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Income Tax - Case Laws

Showing 141 to 160 of 806 Records

• 2021 (9) TMI 1233 - DELHI HIGH COURT
  

  Validity of Reopening of assessment u/s 147 - notice as admittedly issued only in the name of the deceased person and not in the name of the legal representatives - HELD THAT:- In Savita Kapila [2020 (7) TMI 441 - DELHI HIGH COURT] this Court has held that the sine qua non for acquiring jurisdiction to reopen an assessment is that notice under Section 148 of the Act should be issued to a correct person and not to a dead person. This Court further held that Section 159 of the Act applies to a situation where the proceedings are initiated/pending against the assessee when he is alive.

  Section 159(3) of the Act can come to the aid of the respondent only if the notice is issued in the name of the legal representative of the deceased as an assessee.

  In the present case, notice is admittedly issued only in the name of the deceased person and not in the name of the legal representatives and therefore, no reliance can be placed by the respondent on Section 159(3) of the Act. Accordingly, the impugned notice dated 30.03.2019 is quashed and set aside. All proceedings consequent to the impugned notice are also set aside.

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• 2021 (9) TMI 1231 - GUJARAT HIGH COURT
  

  Rejection of declaration u/s 5 of the Direct Tax Vivad Se Vishwas Act, 2020 (‘VSV Scheme’) - Case was pending or not - where the appeal was file beyond the prescribed time limit and delay was not condoned - HELD THAT:- there remains no shadow of doubt that appeal could be said to be pending, even if the delay occurred in filing the same was not condoned and even if it was allegedly irregular or incompetent. In the instant case therefore also, the Respondent could not have rejected the Declaration Form of the Petitioner filed under the said Act merely on the ground that the Appeal was not valid or competent, as the delay occurred in filing the Appeal was not condoned by the Appellate Authority.

  As communication displayed at the portal of the department rejecting the declaration of the petitioner by orders dated 23rd February, 2021 and 12th April, 2021 are quashed and set aside. The respondent is directed to accept the declaration under the said Act for the A.Y. 2014-15.

  Let the declaration be accepted by the respondent on or before the 27th September, 2021. The payment allowed to be made on or before 30th September, 2021 considering the outer time limit set under the scheme. Any other consequential declarations if needed to be allowed, no delay shall be caused by the authority concerned.

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• 2021 (9) TMI 1230 - DELHI HIGH COURT
  

  Faceless assessment - denial of natural justice - Penalty u/s 274 read with Section 271AAC(1) imposed - impugned assessment order passed is jurisdictionally flawed and bad in law since it is violative of the mandatory and binding natural justice requirements stipulated - whether no mandatory valid show cause notice as well as draft assessment order had been issued to the Petitioner before drawing an adverse inference against the Petitioner and creating a tax demand? - HELD THAT:- 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 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 - 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 and notice of demand and the impugned show cause notice for imposition of penalty under Section 274 read with Section 271AAC(1) are 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 in accordance with law.

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• 2021 (9) TMI 1229 - MADRAS HIGH COURT
  

  Maintainability of the Writ Petitions - lack of territorial jurisdiction - Whether the petitioners as well as the Settlement Commission are not falling with the territorial jurisdiction of the High Court of Madras? - HELD THAT:- As relying on M/S. MULBERRY SILKS LTD [2020 (9) TMI 771 - MADRAS HIGH COURT] the Writ Petitions stand dismissed. Leaving it open to the petitioners to move the High Court of Kerala having jurisdiction if they are so advised. It is made clear that the Writ Petitions have been dismissed solely on the ground of lack of territorial jurisdiction to entertain the Writ Petitions and the merits of the case of the petitioners have not been dealt with.

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• 2021 (9) TMI 1228 - KARNATAKA HIGH COURT
  

  Excess depreciation u/s 32 - as per revenue depreciation at 30% in respect of motor buses/lorries/taxi used in the assessee's business of running them on hire, whereas in the instant case, the vehicles are used for assessee's own business and therefore, will not be eligible for higher rate of depreciation - assessee claims to be a C & F agent involved in stevedoring, clearing and forwarding agency, custom house agency, steamer agency and is rendering services in New Mangalore Port - HELD THAT:- As per Supreme Court in 'RADHASOAMI SATSANG [1991 (11) TMI 2 - SUPREME COURT] has held that even though principles of res judicata do not apply to income tax proceedings, but where a fundamental aspect permeating through the different Assessment Years has been found as the fact one way or the other and the parties have allowed the position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in subsequent year.

