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Income Tax - Case Laws
Showing 61 to 80 of 10077 Records
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2019 (12) TMI 1540
Levy of late fee u/s 234E by way of processing TDS statement u/s 200A - assessee has argued that according to Section 200A of the Act which unable the AO to charge fee u/s 234E of the Act was prospectively made effective w.e.f. 01.06.2015, therefore, no fee u/s 234E could have been levied for the assessment years prior to 01.06.2015 - HELD THAT:- It is not in dispute that the assessee has filed the statement of tax deducted at source in ‘Form No.26Q’ for the F.Y.2014-15 delayed. AO has levied the late fees u/s 234E and interest in sum on the basis of an intimation u/s 200A - As in the case of Fatehraj Singhavi [2016 (9) TMI 964 - KARNATAKA HIGH COURT] had observed that the notice u/s 200A of the Act computing fee u/s 234E of the Act would be effective in respect of the period of tax deduction subsequent to 01.06.2015.
Since levy of fees u/s 234E of the Act was made available in Section 200A therefore, we are of the considered view that no fees u/s 234E could have been charged in the course of processing of the statement of tax deducted at source u/s 200A for the period prior to 01.06.2015, therefore, in the said circumstances, the finding of the CIT(A) is not justifiable, hence, we set aside the finding of the CIT(A) on these issues and delete the fees levied statutory dues provisions u/s 234E of the Act. Accordingly, all the issues are decided in favour of the assessee against the revenue.
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2019 (12) TMI 1539
Revision u/s 263 - case of the assessee was selected for limited scrutiny under CASS - CIT invoked the revisionary jurisdiction u/s.263 to look into the other issues relating to the assessee which were not within the purview of the limited scrutiny - HELD THAT:- In this case, the Assessing Officer has already verified those issues for which limited scrutiny was conducted. Commissioner of Income Tax wants the Assessing officer to look into various other issues of the assessee which were not covered within the purview of the limited scrutiny. This is not permitted within the framework of the Income Tax Act.
Further on perusal of the CBDT Circular and the facts of the case, it is clear that the order of the Assessing Officer is neither erroneous nor prejudicial to the interest of the Revenue. The Hon‟ble Supreme Court of India in the case of Malabar Industrial Co. Ltd. [2000 (2) TMI 10 - SUPREME COURT] has specifically held that “in order to assume the revisionary jurisdiction u/s.263, the order of the Assessing Officer must be erroneous so far as it is prejudicial to the interest of the Revenue.”
In the facts of the present case, these criteria are not met so far as the assessment order is concerned and therefore, we quash the order passed by the Ld. Pr. Commissioner of Income Tax u/s.263 - Decided in favour of assessee.
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2019 (12) TMI 1537
TDS u/s 194A - non deduction of TDS on interest paid to non-banking financial companies - Addition u/s 40(a) (ia) - HELD THAT:- Admittedly, assessee has not deducted TDS under section 194 A of the act against interest paid to nonbanking financial companies. It is also an admitted fact that the companies to whom assessee has made payments are repeated companies like M/s. L & T Finance Ltd., M/s. Bajaj Finance Ltd., M/s. Reliance Capital Ltd., M/s. India Bulls Ltd., M/s. Diamler Finance Ltd., M/s. Kotak Mahindra Bank Ltd., and M/s. Tata Capital Ltd., who are regular assessee’s under Income tax Act. As Ld. AR filed before us certificate issued by chartered accountant which was not filed before authorities below, it is necessary that the same is to be verified. We set aside this issue to Ld. AO for due verification of the facts and to consider the claim in accordance with law.
Addition on account of wages expenditure not adequately backed up by primary documents - HELD THAT:- AO has not rejected the books of accounts - as per CIT (A) there is no finding by Ld. AO that expenditure incurred and claimed by assessee is either capital in nature or personal or wholly and exclusively not incurred for the purposes of business - CIT (A) observed that no defect has been pointed out by Ld. AO in any of specific vouchers - As observed that the disallowance made by Ld. AO is on purely ad hoc basis of 10% - AO has not doubted bona fides of such expenditure. Under such circumstances we do not find any reason to interfere with the view adopted by Ld. CIT (A) and the same is upheld.
