remit only for limited purpose of verification of aspect of allocation method adopted to the file of the Assessing Officer. Accordingly, the ground raised by the assessee is allowed for statistical purposes.
Misc. application is allowed.
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2021 (8) TMI 1390
Addition u/s 14A r.w.r. 8D - exempt income necessarily be earned in the AY in question for the applicability of the said provision - HELD THAT:- Issue notice.
Tag with M/S IL AND FS ENERGY DEVELOPMENT COMPANY LTD. [2018 (5) TMI 2126 - SC ORDER]
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