  Thus in view of the law laid down by the Supreme Court in RADHASOAMI SATSANG, supra and taking into account that the identical issue has been held in favour of the assessee by the Tribunal vide order dated 07.09.2013 in respect of Assessment Years 1993-94 and 1995-96 and the parties have allowed it to attain finality, it is not appropriate to allow the position to be changed in subsequent year. In the result, the substantial question of law framed in this appeal is answered against the revenue

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• 2021 (9) TMI 1227 - MADRAS HIGH COURT
  

  Fresh registration u/s 12AB - Notice seeking cancellation of earlier registration u/s 12A / 12AA pursuance of search proceedings u/s 132 and assessment u/s 153C as on 10.8.2021 - applicability of overriding provisions of section 12AB w.e.f. 1.4.2021 - Online submission of application for fresh registration u/s 12AB as on 4.5.2021 - HELD THAT:- under Sub-Clause (ac) of Clause (1) of Section 12A, the trust or institution registered under Section 12A or 12AA shall make an application within three months from the 1st April, 2021 in the prescribed form and manner to the Principal Commissioner/ Commissioner for registration of trust or institution.

  If any such application is made under Section 12A(1)(ac), how such application is to be dealt with has been provided under Section 12AB(1)(a), which has also been quoted hereinabove, where, on receipt of application submitted under Section 12A(1)(ac), the Principal Commissioner/Commissioner shall pass an order in writing registering the trust or institution for a period of five years.

  The procedure of cancellation of the registration already enjoyed either under 12A regime or 12AA regime in the case of the petitioner, in view of the new regime having been introduced, shall take place only after disposing the application made by the trust or institution, under the new regime, as contemplated under Section 12AB(1)(a).

  Since it is the claim of the petitioner that the application has been made only through online and for which, acknowledgment number has also been generated and it is also printed and the same has been filed by way of hard copies before this Court, we cannot doubt the application submitted by the petitioner on 04.05.2021.

  Assuming that such application submitted by the petitioner has not reached the concerned authority of the Income Tax Department for taking action, still the petitioner has got time to make such an application, because, the original period of three months with effect from 01.04.2021 as provided under the new regime has been subsequently, extended by the notification issued in this regard by Central Board of Direct Taxes, Department of revenue, dated 25.06.2021, under which, the time period has been extended upto 31st August, 2021.

  The objection raised by the petitioner side by pointing out the legal position, in view of the new regime introduced with effect from 01.04.2021 in the Finance Act, 2021, as against the impugned notice, is well found.

  This Court feels that, the impugned notice dated 10.08.2021 issued under Section 12AA(3) of the Act, as such, cannot be proceeded further and it can be kept in abeyance for the time being, till an order is passed by the Principal Commissioner/Commissioner as the case may be on the application of the petitioner dated 04.05.2021 under Section 12AB(1)(a) of the Act and once such an order is passed granting such registration for another terms of five years as referred to or contemplated under the new regime, then, it is open to the respondent revenue to proceed against the petitioner and therefore, from that stage, the impugned proceedings dated 10.08.2021 can be proceeded in accordance with law, especially under Sub-Section 4 of Section 12AB of the Act.

  Writ petition disposed of with necessary directions.

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• 2021 (9) TMI 1225 - ITAT DELHI
  

  Penalty u/s 271(1 )(c) - disallowance of depreciation - defective notice u/s 274 - bonafide mistake on part of the assessee - Whether the appellant company has not concealed the income or furnished inaccurate particulars of Income? - HELD THAT:- Assessing Officer was not sure under which limb of provisions of Section 271 of the Income Tax Act, 1961, the assessee is liable for penalty. Besides that the Assessment Order also did not specify the charge as to whether there is concealment of income or furnishing of inaccurate particulars of income in assessee’s case. Besides this, the present case is relating to wrong claim of depreciation which was a bonafide mistake on part of the assessee for which it cannot be said that it is concealment of income or furnishing of inaccurate particular of income. This issue is squarely covered by the decision of the Hon’ble Supreme Court in case of M/s SSA’ Emerald Meadow.[2016 (8) TMI 1145 - SC ORDER].