Addition u/s 14A r.w.r 8D(iii) - DR submitted that assessee earned exempt income and whenever there is an exempt income earned certain indirect/common expenditure could always be attributable to such receipts - HELD THAT:- . Admittedly assessee has earned exempt income and no new investment has been made by assessee during the year under consideration. Further Ld. CIT (A) has observed that all old investments by assessee have been carried out of internal generated funds and that no borrowed funds have been utilised for investments that have been made in the past. No infirmity in the order of Ld. CIT (A) in restricting disallowance to the extent of exempt income earned during the year.
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2019 (12) TMI 1535
Stay of demand - petitioner has challenged an order passed by the Income Tax Appellate Tribunal, Mumbai imposing a condition of depositing further sum of ₹ 25 crore in two equal instalments to enable the petitioner to enjoy stay against further recoveries in relation to the petitioner’s appeal before the Tribunal concerning the assessment year 2011-12 - HELD THAT:- Till date the respondents have not fled any reply. The Writ Petition is admitted. The respondents waive service.
Income-tax Appellate Tribunal, Mumbai shall not insist on the petitioner depositing the amount as directed by its order dated 4th September, 2019. This order is passed without prejudice to the rights and contentions of the parties. The Income-tax Appellate Tribunal, Mumbai is not precluded from proceeding further with the hearing of the appeal on the date fixed or any date thereafter.
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2019 (12) TMI 1533
TP Adjustment - prescribed method as prescribed under section 92C - determining the arm length price of the international transactions without following any of the prescribed method as prescribed under section 92C - HELD THAT:- As in respect of advance given to AE which has been written off by the assessee, the TPO has taken the ALP of the international transaction of writing off of the bridge fee as nil and an equal adjustment has been proposed to be made in the aggregate value of international transactions reported by the assessee. Similarly, in respect of service fees for purchase of franchise, the ALP of the international transaction has been taken at nil and equal adjustment is proposed.
In both these transactions, we observe that no prescribed method has been followed by the TPO as envisaged by the provisions of section 92C of the Act. The Ld. DRP has also upheld the order of TPO while allowing some relief on the additions proposed. In our view the TPO is duty bound to propose additions/adjustments in ALP after following any of the methods as prescribed in section 92C of the Act. See M/S. JOHNSON & JOHNSON LTD. [2017 (3) TMI 1520 - BOMBAY HIGH COURT] and M/S. KODAK INDIA PVT. LTD. [2016 (7) TMI 677 - BOMBAY HIGH COURT]
In both the decisions, the Hon’ble Bombay High Court has held that it is obligatory on the TPO to follow one of the method as mandated by provisions of section 92C of the Act and therefore we are inclined to set aside the order of DRP/TPO and direct the AO to delete the additions. - Decided in favour of assessee.
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2019 (12) TMI 1530
Revision u/s 263 - whether the AO has made enquiries about issue under consideration? - CIT noticed that the assessee has debited in the Profit & Loss Account toll Plaza expenses which included expenses of computer expenses and on weigh bridge expenses - HELD THAT:- Pr.CIT has not specified that which enquiries were ought to have made. The assessee further submitted that the Pr.CIT in his notice himself mentioned that the assessee examination of records showed the discrepancies, which means that the details were on record and were examined by the AO. Explanation 2 to section 263 was inserted with effect from 01.06.2015, hence, same is not applicable for the assessment year under consideration as it is not retrospective in nature.
The assessment order passed after verification and enquiry is not erroneous and prejudicial to the interest of the Revenue. Merely just because the view taken by the AO was not found acceptable does not mean that the AO has failed to make requisite enquiries. If the answer is affirmative then second question arises whether the acceptance of the claim by the AO was a plausible view or on the facts of the finding on the facts that the said finding of the AO can be termed as sustainable in law.
We find that vide questionnaire, the assessee was asked regarding Toll Plaza expenses consisting computer and weigh bridge expenses, court fee expenses, which were appropriated in new contractor account, the court fee expenses and recovery suit expenses were relating to business of the assessee licence fee, Ahatas income is duly shown as para copy of ledger account filed. The assessee had furnished his reply, which is found placed in the Paper Book Pages as referred above.
