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Income Tax - Case Laws
Showing 61 to 80 of 968 Records
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2019 (1) TMI 1911 - ITAT AMRITSAR
Reopening of assessment u/s 147 - Special audit u/s 142(2A) - period for submission of special audit report - time barring assessment order passed after the prescribed limit i.e. 60 days from the date on which the appellant was required to submit the special audit report - HELD THAT:- The time period commencing from the date on which the AO directed the assessee to get its accounts audited under sub-section (2A) of Section 142 of the Act, was 21st December, 2011 and ending with the last date on which the assessee was required to furnish a report of such audit was 21st March, 2012 in the instant case.
As the notice u/s 148 was issued on 29.04.2010, therefore the assessment was supposed to completed within 09 months from the end of the F.Y. in which the notice u/s 148 was served which in the instant case was 31st December, 2011. However, on 21st December, 2011, the assessee was directed to get its account audited u/s 142(2A) of the Act with a direction to file audit report within 90 days i.e. on or before 21st March, 2012 and thereafter, the time gets expired. However, it is the case of the Revenue Department that the time for filing of the audit report u/s 142 (2A) was extended by the Assessing Officer on 10.04.2012 for a period of 45 days which was expiring on 05.05.2012.
Admittedly the order dated 20-04-2012, does not find mention in the assessment order and the Revenue Department neither established the service of the said extension order upon the assessee nor brought any of the records such as receipt and dispatch register and/or any document maintained for dispatch of the letter dated 20.04.2012 or otherwise in normal routine, by which the existence and validity of the said order could be established.
We are in agreement with the stand of the Revenue department that even in the absence of application by the assessee, the Assessing Officer can extend the period for submission of special audit report, however in the instant case, order u/s 142(2A) was passed on 21st Dec. 2011 and time limit for filing of the audit report was fixed as 90 days from the receipt of the order which was expired on 21st March, 2012 and up to 9th April, 2012, nothing happened, neither the assessee filed an application of extension of the time for filing of special audit report and/or not extended suo moto by the Assessing Officer, therefore, once the time limit gets expired by efflux of time, then the Assessing Officer is not empowered to extend it further, therefore on this reason also, the assessment order is void and cannot be acted upon. Hence under the peculiar facts and circumstances of the instant case and in view of considerations, deliberations and analyzations made above, the assessment order being void passed after the time prescribed under the law, consequently liable to be quashed and therefore quashed accordingly.
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2019 (1) TMI 1909 - BOMBAY HIGH COURT
'Mark to Market' loss arising on valuation of forward exchange contracts on the closing date of accounting year - HELD THAT:- The issue is squarely covered against the department by virtue of the judgment of this Court in the case of CIT Vs. M/s. D. Chetan & Co. [2016 (10) TMI 629 - BOMBAY HIGH COURT] we find that there was no submission recorded on behalf of the Revenue that the Respondent assessee should be called upon to explain the nature of its transactions. Thus, the submission now being made is without any foundation as the stand of the assessee on facts was never disputed - On present facts, it was never the Revenue's contention that the transaction was speculative but only disallowed on the ground that it was notional - thus as held that forward contract in foreign exchange when incidental to carrying on business of cotton exporter and done to cover up losses on account of differences in foreign exchange valuations, would not be speculative activity but a business activity. - Decided against revenue.
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2019 (1) TMI 1908 - ITAT KOLKATA
Levy penalty u/s. 271AAB V/S levy penalty u/s. 271(1)(c) - assumption of jurisdiction to levy penalty u/s. 271(1)(c) - assessee objected to penalty proceedings u/s 271AAB since no search u/s. 132 of the Act happened - AO mentioned in the penalty order that he inadvertently issued notice u/s. 271AAB of the Act and then levied penalty u/s. 271(1)(c) - As per assessee no search u/s. 132 of the Act was conducted against him, the penalty u/s 271AAB is not attracted in the instant case - HELD THAT:- Here in this case, we have reproduced the satisfaction of AO in the assessment order which was for levy of penalty u/s. 271 AAB of the Act and in the assessment order, the AO initiated penalty u/s. 271AAB of the Act.