  As the inappropriate words in the penalty notice has not been struck off and the notice does not specify as to under which limb of the provisions, the penalty u/s 271(1)(c) has been initiated, therefore, we are of the considered opinion that the penalty levied u/s 271(1)(c) is not sustainable and has to be deleted. - Decided in favour of assessee.

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• 2021 (9) TMI 1224 - ITAT DELHI
  

  Penalty u/s 271(1) (C) - no specific charges as relates to concealment of income or furnishing of inaccurate particulars of income - whether the penalty is for concealment of income or furnishing of inaccurate particulars of income was not evident from the notice nor from the penalty order as well? - HELD THAT:- In the instant case the inappropriate words in the penalty notice has not been struck off and the notice does not specify as to under which limb of the provisions, the penalty u/s 271(1)(c) has been initiated, therefore, we are of the considered opinion that the penalty levied u/s 271(1)(c) is not sustainable and has to be deleted. Although the Ld. DR submitted that mere non-striking off of the inappropriate words will not invalidate the penalty proceedings, however, the decision of the Hon’ble Karnataka High Court in the case of SSA’S Emerald Meadows [2015 (11) TMI 1620 - KARNATAKA HIGH COURT] where the SLP filed by the Revenue has been dismissed is directly on the issue contested herein by the Assessee. Further, when the notice is not mentioning the concealment or the furnishing of inaccurate particulars, the ratio laid down by the Hon’ble High Court in case of M/s. Sahara India Life Insurance Company Ltd. [2019 (8) TMI 409 - DELHI HIGH COURT] will be applicable in the present case.

  Thus, notice under Section 271(1)(c) r.w.s. 274 of the Act itself is bad in law. We, therefore, set-aside the order of the CIT(A) and direct the Assessing Officer to cancel the penalty so levied. - Decided in favour of assessee.

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• 2021 (9) TMI 1223 - ITAT DELHI
  

  Assessment u/s 153A - unexplained investment - HELD THAT:- As on the date of search, assessment for assessment year 2003 – 04 was not pending. Such assessment could have been disturbed only based on incriminating material found during the course of search. However, the learned assessing officer has made addition based on his statement recorded during the course of assessment proceedings and there is no reference of any incriminating material found during the course of search. Therefore, the issue is squarely covered in favour of the assessee by the decision of Kabul Chawla 2015 (9) TMI 80 - DELHI HIGH COURT] - the fact also shows that the assessee has not purchased this vehicle during the impugned assessment year. Therefore, we reverse the order of the lower authorities and direct the ld AO to delete the addition - Decided in favour of assessee.

  Addition on purchase of car - HELD THAT:- As addition has been made in the hands of the assessee based on statement recorded during the course of assessment proceedings. There is no reference of any incriminating material found during the course of search - even otherwise the assessee has shown that the Maruti Zen Car was purchased on 01.03.2005 and therefore, could not have been added in the hands of the assessee even otherwise for Assessment Year 2004-05. Thus no addition can be made in the case of concluded assessment pursuant to search in absence of any incriminating material. No incriminating material is shown to us by the learned departmental representative and not referred by the learned assessing officer in the assessment order.

  Addition on account of purchase of one Maruti car - HELD THAT:- As in the present case the learned assessing officer was having a power to make an addition based on examination of the return of income by the assessee. In the present case, the learned AO recorded the statement of the assessee on 11/12/2008 by issue of summons u/s 131 of the act - AO was having almost seven vehicles out of which the assessee could not give the adequate evidence with respect to the purchase of Maruti 800 car - AO made the addition of the above sum estimating the cost of the vehicle of ₹ 185,000. As before the lower authorities the assessee could not furnish any explanation with respect to the source of the fund available for purchasing the above car, no evidences are also furnished before us. Even out of the declared income in the return of an assessee as well as his wife, it could not be explained that the car was purchased from the declared source of income of the assessee. It was merely an argument made by the assessee, which is not supported by any documentary evidence - Decided against assessee.