AO had made enquiries under Limited scrutiny assessment. We find that the AO has made due enquiries and had taken a plausible view, hence, same, cannot be disturbed by Pr.CIT in the name of further, verification and framing fresh assessment. Since the AO has made during enquiry and examined the issues, hence, invocation of Explanation 2 of section 263 is not justified no it is applicable for the assessment year under consideration as it was inserted with effect from 01.06.2015.
Pr. CIT has not done any enquiry and not suggested what enquiries were to be carried out. In view of this matter, and relying on above mentioned judicial pronouncements, we find that twin condition were not satisfied for invoking the jurisdiction under section 263 of the Act. Therefore, in absence of the same the Ld. Pr. CIT was not correct in exercise the jurisdiction under section 263 of the Act and setting aside assessment for making denovo and accordingly, we quash the impugned order passed under section 263 of the Act and allow the appeal of the assessee. Appeal of the assessee stands allowed.
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2019 (12) TMI 1523
Income received or deemed to be received in India - Business Income OR Royalties OR Fees for technical services - proof of business connections in India - payment pertains to business proposed to be carried out outside India - liability of withholding tax on premium payments - proposed payments by the applicant to VIVO for the grant of exclusive right to offer ring back tone Services to VIVO's customers in Brazil would be considered to be received or deemed to be received in India - applicant submits that the taxability of the amount of premium paid by the applicant to VIVO is required to be examined under the provisions of the Income-tax Act, 1961 and the provisions of the applicable Double Taxation Avoidance Agreements (DTAA "Tax Treaty"), whichever is more beneficial - HELD THAT:- Applicant received information and contents from VIVO, and thereupon value added products were developed by the applicant. The above replies of the applicant and flow chart submitted by the learned authorised representative confirms in unequivocal terms that the software and content development and customisation of services and testing of products were to be carried out by the applicant in India.
Applying the logic of CIT v. Havells India Ltd. [2012 (5) TMI 449 - DELHI HIGH COURT] to our facts we conclude that the source of premium payment is based in India as all value-added activities are located in India. The case of the applicant does not fall under the second limb of exclusion under section 9(1)(vi)(b). Thus, under the Income-tax Act, the payments are taxable as royalty in the hands of VIVO under the deeming provisions of section 9.
The applicant has kept a database, nurtured by commercial experience, relating to its mobile services which was being made available to the applicant and this valuable right has been shared with the applicant on exclusive basis and this is clearly in the nature of commercial information and experience which is shared with the applicant and the consideration paid is thus covered under article 12(3) of the treaty.
Since we have held that the payments are in the nature of royalty, we are not commenting on the pleas raised by either side for inclusion/exclusion of premium payment as fee for technical services. Suffice it to say that in relation to premium payments no services were rendered by VIVO in India or in Brazil and thus the captioned payment cannot be treated as fees for technical services.
Ruling:
(a) and (b). The payment of ₹ 12.70 million by the applicant to VIVO for the grant of exclusive right to offer ring back tone services to VIVO's customers in Brazil is income deemed to accrue or arise in India in terms of section 9(1)(vi)(b) as royalties.
(c) The amount payable by the applicant is taxable in India under the provisions of the India-Brazil tax treaty as royalties.
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2019 (12) TMI 1522
Order passed by CIT u/s 264 - rejecting the prayer of the petitioner, on the ground, that the petitioner has not filed the copy of the Auditor Statement under Section 80 JJAA - HELD THAT:- As petitioner submitted that the issue can be decided by the respondents in the light of the decision of the Madras High Court in The Commissioner of Income Tax vs. AKS Alloys P.Ltd.[2011 (12) TMI 39 - MADRAS HIGH COURT] and in The Commissioner of Income Tax vs. Punjab Financial Corporation [2001 (12) TMI 50 - PUNJAB AND HARYANA HIGH COURT] and the decision of GM Knitting Industries P. Ltd [2015 (11) TMI 397 - SC ORDER]. Since the issue was covered by the aforesaid decisions, the impugned order is set aside. This case is remitted back to the Commissioner of Income Tax to pass appropriate orders after considering the aforesaid decisions.
