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Income Tax - Case Laws
Showing 301 to 320 of 10077 Records
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2019 (12) TMI 959
Addition u/s 68 - genuineness of the transaction, creditworthiness & identity of the creditors - HELD THAT:- We are not inclined to accept to the finding of the ld. CIT(A) with M/s.Rabna Holdings Ltd. is only a mere pass through entity and M/s. Amas Ltd., being incorporated in Bahamas is found to be a tainted entity. All these observations of the CIT(A) are purely without any basis and not supported by any material evidences brought on record.
This is a classic case of the CIT(A) disbelieving the information obtained by CBDT, FT & TR division from Mauritian tax authorities under exchange of information in terms of Section 90 of the Act and relevant DTAA Article. AR placed on record various case laws in support of its contentions. Since this is purely a factual matter, we do not find it necessary to look into those case laws as in our considered opinion, assessee had duly established three necessary ingredients of Section 68 of the Act of facts and on merits duly supported by all documentary evidences. In view of the aforesaid observations, we direct the ld. AO to delete the addition made in the sum of ₹ 155 Crores u/s.68 of the Act. Accordingly, the ground Nos.1 to 4 raised by assessee are allowed.
Addition made under the head ‘income from house property’ in respect of unit No.701 in the building Marvella - HELD THAT:- Assessee had genuine intention to let out unit No.701 along with other units in the same premises and derive rental income thereon. But due to circumstances beyond its control, it could not do so till 31/12/2014 in respect of unit no. 701 alone and ultimately the said unit after making certain structural corrections had been let out to Hinduja Healthcare Ltd., from 01/01/2015 onwards and rental income derived thereon. Hence, for A.Y.2014-15, this property was not let out as it was remaining vacant and hence, the annual letting value in terms of Section 23(1)(c) of the Act should have to be determined at Rs. Nil. We direct the ld. AO to determine the Annual Letting Value (ALV) of Unit No.701 at Rs. Nil and delete the addition made thereon. Accordingly, the ground No.5 raised by the assessee is allowed.
Disallowance u/s.14A under normal provisions - HELD THAT:- From the perusal of the balance sheet, we find that assessee had got sufficient own funds in its kitty and hence, there is no need to make any disallowance of interest under second limb of rule 8D(2) of the rules. Accordingly, by placing reliance on the decision of Hon’ble Jurisdictional High Court in the case of HDFC Bank [2018 (1) TMI 883 - ITAT MUMBAI] and Reliance Utilities and Power Pvt. Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT] we direct the ld. AO to delete the disallowance made under second limb of rule 8D(2) of the rules.
With regard to the third limb, we hold that only investments that had yielded exempt income should be considered and the ld. AO is directed to recompute the disallowance under third limb of rule 8D(2) of the rules accordingly. The disallowance made under first limb of rule 8D(2) will remain.
Disallowance u/s.14A of the Act r.w.r.8D of the rules while computing book profits u/s.115JB - HELD THAT:- Special Bench of Delhi Tribunal in the case of Vireet Investments [2017 (6) TMI 1124 - ITAT DELHI] had held that the computation mechanism provided in rule 8D(2) of the rules cannot be imported into clause of Explanation-1 to section 115JB (2) of the Act. The Special Bench further held that the disallowance of expenses under Clause f need to be made based on actual expenditure debited to profit and loss account by the assessee by clearly identifying the same for the purpose of earning exempt income. Hence, we deem it fit and proper to remand this issue to the file of the ld. AO for denovo adjudication
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2019 (12) TMI 958
Disallowance u/s 14A read with rule 8D(2)(ii) and 8D(2)(iii) - assessee-company has suo motu offered an amount as disallowance under the said section - HELD THAT:- If there were funds available both interest-free and overdraft and/or loans taken, then a presumption would arise that investments would be out of the interest-free funds generated or available with the company, if the interest-free funds were sufficient to meet the investments. In this case this presumption was established considering the finding of fact both by the Commissioner (Appeals) and the Tribunal. The interest was deductible. Therefore, considering the factual position and position in law explained above, we delete the disallowance under rule 8D(2)(ii) of the Income-tax Rules.