  Addition of foreign tour of the minor son of the assessee - HELD THAT:- In this case, the assessee was issued notice on 3/11/2008 for giving the complete details. Further, during the course of search, the assessee was examined and he disclosed in a statement u/s 132 of the income tax act on 12/12/2016 that he has invested approximately ₹ 15 lakhs on complete renovation of the house including furniture and fixtures. Further, the statement was also corroborated when it was taken during the course of assessment proceedings on 11/12/2008. The assessee once again confirmed the same. There is no evidence of any retraction made by the assessee. Merely because the assessee has not offered the above income in the return of income, it cannot be stated that the assessee has retracted the above statement. No evidences produced before us that the statement given by the assessee during the course of search as well as during the course of assessment proceedings was because of any threat/coercion. Therefore it can be merely an argument for deletion of the addition which needs to be brushed aside - We do not find any infirmity in the orders of the lower authorities.

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• 2021 (9) TMI 1222 - ITAT DELHI
  

  TDS u/s 194H - discount allowed to distributors/channel partners on the sale of recharge coupon vouchers and the starter kits for telecommunication services - Addition u/s 201(1) - whether the transaction of sale of recharge coupon vouchers and starter kits was done on principal to principal basis? - HELD THAT:- As in the case of TTSL [2015 (3) TMI 1023 - ITAT JAIPUR] followed the judgment of Bharti Airtel vs. DCIT [2014 (12) TMI 642 - KARNATAKA HIGH COURT] and held that the discount on sale of recharge vouchers and SIM cards by telecommunication company to its distributors did not amount to commission in terms of section 194H of the Act.

  Also in the case of Tata Tele Services Ltd.[2015 (3) TMI 1023 - ITAT JAIPUR] and Vodafone Cellular Ltd [2009 (4) TMI 209 - ITAT COCHIN] have also decided the issue in favour of the assessee by holding that the provisions of section 194H were not applicable to the transaction of sale of starter kits and pre-paid SIMs to distributors on principal to principal basis. Under such circumstances and taking guidance from the judgment of the Hon’ble Apex Court in the case of Vegetable Products [1973 (1) TMI 1 - SUPREME COURT] we hold that the view favouring the assessee needs to be taken.

  Thus we hold that the sale of recharge voucher coupons and starter kits and the discount offered to the distributors would not attract TDS provisions u/s 194H of the Act and as such no default u/s 201(1) of the Act can be attributed to the assessee. Accordingly, the order of the Ld. CIT(A), allowing relief to the assessee, is upheld and the grounds raised by the Department are dismissed.

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• 2021 (9) TMI 1221 - ITAT DELHI
  

  Exemption u/s 54 - denial of claim on purchase of property abroad - Scope of amendment to Act - investment made in purchasing the residential house outside India prior to the amendment to section 54 vide Finance Act, 2014 - CIT(A) allowing the benefit of exemption, placed reliance on the judgment of Leena Jugalkishor Shah v. ACIT [2016 (12) TMI 351 - GUJARAT HIGH COURT] - HELD THAT:- Amendment introduced in Section 54 of the Act vide Finance Act, 2014, which mandates purchase or construction of residential house in India, is prospective in nature operational only with effect from 1st April, 2015 i.e., Assessment Year 2015-16 and it will not affect the eligibility of claim in respect of investment made outside India prior to such amendment. In the present appeal, the investment in purchase of residential house in UK was made in July, 2013 and as such the claim of exemption u/s 54 of the Act in respect of such investment is allowable. Accordingly, we find no reason to take a view different from the view taken by the Ld. CIT(A) on the issue and we uphold the same. The grounds raised by the Department are dismissed.