AO without even initiating penalty u/s. 271(1)(c) of the Act in the assessment order itself, the imposition of penalty u/s. 271(1)(c) of the Act where in the assessment order AO adds any amount or disallowed while computing the total income or loss of an assessee in and the said order does not contains a direction for initiation of penalty proceedings under clause (c) of subsection (1), such an order of assessment or reassessment cannot be deemed to constitute satisfaction of the Assessing Officer for initiation of the penalty proceedings under the said clause (c).
We note that in the assessment order the AO has neither recorded satisfaction to levy penalty against the assessee u/s. 271(1)(c) of the Act nor has he initiated the penalty u/s. 271(1)(c) of the Act. Therefore, after recording satisfaction in assessment order to levy penalty u/s. 271AAB and initiation of penalty u/s. 271AAB of the Act, the AO does not have jurisdiction to levy penalty u/s. 271(1)(c) of the Act. We also rely on the Karnataka High Court decision in CIT Vs. MWP Ltd. [2013 (12) TMI 1214 - KARNATAKA HIGH COURT]
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2019 (1) TMI 1904 - ITAT MUMBAI
TP Adjustment - whether the assessee is a BPO or a KPO? - Eclex Solutions Limited exclusion - HELD THAT:- We feel there is no need to address the preliminary issue as to whether the assessee is a BPO or KPO. We find that the ld.AR was very fair in stating that once the comparable Eclex is excluded from the list of comparables chosen by the ld. TPO, then its margin would be through, warranting no adjustment to ALP in respect of international transaction carried out by it. Hence, we proceed to address that particular comparable alone in this order.
Outsourcing activity in one company which is done predominantly cannot be treated as a comparable with the company which is engaged in carrying out its activity in-house. These facts were duly brought as a specific objection by the assessee before the ld. TPO as well as ld. DRP as detailed elsewhere hereinabove in this order by way of written submissions. Hence, it cannot be said that the assessee had made this objection for the first time before this Tribunal. We also find that the objections made by the assessee with regard to this comparable namely Eclex Solutions Limited had not been disputed by the ld. TPO or by the ld. DRP by pointing out certain factual differences in the objections of the assessee, more particularly, with regard to the predominant activity carried on by the said comparable.
We hold that Eclerx Solutions Limited should not be treated as a comparable as it is functionally different and we direct the ld. TPO to exclude the same from the list of comparables while benchmarking the international transactions for determination of Arm’s Length Price, for this assessment year.
We would like to make it clear that the grounds raised by the assessee with regard to other comparables are left open and no opinion is given by us in this order. Accordingly, the grounds raised by the assessee are allowed.
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2019 (1) TMI 1902 - ITAT MUMBAI
Disallowance u/s 14A - suo motu disallowance made by the assessee - HELD THAT:- In the case of Maxopp Investment Ltd. [2018 (3) TMI 805 - SUPREME COURT], it has been held that “in those cases, where shares are held as stock-in-trade, main purpose is to trade in those shares and earn profits there from, in the process, certain dividend is also earned, though incidentally, which is also an income. This triggers applicability of section 14A which is based on theory of apportionment of expenditure between taxable and nontaxable income. Therefore, to that extent, expenditure incurred in acquiring those shares will have to be apportioned.”
We observe that the assessee has filed a computation with net disallowance u/s 14A, having considered the total value of non-taxable investments as on 31.03.2011 and 01.04.2010. It is supported by the closing stock as on 31.03.2011 on which dividend was earned in FY 2010-11 and opening stock as on 01.04.2010 on which dividend was earned in FY 2010-11.
In the case of ACIT v. Vireet Investment (P) Ltd. [2017 (6) TMI 1124 - ITAT DELHI] it has been held by the Special Bench that only those investments are to be considered for computing average value of investment which yielded exempt income during the year.
