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Income Tax - Case Laws

Showing 121 to 140 of 806 Records

• 2021 (9) TMI 1270 - ITAT DELHI
  

  Addition of 20% of the expenses and addition u/s 68 - non-appearance of the assessee before the A.O. and non-filing of the details - HELD THAT:- It is an admitted fact that due to non-appearance of the assessee before the A.O. and non-filing of the details, the A.O. made various additions to the total income of the assessee. We find the Ld. CIT(A) in his elaborate order has sustained the various additions made by the A.O.

  So far as the disallowance of 20% of the expenses perusal of the detail of the expenses show that the entire expenses have been incurred by the appellant in cash. Thus, there is always possibility to inflate the expenditure on the basis of self-made vouchers/in absence of proper bills/vouchers. Further, without producing bills/vouchers of various expenses, the authenticity of the expenses cannot be ascertained. Under these circumstances, I find that the AO was justified to disallow out of the claim of the appellant.

  Upholding the addition of 20% sundry creditors above confirmations did not contain the PAN of the party and were undated. Even the Ledger account of these parties filed by the assessee only shows that the assessee had been making only cash payment to these parties against purchases of ₹ 20,000/- each on continuous dates. Hardly any payment has been made through cheques.

  Unexplained cash deposit in the Bank A/c under section 68 appellant has offered no creditable explanation about the amounts credited in his bank account, the entire receipts therefore cannot be treated as explained. In appeal, the additional evidence filed by the appellant has been examined, and perused, however, in the absence of application for admission of additional evidence, the same has not been admitted and taken cognizance of. The additions made by the Assessing Officer is therefore upheld.

  Since the assessee did not to appear before the Tribunal and since there is no other evidence before us to take a contrary view than the view taken by the Ld. CIT(A) in sustaining the various additions made by the A.O, we do not find any infirmity in his order. - Decided against assessee.

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• 2021 (9) TMI 1266 - ITAT BANGALORE
  

  Rectification of mistake u/s 254 - HELD THAT:- The scope of powers under section 254(2) of the Act is only to correct the mistakes that are apparent on the face of the record. The objections raised by the assessee in this MP cannot be said to be mistakes apparent on the face of the record. The assessee cannot reargue the matter and seek review of the order of the Tribunal.

  In this case, the order was passed by the CIT(A)-11 on 17.7.2018 and admitted position is that that by notification dated 16.07.2018, issued u/ s.120 of the Act, by the Principal Chief Commissioner of Income Tax, Karnataka & Goa, the appeals pending before Commissioner of Income Tax (Appeals) - 11 were transferred to Commissioner of Income Tax (Appeals) - 12, Bengaluru. Therefore, in the present case, the assessee cannot have any grievance whatsoever as the impugned order suffers from an irregularity which is not curable and the Tribunal has therefore adopted the right course by setting aside the impugned order. We do not find any mistake in the order which is apparent on the face of the record. Accordingly, this MP is devoid of any merit and is liable to dismissed.

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• 2021 (9) TMI 1265 - ITAT DELHI
  

  Rectification of mistake u/s 154 - levying penalty u/s 271(1)(c) - bogus export to Russia has been made for conversion of black money through Hawala channel and the assessee claimed deduction u/s 80HHC - HELD THAT:- There is no error pointed out by the assessee before the ld AO and the ld CIT(A) based on which it could have been said that there is a mistake apparent from the record in absence the order u/s 271 (1) (C) of the Act by the ld AO - AO is also justified in passing the order u/s 271 (1) (C) of the Act as the appeal of the assessee was dismissed by learned CIT – A and further merely because some rectification is pending before the ld CIT(A) against quantum proceedings it cannot become a mistake apparent from the record in the penalty proceedings.

  Of course, if there is error in the order of the ld CIT(A) in quantum proceedings and if the addition is deleted, naturally the penalty could be deleted thereafter. In fact this is the appeal against the order passed u/s 154 of the act in penalty order levying penalty u/s 271 (1) (C) of the and not the appeal against the penalty order passed u/s 271(1)(c) of the Act. Even the ground of appeal raised by the assessee do not support the respective orders attached with the appeal

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• 2021 (9) TMI 1263 - ITAT DELHI
  

  Addition being cash deposit in the saving bank account - cash deposits treated as undisclosed income - Assessee argued that deposit made by the assessee on 29.11.2010 has been deposited out of the cash withdrawn earlier - HELD THAT:- The cash withdrawals made earlier by the assessee has not been controverted by Revenue but however the contention of the assessee that the cash deposits are out of such cash withdrawals was not accepted by the AO as there was a huge difference between the dates of cash withdrawal and cash deposits. Before us, Revenue has not placed any material to demonstrate that the cash withdrawal made by the assessee was not available with the assessee as it has been spent by the assessee or has been invested and therefore was not available for deposits. In such a situation, without their being evidence to the contrary, we are of the view that the explanation of the assessee of the cash deposits being out of the withdrawals made earlier cannot be simply brushed aside. We therefore, direct the deletion of cash deposits of ₹ 2 lakh. - Decided in favour of assessee.