  Disallowance of expenses claimed by the assessee towards cost of improvement - HELD THAT:- Costs incurred towards stamp duty and registration of the gift in the name of the assessee was an essential pre-condition for the purpose of obtaining the legal title of the property and its further sale - charges incurred for conversion of leasehold to freehold also had to be incurred for the purpose of enhancing the sales consideration value of the property sold and, therefore, it can be safely concluded that the impugned expenditure was a legitimate cost of improvement. We are of the considered opinion that cost of improvement is of wide amplitude and it would take into its fold all kinds of expenses incurred for the improvement of the impugned property. Therefore, we set aside the order of the Ld. CIT(A) on the issue and direct the Assessing Officer to allow the claim of assessee

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• 2021 (9) TMI 1220 - ITAT DELHI
  

  Proceedings u/s 153C - Addition of purchase price of land AND Cost of acquisition of land - Addition on the basis of the incriminating material found during the course of search or not? - Assessee argued that assessment year 2006 – 07 is a concluded assessment on the date of the search and no addition could have been made in the hands of the assessee in absence of any incriminating material found during the course of search - Assessment year 2006 – 07 - HELD THAT:- In the order of the ld AO as well as the ld CIT(A), we do not find that any incriminating material found during the course of search which even remotely shown that assessee has made a payment beyond what is recorded in her books of account for purchase of land and shown in the purchase deed of the property. The total addition made by the ld AO based on the report of the DVO. Further, the addition on account of cost of construction was also made on the basis of estimation of DVO determining the cost of construction.

  Hon'ble Delhi High Court in CIT Vs. Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT] categorically stated that in concluded assessment no addition could have been made in the hands of the assessee in absence of any incriminating material found during the course of search. The ld CIT(A) also called for remand report where the ld AO records that no incriminating material was found during the course of search. We delete the addition made on account of purchase price of land as well as the addition on account of cost of construction for the reason that there is absence of any incriminating material found during the course of search supporting the above addition. - Decided in favour of assessee.

  Addition based on the DVO’s report - Assessment Year 2010-11 - HELD THAT:- Reference to learned DVO was made without first verifying the cost of construction shown by the assessee and without first making a specific observation that assessing officer does not have any confidence in the cost of construction submitted by the assessee. Unless the assessee is found to have incurred some additional expenditure which are not recorded in the books of accounts or for which source of withdrawal from the bank or the cash available with the assessee is found to be not reliable, then only the learned assessing officer would have been justified in referring the matter to the learned DVO. This is also the dictum of the decision relied upon by the learned authorised representative.

  No reason to sustain the addition made by the learned assessing officer of difference in house property cost of construction. Accordingly, the orders of the lower authorities are reversed and the appeal of the assessee is allowed.

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• 2021 (9) TMI 1219 - ITAT VISAKHAPATNAM
  

  TDS u/s 194A - interest payment to APIIC[State Government undertaking] - 2nd round of litigation - whether the APIIC is covered u/sec. 194A(3)(iii)(b) of Act - Commissioner deleted the addition made by the AO u/sec. 201(1) & 201(1A) of the Act by accepting the claim of the Assessee - HELD THAT:- APIIC, the payee company has been incorporated under the Companies Act, 1966 holding of which is entirely held by the Government of Andhra Pradesh and, therefore, the provisions of section 194(A)(1) of the Act are not applicable qua interest paid/payable by the Assessee to the said organization APIIC as per section 194(3)(iii)(f) of the Act.

  Considering the peculiar facts and circumstances in totality, we are in concurrence with the conclusion of the ld. Commissioner for covering the APIIC u/sec. 194A(3)(iii)(f) of the Act and to the effect as well that APIIC is an organization exempted u/sec. 11 of the Act having filed ‘NIL’ taxable income, is not liable to tax and, therefore, deduction of tax at source qua APIIC is not attracted. Consequently, the conclusion drawn by the ld. Commissioner, whereby deleted the addition made by the AO u/sec. 201(1) & 201(1A) of the Act is liable to be affirmed.

  Whether APIIC is a ‘financial corporation’ or not within the meaning of section 194A(3)(iii)(b)? - whether the ld. Commissioner was empowered to adjudicate the issue which was not the subject matter of the appeal and/or the original claim of the Assessee? - HELD THAT:- APIIC is also exempt from TDS provisions as APIIC is held by GoAP and is the State Government undertaking thereby covered as per section 194(3)(iii)(f) of the Act, however, this fact was not considered by the ld. Commissioner. In appeal before the Hon'ble Tribunal in the first round of litigation, the said fact was not brought to the knowledge of the Bench and therefore the same remained un-noticed, which resulted into remanding the issue to the file of the AO by the Hon'ble Tribunal to find out the applicability of section 194(3)(iii)(b) instead of section 194(3)(iii)(f) of the Act. Therefore, all sequences resulted into multi and prolonged litigations.

