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Income Tax - Case Laws
Showing 441 to 460 of 506 Records
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2021 (11) TMI 131 - ITAT MUMBAI
Penalty u/s 271D/271E - contravention of provisions of sections 269SS/ST - taking or accepting loans otherwise than account payee cheques - book adjustments through journal entries between cross parties - CIT-A deleted the addition on reasonable cause u/s 273B for entering on transaction to transaction basis - Whether CIT(A) is justified in holding that the journal entries should enjoy equal immunity on par with account payee cheques and bank drafts? - HELD THAT:- As given a thoughtful consideration and are of the considered view that the issue involved in the present appeal pertains to levy of penalty u/s 271E of the Act as regards the assignment of receivables or extinguishment of mutual liability of paying/receiving the amounts by the assessee and its sister concerns AND rectification of an error. We, thus, going by the reasoning adopted by us for vacating the penalty u/s 271D of the Act, on the same footing uphold the order of the CIT(A) who had rightly set-aside the impugned penalty imposed by the Addl. CIT, for the reason, that the same is simpliciter an assignment of receivables or extinguishment of mutual liability of paying/receiving the amounts by the assessee and its sister concerns AND rectification of an error. Accordingly, finding no infirmity in the view taken by the CIT(A), we uphold his order. - Decided in favour of assessee.
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2021 (11) TMI 130 - ITAT MUMBAI
Revision u/s 263 - As per CIT Assessee, in the garb of conversion from loan to equity, was irregularly allowed Long-Term Capital losses - HELD THAT:- The assessee had made strategic investment in RLS Inc. in earlier years. The investment was in the shape of share application as well as loans. As per the agreement, the loan was convertible into share capital. Accordingly, entire share application money as well as loan was converted into share capital / capital surplus as on 31/03/2011 - Long-Term Capital losses have been computed by the assessee as per the provisions of Sec.46 by deducting the indexed cost of acquisition from sale consideration. These transactions were duly reflected in the computation of income and necessary disclosures were made at appropriate places in the financial statements. These transactions were also reflected in Form No.3CEB which has been subjected to benchmarking before Ld. TPO. Not only this, specific enquiries were made by Ld. AO by issuance of notice u/s 142(1) wherein elaborate information was sought from the assessee with respect to this claim. The assessee responded to the queries comprehensively along with requisite information and documentary evidences.
Allegation of Ld. Pr. CIT that the assessment order was passed without making requisite enquiries do not have any sound basis rather the same is based more on surmises and conjectures without appreciating material facts on record and without considering detailed response filed by the assessee during assessment proceedings as well as during revisional proceedings. As per settled legal position, the revisionary proceedings could not be held to be valid where Ld. AO had made enquiries and adopted the claim with due application of mind. Merely because the issue has not been discussed in the assessment order, the same would not lead to a conclusion that assessment was made without application of mind.
On the facts and circumstances of the case, we are of the opinion that revisional jurisdiction as exercised by Ld. Pr. CIT u/s 263 is bad in law and is liable to be quashed in terms of settled legal position .
Allowability of interest - As the interest was taxable u/s 56 to 59 as ‘Income from Other Sources’, the claim made u/s 36(2) could not be made and therefore, incorrect grant of the deduction has made the assessment order erroneous - We find that the allegations made by Ld. Pr. CIT are without any sound basis. The interest income was offered as well as accepted as ‘Business Income’ which is evident from the assessment order framed by Ld. AO. Not only this, the assessment orders for AYs 2009-10 to 2014-15 has been placed by the assessee on record, the perusal of which would show that interest income has always been accepted as ‘Business Income’ only. The opinion that interest would be taxable as ‘Income from Other sources’ is nothing more than an opinion of Ld. Pr. CIT and is one of the possible views. However, it is a fact on record that Ld. AO has chosen to accept the interest income as ‘business income’ in all the earlier years as well as in this year and accordingly, the write-off would be allowable business expenditure to the assessee as claimed in the Profit & Loss Account. This view is an equally possible view keeping in mind the fact that the investments were strategic investments in subsidiary and out of commercial expediency. This stand of the assessee was always accepted by the revenue in earlier years as well as in this year. The rule of consistency would debar the revenue to take different stand on similar factual matrix which is supported by the decision of Hon’ble Bombay High Court in the case of Pr.CIT V/s Quest Investment Advisors Pvt. Ltd[2018 (7) TMI 479 - BOMBAY HIGH COURT]
After going through the assessment proceedings, it could be seen that the claim was well examined by Ld. AO and specific queries were raised with respect to the claim. The same were duly responded to by the assessee along with requisite documentary evidences. After considering the same, the claim was allowed with due application of mind. The view taken by Ld.AO could not be said to be contrary to the law. Therefore, the assessment order could not be held to be erroneous and prejudicial to the interest of the revenue.