  Bogus purchases - assessee argued that the impugned purchase made from Aggarwal Canvas Co., the sales have been made and the sales have been accepted by the Revenue and in such a situation, no disallowance of purchases is called for - HELD THAT:- As assessee could not produce the copy of the purchase invoice of Aggarwal Canvas Co. before the CIT(A) nor has it been produced before us. It is also a fact that alternatively it is the contention of the Learned AR that the gross profit of the sales made from the impugned purchases could be added to the income. Before us, assessee has not placed any record to point out the gross profit earned by the assessee during the year. Considering the totality of the facts and also the fact that the appeal is of A.Y. 2011-12, we are of the view that ends of justice shall be met in the present case if the disallowance is restricted to ₹ 15,000/-. We therefore direct the disallowance be made of ₹ 15,000/- and direct the deletion of the balance disallowance of ₹ 1,56,220/-. Thus the ground of the assessee is partly allowed.

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• 2021 (9) TMI 1262 - ITAT PUNE
  

  Rectification of mistake u/s 254 - non issuance of valid notice u/s 143(2) - Whether transfer of case u/s 127 proved? - assessment u/s.143(2) of the Act was completed by the ITO, Ward 2(4), Aurangabad whereas, the notice u/s.143(2) of the Act was issued to the assessee by the ITO, Ward 2(1), Aurangabad - HELD THAT:- As in the present case of the assessee, it is not the case that notice u/s.143(2) of the Act was not issued to the assessee. The facts in the Hotel Blue Moon case [2010 (2) TMI 1 - SUPREME COURT] is distinguished from the facts of the present case in respect of the assessee in so far that the judgment of the Hon‟ble Supreme Court says, notice u/s.143(2) of the Act shall be issued by the AO making assessment but here is the case where such notice was already issued by the Assessing Officer having jurisdiction and now subsequently it was transferred to another AO for making assessment.

  Assessee has not challenged the jurisdiction of the AO and has constantly filed return with the Assessing Officer having jurisdiction, whereas, such notice is already sent u/s.143(2) of the Act to the assessee, now no further re-issuance of notice is required. Therefore, the Hotel Blue Moon case (supra.) is factually distinguishable.

  Legislative intent becomes clear with reading to Section 127(3) and Section 127(4) of the Act that while Section 127(3) makes right to be heard dispensed with if the case transferred from one Assessing Officer to another in same city, place or locality and the assessee has agreed these facts. That Section 127(4) is clear that re-issuance of notice already issued by the Assessing Officer having jurisdiction and now subsequently transferred to another Assessing Officer shall not be required. Considering the legislative intent as enshrined in the provision of Sections 127(3) and Section 127(4) of the Act, we are of the opinion that there has crept in mistake apparent from record in the order of the Tribunal [2019 (8) TMI 1764 - ITAT PUNE ]is hereby recalled subject to dismissal of ground No.1 of the appeal.

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• 2021 (9) TMI 1259 - ITAT VISAKHAPATNAM
  

  Addition u/s 68 - Unexplained cash credit - HELD THAT:- No cash credits were found in the books of accounts during the previous year relevant to the assessment year for which the assessee could not offer explanation. What was found by the AO was sundry creditors were converted into share application money in the hands of one of the Directors and reflected the same as share application money. The sundry creditors were reduced and the share application money was increased.

  Subsequently, the sundry creditors balances were reversed back and the company has paid the same. The assessee also furnished evidence in the paper book in the form of copies of confirmation letters from the creditors. There was no cessation of liability and facts are identical to case of M/s Srinivasa Hair Industries, Eluru [2019 (2) TMI 1463 - ITAT VISAKHAPATNAM] - In the facts and circumstances of the case we, hold that there is no case for making addition u/s 68 and the Ld.CIT(A) has rightly deleted the addition, hence, we uphold the order of the Ld.CIT(A) and dismiss the appeal of the revenue.