Disallowance under rule 8D(2)(iii) - We note that in its computation of income, the assessee suo motu disallowed a sum under section 14A of the Act read with rule 8D(2)(iii), being 0.5 per cent. of the average investments yielding exempt income. The said computation is reproduced in the assessment order, page 3, point 5. We direct the Assessing Officer to restrict the disallowance to the tune of ₹ 91,07,352 under section 14A of the Act read with rule 8D(2)(iii), being 0.5 per cent. of the average investments yielding exempt income. In a nut shell we confirm the disallowance under rule 8D(2)(i) at ₹ 56,181 and under rule 8D(2)(iii) at ₹ 91,07,352. The same principles for computation of disallowance under section 14A read with rule 8D will be applicable to the assessee's appeal in I. T. A. No. 937/Kolkata/2018, therefore, the Assessing Officer is directed to compute the disallowance as per the precedents cited above and discussion made
Disallowance of prior period expenses - CIT(Appeals) rejected the claim of the assessee holding that since the assessee followed the mercantile system of accounting and as such the impugned expenditure can only be allowed in the year to which it pertains - HELD THAT:- Since the bills were not received, it was not possible to make provisions for such expenses in the accounts of the preceding year ending on March 31, 2009. On receipt of these bills relating to earlier year, these payments were made in the current year. These prior period expenses, which were claimed in the current year, were not debited in the books of the preceding year and accordingly were not claimed by the assessee in the assessment year 2009-10. The said expenses of ₹ 4,06,487 was claimed by the assessee in the assessment year 2010-11, hence we allow the claim of the assessee. Therefore, we delete the addition
Addition of notional interest - HELD THAT:- Keeping in view all these facts of the case and applying the rule of consistency, we uphold the impugned order of the learned Commis sioner of Income-tax (Appeals) deleting the disallowance made by the Assessing Officer on account of interest allegedly attributable to the interest-free loans given by the assessee-company to its subsidiary companies and dismiss ground No. 3 of the Revenue's appeal
Disallowance of compensation paid to M/s. Conforms Pvt. Ltd, a related company under section 40A(2)(b) - HELD THAT:- The payment was made in respect of vacation of the property so occupied by such company. We find substance in the learned counsel's argument that the payment was made by the assessee after much negotiation and it was a separate entity and correspondences had occurred between the assessee and the said company to settle the amount. Even if the agreement was not there but the relevant correspondences duly prove that the payment was for the vacation of the impugned premises which was vacated by the said company. Hence, it is in accordance with the business of the assessee and the same is allowable. That being so, we decline to interfere with the order of the learned Commissioner of Income-tax (Appeals) in deleting the aforesaid addition. His order on this issue is, therefore, upheld and the grounds of appeal of the Revenue is dismissed.
Treating the Government securities within the meaning of 'bonds' for the purpose of the third proviso to section 48 of the Act and erred in dismissing the assessee's claim for indexed loss - HELD THAT:- as per section 2(42A) expression "security" shall have meaning assigned to clause II of the Securities Contracts Regulation Act, 1956 which includes Government securities. The facts of this case are squarely applicable to the present case of the assessee. Therefore, respectfully following the judgment of the co-ordinate Bench in the case of Sundaram Finance Limited [2017 (7) TMI 661 - ITAT CHENNAI] we note that it is abundantly clear that the Government securities are entitled to indexation benefits. Therefore, we note that the Government securities are different from bond and debenture for the purpose of the third proviso to section 48 of the Act (4th proviso after amendment) and therefore the benefit of indexation should be granted to the assessee on the redemption of these Government securities.
Deduction u/s 37(1) on account of education cesses paid by the assessee - HELD THAT:- Education cess being not "Income-tax" is allowable as deduction under section 37(1) of the Act. For this, we rely on the judgment of ITC Ltd. [2018 (11) TMI 1611 - ITAT KOLKATA] wherein it was held that education cess is an allowable expenditure under section 37(1) of the Act. Therefore, we direct the Assessing Officer to verify all the relevant facts and allow education cess as deduction under section 37(1) of the Act.
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2019 (12) TMI 922
Reopening of assessment - taking into consideration the jantri value of the land sold by the petitioner - as submitted that the reasons recorded for reopening the assessment are erroneous inasmuch as section 50C of the Act does not require the land to be valued at the jantri rate, but as per the valuation made by the Stamp Valuation Authority - HELD THAT:- Having regard to the submissions advanced by the learned advocate for the petitioner, issue Notice, returnable on 27.01.2020.
By way of ad-interim relief, further proceedings pursuant to the impugned notice dated 31.03.2019 issued under section 148 of the Act for assessment year 2012-13 are hereby stayed.