Assessee appeal allowed.
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2021 (11) TMI 107 - TELANGANA HIGH COURT
Recovery of tax - attachment of immovable property - validity of sale of immovable property - right of bonafide purchaser - adequate consideration - 2nd respondent has stated that the immovable property was attached under warrant of attachment - whether transfer affected by the 3rd and 4th respondents in favour of the petitioners is not for adequate consideration? - HELD THAT:- As provisions of Section 281(1) of the Act would stand attracted, only when a demand is raised and the same is not paid by the assessee, thereby, becoming an assessee in default. It is only when an assessee is declared as assessee in default and certificate of recovery is drawn up, the protection provided under the said Section 281(1) of the Act would be available.
In the facts of the case, it is not shown to this Court that the transfer affected by the 3rd and 4th respondents in favour of the petitioners is not for adequate consideration or that attachment of the subject property has been made before the petitioners had purchased the same.
Going by the admission of the 2nd respondent in the impugned order itself, it is evident that warrant of attachment in ITCP-16 was issued for the first time on 04.10.2002. On the other hand, the sale deeds under which petitioners 1, 2 and 4 had purchased the property are all registered on 19.07.1999 and that of the 3rd petitioner on 24.07.1999. Further, it is also to be noted that the order of attachment issued mentions that certificate of recovery has been drawn up only on 02.06.2000, whereby it is held that the3rd respondent has failed to pay the sum as shown therein.
As the 3rd respondent is treated as an assessee in default only upon the drawing up of certificate of recovery dt. 02.06.2000, the transfers of immovable property effected prior to the said date in favour of the petitioner cannot be said to be hit by the provisions of Section 281(1) of the Act; consequently, the purchase of flats by the petitioners is a bona fide purchase and are covered by the escape route provided under Section 281(1) of the Act, as held in ICICI Bank case [2019 (3) TMI 701 - TELANGANA AND ANDHRA PRADESH HIGH COURT]
Thus, the petitioners are entitled to claim the benefit of protection provided under Section 281(1) of the Act in respect of purchase of flats made by them from the 3rd respondent under registered documents bearing Nos.1666/99, 1667/99 and 1668/99 dt.19.07.1999 executed by the 3rd and 4th respondents in favour of petitioners 1, 2 and 4 and registered document No.1736 of 1999 executed on 24.07.1999 in favour of the 3rd petitioner by the 3rd and 4th respondents.
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2021 (11) TMI 106 - TELANGANA HIGH COURT
Renewal of approval under proviso (ii) (b) to section 17 (2) (viii) - approval for providing treatment for Covid-19 patients - rejecting the application of the petitioner for grant of renewal of approval under Section 17(1)(b) of the Income Tax Act, 1961 to treat Covid-19 patients on 03.08.2020 - order of the State Government of the mandate for Covid treatment - revocation of permission for providing medical treatment for Covid-19 by the State Government - HELD THAT:- State Government revoking the mandate given for Covid treatment be considered for deciding application of the petitioner for renewal of approval under Section 17(2)(ii)(b) of the Act, and nothing else. The impugned order, apart from dealing with the revocation of mandate for Covid treatment by the State Government, also dealt with other aspects as to the nature of coronavirus disease being a respiratory disease and the petitioner having resorted to excessive, exorbitant and unconscionable pricing being a misconduct or an offence, without putting the petitioner on notice of the said allegations, to offer its explanation. This action of the first respondent in passing the impugned order by traversing beyond the show cause notice in our view is a violation of principles of natural justice causing serious prejudice to the petitioner. On this sole ground itself the impugned order is liable to be set aside.