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• 2021 (9) TMI 1258 - ITAT AMRITSAR
  

  Revision u/s 263 by CIT - eligibility for deduction in terms of section 80IB(11A) - case of the appellant was selected for scrutiny - as per CIT AO had failed to make necessary enquiry/verification of the issues referred to in paragraph 4 and 5 of the show cause notice - HELD THAT:- The assessment record produced before us, clearly shows that the assessing officer and made various enquiries/ verification from the assessee, and the assessee gave the reply to the said enquiries/ verification during the assessment proceedings. AO asked various questions/ show cause notice/ verification in respect of alleged fall in GP.

  The perusal of the Performa of audit report dated 29th November 2013, clearly shows that the assessee has mentioned in the four Performa the initial year of the assessment year for which the deduction was claimed and also mentioned the date of commencement of the activities. Thus the finding of the Ld. PCIT that AO had not made enquiry with respect to the initial year of assessment for which deduction was claimed is factually incorrect as the assessing officer made sufficient enquiries.

  The assessee filed the detailed reply on 4thAugust 2016, explaining elaborately how the assessee satisfies the conditions, as required under section 80 IB - thus it is abundantly clear that the assessing officer while framing the assessment had made an extensive, elaborate and necessary enquiry with a view to find out whether the assessee fulfils the conditions mentioned in section 80IB or not. The reading of the notice and the reply and subsequent notices and replies clearly shows that the assessing Officer was satisfied that the assessee had fulfilled all the conditions necessary for claiming the deduction under section 80 IB.

  As sufficient, necessary enquiries were made by the assessing officer during the assessment proceedings, therefore the action on the part of the principle CIT cannot be countenanced and the invocation of jurisdiction under section 263 , was devoid of any merit and is liable to be set aside and annulled .

  As AO at the first instance was holding the view that no addition can be made based on either non-fulfilment of the Commissioner under section 80IB and thereafter he had turned around and proposed that additions are required to be made on account of non-fulfilment of the conditions of section 80 IB and non-verification of the GP ratio of the assessee. Similarly, If we believe the assessing officer, that the order section was given by the Commissioner income tax framing the assessment and making the additions again the assessee at the time of passing the assessment order, the Commissioner was holding a view and was also simultaneously discussing the matter with the assessing officer, however quite contrary to this he chooses to issue the show-cause notice based on the proposal given by the assessing officer and pass the order under section 263, thus substantially both the officers were having two views for deleting the additions in making the addition. The law is reasonably settled when two views are possible, then the proceedings under section 263 are required to be dropped and quashed.- Decided in favour of assessee.

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• 2021 (9) TMI 1256 - ITAT BANGALORE
  

  Disallowance of deferred revenue expenditure and pre-operative expenses - expenditure incurred on opening and publicity of branches was treated as deferred revenue expenditure and pre-operative expenses in books of accounts - HELD THAT:- AO has extracted the details of proportionate deferred revenue expenses and pre-operative expenses claimed by the assessee during the year under consideration. As rightly pointed out by Ld. D.R., those expenses are in the nature of revenue expenses only. It is an admitted fact that these expenses have been incurred in an earlier year in connection of opening of branches in Mumbai and Gurgaon. In the books of account, the assessee chose to treat these expenses as deferred revenue expenses & pre-operative expenses and was claiming proportionate amount every year. The assessee has chosen to claim proportionate amount under Income tax Act also while computing total income.

  Under the Income tax Act, the "total income" is computed in accordance with the provisions of the Act. The issue relating to allowability of 'deferred revenue expenses' has been examined by the Ahmedabad special bench in the case of ACIT vs. Ashima Syntex Ltd. [2006 (3) TMI 188 - ITAT AHMEDABAD-B]

  In the instant case nature of expenses claimed by the assessee under "deferred revenue expenses/pre-operative expenses" did not result in creation of any capital asset nor they could be clearly and unambiguously identified over specified future time periods. Admitted the expenses have been incurred in the past year in connection of opening of branches and they are in the nature of revenue expenses. The claim made by the assessee during the year under consideration is part of those expenses, which was claimed as amortisation of those expenses over certain years. The principles laid down by the Special bench [supra] there is no concept of deferred revenue expenses under the Income tax Act and hence the revenue expenses incurred in an earlier year cannot be allowed as deduction during the year under consideration. The various case laws relied upon by Ld. A.R. have been rendered in a different context

  Principle of Consistency - As rightly submitted by Ld. D.R., the returns of income filed for earlier years have been processed u/s. 143(1) of the Act and hence there was no scrutiny of similar claims made in the earlier years by the AO. Hence the principle of consistency will not apply to this claim.- Decided against assessee.