  However as the controversy has been settled by the Ld. Commissioner while considering and allowing the alternative claim of the Assessee raised by ground no. 7 wherein it was claimed that without prejudice, the AO failed to consider the submission of the appellant that the interest paid to APIIC in which all the shares are held by the Government of Andhra Pradesh is an entity covered u/s 194A(3)(iii)(f) is exempted from TDS vide notification No. SO 3489, dated 22/10/1970, therefore there is no need to adjudicate ground Nos. 2 specifically as the same become infructuous hence dismissed.

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• 2021 (9) TMI 1218 - ITAT DELHI
  

  Undisclosed investment - Addition made on the basis of two seized documents - HELD THAT:- AO has made the above addition in the hands of the assessee on protective basis. He further noted that as the documents has been found from the assessee’s premises and are in handwriting of the assessee, substantive addition is deserves to be made in the hands of the assessee - as the complete amount involved in those documents covers the disclosure made by the assessee , which is in excess of the sum declared by the assessee, the impugned amount of income comprised in the seized documents subsumed in the amount of the total disclosure - addition was deleted. DR could not show us any reason to deviate from him. Accordingly, Ground No. 1 of the appeal is dismissed.

  Undisclosed income - addition arises from the disclosure made by Shri Rajiv Gupta on behalf of the entire group - main reason for deleting the addition was that overall disclosure was given on estimated basis and on actual subsequent analysis, it has been found to be on the lower side than what was disclosed - HELD THAT:- AO did not investigate that as there is any further income over and above the income disclosed sum by the assessee in his return of income such addition could not have been made. DR could not show any infirmity in the order of the ld CIT(A). We also find Mr. Rajiv Gupta disclosed ₹ 10 crores in the hands of the assessee which was found to be actually only ₹ 9,33,11,511/- which was disclosed by the assessee in his return of income. Therefore, to make any further addition same should have been substantiated by the ld AO with evidences after proper investigation and putting cogent material on record with the disclosure made by the assessee holding that it is not ₹ 9.33 crores but ₹ 10 crores. Such effort has not been made. No evidence is recorded in the assessment order as well as before the ld CIT(A). In view of this, we do not find any infirmity in deleting the above addition.

  Unaccounted cash - seized documents about money received by him on account of sale of property - HELD THAT:- We also found that four different companies have accepted the receipt in cash towards sale consideration of the property which is duly reflected in their books of account and therefore, addition has rightly been deleted by the ld CIT(A). With respect to cash found it is subsumed by the overall disclosure. Further, the ld AO failed to telescopic the above addition which was given by the ld CIT (A). Accordingly, we confirm the order of the ld CIT(A) deleting the above addition. - Decided against revenue.

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• 2021 (9) TMI 1217 - ITAT DELHI
  

  Unexplained receipts u/s 68 - Sum received from 5 farmers and the balance sum received from the two directors of the assessee company - CIT-A deleted the addition - HELD THAT:- Assessee has discharged initial onus cast upon him to prove the identity of the depositors, creditworthiness, and the genuineness of the transaction. The learned assessing officer did not make any enquiry on the evidences filed by the assessee and further he has not also acted upon the request of the assessee for examining all the agriculturist. In view of this, we do not find any infirmity in the order of the learned CIT-A deleting the addition made in the hands of the assessee with respect to 5 agriculturists.

  Addition with respect to the 2 directors of the assessee company itself - AO carried out the investigation and after that the learned AO has accepted that the amount invested by the directors of the company that it satisfies the condition of proving the identity, creditworthiness, and genuineness. In view of this, we do not find any reason to upset the order of the learned CIT – A with respect to the above investment made by Mr. Gaurav Aseem, director of the company in the share capital of the company.