We are also at a loss to understand the basis on which the 1st respondent has concluded that the treatment for coronavirus would be covered by respiratory disease, in as much as even after more than a year, no fool proof medical treatment/ vaccination is discovered and the research is continuing. Even the World Health Organization (WHO) or the Indian Council of Medical Research, which is the apex body in India for the formulation, coordination and promotion of biomedical research and one of oldest research bodies in the world established in the year 1911, have not notified the SARSCov-2 (corona virus) to be only a respiratory disease.
On the other hand some of the other serious symptoms associated with Corona virus are chest pain or pressure, sore throat, loss of taste or smell, fever, dry cough and loss of speech or movement etc.- As the mutants of corona virus continue to strike, ICMR is continuing work on variant strains of SARS-Cov-2 and assisting in development of vaccines. In view of the above , the claim of the 1st respondent, that Covid-19 treatment is a respiratory disease, in our view, is not backed by any material or scientific data and appears to be a self evolved theory of the 1st respondent, and is liable to be rejected.
Since the show cause notice issued relies only on the revocation of permission for providing medical treatment for Covid-19 by the State Government, and the said revocation, having been lifted by the State authorities by proceedings dated 13.09.2020 and the petitioner was permitted to provide treatment for Covid-19 patients, the very basis of the show cause notice issued, stands removed.
In view of the above, considered from any angle, the impugned order passed by the 1st respondent, cannot be sustained.
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2021 (11) TMI 105 - ITAT PUNE
Deduction u/s 80IA - manner of computation of amount of deduction allowable u/s 80IA - AO had arrived at the amount of eligible profits for the purpose of deduction u/s 80IA of the Act by setting off of unabsorbed losses of earlier years against current year profits of the eligible unit i.e. Windmill - HELD THAT:- As provisions of section 80IA of the Act are separate and distinct and has to be treated on standalone basis and also lays down a special method of computing the profits and gains entitled to deduction u/s 80IA of the Act. Further, it also suggests that the provisions of section 80IA of the Act are overriding in nature and the provisions of section 80IA of the Act shall be applied as if each unit is an independent unit and one and only source of income which means that the profits and losses of other units cannot be mixed up. As in the case of CIT Vs. Dewan Kraft Systems [2007 (2) TMI 149 - DELHI HIGH COURT] also held to the same effect and there is long line of authority in support of the this proposition. As a natural corollary of this, the losses of ineligible units cannot be set off against the profits of eligible units for the purpose of computing the amount of deduction and this line of approach has been consistently followed by several High Courts.
Whether the unabsorbed losses of eligible units should be set off against the profits of current year for the purpose of computing the amount of deduction u/s 80IA? - The Hon’ble Madras High Court in the case of Velayudhaswamy Spinning Mills [2010 (3) TMI 860 - MADRAS HIGH COURT]clearly held that the initial assessment year would mean the first year opted by the assessee for claiming deduction u/s 80IA of the Act out of block of years and not the first year of commencement of operations of eligible business. CBDT also issued a Circular No.1/2016, dated 15.02.2016 accepting the legal position enunciated by the Hon’ble Madras High Court in the case of Velayudhaswamy Spinning Mills Vs. ACIT (supra). Therefore, the finding of AO that the initial assessment year commences from the first year of commencement of commercial operations of eligible business has no legs to stand.
Neither the ld. CIT(A) nor AO had dealt with the factual aspects as to whether the unabsorbed losses are pertaining to the prior period to the initial assessment year as opted by the assessee or after the initial assessment year. CIT(A) merely granted the relief by accepting the legal position without discussing it in detail on the factual aspects. Since the order of ld. CIT(A) is bereft of material facts necessary for adjudication of issue in appeal, we have no other option but to remit the matter back to the file of AO to examine the claim of assessee after due verification on the aspects whether the unabsorbed losses set off by the AO against current year eligible profits falls prior to the initial assessment year or after the initial assessment year. Appeal of Revenue for A.Y. 2013-14 is partly allowed for statistical purposes.
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2021 (11) TMI 104 - ITAT DELHI
Addition made on account of recognition of revenue on the basis of POCM of the project - CIT-A deleted the addition - as per Revenue that the assessee ought to have recognized Revenue on the principles of POCM - HELD THAT:- No infirmity into the above findings of Ld.CIT(A) as the assessee has been applying consistently the same method since inception. Moreover, Ld.CIT(A) has recorded the fact that the assessee has been adopting the same method of accounting which was accepted by the Revenue. Further, it is also recorded by Ld.CIT(A) that the Assessing Officer committed error in computing the construction and development cost incurred by the assessee till 31.03.2014. As per Ld.CIT(A), the cost was only 18.40% of the total estimated construction and development cost. Therefore, no revenue could have been booked even as per the guidance note issued by ICAI. This finding of fact is not rebutted by the Revenue. Thus, Ground No.1 raised by the Revenue is devoid of any merit hence, dismissed.