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• 2021 (9) TMI 1255 - ITAT DELHI
  

  Penalty u/s. 271(1)(c) - disallowance of deduction u/s. 35(2AB) as the assessee not voluntarily disclosed the fact of not receiving DSIR Certificate for - revised computation was filed by the assessee only after AO questioned him on deduction u/s. 35(2AB) during the assessment proceedings - CIT-A Deleted the penalty levy - HELD THAT:- CIT(A) has give a categorical finding that the assessee was under the genuine belief that approval will be granted by the appropriate authority i.e. DSIR and accordingly made the claim for deduction u/s. 35(2AB) of the Act for the Assessment Year under consideration. But the approval was granted by DSIR w.e.f. 01.04.2013 and, therefore, the assessee withdrawn the weighted deduction claim by filing revised computation of income before the Assessing Officer in ongoing assessment proceedings. This cannot be termed as concealing income or furnishing inaccurate particulars of income.

  Besides this, the assessee has also given explanation before the Assessing Officer as relates to revised computation of income. Thus, in case of CIT Vs. Reliance Petro Products Pvt. Ltd. [2010 (3) TMI 80 - SUPREME COURT] - Thus, there is no need to interfere with the findings of the CIT(A). The appeal of the Revenue is dismissed.

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• 2021 (9) TMI 1254 - ITAT DELHI
  

  Correct head on income - Income from revenue operation from common area maintenance charges received from the tenants - income from house property or income from business - HELD THAT:- Issue decided in favour of assessee as relying on own case [2021 (8) TMI 210 - ITAT DELHI] maintenance charges received were towards maintenance and promotion of common area and the amounts received towards maintenance charges were business receipts liable to be assessed under the head ‘Income from business’. - Decided against revenue.

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• 2021 (9) TMI 1253 - ITAT VISAKHAPATNAM
  

  Disallowance of interest expenditure related to the amounts advanced to VVCIPL under the head ‘business income’ - CIT(A) found that as there was excess expenditure incurred by the assessee, the Ld.CIT(A) held that there is no case for making the addition and accordingly deleted the addition - HELD THAT:- In the instant case, there is no dispute that the assessee has earned interest income on the amounts lent to VVCIPL and at the same time, the assessee also paid the interest on borrowed funds. Since the assessee has earned interest of equal amounts and offered to tax, there is no loss of revenue. The department has not disputed the fact that the assessee has received income from VVCIPL and offered the same under the head ‘income from other sources’. There is no loss of revenue and the Ld.CIT(A) rightly deleted the addition. Hence, we do not find any reason to interfere with the order of the Ld.CIT(A) and the same is upheld. This ground of the revenue is dismissed.

  Addition on account of profits admitted - Since the assessee could not explain the nature of the expenditure, the AO made the addition to the returned income - HELD THAT:- Though the assessee has claimed that the interest was paid on advance received on sale of flat which was cancelled subsequently, no details were made available either in the assessment proceedings or in the appeal proceedings. The assessee is supposed to furnish the details with regard to flat No., identify the buyer etc. to claim the expenditure. Without having furnished the above details, the AO cannot verify the genuineness of the expenditure. It also appears that the AO did not make any effort to collect the details. Therefore, we remit the matter back to the file of the AO with a direction to re-examine the issue in detail and decide the issue afresh on merits. Appeal of the revenue on this ground is allowed for statistical purpose.

  Disallowance of expenditure u/s 40(a)(ia) - Non deduction of commission, salary, electrical works, land development charges, carpentary works, NMR works, painting works etc - HELD THAT:- There is no dispute that the assessee is maintaining the books of accounts and the books of accounts were duly audited by qualified Chartered Accountant and given his findings on TDS liability. The assessee has furnished the details of TDS made before the CIT(A) and the CIT(A) has given a finding that TDS is applicable only on commission payment, carpentary works and painting works and the assessee has deducted the TDS. The remaining payments were outside the purview of TDS since each payment was less than the threshold limit for deduction of TDS - AO did not identify each payment and the quantum of TDS that is required to be made. It is the obligation of the AO to ascertain the details of payments made to each person from the books of accounts and determine the TDS liability to make the addition. During the appeal hearing, the Ld.DR did not place any material to controvert the finding given by Ld.CIT(A). Therefore, we do not find any reason to interfere with the order of the Ld.CIT(A) and the same is upheld. Appeal of the revenue on this ground is dismissed.