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2019 (12) TMI 921
Revision u/s 263 - assessee had obtained certain unsecured loans during the year in question - case was selected for limited scrutiny through CASS and notice u/s 143 (2) was issued and on being satisfied the Assessing Officer accepted the return income of the assessee - HELD THAT:- Documents relating to the persons who had granted the loans had not only been submitted before the Assessing Officer but had also been produced before the Commissioner and at no stage was it pointed out that from a perusal of those documents, a case was made out for further requiring the assessee to obtain the balance sheets of all those persons and the Tribunal in these circumstances firstly held that the Commissioner erred in holding that the bank statement and the income tax returns had not been filed before the Assessing Officer and secondly the Tribunal noticed and further held no infirmity has been pointed out by the Ld. Pr. CIT in the same in his entire order which would show that the creditworthiness of the loanees was doubtful and the AO having not taken cognizance of the same had committed an error causing prejudice to the Revenue.
We fail to understand the relevance of the balance sheet of the loanees for establishing their creditworthiness when all other relevant documents for the same, i.e. return of income of the loanees and copy of their bank statement from which the loans were advanced were filed and no adverse observation with respect to the same has been made by the Ld. Pr. CIT effecting the creditworthiness of the loanees. - Decided against revenue
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2019 (12) TMI 920
Centralization of case - centralized for administrative requirement or other reasons - HELD THAT:- In the present case, when the survey was conducted on 3.8.2016 a detailed questionnaire was put to the Chairman-cum-Managing Director of the petitioner, and the replies he had given to the questions clearly indicate that he was well aware of the reasons for which the exercise was being carried out. It is not a case where the assessee was left in the dark, not knowing what the reasons were for the centralization of its case.
A perusal of the pleadings and the documents shown to us (in a sealed cover) reveal that the petitioners had full and complete knowledge of the reasons which had weighed with the competent authority while passing the order of centralization of the cases. The petitioners in the replication have also strangely not denied any of the averment made by the Revenue in the preliminary objections of their written statement. In fact, as rightly pointed out by counsel for the Revenue, totally vague and evasive replies have been given to paragraph No.2 of the written statement and there is no categoric denial to the averment that the petitioners were connected in some manner to the Augusta Westland case and to the Gautam Khaitan Group of companies.
In our considered opinion, because of the possibility of the involvement of the assessee in a scam having international ramifications it may not have been possible for the Revenue department to have expressed or given more reasons than what were given in the impugned order and, in the facts of the present case this would be in the larger public interest; particularly when we find that the reasons were well knows to the petitioners.
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2019 (12) TMI 919
Declaration filed under the Income Declaration Scheme, 2016 (IDS) rejected - payment of advance claimed to be adjusted - failure to pay the tax, surcharge and penalty on the undisclosed income declared by him before the due date, i.e., September 30, 2017 - HELD THAT:- Once the tax deducted at source relevant for the period covered by the declaration filed under the Income Declaration Scheme is given credit as per the Central Board of Direct Taxes' clarification itself, there is no logic as to why advance tax paid for the very same period, which has not been given credit to earlier, should not be adjusted against the amount payable under the Income Declaration Scheme. In the case on hand, the declaration of the petitioner pertains to the assessment years 2010-11 to 2015-16. The advance tax of ₹ 1,10,000 was paid by him for the assessment year 2013-14. Admittedly, there was no regular assessment for the said year, whereby the said advance tax could have been adjusted. Therefore, there is no logic or rationale in denying the petitioner credit of this amount while computing the amount payable by him under the Income Declaration Scheme.
The writ petition is accordingly allowed setting aside the impugned pro- ceedings dated February 6, 2018 passed by the Principal Commissioner of Income-tax-6, Hyderabad, rejecting the declaration filed by the petitioner under the Income Declaration Scheme, 2016. The said declaration shall be considered afresh by the Principal Commissioner of Income-tax-6, Hyderabad, duly giving credit not only to the tax deducted at source but also to the advance tax paid by the petitioner for the assessment year 2013- 14.
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2019 (12) TMI 918
Addition u/s 69 - assessee had purchased two properties during the year under consideration and stated that he had taken loan from relatives in part and rest was invested out of his own sources - HELD THAT:- Contention of the assessee was not accepted by the Ld. CIT(A) on the ground that the assessee has been changing his stance. Assessee has also furnished certain documentary evidences demonstrating that the joint owner of the property being brother of the assessee has also contributed for the acquisition of property as he made remittances from Kuwait. It is a fact that the assessee has been changing his stand but it is also fact that the assessee has filed certain evidences in support of his contention that the brother of assessee remitted certain amounts from Kuwait who happened to be co-owner of the properties in question.