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2019 (12) TMI 1521
Revision u/s 264 - Deduction u/s 80JJAA denied - rejecting the prayer of the petitioner, on the ground, that the petitioner has not filed the copy of the Auditor Statement under Section 80 JJAA - HELD THAT:- Issue can be decided in the light of the decision of AKS Alloys P.Ltd. [2011 (12) TMI 39 - MADRAS HIGH COURT] the decision of the Full Bench of High Court of Punjab and Haryana in The Commissioner of Income Tax vs. Punjab Financial Corporation [2001 (12) TMI 50 - PUNJAB AND HARYANA HIGH COURT] and the decision of GM Knitting Industries P. Ltd [2015 (11) TMI 397 - SC ORDER] Since the issue was covered by the aforesaid decisions, the impugned order is set aside. This case is remitted back to the Commissioner of Income Tax to pass appropriate orders after considering the aforesaid decisions.
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2019 (12) TMI 1518
Deprecation on purchase of goodwill or any other business or commercial rights in view of the amendment of Section 32(1)(ii) - Whether rights acquired for acquisition of Customer Contracts falls within the expression “any other business or commercial rights of similar nature” as defined in Explanation 3 to Section 32(1)(ii)? - HELD THAT:- In view of the above factual aspects and legal position and the co-ordinate Bench decision in assessee’s own case in . [2018 (8) TMI 2049 - ITAT MUMBAI] for AY 2012-13, we are of the view that the contracts which are part of Slump sale agreement i.e. business purchase agreement form part of intangible assets in term of explanation 32(1)(ii) of the Act. Hence, we find no infirmity in the order of CIT(A) allowing the claim of depreciation of the assessee, we confirm the order of CIT(A).
Addition made while computing book profit u/s 115JB - HELD THAT:- Assessee has made claim of exclusion of amortization of intangible assets, including goodwill, fee paid to consultants and expenses incurred for acquisition of business of DC Gupta construction Pvt. Ltd while computing book profit under section 115JB of the Act. We noted that the AO made addition in the book profit of the assessee but the facts are that the provisions of Sec. 115JB of the Act requires that net profit should be prepared in accordance with Part II and III of Schedule VI to Companies Act.
In the instant case, because of specific accounting treatment followed by the assessee pursuant to High Court order, the financial statements are not showing true and fair view and are contrary to Accounting Standards, provisions of Companies Act and Schedule VI thereto. In the instant case, what has been done pursuant to High Court scheme is not affect the accounting to be made as per companies Act while arriving at the true profit as per Part II of Schedule VI and hence, the assessee is entitled to make necessary adjustment in order to incorporate the impact of the said observation to the Profit as shown in the profit & Loss account to arrive at correct Book Profit under section 115JB of the Act. Hence, the CIT(A) has rightly deleted the addition made by the AO. This ground of Revenue’s appeal is dismissed.
Reimbursement of expenses - AO disallowed the claim of reimbursement expenses by stating that the assessee has not filed the details including bills and vouchers by observing - HELD THAT:- We noted that the assessee has filed details of reimbursement of expenses and this issue is covered by the decision in the case of Vazirani Lani Developers Pvt. Ltd. [2009 (2) TMI 904 - BOMBAY HIGH COURT]. Hence, we find no infirmity in the order of CIT(A) and the same is confirmed. This issue of Revenue’s appeal is dismissed.
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2019 (12) TMI 1511
Deduction U/s 10A/10B - proportionate allocation of the head office expenses made by the A.O. while computing the profits of the units eligible for deduction U/s 10A/10B - HELD THAT:- As decided in own case [2017 (10) TMI 233 - ITAT MUMBAI] assessee is having four units based at various locations which were controlled through its headquarter. The expenditure incurred by head office like travel and conveyance, communication expenses, legal and professional charges and rates and taxes definitely is having relevance to its total business. Therefore, we are of the view that the AO was right in allocating head office expenses to the units eligible for claiming exemption u/s 10A / 10B of the Act. We further observe that there is merit in the argument of the assessee that only net expenses of head office should be allocated to the units claiming exemption u/s 10A / 10B, because the assessee is generating other income like interest on fixed deposit and rent which may have some bearing on the functioning of its units claiming exemption u/s 10A / 10B. Therefore, we are of the view that the issue needs to be re-examined by the AO in the light of the submissions of the assessee. Hence, we set aside the issue to the file of AO and direct him to consider the issue afresh after affording opportunity of hearing to the assessee.