  Addition u/s 69A r.w.s. 115BBE - cash deposits made in the bank account during demonetization period - CIT- A deleted the addition - HELD THAT:- Since the facts are identical respectfully following the view taken by this Tribunal in Mr.Jaya Prakash Babu 2021 (9) TMI 1192 - ITAT VISAKHAPATNAM] and M/s Karthik Constructions [2018 (3) TMI 39 - ITAT MUMBAI] we uphold the order of Ld.CIT(A) and dismiss the appeal of the revenue.

  Addition u/s 68 - unexplained cash credit - HELD THAT:- The source for infusion of capital was the amount given by his father Shri Jaya Prakash Babu through transfer from his capital account. As per the ledger account, the said sum was credited in the capital account on 01.04.2016. Since, the assessee has submitted the ledger account of Shri V.Jaya Prakash Babu, which clearly shows that the said sum was credited in the capital account of the assessee, the source stands explained. In fact Shri Jaya Prakash Babu also assessed in the same circle/ward and the AO did not cause any enquiries to ascertain the correctness and thus did not make out any case for addition u/s 68.

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• 2021 (9) TMI 1249 - ITAT JAIPUR
  

  Addition u/s 68 - Unexplained deposits - HELD THAT:- Cash deposit on 12.11.2010 which was available with the assessee as per her bank statement and which was then withdrawn on 13.01.2011. It is noted that the claim of the assessee regarding frequent cash withdrawal and deposit for the purposes of availing OD limit has been accepted by the AO in his remand report for the year under consideration and duly considered and accepted by the ld. CIT(A) while working out the peak credit.

  Where similar transactions of deposits and withdrawals exist in the previous financial year, the explanation of the assessee duly supported by her bank statements cannot be disputed without any adverse material on record - assessee has disclosed income in her return of income and which has been accepted by the AO which again explain the source of part of deposits in the bank account. We therefore find that the assessee has reasonably explained the source of deposits in her bank account and the additions so confirmed by the ld. CIT(A) is hereby directed to be deleted - Decided in favour of assessee.

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• 2021 (9) TMI 1248 - ITAT DELHI
  

  CIT-A upholding the order passed u/s. 250 granting part relief out of disallowances made u/s. 14A of I.T. Act read with Rule 8D - HELD THAT:- Bare perusal of the impugned order passed by the ld. CIT(A) goes to prove that relief has already been granted to the assessee by ld. CIT (Appeals)-16 vide as disallowance u/s. 14A of the Act read with rule 8D of the I.T. Rules made by the AO has already been deleted.

  Even assessee has filed the present appeal by raising vague and ambiguous ground from which it is difficult to discern as to what relief is being sought - finding no illegality or infirmity in the impugned order passed by the ld. CIT(A), present appeal filed by the assessee is hereby dismissed.

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• 2021 (9) TMI 1244 - ITAT PUNE
  

  Capital gain - year of assessment - CIT-A holding 50% of the sale consideration received in the year under consideration is chargeable to tax - HELD THAT:- As the issue raised is similar to the facts therein in the case of Shri Rajendra S. Goel [2017 (1) TMI 1765 - ITAT PUNE] and applying the principle laid down by the ITAT Pune Benches deleted the addition made by the AO by holding the capital gain is chargeable to 50% of the consideration which has been received in the year under consideration.

  CIT(A) discussed the issue in detail and we find no dispute with appellant-Revenue regarding the receipt of 50% of sale consideration by the assessee in the year under consideration. There is no order contrary to the view taken by the ITAT Pune Benches in the case of Shri Rajendra S. Goel brought on record and therefore, we find no infirmity in the order of CIT(A) and it is justified. Appeal of Revenue is dismissed.

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• 2021 (9) TMI 1243 - ITAT DELHI
  

  TP Adjustment - payment made for intra group services - CIT(A) directed the TPO to grant 50% of the adjustment claimed by the assessee on account of intra-group services - scope of commercial expediency - HELD THAT:- Since the issue has already been decided by the Tribunal [2020 (2) TMI 1567 - ITAT DELHI]favour of the assessee by deleting 50% of disallowance sustained by the Ld. CIT(A), therefore, in view of the Order of the Tribunal, we do not find any infirmity in the Order of the Ld. CIT(A) in deleting the adjustment on account of payment of intra group service to A.E. Ground Nos. 1 to 3 of the appeal of the Revenue are accordingly dismissed.