Addition on account of brokerage expenses - assessee company had not declared any income from the projects undertaken during the year under consideration - As per AO Expenditure should have been treated as work in progress - CIT- A deleted the addition - HELD THAT:- No infirmity in the order of Ld. CIT(A) as the CIT(A) has correctly appreciated the facts in the light of ratio laid down by the Hon’ble Jurisdictional High Court rendered in the case of CIT vs Samsung India Electronics Ltd . [2013 (7) TMI 335 - DELHI HIGH COURT] and ESPN SOFTWARE INDIA P. LTD. [2008 (3) TMI 90 - DELHI HIGH COURT] - Revenue could not rebut the finding of Ld.CIT(A) that brokerage forms part of selling cost therefore, allowable expenditure. The Ground No.2 raised by the Revenue is dismissed.
Interest free advance given to group companies - HELD THAT:- CIT(A) has categorically given a finding that from the financial statement, it was observed that interest was paid to Greater Noida Authority for late payment of installment of the land purchased on deferred credit. It was also recorded that the advances given to the associate concern was out of interest free advances received from booking of the flats. This finding on fact was not rebutted by the Revenue by furnishing any contrary material. Therefore, no interference is called for in the decision of Ld.CIT(A), the same is hereby affirmed.
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2021 (11) TMI 103 - ITAT BANGALORE
Disallowance of deduction u/s 80P - CIT(A) held that the assessee was having substantial dealings with non-members (nominal members) thus not entitled to any deduction - HELD THAT:- Hon’ble Apex Court in the case of Mavilayi Service Co-operative Bank Ltd. [2021 (1) TMI 488 - SUPREME COURT] had held that the co-operative societies providing credit facilities to its members is entitled to deduction u/s 80P(2)(a)(i) - Section 80P(4) now specifically excludes only co-operative banks which are co-operative societies engaged in the business of banking i.e. engaged in lending money to members of the public, which have a licence in this behalf from the RBI. The Hon’ble Apex Court had enunciated various principles in regard to deduction u/s 80P of the I.T.Act.
On identical factual situation, Tribunal in the case of M/s.Ravindra Multipurpose Cooperative Society Ltd [2021 (9) TMI 342 - ITAT BANGALORE]had remanded the issue to the files of the A.O. for de novo consideration. The Tribunal directed the A.O. to follow the dictum laid down by the Hon’ble Apex Court in the case of Mavilayi Service Co-operative Bank Ltd. & Ors. v. CIT & Anr. (supra). Thus we restore the issue of claim of deduction u/s 80P of the I.T.Act to the files of the A.O. for de novo consideration.
As regards the claim of deduction u/s 80P(2)(d) of the I.T.Act, the CIT(A) has not adjudicated the same for the reason that the assessee has violated the principle of mutuality. If the assessee receives / earns interest / dividend income out of investments with co-operative society, the same is entitled to deduction u/s 80P(2)(d) of the I.T.Act. With these observations, we direct the A.O. to examine the claim of deduction u/s 80P(2)(d) of the I.T.Act, afresh.
If interest income is to be assessed income from other sources, necessarily, the cost incurred for earning such interest income should be allowed as deduction u/s 57 - We find an identical issue was considered in the case of Totgars Co-operative Sales Society Ltd. [2015 (4) TMI 829 - KARNATAKA HIGH COURT] - assessee has not raised the plea before the Income Tax Authorities that it has to be given deduction u/s 57 of the I.T.Act, in respect of expenditure for earning the interest income. However, inspite of such plea not being raised before the lower authorities, we are of the view that since the fundamental principle under Income-tax Act being that only net income has to be taxed and not the gross income, this plea of the assessee has to be necessarily entertained.
Thus issue of deduction u/s 57 of the I.T.Act is restored to the files of the A.O. The A.O. is directed to examine whether assessee has incurred any expenditure for earning interest income, which is assessed under the head `income from other sources’. If so, the same shall be allowed as deduction u/s 57.Appeal filed by the assessee is allowed for statistical purposes.