TPA - Comparable selection - HELD THAT:- Respectfully following the order of the Tribunal in assessee’s own case for the A.Y. 2010-11 [2019 (10) TMI 1241 - ITAT MUMBAI], we do not find any infirmity in the order of the ld. CIT(A) for directing exclusion of companies namely M/s Infosys Ltd. and M/s Larsen & Turbo Infotech Limited from the final set of comparables.
M/s Zylog Systems Limited, the ld CIT(A) has directed for exclusion after recording a finding to the effect that it is a giant in its area of operation and assumes greater risks translating into higher profitability. Thus, this giant sized company with advantages such as brand, intangibles etc. cannot be compared to a company such as the assessee company which is a captive unit of his AE assuming only limited risks. After recording a similar finding, the ld. CIT(A) also excluded Infosys Lt., which is already covered by the order of the Tribunal. The ld DR could not place on record any material so as to persuade us to deviate from the finding of the ld. CIT(A).
Functional comparability M/s Thirdware Solutions Ltd. and M/s Kals Information Systems Ltd. with the software development service segment of the assessee - We had carefully perused the order of the Tribunal [2019 (10) TMI 1241 - ITAT MUMBAI] and found that exactly on the similar facts and circumstances, the Tribunal have confirmed the action of the ld. CIT(A) for exclusion of these companies from the set off final comparables. The ld DR has fairly conceded the fact that the issue is covered by the order of the Tribunal - we do not find any infirmity in the order of the ld. CIT(A) for excluding these comparables.
Working capital adjustment while determining the arm’s length price of the international transaction in the nature of provision of software development services - HELD THAT:- As the facts and circumstances during the year under consideration are pari materia, accordingly, we direct the A.O. to grant working capital adjustment while determining the ALP for international transaction in terms of direction given by the Tribunal in [2019 (10) TMI 1241 - ITAT MUMBAI]
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2019 (12) TMI 1508
Depreciation on crawler cranes/trailers - Whether the crawler cranes/trailers are in the nature of Plant & Machinery and thus eligible for depreciation @15% and not eligible for higher depreciation of 30%? - HELD THAT:- As relying on own case [2017 (12) TMI 644 - ITAT MUMBAI] we do not find any merit in action of lower authorities for declining higher claim of depreciation at 30% on Crawler Cranes and Dozers - Decided against revenue.
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2019 (12) TMI 1507
Depreciation on crawler cranes/trailers - Whether the crawler cranes/trailers are in the nature of Plant & Machinery and thus eligible for depreciation @15% and not eligible for higher depreciation of 30%? - HELD THAT:- As decided in own case[2017 (12) TMI 644 - ITAT MUMBAI] in view of the above discussion and considering judicial pronouncements as quoted above we do not find any merit in action of lower authorities for declining higher claim of depreciation at 30% on Crawler Cranes and Dozers. Appeal of the Revenue is dismissed.
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2019 (12) TMI 1504
Stay petition - ad-interim protection was granted to the Petitioner - HELD THAT:- Ad-interim protection was granted to the Petitioner - By order dated 1 October 2019, it was directed that if the order on the application for stay filed by the Petitioner is adverse to the Petitioner, then no coercive proceedings would be adopted by the Revenue for a period of two weeks. It is upon the rejection of the application for stay, the present petition is filed.
Considering the aforesaid order dated 1 October 2019 and that as we are placing the matter for final disposal on a short date i.e. on 3 January 2020 immediately upon reopening of the Court after Christmas Vacation, we are inclined to continue the protection granted by the order dated 1 October 2019.
Respondents requests that instead of 3 January the matter may be adjourned to 10 January 2020. Accordingly, the petition to stand over to 10 January 2020. The protection granted by the Court by order dated 1 October 2019 in Writ Petition to continue till the next date.