  Reimbursement payment from the operating cost - international transaction relating to provision of management consultancy services provided to AEs and reimbursement of expenses from AEs - HELD THAT:- As decided in own case[2020 (2) TMI 1567 - ITAT DELHI].restored the issue to the file of A.O./TPO with a direction to verify the analysis done by them in subsequent years and find-out as to whether this company is functionally similar or dissimilar to that of the assessee company and decide the issue as per fact and law.

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• 2021 (9) TMI 1241 - ITAT INDORE
  

  Estimation of net profit from Trading in Scraps and Granules - Profit on unrecorded sales of scraps - estimation of net profit @25% on unaccounted sales - Certain diaries inventorized as A-1 to A-8 were found and seized by the search party - As argued the unrecorded sales of scrap was not effected by the appellant only in one previous year relevant to A.Y. 2011-12 but factually, it was effected by him in two previous years relevant to A.Y. 2011- 12 and A.Y. 2012-13 - HELD THAT:- AR failed to demonstrate with any positive evidence that the jottings made in these diaries pertain to two financial years. Since, the assessee himself is claiming that he had commenced the unaccounted business of scrap trading during the financial year relevant to A.Y. 2011-12 only and further since, from the seized diaries the assessee has failed to demonstrate that these transactions were also carried out by him during the subsequent financial year too, we find absolutely no infirmity in the views taken by the authorities below that the transactions of unrecorded trading of scrap were carried out by the assessee during the financial year relevant to A.Y. 2011-12 only and consequently, the entire income arising from carrying out such unrecorded transactions is liable to be taxed in the hands of the assessee for the A.Y. 2011-12 only. Accordingly, the Ground No. 1(b) of the assessee is dismissed.

  Determination of undisclosed income from the undisclosed and unrecorded trading transactions in scrap carried out by the assessee - HELD THAT:- Considering the facts that the assessee has carried out only a trading business on wholesale basis which was commenced by him only in the financial year under consideration and further considering the amount of investment, rate of return on investment etc. in our view, the estimation of the net profit rate so made by the CIT(A) at 25% is quite at a higher side. In all the fairness to both the parties , we restrict the estimation of net profit at 10% of the undisclosed sales. Before us, the assessee has also taken two separate grounds bearing nos. 1(c) and 1(d) for allowing him the benefit of telescoping of the total undisclosed income shown in the return against the net undisclosed income/investment finally determined. We are of the considered view that an assessee is eligible for claim of set-off of the undisclosed income voluntarily shown by himself in the return of income filed u/s. 153A against any undisclosed income/undisclosed investment, finally determined. Accordingly, the AO is directed to work out the net profit at the rate of 10% on the unaccounted sales and after giving due benefit of telescoping of the undisclosed income already shown by the assessee in his return of income (other than those undisclosed income for which a separate specific claim for set-off is made by the assessee), re-compute the total income of the assessee.

  Unexplained Expenditure being Purchase of Scraps and Granuels - HELD THAT:- It would be fair and reasonable to estimate that the assessee had made initial investment for carrying out undisclosed trading business of scrap equivalent to a half month’s sales of the entire sales made during the period under consideration. Accordingly, in our considered view, the undisclosed investment of the assessee in the initial capital of the business should be computed at 1/24th of the total annual sales of ₹ 9,30,89,378/- found recorded in the seized diaries which works out to be at ₹ 38,78,724/- as against the same determined by the Ld. CIT(A) at ₹ 55,28,966/-. We also direct the Ld. AO that assessee would be eligible to set off of this amount of ₹ 38,78,724/- against the total income of ₹ 3,60,00,000/- surrendered in the return of income furnished under s.153A.

  Advance payment by the assessee to one Mr. Rahul by invoking the provisions of s.69 - HELD THAT:- We find that the amount of ₹ 29,90,000/- has already been considered by both the authorities below while making/ restricting the addition as aforesaid, in our considered view, no further addition is required on account of advances amounting to ₹ 29,90,000/- made by the assessee to Mr. Rahul. It is well known maxim of the law that the same addition cannot be made twice. Since, while making the separate addition of ₹ 7,83,60,000/-, which includes the advances amounting to ₹ 29,90,000/- given by the assessee to Mr. Rahul, the AO has separately determined the interest amounting to ₹ 1,25,23,200/-, in our considered view, no separate addition is required even in respect of receipt of interest on advance to Mr. Rahul. Accordingly, the Ground Nos. 3(a) & 3(b) of the assessee are allowed.