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2021 (11) TMI 102 - ITAT DELHI
Reopening of assessment u/s 147 - Addition u/s 68 - assessee has failed to prove the genuine creditworthiness- HELD THAT:- The person approving the reasons recorded is the same officer i.e. JCIT, Range 32, New Delhi, who passed the assessment order in the case of the assessee for assessment year 2011-12. Thus, from the above it is apparent that the approving authority who passed assessment order for assessment year 2011-12 on 31.03.2014 approved the reasons recorded by the Assessing Officer i.e. ACIT, Circle 32(1), New Delhi, on or before 27th of March, 2014 stating that assessment order for assessment year 2011-12 has been passed is clearly a back dated reason recorded by the Assessing Officer and approved by the lower authorities.
Such reasons do not have any legs to stand and further the approving authority also did not apply his mind at the time of approving the reasons. Thus, reasons were recorded on 27th of March, 2014 based on assessment order for assessment year 2011-12 which was passed only on 31.03.2014 clearly shows that as on the date of recording of the reasons the assessment order for assessment year 2011-12 did not exist at all. In view of this, we do not have any hesitation in quashing the re-assessment proceedings. Thus, without going into the merits of the above, we quash the re-assessment proceedings and the order passed by the ld. Assessing Officer for assessment year 2007-08. Accordingly, the additional ground raised by the assessee is allowed.
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2021 (11) TMI 101 - ITAT KOLKATA
Disallowing the expenses on account of rent - Disallowing of claim as most of the owners of the premises were partners of the assessee firm and one of them was the partner’s wife - HELD THAT:- Even though the owners of the property are relatives, the assessee has been able to bring on record relevant material to support its claim of having taken the premises in question on rent.
Whether the assessee was able to show that the rental premises was used wholly and exclusively for the purpose of the business? - As brought to our notice that all its commercial activities like back office work etc. was carried out at that premises, from which only the assessee has turnover of ₹ 458 crore. We note that the payment of rent was made by the assessee firm to the owners (partners) through cheque after deduction of TDS and the owners (partners) have duly shown the rental income in their respective Income tax returns and that tax has been paid on it. To substantiate the incurring of rental expenditure the assessee had filed the rental agreement, sale deed of the related parties, electricity bills, payment by cheque and details of TDS deducted on the rental payments. It is noted that these evidence could not be controverted/rebutted by the AO/Ld DR and the AO has disallowed the expenditure on the basis of surmises and conjectures. So we are of the opinion that disallowance made by the AO has been rightly reversed by the Ld. CIT(A). Therefore, we do not find any reason to interfere with the order of the Ld. CIT(A) and we confirm the same. Therefore, this ground of appeal of revenue stands dismissed.
Addition of excess interest claimed on unsecured loan - assessee had borrowed sums from two (2) types of parties viz., ‘related parties’ as defined u/s. 40A(2)(b) and ‘non-related parties’ - HELD THAT:- CIT(A) has found that since there was an urgent business requirement, the assessee had taken the unsecured loan due to business exigency at higher rate @ 15% which was also repaid in the same year. The Ld. CIT(A) has noted that the assessee had disclosed the loans, nature of the loans, interest rates paid etc. which were reflected in the tax audit report which included the details of the unsecured loan from related parties. The Ld. CIT(A) was of the opinion that the assessee has made out a case that due to business exigency, loans were taken at a higher rate of 15% at short notice which warranted payment of higher rate of interest. The Ld. CIT(A) thereafter relied on the decision of the Hon’ble Supreme Court in the case of S. A. Builders [2006 (12) TMI 82 - SUPREME COURT] to allow the assessee’s interest expenditure. The aforesaid facts narrated above could not be rebutted/contradicted by the Ld. DR before us. Therefore, based on the factual finding of the Ld. CIT(A) on this issue as discussed supra, we do not find any reason to overturn the decision of the Ld. CIT(A) accepting the interest expenditure.