The latest computation sheet filed by the counsel, wherein net addition also has been arrived at by the assessee, was not submitted either before the AO or the Ld. CIT(A) - the present matter may be examined by the AO. We set aside the order of the Ld. CIT(A) and restore the matter to the file of the AO to make a de novo order in the light of the discussion above, after giving reasonable opportunity of being heard to the assessee. We direct the assessee to file the relevant documents/evidence before the AO. - Appeal is allowed for statistical purposes.
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2019 (1) TMI 1901 - ITAT MUMBAI
TP Adjustment - Comparable selection - whether orders passed by learned DRP and by this Tribunal in the case of Vodafone India Services Pvt. Ltd. [2014 (12) TMI 563 - ITAT MUMBAI] could be used in the hands of the assessee herein? - HELD THAT:- We find that the very same business carried out by the assessee up to 4.12.2007 was carried out by Vodafone India Services Pvt. Ltd. for the remaining part of the financial year. We also find that the very same seventeen comparable companies were selected by learned TPO while framing transfer pricing assessment in the hands of Vodafone India Services Pvt. Ltd. for A.Y. 2008-09. Hence, we hold that there is no harm in following learned DRP‟s order and order of this Tribunal for assessee-herein.
From the aforesaid table, it could be seen that average of final eight comparable works out to 15.85%, whereas assessee‟s margin was 15.65%. Giving credit to the assessee for range of plus/minus 5%, we hold that assessee‟s margin would be at arm‟s length.
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2019 (1) TMI 1900 - ITAT DELHI
Bogus LTCG - Addition u/s 68 - Bogus Long-Term Capital Gain earned at listed equity shares sold through Bombay Stock Exchange after payment by Security Transaction Tax, on the ground that it is a case of penny stock - HELD THAT:- As seen nowhere there is any evidence or information gathered during the course of any investigation or inquiry either from the broker or from the company M/s. Kappac Pharma Ltd. that assessee is beneficiary of any accommodation entry or has routed his own unaccounted money in the garb of fictious Long-Term Capital Gain.
The entire addition has been made on hypothesis from general modus operandi adopted by various entry operators for providing accommodation entry in Long Term Capital Gain. Here, in this case, there is no reference of any entry provider or any information that the assessee has paid any unaccounted money for getting such kind of an accommodation entry.
Once the nature of transaction is dealing in shares and source of the credit appearing in the bank account is from sale of shares, then without any contrary material to show that such credit in the bank account is bogus or non-genuine, then said credit cannot be deemed to be income of the assessee. Though such a phenomenal rise of the shares in a span of 18 months do raises lot of suspicion, but howsoever strong suspicion may be, there has to be some kind of an evidence or information that assessee was involved in some kind of bogus or sham transaction, either by himself or through some entry provider. There is no whisper in the assessment order or appellate order that any action has been taken by SEBI against M/s. Kappac Pharma or they have been found to be rigging the price in the stock exchange.
Once a listed share which is regularly traded in the recognized stock exchange at quoted price and the sale of share is recorded in the stock exchange and sale proceeds of the said share has been credited in the bank account, then source of credit stands proved.
Simply because the price of the scrip has risen manifold cannot per se be the ground to hold that credit in bank account of the assessee is unexplained. If there is some undisclosed or unexplained money which has been routed through some suspicious channel then that has to be some evidence or trail brought on record so as to nail the assessee. General modus operandi of the entry providers cannot be the basis for making the addition in each and every case in absence of any specific information or material that such person is beneficiary of accommodation entry or any kind of scam or is part of that modus operandi. Appeal of the assessee is allowed.
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2019 (1) TMI 1899 - ITAT MUMBAI
Addition u/s 14A r.w.r. 8D - HELD THAT:- CIT (A) has held that the appellant had sufficient own funds as well as interest free funds available which was more than the amount of investment made by the assessee. Since, the assessee had sufficient interest free funds, the Ld.CIT (A) has rightly deleted the addition made u/s 14A read with rule 8D (2)(ii) of the Rules in the light of the judgment in the case of CIT vs. HDFC Bank [2014 (8) TMI 119 - BOMBAY HIGH COURT].