  Benefit of telescoping to the assessee in respect of advances given to Mr. Rahul against the additional income surrendered and shown by the assessee himself in his return of income - HELD THAT:- Once the CIT(A) has confirmed the addition under s.69 of the Act, it has to be necessarily held that the advances were given by the assessee during the year under consideration only and not in the earlier years, for the reason that under the provisions of s.69 of the Act, an addition can be made only for the year in which the assessee has been found to have made undisclosed investment. In our view, the Ld. CIT(A) was not correct in sailing on two boats inasmuch while confirming the addition, he has presumingly affirmed that the assessee had made the investment only during the year under consideration but, while considering the benefit of telescoping, the Ld. CIT(A) has presumed that the assessee might have made such investments by giving advances to Mr. Rahul in earlier years. In our considered view, since, we have fully deleted the addition so made by the AO, as aforesaid, the question of telescoping has become academic in nature only. Accordingly, the Ground No. 3(c) of the assessee is allowed.

  Addition u/s 69 - sale proceeds of land - HELD THAT:- Having held that the assessee had derived income amounting to ₹ 12,60,000/- from partial sale of land, it has to be necessarily held that the sales proceeds of such land amounting to ₹ 40,80,000/- was available with the assessee. We find that the transaction of purchase of land has its nexus with the letter dated 12.01.2011. Business of trading in scrap and other related activities are since the beginning of the year and another seized paper showing loans and advance is having a date of December. Therefore this plea of the assessee that sale proceeds of land was used in giving loans and advances and used in the business of scrap has no merits. Accordingly, the ground no. 5 of the assessee appeal for A.Y. 2011-12 is dismissed.

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• 2021 (9) TMI 1240 - BOMBAY HIGH COURT
  

  Review petition on Reopening of assessment - re-opening of the proceedings was undertaken based on information received from office of the DCIT Circle, New Delhi and not on the Shah Commission Report - Review of judgment [2019 (8) TMI 16 - BOMBAY HIGH COURT] - HELD THAT:- entire exercise of re-opening the assessment was undertaken with reference to the Shah Commission Report pertaining to under invoicing in connection with the export of iron ore. We are satisfied that the issue arising in Writ Petition [2019 (8) TMI 16 - BOMBAY HIGH COURT] was the same as the issue raised in the other Writ Petitions and that it was correctly clubbed with them and disposed of.

  Therefore, there is no substance in the contention raised in the present Review application. There is no error apparent on the face of the record demonstrated by the applicant. Hence, the Review application is dismissed.

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• 2021 (9) TMI 1238 - DELHI HIGH COURT
  

  Recovery of outstanding tax demands from the director of a private company in liquidation - Joint or severe liability - As per the MOU / Settlement agreement, all the income tax liabilities will be borne and paid by one of the Directors (Not the present petitioner) - HELD THAT:- Section 179 of the Act imposes a vicarious responsibility on the Directors for the dues of the company. It has, therefore, to be interpreted rigidly, subject to conditions, for application under Section 179. The primary condition is that the tax dues could not be recovered from the company before Section 179 could be invoked.

  The director of the private company can avoid his joint and several liability for payment of taxes if he proves that the non-recovery cannot be attributed to his gross neglect, misfeasance or breach of any duty on his part in relation to the affairs of a company.

  The contention of the petitioner that no action to recover the demand from the Realtech Group of Companies was taken by the Assessing Officer is not correct - as mentioned in the impugned order dated 29th January, 2018 under Section 179(1) that the demand notices were served upon the said companies on 29th March, 2014. Thereafter, notices under Section 221(1) of the Act were issued to the companies on 14th November, 2014. It was only when the demand was not paid, bank accounts of the companies were attached and partial recovery was made through the said attachments. In fact, the impugned order passed under Section 179(1) of the Act dated 29th January, 2018, as well as the Order passed under Section 264 dated 01st April, 2021 clearly demonstrate that only a small part of the demand was recovered despite all possible efforts by the Department including action of attachment of bank accounts of the Realtech Group of companies.

  Tax dues against Realtech Construction Pvt. Ltd. which was developing The City Emporio Mall was only ₹ 12.17 lakhs. The tax demand against the other companies could not be recovered from the assets of that company. Section 179 only permits recovery against a director and not against other group companies which are distinct legal entities.