There is no finding by the lower authorities as to what happened to money which the assessee claimed to have received as gift/loan. Under these facts, we deem it proper to restore this issue to the file of the Ld. CIT(A) to decide the issue afresh after examining the aspect of remittance by the co-owner of the property and also the loan/gift claimed by the assessee. Ground of the assessee’s appeal is allowed for statistical purposes.
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2019 (12) TMI 917
Penalty levied u/s.271(1)(c) - income declared during the course of survey - HELD THAT:- AO should be clear as to which of the two limbs under which penalty is imposable, has been contravened or indicate that both have been contravened while initiating penalty proceedings. It cannot be that the initiation of penalty proceedings would be on both the limbs i.e. “for furnishing inaccurate particulars of income” or “concealment of income” or without any limbs of Section 271(1)(c) of the Act. The Assessing Officer has to mention specific limbs while imposing penalty u/s.271(1)(c) of the Act.
The sanctity in terms of natural justice with regard to this proposition is that the assessee under the scheme of welfare legislation which is embedded in the Income Tax Act, 1961 should get an opportunity to prepare himself for the defense as regards to the exact charge on which penalty is imposed upon him u/s. 271(1)(c) of the Act. In the instant case, the charge is vague and therefore, levy of penalty is not warranted. Appeal of the assessee is allowed.
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2019 (12) TMI 916
Reopening of assessment u/s 147 - as argued approval granted by the Addl. CIT, Range-16, New Delhi is a mechanical and without application of mind - HELD THAT:- Approval granted by the Addl. CIT, Range-16, New Delhi is a mechanical and without application of mind, which is not valid for initiating the reassessment proceedings issue of notice u/s. 148 and is not in accordance with section 151 of the I.T. Act, 1961, thus, the notice issued u/s. 148 of the Act is invalid and accordingly the reopening in this is bad in law and therefore, the same is hereby quashed. Accordingly, the legal ground no. 1 raised by the assessee is allowed.
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2019 (12) TMI 915
TDS u/s 194A - Disallow of interest u/s 40(a)(ia) - non deduction of TDS - HELD THAT:- The amendment to section 194A was expressly provided from the prospective date of 1st June 2015 but not retrospectively. In the instant case the A.Y. involved is 2014-15, hence, the amendment to section 194A has no application in assessee’s case. Since the facts are identical and the Ld.CIT(A) followed the order of this Tribunal, we decide the issue in favour of the assessee and uphold the order of the Ld.CIT(A). The revenue’s appeal on this ground is dismissed.
Amortization of government securities - HELD THAT:- The assessee is required to maintain 25% of its demand and time liabilities in the form of liquid assets as per the provisions of section 24 of the Banking Regulation Act, 1949. In compliance with these provisions, the assessee purchased some government securities. As per the RBI guidelines, where the cost of acquisition of these securities is more than their face value, such excess amount has to be amortised over the remaining period of maturity. The assessee claimed towards amortization for the impugned assessment year. The AO treated the same as contingent liability and disallowed the same. Against which the assessee went on appeal before the CIT(A) and the CIT(A) allowed the appeal of the assessee following the order of this Tribunal in the assessee’s own case for the A.Y. 2012-13 and 2013-14 - Issue is remitted back to the file of the AO with a direction to decide the appeal afresh as per the directions given by the Ld.CIT(A) and also keeping in view of latest direction of the RBI
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2019 (12) TMI 914
Penalty u/s.271(1)(c) - penalty is leviable either for ‘concealment of income’ or ‘furnishing of inaccurate particulars of income’ - Assessee filing revised return disclosed his entire income in totality and have paid taxes - HELD THAT:- Revised return was accepted and taxes paid accordingly. No further addition was made by the AO in the case of the assessee. In such scenario, in the instant case of the assessee as well, no penalty u/s.271(1)(c) of the Act can be imposed.
While levying penalty u/s.271(1)(c) AO has recorded his satisfaction at the time of framing original assessment order based on the original return filed by the assessee u/s.139(1) of the Act. That however, while survey was conducted which resulted in levy of the penalty, during that time no separate satisfaction was recorded by the AO before initiation of penalty proceedings. This is also not legally permissible as observed by the Pune Bench of the Tribunal in the case of Ashok S. Agarwal Vs. the Deputy Commissioner of Income Tax [2018 (6) TMI 1678 - ITAT PUNE] .