The assessee has not earned any exempt income, no question of disallowance does arise. The Hon’ble Delhi High Court, in the case of Cheminvest Ltd.[2015 (9) TMI 238 - DELHI HIGH COURT] has held that in order to apply the provisions of section 14A read with rule 8D, there should be an actual receipt of income which is not includible in the total income during the relevant previous year or in other words section 14A will not apply if no exempt income is received or receivable during the year relevant to the assessment year under consideration. Since, the findings of the Ld. CIT (A) are based on the law laid down there is no infirmity in the order of the Ld. CIT (A). Hence, we uphold the findings of the Ld. CIT (A) and dismissed this ground of appeal of the revenue.
Additional depreciation u/s 32 (1)(iia) - plants and machinery acquired and installed in the preceding year - Asset put to use for less than 180 days in the previous year - HELD THAT:- In the case of CIT vs. Rittal India Pvt. Ltd.[2016 (1) TMI 81 - KARNATAKA HIGH COURT] has decided the identical issue in favour of the assessee. In the said case the assessee had acquired and installed new plant and machinery in the assessment year 2007-08 and was put to use for a period of less than 180 days. The assessee claimed 10% additional depreciation u/s 32(1)(iia) in the assessment year 2007-08, which was allowed by AO. However, balance 10% was rejected in the assessment year 2008-09. In the first appeal the CIT(A) affirmed the action of the AO. But in the second appeal the Tribunal allowed the assessee’s claim. In the further appeal the Hon’ble High court affirmed the decision of the Tribunal and held that the assessee is entitled for 50% depreciation in the subsequent year.
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2019 (1) TMI 1898 - ITAT PUNE
Validity of assessment order passed u/s 143(3) - order made beyond the time limit specified under section 153(1) - as prayed that the said assessment order being time barred ought to be held as bad in law, liable to be quashed - AO made reference under section 92CA(1) to the Transfer Pricing Officer (TPO), who passed an order dated 08.10.2012 proposing no adjustment to the value of international transactions declared by assessee - whether the final assessment order passed in the case of assessee is time barred or has been passed within time available to the Assessing Officer? - HELD THAT:- In case reference is made under section 92CA(1) of the Act, then the Assessing Officer is empowered to pass order under section 143(3) r.w.s. 92CA(3) of the Act within period of three years i.e. upto 31.03.2013 for the captioned assessment year.
In the facts of case, where no addition was proposed by the TPO under section 92CA(3) of the Act and since there was reference made to the TPO, assessment order had to be passed within extended period of 12 months i.e. ending by 31.03.2013. However, the assessment order has been passed on 17.06.2013, hence the same is time barred.
We find no merit in the objections raised by Revenue that since draft assessment order was passed on 28.03.2013, there is nothing prejudicial to the interest of assessee. It is not draft assessment order but the final assessment order, which completes the proceedings against the assessee and there is no merit in the objections so raised. It may also be pointed out that the Assessing Officer in all fairness has in the letter dated 24.10.2018 accepted that the time barring date to pass assessment order was 31.03.2013.
Since the Assessing Officer has failed to do so, we hold that final assessment order passed on 17.06.2013 is both null and void in law. Consequently, the assessment made in the case of assessee is directed to be set aside. The jurisdictional issue raised vide ground of objection No.1 is thus, allowed.
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2019 (1) TMI 1896 - ITAT BANGALORE
Condonation of delay - delay of 898 days and and 883 days in filing the appeal - reasonable cause - HELD THAT:- In the case on hand, the factual matrix, in our view, clearly establishes that the delay was due to the negligence and inaction on the part of the assessee, which could have been avoided by the assessee if he had exercised due care and attention. Therefore in our opinion, in the factual matrix of this case there exists no sufficient and reasonable cause for the inordinate delay in filing the appeals for Assessment Years 2009-10 to 2010-11 by the assessee.