  With respect to another director Mr. Kalwa Singh share capital - this director was holding at the beginning of the year the share capital to the extent of ₹ 238,09,800. The share capital in the earlier years issued in the name of the same director has been accepted by the learned assessing officer. The assessee also provided with the permanent account number of the above director, confirmation and also the bank account of the director as well as the certificate from the bank with respect to the above share capital issued. Assessee has also produced the balance sheet of the director wherein as on 31st of March 2012 the shares in the name of the company amounting to ₹ 79,500,000 are outstanding. Therefore, it is apparent that assessee has discharged its onus of proving the identity, creditworthiness, and genuineness of the transactions. - Decided in favour of assessee.

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• 2021 (9) TMI 1216 - ITAT DELHI
  

  Addition u/s 14A r.w.r.8D - CIT(A) deleted the addition by following the decision of his predecessor in assessee’s own case in the preceding years - HELD THAT:- We find, the issue stands decided in favour of the assessee by the decision of the Tribunal in assessee’s own case in various assessment years starting from A.Y. 2000-01 and onwards. We find, the Hon’ble Delhi High Court [2020 (3) TMI 507 - DELHI HIGH COURT] has dismissed the appeal filed by the Revenue in assessee’s own case where the Tribunal had held that in view of the provisions of section 44 r.w. the First Schedule, the provisions of section 14A are to be excluded in relation to computation of income of an insurance company.

  As already decided the issue in favour of the assessee, therefore, in absence of any contrary material brought to our notice, the order of the CIT(A) on this issue is upheld and the ground raised by the Revenue is dismissed.

  50% disallowance on account of expenses incurred on Guest House made by the AO - expenditure on the maintenance and upkeep of the guest houses - HELD THAT:- CIT(A), following the order for preceding assessment year i.e., 2014-15, deleted the disallowances. We do not find any infirmity in the order of the CIT(A) on this issue. We find, the issue stands decided in favour of the assessee by the decision of the Tribunal in assessee’s own case. We find, the Tribunal [2019 (4) TMI 959 - ITAT DELHI] has dismissed the appeal filed by the Revenue wherein the CIT(A) had deleted 50% of disallowance on account of guest houses - Decided against revenue.

  Addition being disallowance u/s 14A for the purpose of 115 JB - HELD THAT:- We find, the AO, in the instant case, made addition which was disallowed by him u/s 14A of the Act for computation of the book profit u/s 115JB of the IT Act. We find, the ld.CIT(A), following the orders of his predecessor, deleted the addition being the disallowance u/s 14A of the Act made by the AO for the purpose of section 115JB of the Act. We do not find any infirmity in the order of the CIT(A) on this issue. We find, in the case of Shobha Developers Ltd.[2021 (1) TMI 378 - KARNATAKA HIGH COURT] has held that disallowance made u/s 14A could not be added to book profit of the assessee u/s 115JB - Decided against revenue.

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• 2021 (9) TMI 1215 - ITAT CHENNAI
  

  Exemption u/s 54 - whether the sale agreement entered into by the assessee on 08.04.2015 is genuine or not? - HELD THAT:- As gone through the sale agreement, which do not bear the signature of the assessee and also translated copy of the sale agreement into English dated 08.04.2015 and found that nowhere in the sale agreement it is mentioned that the possession was given to the assessee. In the alleged letter filed by the assessee that the amount was paid and possession was handed over to the assessee, neither date is mentioned nor there is signature from the sellers of the property.

  As per the sale deed dated 04.07.2016, the entire amount was received by the sellers on 04.07.2016 and possession was also handed over to the assessee on 04.07.2016. Under the above facts and circumstances, we are of the opinion that the sale agreement dated 08.04.2015 is not genuine. Accordingly, the benefits under section 54 of the Act cannot be granted to the assessee for the main reason that the sale deed clearly mentions that the entire sale consideration was received on the same day and possession was also handed over. - Decided against assessee.

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• 2021 (9) TMI 1214 - ITAT CHENNAI
  

  Penalty u/s. 271(1)(c) - assessee has purchased a vacant land for which he is not entitled for deduction u/s. 54F - HELD THAT:- The assessee has sold a property and purchased another property and claimed deduction u/s. 54F - AO has called the details of the purchased property. After examining the sale deed, the AO noticed that the house purchased by the assessee is not a residential house and it is only for the purpose of for running the industry and other connected activities and therefore, the very nature of the property purchased by the assessee is only industrial property not a residential house and levied penalty u/s. 271(1)(c) - It is a fact that the assessee has not purchased a residential house. It is a bonafide claim of the assessee that on sale of the property he can purchase another property, but, the fact remains that another property which is supposed to be purchased only residential house and not an industrial property. Therefore, the assessee is not entitled for the deduction u/s. 54.