  In the impugned order dated 01st April, 2021 there is a specific finding that despite issuing notices and attachment orders the entire outstanding tax dues could not be recovered from the Realtech Group of companies leaving the Department with no other option, but to recover the same from the Directors including the petitioner.

  The submission of petitioner that it is for the respondent-Revenue to demonstrate that the petitioner Director was guilty of gross neglect, misfeasance or breach of duty on his part in relation to the affairs of the company is contrary to the explicit language used in Section 179. The burden is on the individual Director to prove that the non-recovery was not due to his gross negligence, misfeasance or breach of duty on his part.

  MOU, Settlement Deed and an Arbitral Award govern rights in personam and cannot bind a statutory authority like the respondent-Revenue. It is a settled law that while rights in personam are arbitrable, rights in rem are unsuited for private arbitration and can only be adjudicated by the Courts or Tribunals - private parties cannot apportion Income Tax liability by private agreement as the petitioner has sought to do in the present case. WP dismissed.

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• 2021 (9) TMI 1237 - GUJARAT HIGH COURT
  

  Participation in the process under the VsV Scheme - Condonation of delay - whether in case of the present petitioner, any such appeal was pending or can he be said to be an appellant within the meaning of the VsV Act? - HELD THAT:- Time period for filing the appeal, if has already expired before 31st January, 2020, but an application for condonation of delay has already been filed, a deeming fiction is provided. According to the Revenue if the time for filing of the appeal expired during the period from 1st April, 2919 to 31st January, 2020( both the dates included in the period) and if the application for condonation of delay is filed before the date of issuance of this circular and if the appeal is admitted by the appellate authority before the date of filing of the declaration, such appeal is deemed to be pending as on 31.01.2020.

  As rightly contended on the strength of the decision rendered in the case of Boddu Ramesh (2021 (6) TMI 1054 - TELANGANA HIGH COURT) by the learned advocate for the petitioner that condonation of delay whenever is accepted by the appellate authority, the same would relate back to the original date of filing of the appeal, as if the appeal is filed within the time period given under the statute. The Telengana High Court also has taken into consideration the Finance Bill memorandum containing explanation of every clause, intent and purpose for the proposal while laying the said Bill along with the circular of the CBDT which explained each clause while issuing the Circular. The Finance Minister’s speech, its intent and purpose as also the insertion, amendment and modifications have been regarded. The Apex Court has held that the CBDT under section 119 is conferred the powers with the general objective for use of powers and proper administration of this Act.

  Therefore, when the Circular has been issued by the CBDT on 04.12.2020 answering to one of the Frequently Asked Questions, it is not expected of the Revenue to contend contrary to the said guidelines in the answer given in the Circular. Obviously, the Circular cannot override the express provisions of the Act and they are to be considered clarificatory in nature. They are basically meant to guide the officers and those, who execute the law in the field. They may not also bind the Court while it interprets statutory provisions.

  Court when regards and takes into consideration the fundamental principles along with the provision of Limitation Act, particularly Section 5 of the Limitation Act seeking condonation of delay in preferring any petition, appeal or litigation or proceedings, it is meant for exercise of discretion by the adjudicatory authority, which, if is satisfied with the sufficiency of cause, is expected to condone the delay. And, once the application for condonation of delay in any such matter is preferred and the same is allowed, it would be construed as if there is no delay and the appeal is preferred well within time.

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• 2021 (9) TMI 1236 - DELHI HIGH COURT
  

  Faceless assessment u/s 144B - violation of principle of natural justice - HELD THAT:- As in the present case, there has been a violation of principle of natural justice as well as Section 144B(1)(xvi)(b) of the Act inasmuch as the impugned draft assessment order under Section 144C(1) of the Act has been passed five days prior to the last date for filing of the reply/objections to the Show Cause notice by the petitioner. Consequently, the draft assessment order dated 29th August, 2021 passed by respondent u/s 144C(1) of the Act is hereby quashed - This Court directs that the Petitioner shall file its reply/objections to the Show Cause Notice dated 27th August, 2021 on or before 24th September, 2021 and the Assessing Officer shall pass a fresh draft assessment order in terms of Section 144C(1) of the Act on or before 30th September, 2021. To facilitate the filing of the reply/objections by the petitioner, the Assessing Officer is directed to open functionality on the online portal. The Petitioner is also directed to file its reply/objections to the Show Cause Notice by email.

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