We have considered the factual matrix of this case to reach the finding that there existed no sufficient and reasonable cause for the inordinate delay of 898 days and 883 days in filing the appeals for Assessment Years 2009-10 and 2010-11 as the assessee has also not been able to establish that he was prevented by sufficient causes beyond his control from filing these appeals on time. In this view of the matter, we are of the opinion that, in the case on hand, the cause of substantial justice would not be served by condoning the inordinate delay in filing these appeals for which reasonable or sufficient cause has not been established. We accordingly reject these petitions for condonation of delay for Assessment Years 2009-10 and 2010-11.
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2019 (1) TMI 1895 - ITAT DELHI
TP Adjustment - comparable selection - Higher profitability criteria - HELD THAT:- Assessee as characterised as a value added distributor of printed courseware/e-books in India which assumes normal/significant risks associated with carrying out such marketing/distribution activities in India, companies functinally dissimilar with that of assessee need to be deselected.
Acropatel Technologies Ltd., (Information Technology service segment) company is engaged in provision of high end healthcare services and develops & owns related intellectual property providing substantial competitive advantage to this company, leading to higher profitability. As per annual report, this company is engaged in sale of software products. It is observed that assessee is undertaking software development relating to presentation of course material by way of including animation, graphics and audio training aids etc. Therefore, Acropetal Technologies Limited is functionally different from that of assessee and should have been excluded by Ld.TPO. The company is also engaged in two business segments, i.e., sale of products and sale of services but segmental profitability is not available in audited financial statements. Therefore, we direct Ld.TPO to exclude this company from comparables.
E-Infochips Ltd since no segmental data of this company is available indicating operating profit from software development services, we order to exclude this company from the list of comparables.
Wipro Technology Solutions Ltd disqualifies to become a comparable uncontrolled transaction for the purposes of inclusion in the final list of comparables under Rule 10B(1)(e)(ii). We, therefore, direct removal of this company from the list of comparables.
Sasken Communication Technologies - As revenue generated from sale of software services/ products and other services are to the tune of ₹ 39,419.62 crores. Further it is observed from order of Ld.TPO that this company has been selected as a comparable only because it satisfies filter of applicability of 75% of its income from services. However on perusal of accounts, no segmental financials are available. Moreover in our considered opinion functionally itself this company is not comparable with that of assessee. Accordingly we direct this comparable to be excluded from the final list.
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2019 (1) TMI 1894 - MADRAS HIGH COURT
Recovery proceedings - Challenge Auction Sale Notice - Prayer taking no action affecting the secondary charge of the petitioner on the schedule mentioned property - HELD THAT:- When the matter is taken up for hearing, the learned counsel for the petitioner submitted that since no auction was conducted pursuant to the sale notice dated 06.02.2014, the Writ Petition has become infructuous.
In view of the submission made by the learned counsel for the petitioner, the Writ Petition is dismissed as infructuous. No costs. Consequently, the connected miscellaneous petitions are closed.
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2019 (1) TMI 1893 - ITAT AMRITSAR
Reopening of assessment u/s 147 - Jurisdiction of AO to issue notice - HELD THAT:- In the present case, it is an admitted fact that the ITO-1(5), Ludhiana issued the notice u/s 148 r.w.s. 147 of the Act, thereafter, the jurisdiction was transferred to the ITO-1(5), Jalandhar who never issued the notice u/s 148 of the Act but framed the assessment u/s 143(3) - As relying on JAWAHAR LAL AGARWAL VERSUS ITO-4 (2) , AGRA [2018 (3) TMI 936 - ITAT AGRA] he assessment framed by the AO who had not issued notice u/s 148 r.w.s. 147 of the Act is quashed.
Addition u/s 69 of the Act on account of non declaration of cash and other deposits in bank account.
Reasons to believe - AO while issuing the notice u/s 148 of the Act has mentioned that the assessee had deposited a cash of ₹ 1,39,28,640/- during the financial year 2009-10 in the bank account which had escaped assessment. On the contrary, in the assessment order, he mentioned that the cash deposited in the bank account of the assessee was ₹ 51,24,064/-, which is evident from para 8.3 off the assessment order dated 14.12.2017. Therefore, the reasons recorded by the AO were not emerging from the record available with him.