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2019 (12) TMI 1503
Assessment u/s 153A - HELD THAT:- Following the principles laid down in the case MEETA GUTGUTIA [2018 (7) TMI 569 - SC ORDER] as no incriminating material has been found in the course of search in the case of the assessee for the assessment years under appeal, the addition as made by the AO is unsustainable. Consequently, the findings of the Ld.CIT(A) on this issue stands confirmed. Appeals filed by the Revenue are dismissed.
Intimation u/s.143(1) - only restriction to the raising of the legal ground is that no new or fresh facts should be required to be brought into the proceedings or determined through the proceedings - HELD THAT:- In the present case, all the facts are emanating clearly from the assessment order and no new facts have been produced by the assessee nor are being called for determination in the present proceedings. Consequently, the legal ground is liable to be admitted and we do so.
A perusal of the provision of Section 142(1) clearly shows that the AO can issue a notice u/s.142(1) calling upon the assessee to file his return of income only when the assessee has not filed his original return of income under the provision of Section 139(1). In the present case, the assessee has filed his original return on 01.10.2015 which is a return u/s.139(1) and the said return has also been processed u/s.143(1) on 02.06.2016. The notice u/s.142(1) issued on 29.06.2016 asking the assessee to file the return of income consequently is an invalid notice and is liable to be quashed and we do so.
The assessee having filed a valid return u/s.139(1) on 01.10.2015, the time limit calling for details u/s.143(2) for the purpose of assessment expired on 30.09.2016. The notice u/s.143(2) has been issued only on 09.11.2016 which is far beyond the time stipulated under the statute. Consequently, the said notice u/s.143(2) being barred by limitation is liable to be quashed and we do so. As the notice u/s.143(2) has been quashed, the assessment becomes unsustainable and the same stands quashed.
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2019 (12) TMI 1502
Delay in e-filing of appeal - E- Filing of appeal - HELD THAT:- When the assessee admittedly filed appeal manually on 07.04.2016 and also filed electronically on 07.02.2019 and admittedly the CIT(A) has not issued any defect memo, the appeal filed electronically on 07.02.2019 would relate back to the date of originally filed the appeal manually on 07.04.2016. Therefore, there was no delay at all.
Hence, the order of the CIT(Appeals) is set aside and the entire issue raised by the assessee is remitted back to the file of the CIT(Appeals). CIT(Appeals) shall consider the appeal on merit and dispose the same in accordance with law, after giving a reasonable opportunity to the assessee. Appeal filed by the assessee is allowed.
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2019 (12) TMI 1499
Depreciation in respect of residential properties - HELD THAT:- As perused the order of the Tribunal for the A.Y. 2004-05 [2019 (4) TMI 1809 - ITAT MUMBAI] wherein the Tribunal decided this issue in favour of the assessee - as observed that the Tribunal while disposing off appeal for the A.Y. 2005-06 [2019 (4) TMI 1809 - ITAT MUMBAI] to A.Y. 2007-08 directed the Assessing Officer to allow the depreciation as claimed by the assessee on residential premises, however, it was also directed to verify the fact as to whether deduction U/s.24(a) was claimed by the assessee or not and if it is claimed the same is to be disallowed. Similar view has been taken by the Tribunal in [2019 (11) TMI 1368 - ITAT MUMBAI] for the A.Y. 2008-09 and A.Y. 2009-10 by order [2019 (11) TMI 1368 - ITAT MUMBAI]. As the facts being identical respectfully following the said decision, we direct the Assessing Officer to carry out similar exercise as directed
Disallowance of amortization of premium paid on leasehold land has been decided in favour of the Revenue in own case in [2019 (11) TMI 1368 - ITAT MUMBAI] for the A.Y. 2008-09 and A.Y. 2009-10 .
Disallowance of depreciation on toll road - Addition made towards notional interest in respect of toll road from Madhya Pradesh State Industrial Development Corporation - HELD THAT:- We restore this matter to the file of the Assessing Officer with a direction to decide the issue following the directions of the Tribunal for the A.Y. 2005-06 to 2007-08. [2019 (4) TMI 1809 - ITAT MUMBAI] This ground is allowed for statistical purpose.