It is not a fit case for levy of penalty u/s.271(1)(c) of the Act. Hence, we set aside the order of the Ld. CIT(Appeal) and direct the Assessing Officer to delete the penalty from the hands of the assessee. Appeal of the assessee is allowed.
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2019 (12) TMI 913
Revision u/s 263 - assessment was completed u/s. 143(3) - HELD THAT:- The way in which assessment should be finalized falls in the exclusive domain of the AO. Section 142(1) speaks of inquiry before assessment and gives immense power to the A.O. for conducting enquiry. Therefore, the A.O. u/s 142(1)(ii) & (iii) can ask the assessee almost any information which he think necessary for passing assessment order. The assessing officer has conducted a detailed scrutiny and thorough enquiry in respect of capital introduced and labour charges. After going through the information furnished by assessee, we note that it is not a case of inadequate scrutiny as noted by the ld CIT in his order u/s 263 of the Act.
Thorough examinations of the details and documents and explanations submitted by the A.R. of the assessee (in respect of labour charges and capital introduced), as per requisitions sought by the A.O. and as deemed fit for computing the true taxable income, the assessment was completed u/s. 143(3) of the Act, therefore, it is not a case of inadequate scrutiny hence the order passed by the AO is neither erroneous nor prejudicial to the interest of Revenue, therefore, we quash the order passed by ld PCIT under section 263 of the Act.
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2019 (12) TMI 912
Deduction on account of interest u/s 36(1)(iii) - as per DR before us is that the case of the assessee of commercial expediency behind the incurring of interest expenditure in question was not substantiated by any documentary evidence and the CIT(A) accepted the case of the assessee without considering this vital aspect - HELD THAT:- In the present case, the commercial expediency of the interest expenditure in question was duly established by the assessee and on appreciation of the relevant facts of the case of the assessee as well as keeping in view the decision in the case of S.A. Builders [2006 (12) TMI 82 - SUPREME COURT] as well as Reliance Communications Infrastructure Ltd. 2006 (12) TMI 82 - SUPREME COURT] the claim of the assessee for the interest expenditure was allowed by the Ld. CIT(A). We, therefore, find no merit in the contention of the DR that the claim of the assessee for interest expenditure was allowed by the CIT(A) without considering the vital aspect of commercial expediency. In our opinion, when the relevant borrowed funds were utilised by the assessee company for making investment in its subsidy engaged in the same business, the business purpose of the investment as well as its commercial expediency was duly established and the interest paid by the assessee on the borrowed funds was allowable as deduction u/s 36(1)(iii) as held interalia by the Hon’ble Supreme Court in the case of S.A. Builders (supra) as well as by the Hon’ble Bombay High Court in the case of Reliance Communications Infrastructure Ltd. (supra). - Appeal of the Revenue is dismissed.
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2019 (12) TMI 911
Capital gain computation - CIT(A) in not considering the date of agreement as the date of purchase for computation of capital gain u/s 48 - HELD THAT:- For the computation of the capital gain arisen out of the aforesaid sale, the assessee has taken the date of purchase of the above property as 31.01.2009 which is the date of agreement to purchase as against the actual date of purchase i.e., 21.03.2013.
As find the AO treated the date of purchase of the property as 21.03.2013 and determined the gain arising on sale of the property as short-term capital gain whereas, according to the assessee, the property is a long-term capital asset since the holding period is more than 36 months if the date of agreement to purchase the property is considered as the date of acquisition.
In the case of Nilam R. Kataria [2019 (6) TMI 1052 - ITAT AHMEDABAD] after considering the various decisions, came to the conclusion that the period of holding of the asset has to be considered from the date of allotment of the property and not from the date of actual registration.
We direct the AO to consider the date of agreement to sell as the date of acquisition and accordingly compute the long-term capital gain. The grounds raised by the assessee are accordingly allowed.