AO recorded the reasons which were not found to exists on the record, therefore, the reassessment framed deserves to be quashed. In view of the aforesaid discussion, we are of the confirmed view that viewed from any angle, the reassessment framed by the AO was not justified, hence quashed. - Decided in favour of assessee.
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2019 (1) TMI 1890 - ITAT AHMEDABAD
Exemption u/s 11 - charitable activity u/s 2(15) - whether assesses has violated the provisions of Section 11(5) of the Act and that provisions of Section 13(1)(d) of the Act were applicable? - HELD THAT:- We find that the Tribunal [2017 (11) TMI 1707 - ITAT AHMEDABAD] has allowed appeal of the assessee and held that it is to be treated as charitable institution, which is entitled for exemption under sections 11 and 12. Its income has to be determined accordingly.
Since very basic for determination of assessee’s taxable income has been changed, therefore, all consequential issues were to be examined by the AO while giving effect to order of the Tribunal. The issues agitated in the CO are no more relevant and no specific finding is required to be recorded in the present proceedings. All these things should be taken care of by the AO while passing fresh assessment order in pursuance of the Tribunal’s order in the appeal of the assessee. Status of the assessee has been changed. It is to be treated as a charitable institution and its income is accordingly to be determined. Thus, no fresh directions are required to be issued to the AO, more so, the issues agitated in the CO are being not arisen from the assessment order. Hence, there is no force in the grounds taken in the CO. Cross Objection of the Revenue is dismissed.
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2019 (1) TMI 1887 - ITAT BANGALORE
Rectification of mistake u/s 154 - corporate tax issues as mentioned at page 5 and 6 of the order of the Tribunal dt.11.12.2017, have not been adjudicated - HELD THAT:- We find that the Tribunal after recording the grounds at page 5 and 6 as not adjudicated the grounds relating to Corporate tax issues.
Accordingly the order dt.11.12.2017, passed by the Tribunal is recalled for the limited purpose of adjudicating the corporate tax issues mentioned above. Registry is directed to post the appeal for hearing in the due course.
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2019 (1) TMI 1884 - ITAT MUMBAI
Assessment u/s 153A - as per assessee in absence of any incriminating material found from the premises of the assessee, the action of the AO in making the assessment u/s 153A of the Act is against the law - reassessment proceedings under section 147 of the Act were found to be pending as on the date of issue of notice u/s 153A - HELD THAT:- In the instant case, the Assessing Officer has mentioned that assessment in the case of the assessee was reopened by way of issue notice under section 148 of the Act and those reassessment proceeding under section 148 were pending on the date of issue of notice u/s 153A - This fact has not been contorted by the assessee either before the AO or before the CIT(A). We are bound to conclude that as on the date of the issue of notice u/s 153A assessment proceedings were pending in the case of the assessee, which got abated. Hence, the contention of the assessee that no assessment proceedings were pending in the case of the assessee, is rejected. As the one of the condition required for holding addition made under section 153 proceedings as valid in terms of decision of Kabul Chawala [2015 (9) TMI 80 - DELHI HIGH COURT] has not been satisfied, we do not find any infirmity in the finding of the Ld. CIT(A) on this issue and accordingly we uphold the same. The ground No. 1 of the appeal of the assessee is dismissed.
Whether material found during the course of the search at the premise of Sri Naresh Gupta, belonged to the assessee? - The material found from the premise of the Sh Naresh Gupta is digital record of the draft deed maintained in the computer of Sh. Naresh Gupta, Advocate (deed writer), which belonged to him. As the information contained in said agreement to sell was merely related to the assessee. The said document was prepared in ordinary course of his profession and thus he was rightful owner of the document, though the document contained related information to the assessee, it belongs to Sh. Naresh Gupta only. Therefore, the Assessing Officer correctly reopened the assessment under the provisions of section 147 of the Act. Since the said reassessment proceedings under section 147 of the Act were found to be pending as on the date of issue of notice u/s153A of the Act, the Assessing Officer is justified in completing the assessment under the provisions of section 153A of the Act. Accordingly, the ground No. 1 of the appeal challenging the validity of proceeding under section 153A of the Act is dismissed.