Disallowance of interest on loan given to IL & FS employee welfare trust - HELD THAT:- We observe that this issue has been decided by the Tribunal for the A.Y. 2009-10 [2019 (11) TMI 1368 - ITAT MUMBAI] held that the assessee has not proved that the loan is given for the purpose of business of the assessee. Even before us the assessee could not substantiate that the loan has been given for the purpose of business of the assessee. In the circumstances, we are not inclined the disturb the finding of the Ld. CIT(A) hence, the action of the Ld.CIT(A) is sustained. Ground raised by the assessee is rejected.
Double addition to income - HELD THAT:- We are inclined to restore this issue to the file of the Assessing Officer with a direction to examine the submissions of the assessee with reference to Books of Accounts, Profit and Loss Account and balance sheet and decide the issue in accordance with law. We make it clear that if it is proved that assessee has offered excess income as claimed by the assessee the same shall not be brought to tax as it would amount double addition, though it is an inadvertent mistake of the assessee.
Disallowance of deduction u/s.36(l)(viii) - HELD THAT:- The appellant had advanced loans for infrastructural facilities to group entities which are developing the infrastructural facilities in separate company. This separate company formed as group entity develops infrastructural facility and income from this accrues to this group entities. The appellant's extended loan for development of infrastructural facilities on long term basis which is the 2nd condition which appellant has to fulfill to claim sec.36(l)(viii). As appellant is fulfilling the condition of specified entity and extending the loan for infrastructural facilities though they are group companies which are themselves developing infrastructural facilities, the appellant is eligible for deduction u/s.36(l)(viii)
Mis-match in AIR - assessee has not explained the transactions and accordingly made addition u/s.69/69B/69C - HELD THAT:- No infirmity in the order passed by the Ld.CIT(A). The Assessing Officer is directed to issue notice u/s. 133(6) of the Act to the parties mentioned in AIR and if the parties confirm that they have made payments to the assessee the same shall be treated as income of the assessee. However, the Assessing Officer shall provide complete details to the assessee to rebut the confirmations which the Assessing Officer receives from the parties. Adequate opportunity shall be given to the assessee to make its submissions; in case the Assessing Officer wants to treat any amount as income of the assessee due to the mis-match in AIR.
Allowing depreciation on computer software @60%.
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2019 (12) TMI 1498
Reopening of assessment u/s 147 - non supply of reasons of reopening to assessee - HELD THAT:- Reasons have to be recorded before assumption of Jurisdiction u/s 147 i.e. before issue of notice u/s 148 - Any developments which take place after assumption of jurisdiction u/s 147 r.w.s.148 has no relevance for deciding whether the AO had reason to believe, before assumption of jurisdiction u/s 147 of I.T.Act ( i.e. before issue of notice u/s 148 that income had escaped assessment. When such reasons are not made available by Revenue either to the assessee or to the appellate authorities we have to conclude that the onus has not been discharged by Revenue to justify assumption of jurisdiction u/s 147 through issue of notice under section 148 of Income Tax Act. When the assumption of jurisdiction u/s 147 read with section 148 of I.T.Act lacks validityt he resultant assessment order lacks legitimacy. On this ground alone, the aforesaid assessment order dated 12.12.2008 deserves to be annulled.
We further note that the Assessing Officer has not furnished reasons for issue of notice u/s 148 to the assessee in spite of order of Hon’ble Supreme Court in the case GKN Driveshafts (India) Ltd [2002 (11) TMI 7 - SUPREME COURT] whereby the Assessing Officer is bound to provide reasons recorded by him for issue of notice u/s 148 of I.T.Act to the assessee once the assessee has filed return in response to the notice issued u/s 148 of Income Tax Act.
As assumption of jurisdiction by the AO u/s 147 of I.T.Act read with section 148 of I.T.Act is based on inquiries conducted without the authority of law. We are of the firm view that assumption of jurisdiction u/s 147 r.w.s. 148 of I.T.Act on the basis of inquiries conducted without the authority of law lacks legitimacy. Assumption of jurisdiction must be held to be unauthorized, when the inquiries made for assuming the jurisdiction were unauthorized in law; and the assessment order passed in pursuance of unauthorized assumption of jurisdiction u/s 147 r.w.s. 148 of I.T. Act, also lacks legitimacy. - Decided in favour of assessee.