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2019 (12) TMI 910
Reopening of assessment u/s 147 - as argued reasons recorded and satisfaction / approval accorded is not within the meaning of section 151 - HELD THAT:- Approval granted by the Pr. CIT-4, New Delhi is a mechanical and without application of mind, which is not valid for initiating the reassessment proceedings, because from the aforesaid remarks, it is not coming out as to which material; information; documents and which other aspects have been gone through and examined by the Pr. CIT-4, New Delhi for reaching to the satisfaction for granting approval. Thereafter, the AO has mechanically issued notice u/s. 148 of the Act. The judicial decisions relied upon by the Ld. Sr. DR, have been duly considered. Reopening in the case of the assessee for the asstt. Year in dispute is bad in law and deserves to be quashed. - Decided in favour of assessee.
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2019 (12) TMI 909
Revision u/s 263 - Characterization of interest earned on funds primarily brought for infusion in the business - HELD THAT:- PCIT while reading the provisions of section 263 of the Act and the decision of Hon’ble Apex Court in the case of M/s. Tuticorin Alkali Chemicals and Fertilizers Ltd [1997 (7) TMI 4 - SUPREME COURT] reached a conclusion that inasmuch as there was no specific inquiry by the Assessing Officer, the assessment order was erroneous in so far as it is prejudicial to the interest of Revenue. He does not conduct any independent enquiry to reach the conclusion that the assessment order was erroneous in so far as it is prejudicial to the interest of Revenue.
If we accept the submission of the ld. DR that since all the material was available on record, there was no need for the PCIT to conduct any further inquiry, it also inures to the benefit of the assessee because all these things are available on record and the assessee specifically submitted that the difference in the ITR and 26AS occurred because of the adjustment of the interest received against the project expenditure. Admittedly, this is the only project conducted by the assessee and there is no other project. In such an event, it is not the passive submission to be recorded to the AO, but also actively pleading before him that the interest received was adjusted against the project expenditure.
Hon’ble jurisdictional High court considered the decision of the Hon’ble Apex Court in the case of M/s. Tuticorin Alkali Chemicals and Fertilizers Ltd.(supra) and Bokaro Steel Ltd. [1998 (12) TMI 4 - SUPREME COURT] in Indian Oil Panipat Power Consortium Ltd. Vs. ITO [2009 (2) TMI 32 - DELHI HIGH COURT] and held that the interest earned on funds primarily brought for infusion in the business could not have been classified as income from other sources. Further, unlike in the case of M/s. Tuticorin Alkali Chemicals and Fertilizers Ltd.(supra), in the case on hand, the assessee had already commenced business.
Viewing from another angle, we are of the considered opinion that the ld. PCIT is not justified in invoking the jurisdiction u/s. 263 of the Act or to hold that the assessment order is erroneous or prejudicial to the interest of Revenueand we find it difficult to sustain the same. Hence, we allow the ground appeal.
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2019 (12) TMI 908
Penalty u/s 271(1)(c) - search proceeding carried out under section 132 - whether the assessee can be visited with the penalty with respect to the income disclosed by him in such proceedings voluntarily and without finding any incriminating document during the course of search? - HELD THAT:- Assessee has already disclosed impugned long term capital gain in the return filed under section 139 of the Act. But the addition in the assessment framed under section 153A r.w.s. 143(3) of the Act was made on account of the difference in the rate adopted by the assessee vis-a-vis adopted by the Revenue as on 1st April 1981. The assessee has taken the rate at ₹ 84.80 per square feet for the acquisition of the land whereas the AO has adopted the rate at ₹ 15 per square feet for the acquisition of such land as on 1-4-1981. Thus the addition was made on account of the difference in the rate and not on the basis of any incriminating document found during the course of search.
Additional income in the return filed under section 153A of the Act was voluntarily and without having found any income/documents by the Revenue in the manner provided under explanation 5A to section 271(1)(c) of the Act. As such, there was not found any undisclosed income by the Revenue in the course of such conducted under section 132 of the Act. Thus, it is inferred that such addition was not based on the document found during the course of search.
There cannot be any penalty under explanation 5A to section 271(1)(c) of the Act until and unless it supported on the basis of incriminating document.