Sale of first floor of property - According to the Ld. Assessing Officer, on perusal of the contents of draft of sale of agreement found in the hard disk of computer as well as contents of the registered sale deed, he found that both are same except difference of amount of sale consideration - whether it can be presumed that the assessee received payment in cash of ₹ 83,50,000/-in addition to the amounts recorded in registered sale deed ? - HELD THAT:-The entire document found is a draft prepared by the deed writer, which is not signed by any of the party mentioned in the said draft. Such an unsigned document cannot be made basis of presumption that the assessee received cash on sale of the property. The assessee has been subjected to search but no other documentary evidence of receipt of cash by the assessee has been found in the course of the search. We also note that no attempt has been made by the Assessing Officer to make an enquiry from the buyer or to ascertain the prevalent market value of the property sold by the assessee.
We are of the opinion that no addition can be sustained only on the basis of the unsigned draft agreement to sell found from the premises of the third party and that too without any corroborative evidences. Accordingly, we set aside the order of the Ld. CIT(A) and the Assessing Officer on the issue in dispute and direct the Assessing Officer to delete the addition for alleged cash received on sale of 1st floor of the property under reference. The grounds No. 2 and 3 of the appeal are, accordingly, allowed.
Long term capital gain on sale of agriculture land - AY: 2012-13 - HELD THAT:- As perused the Notification No. 18/1/95/2008-3C1 dated 20/03/2010 issued by the Department of urban local bodies, Haryana government, which is available on page 114 of the paper book filed by the assessee. The said notification has included entire part of the revenue land of the village “Ghata”. There is no dispute between the parties that the land in question was situated in village Ghata. In view of the clear finding of the fact recorded by the Ld. CIT(A) that the land in question was situated within the 8 km of the limits of the Municipal Corporation, the sale of the land is liable to provisions of the capital gain. In view of the above, we do not find any error in the order of the Ld. CIT(A) on the issue in dispute, accordingly we uphold the same. The ground No. 1 of the appeal is, accordingly, dismissed.
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2019 (1) TMI 1882 - MADRAS HIGH COURT
Reopening of assessment u/s 147 - HELD THAT:- The very same petitioner approached this Court and filed a writ petition in [2021 (5) TMI 417 - MADRAS HIGH COURT] and challenged the said reopening proceedings. This Court, while entertaining the writ petition, has passed an interim order on 21.12.2018 permitting the assessment to go on and however, with a further direction to the Assessing Officer to keep the assessment order in a sealed cover. It is stated that the said order was communicated to the Assessing Officer on the very same day. However, he passed the assessment order on 21.12.2018 itself and communicated the same to the petitioner. Even though the AO is not prevented by this Court from passing the order of assessment, however, in view of the interim order granted by this Court, which was also communicated to him immediately, the Assessing Officer has to only keep the order of assessment in the sealed cover, without communicating the same to the Assessee.
Assessing Officer has not given effect to the interim order granted by this Court on 21.12.2018. Sending the order of assessment to the Assessee has in effect defeated the purpose of granting interim order by this Court, more particularly, when the very re-opening proceedings of the assessment has already put to challenge before this Court as stated supra. Therefore, under the above stated facts and circumstances, this Court is fully convinced to stay the impugned order of assessment, pending disposal of this writ petition, as the order to be passed will certainly have a bearing on the present impugned order of assessment.
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2019 (1) TMI 1881 - ITAT DELHI
Nature of expenditure - royalty held by the DRP as revenue expenditure - assessee submitted before us that the royalty in the year under consideration has been paid under a license agreement dated 27/10/2003 entered into with “Baxter International inc. USA” (in short the ‘Baxter USA’) for the right to use the patents, trademarks, know-how and software which is owned by Baxter USA and no ownership rights have been acquired or purchase by the assessee in any of the above - HELD THAT:- It is undisputed that the royalty in the year under consideration has been paid under the license agreement dated 27/10/2003 with the company namely Baxter USA. The addition made in earlier years has been deleted by the Tribunal in favour of the assessee.