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2019 (12) TMI 1487
Bogus LTCG - assessee has manipulated the sale of shares within a short span of time in collusion with the brokers in order to earn tax free exempt LTCG - HELD THAT:- As noticed that the assessee has not been given a fair opportunity to prove the genuineness but the assessment has been made primarily, based on the evidences collected by the Revenue in the course of the investigation conducted by them on the brokers / share broking entities etc. This is not permissible. This being so, in the interests of natural justice, the issue of the genuineness of the transactions require re-adjudication. Since, the right to exemption must be established by those who seek it, the onus therefore lies on the assessee.
In order to claim the exemption from payment of income tax, the assessee had to put before the Income Tax authorities proper materials which would enable them to come to a conclusion. See RAMAKRISHNA DEO. [1958 (10) TMI 9 - SUPREME COURT].Thus, the AO must keep in mind that the onus of proving the exemption rests on the assessee. If the AO does have any evidence to the contrary, it is to be put to the assessee for his rebuttal. The internal communications of the Revenue are evidences for drawing an opinion on possible wrong claims but they are not the final evidence.
Thus we deem it fit to remit the issue of exemption in this appeal back to the file of the Assessing Officer for re-adjudication on the lines indicated above. Therefore, the Assessing Officer shall require the assessee; to establish who, with whom, how and in what circumstances the impugned transactions were carried out etc., to prove that the impugned transactions are actual, genuine etc. The assessee shall comply with the Assessing Officer’s requirements as per law. AO is also free to conduct appropriate enquiry as deemed fit. AO shall also bring on record the role of the assessee in promoting the company and relationship of the assessee with other promoters, role of the assessee in inflating the price of shares, etc. as had been held by the Co-ordinate Bench of this Tribunal in the case of Kanhaiyalal & Sons [2019 (2) TMI 1640 - ITAT CHENNAI] - Appeal filed by the assessee is treated as partly allowed for statistical purposes.
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2019 (12) TMI 1485
Condonation of delay - Managing Director and Chairman of the assessee filed an affidavit for each of the appeal pleading that the impugned orders were received electronically. The accounts department did not communicated the impact of those orders for appropriate action within the prescribed limitation period which resulted in the delay in filing these appeals, he was not conversant as well as not comfortable with the e-proceedings at the said point of time - HELD THAT:- As pleaded that though the impugned orders were passed from 2009 to 2019, till the recovery notice served, electronically on 25.02.2019, the Revenue had not sent any other communication in respect of any of the demand raised in the impugned orders and reason canvassed by the assessee towards the delay in filing these appeals have sufficient and reasonable cause and hence, it was prayed to condone the delay in filing each of these appeals, we find that the reason canvassed by the assessee towards the delay in filing the impugned appeals appears reasonable and sufficient and hence, we condone the delay in filing each of these appeals and remit these appeals back to the ld.CIT(A) for deciding each of them on merits after affording effective opportunity to the assessee.
It is clear from the above that the CPC was processing the orders from January, 2011 onwards. However, the CBDT issued the above notification on 15.01. 2013 only which indicates that there were gaps between the manual system and the electronic system which required proper administration and hence, the CBDT addressed such problems through the impugned notification. Though, the Revenue claimed to have served the impugned orders electronically, the assessee pleads that they were not brought to its notice and the Revenue has not sent any further communication till the date of recovery notice served on 25.02.2019 electronically. Therefore, the assessee was unaware of such orders. Even, if the above notification is applied, the orders passed by the CPC, prior to this date, that is those orders passed from Jan 2011 to Dec2013 should have been served on the assessee by any of the mode mentioned in sub-section (1) to Section 282 of the Act, which, apparently, has not been done by the Revenue, as it has not placed any such material before us. Further, when there is a change from one system, say the manual system to the other system, say the electronic system , apart from relying the rules and regulations, the Revenue as an administrator of the Act must also guide the assessees, in enabling them to comply with the systemic changes in a reasonable manner. Atleast in those cases, like this case, where the demand made on the assessee is pending for long time and the assessee has not responded, the Revenue should also have used other mode of communication
Thus we condone the delay in filing each of these appeals and remit these appeals back to the ld.CIT(A) for deciding each of them on merits after affording effective opportunity to the assessee.
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