At the time of the hearing, a query was raised to the Ld. DR whether the income disclosed by the assessee in pursuance to the search was based on the incriminating document, but he failed to bring any material on record. Therefore, in the absence of any documentary evidence, we infer that the additional income offered to tax cannot be subject to the penalty under explanation 5A to section 271(1)(c) of the Act. - Decided in favour of assessee
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2019 (12) TMI 907
Disallowance in respect of bad debts - bad debts comprising of settlement of claims and appended a note no. 31 to financial statements to that effect and not acknowledged by Reliance entities as debts - AO rejected the claim of the assessee by holding that the amounts written off were sham transactions and was a methodology to reduce tax liability in the hands of the assessee - CIT(A) partly allowed the appeal of the assessee - HELD THAT:- Revenue has not disputed the dealings by the assessee company with Reliance entities which have been offered by the assessee to tax. We are also not in agreement with the findings of the CIT(A) that the said transactions were sham transactions especially when the revenue offered by the assessee has accepted by the Revenue authorities. Moreover, the issue is squarely covered by the decision of the Hon'ble Supreme Court in the case of T.R.F. Ltd. [2010 (2) TMI 211 - SUPREME COURT] wherein held that once the debts are written off as irrecoverable, that is sufficient and assessee is not required to prove that the debt has actually become bad during the year.
Thus order of the learned CIT(A) cannot be sustained as the assessee has written off the bad debts as same have been offered to tax by the assessee in the earlier year and accepted by the Revenue - Decided in favour of assessee.
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2019 (12) TMI 906
Additions on account of expenditure made on gifts given to doctors and disallowing claim of deductions u/s.35AB(1) and u/s.35(1)(iv) - HELD THAT:- We observe that in assessee’s own case for assessment year 2011-12, the Tribunal had an opportunity to examine this issue and it was brought to the notice of the Tribunal that in assessee’s own case for assessment year 2010-11 [2018 (2) TMI 52 - ITAT PUNE] the matter was decided in favour of the assessee. Thereafter, the Tribunal while deciding this issue for assessment year 2011-12 (supra.) had held that considering rule of consistency, this issue of disallowance of marketing and sales promotion expenses should be allowed in favour of the assessee and that the Circular issued by the Medical Counsel of India read with Circular issued by the CBDT do not cover the Drug making companies like the present assessee.
Claim of credit for foreign TDS - HELD THAT:- Decision of Mumbai Bench of the Tribunal in the case of JCIT Vs. Petroleum India International [2008 (9) TMI 398 - ITAT BOMBAY-E] and submitted that identical issue came before the Tribunal and the Tribunal decided the same in favour of the assessee. The Ld. Counsel further placed reliance on the judgment of the Hon’ble Jurisdictional High Court in the case of CIT Vs. Petroleum India International [2013 (2) TMI 99 - BOMBAY HIGH COURT] wherein the Hon’ble High Court has held that the object of section 91(1) is to give relief from taxation in India to extent taxes have been paid abroad for relevant previous year and this relief is not dependent upon payment also being made in previous year. We find the said issue i.e. claim of credit for foreign TDS should be allowed in favour of the assessee.
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2019 (12) TMI 905
Revision u/s 263 - tax liability under the normal provision of the Act and under section 115JB Minimum Alternate Tax - HELD THAT:- Tax liability of the assessee under the normal provisions of I.T Act comes at ₹ 42,93,91,857/-(after adjusting the disputed amount by ld PCIT), whereas the tax liability u/s 115JB-MAT comes to the tune of ₹ 53,51,67,527/- which is more than normal income tax liability. As per the scheme of the Act, the assessee is supposed to pay the income tax as per Minimum Alternate Tax under section 115JB which is more than the tax liability computed under the normal provision of the Act. If for the time being, we presume that the issue discussed by the ld. PCIT is correct and after giving the effect of the issue raised by the ld. PCIT, even then the tax liability under the normal provision would be below than the tax liability u/s 115JB of the Act therefore there is no loss to the Revenue. Therefore, we can conclude that the order of the Assessing Officer may be erroneous but it is not prejudicial to the interest of the revenue.
In order to exercise the jurisdiction u/s 263 of the Act, the ld PCIT needs to satisfy two conditions namely, i) the order is erroneous and ii) the order is prejudicial to the interest of revenue. In the assessee`s case under consideration one of the conditions “prejudicial to the interest of the revenue” is not satisfied therefore the order passed by the ld. PCIT needs to be quashed.
As the issue is squarely covered in favour of the assessee by the decision of M/s ARL Infratech Ltdin [2018 (1) TMI 1552 - ITAT JAIPUR] and there is no change in facts and law and the Revenue is unable to produce any material to controvert the aforesaid findings of the Division Bench (supra). We find no reason to interfere in the said order of the Division Bench, therefore, respectfully following the judgment of the Division Bench we conclude that order passed by the assessing officer is not prejudicial to the interest of Revenue, hence we quash the order of ld PCIT under section 263 of the Act. - Decided in favour of assessee
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