Since there is no change in the license agreement in the year under consideration under which royalty has been paid as compared to the assessment year 2006-07 [2018 (8) TMI 2029 - ITAT DELHI] thus respectfully following of the decision of the Coordinate bench (supra), we uphold the finding of the learned DRP on the issue in dispute and dismiss the grounds No. 1 and 2 of the appeal of the Revenue.
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2019 (1) TMI 1879 - ITAT MUMBAI
Addition under the head ‘Income from House Property’ representing Annual Letting Value of unsold flat - notional ALV of the unsold flat, which is held by the assessee as stock-in-trade - HELD THAT:- We find that our case of C.R. Developments Pvt. Ltd. [2015 (5) TMI 1161 - ITAT MUMBAI] dealt with charging of notional income under the head ‘Income from House Property’ in respect of unsold shops which were shown by assessee therein as part of ‘stock-in-trade’. As per the Tribunal “The three flats which could not be sold at the end of the year was shown as stock-in-trade.
Estimating rental income by the AO for these three flats as income from house property was not justified insofar as these flats were neither given on rent nor the assessee has intention to earn rent by letting out the flats. The flats not sold was its stock-in-trade and income arising on its sale is liable to be taxed as business income. No justification in the order of AO for estimating rental income from these vacant flats u/s 23 which is assessee’s stock in trade as at the end of the year. Accordingly, the AO is directed to delete the addition made by estimating letting value of the flats u/s 23 of the I.T. Act.”
The aforesaid observation of our coordinate Bench squarely applies to the facts of the present case.
We find that Sec. 23(5) of the Act has been inserted by the Finance Act, 2017 w.e.f. 01.04.2018. In terms of the said section, it is prescribed that “where the property consisting of any building or land appurtenant thereto is held as stock-in-trade and the property or any part of the property is not let during the whole or any part of the previous year, the annual value of such property or part of the property, for the period up to one year from the end of the financial year in which the certificate of completion of construction of the property is obtained from the competent authority, shall be taken to be nil”. Though the said provision is effective from 01.04.2018, yet even if one is to see the present case from the standpoint of Sec. 23(5) of the Act, no addition is permissible in the instant year - completion certificate is stated to have been obtained on 28.11.2011 and going by the provisions of Sec. 23(5) of the Act, no addition is permissible in the instant assessment year. Be that as it may, we are only trying point out that the assessability of notional income in respect of unsold flat, which is taken as stock-in-trade, is not merited in the instant case - we set-aside the order of CIT(A) and direct the Assessing Officer to delete the addition. - Decided in favour of assessee.
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2019 (1) TMI 1877 - ITAT DELHI
Reopening of assessment u/s.148 - addition on account of share capital and premium u/s.68 and addition on account of unexplained expenditure for obtaining the accommodation entry - HELD THAT:- Assessing Officer in the reasons for reopening of the assessment has also mentioned above information regarding accommodation entries of bogus purchases through bills without any delivery of goods by M/s. Maa Durga Trading Company. However, in the assessment order no such addition have been made by the Assessing Officer, because nothing adverse was found against the assessee. Payment for purchase could not be regarded escaped income u/s.148 of IT Act.
AO without verifying an information against the assessee merely acted on suspicion against assessee. The Assessing Officer without application of mind recorded the reasons for reopening of assessment. No specific material has been brought on record to justify reopening of the assessment, therefore, Assessing Officer has not validly assumed jurisdiction u/s.148 of the IT Act for reopening of the assessment in the matter. The documentary evidence filed on record also proved that assessee proved identity of the investor company, its creditworthiness and genuineness of the transaction in the matter. There was thus no justification to make any addition against the assessee. No evidence have been brought on record if assessee paid any amount as commission etc. for obtaining any accommodation entry. The issues are therefore covered by order of A.P. Refinery Pvt. Ltd.[2016 (5) TMI 55 - ITAT CHANDIGARH]. The decisions cited by ld. D.R. in the written submission would not support case of the Revenue. Appeal of the assessee is allowed.
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