  So far as penalty is concerned, the assessee simply made a claim, which is not acceptable to the A.O, penalty cannot be levied u/s. 271(1)(c) of the Act automatically as has been held in the case of CIT vs. Reliance Petroproducts (P) Ltd. [2010 (3) TMI 80 - SUPREME COURT], wherein, explained that whether a claim simply not accepted by the AO., it does not mean that it is a concealment of income or furnishing of inaccurate particulars of income so that penalty can be levied - following the judgment of the Hon’ble Supreme Court, we are of the opinion that the assessee has neither concealed the income nor furnished inaccurate particulars in this case and therefore, the penalty levied by the A.O and confirmed by the CIT(A) is not correct. In view of the above, we cancel the penalty levied under section 271(1)(c) of the Act by the AO. - Decided in favour of assessee.

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• 2021 (9) TMI 1213 - ITAT VISAKHAPATNAM
  

  Addition u/s 41(1) - benefit by way of remission or cessation of liability - HELD THAT:- There is no dispute that there was a liability in existence in the books of the assessee. The AO has to go according to the books of accounts of the assessee, while computing the income of the assessee but not as per the books of accounts of the creditor. As per section 41(1) of the Act any allowance or deduction made in the assessment year in respect of loss or expenditure or trading liability incurred by the assessee and subsequently obtained the benefit by way of remission or cessation, the same required to be taxed under the profits and gains of the business of income of that person of the previous year

  The expression ‘loss or expenditure or some benefit in respect of any such trading liability by any unilateral act by the first mentioned person under clause(a) or the successor in business under clause (b) of section 41(1) of the Act. In the instant case, the first mentioned person is the assessee, but not the creditor. In the instant case, the assessee has not written off the liability, though the creditor has written off the debt. Though the debtor has no legal right to enforce the debt, still the assessee is having liability to make the payment, till the assessee writes off the debt.

  In these facts and circumstances there is no case for making addition u/s 41(1) of the Act. ITAT Kolkata in the case of M/s Sonodyne Television Co. Ltd [2018 (1) TMI 1454 - ITAT KOLKATA] dismissed the appeal of the revenue on similar fact - There is no case for invoking the provision u/s 41(1) in the case of the assessee. Accordingly, appeal of the assessee is allowed.

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• 2021 (9) TMI 1212 - ITAT VISAKHAPATNAM
  

  Addition u/s 68 - Addition pertaining to cash deposits in bank account - HELD THAT:- No dispute that the cash deposits were made in the bank account and there were no cash credits in the books of accounts. AO did not bring any material to show that the assessee has brought cash credits in the books of accounts for which the source was not explained. As per section 68, cash credits made in the books of accounts for which the assessee could not explain the source to the satisfaction of the AO, required to be brought to tax u/s 68 of the Act. In the instant case, the deposits were made in the bank account. As per the settled issue, the bank deposits required to be made addition u/s 69 but not u/s 68 of the Act. The bank passbook or bank statement does not amount to the books of accounts of the assessee.

  As in the case of Babbal Bhatia [2018 (6) TMI 1030 - ITAT DELHI] held that the bank is different from books of accounts of the assessee and credit in the bank account of the assessee cannot be construed as credit in the books of accounts of the assessee - Tribunal in the case of Asha Sanghavi [2019 (11) TMI 868 - ITAT VISAKHAPATNAM]has taken similar view and held that cash deposits made in the bank account cannot be brought to tax u/s 68.

  In the instant case, there is no dispute that the deposits were made in the bank account and there were no entries in the books of accounts. The deposits made in Bank account are not permissible to tax u/s 68 - addition made by the AO u/s 68 in respect of cash deposits made in the bank are unsustainable, accordingly deleted. Appeal of the assessee is allowed.

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