Addition of commission paid to selling agents - as per AO there was no written agreement between the assessee and such brokers and payment made by cheque/TDS deducted cannot be the deciding factor regarding genuineness of claim of the commission paid by the assessee - CIT-A deleted the addition - HELD THAT:- CIT(A) noted that the remand report included brief note on the business activity of the commission agents, copies of return of income tax, copy of the TAR, copies of the P&L Account and the details of commission received for work rendered by the commission agents for the assessee. The Ld. CIT(A) also noted that the assessee had a turnover of ₹ 458.91 cr. from Mumbai office itself which according the Ld. CIT(A) was around 72% of the total turnover and that the commission expenses worked out to be very less and constituted only a fraction of such disclosed turnover, which according to the Ld. CIT(A) was reasonable, especially in the situation when the salary payments incurred by the assessee are not excessive. So, he found justification for paying the commission to agents to achieve higher turnovers
AO/Ld DR did not bring on record any material to show that the transaction of payment of commission to agents were not genuine or the commission paid was excessive or unreasonable, therefore, no disallowance could have been made by the AO at the first place itself. For that proposition, we rely on the decision of the jurisdictional High Court in the case of CIT Vs. Alfa Hydronics Pvt. Ltd. [2014 (11) TMI 1156 - CALCUTTA HIGH COURT] - Therefore, the Ld. CIT(A) rightly deleted the addition which does not require our interference so, we confirm the same. Therefore, this ground of appeal of revenue stands dismissed.
Addition of expenses on account of sales promotion - CIT-A deleted the addition - HELD THAT:- CIT(A) took note of the fact that the gifts presented in the form of redeemable gift voucher of various denomination such as gold/silver gifts etc. was meant for promoting the business of the assessee thus attracting generation of more revenue and, therefore, is an allowable expenditure. We note that the entire scheme (promotion scheme) was governed by the scheme put in place by M/s. Tata Steels, and that purchases of the gifts were also from Tata related outlets like M/s Titan and M/s Tanishq. And the distribution was also carried out by an authorized gift distributor company for M/s. Tata Steels. The scheme was controlled by M/s. Tata Steels and was to ensure that the end users would benefit if they are eligible. The Ld. CIT(A) has found that there was no doubt about the genuineness of the expenditure and the expenditure was for promotion of business of the assessee and therefore an allowable expense. This finding of facts could not be controverted or rebutted by AO/Ld DR, so in such a case, we find no infirmity in the order of the Ld. CIT(A)
Appeals of the revenue are dismissed.
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2021 (11) TMI 100 - ITAT JAIPUR
Unexplained investment u/s 69 - Whether material found during the course of search to show that the assessee has made the balance of purchase consideration to the seller? - HELD THAT:- In the absence of any material or other facts to indicate that the alleged payment was made by the assessee and that too in the year under consideration the addition made by the AO merely on the basis of assumption and presumption has not justified. CIT(A) has confirmed the addition made by the AO by giving the reasons that the assessee has not explained the details of payment. It is pertinent to note that once the assessee has denied any payment except the payment made by the assessee at the time of agreement, the assessee is not supposed to produce any evidence of non existing transaction.
As per terms of the agreement the assessee was to pay ₹ 25,00,000/- for discharge of loan amount against the property and once this payment is not made by the assessee to discharge the property in question from the mortgage charge of the bank which is matter of record then it cannot be presumed that the assessee has made the said payment. AO instead of discharging his duty to bring any material on record to show that the assessee has made unaccounted payment during the year under consideration the addition made purely on the basis of presumption it is not justified and the same is liable to be deleted. Accordingly the addition made by the AO is deleted.
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2021 (11) TMI 99 - ITAT HYDERABAD
Assessee as assessable as an agent of M/s Sino Hydro Corporation u/s 163 - HELD THAT:- Assessing authority appears to have set into motion section 163 mechanism in order to assess the taxpayer herein as an agent of M/s Sino Hydro Corporation (JV Partner) in tune by treating the tribunal’s discussion in Revenue’s and latter’s cross appeals appeal [2014 (2) TMI 138 - ITAT HYDERABAD] for AY 2006-07 -The Revenue’s endeavor all along; in light of the Assessing Officer’s order in issue herein dated 30th March, 2013, is that the earlier coordinate bench directions has settled the issue of the assessee’s having acted as other entity’s JV/agent so as to be liable for section 163 assessment.
We, thus, hold that the instant issue is no more res-integra between the parties since there were no such section 163 direction(s) against the assessee involved in the earlier order of the Tribunal and more so, when Revenue’s appeal raising the very issue, is stated to be pending before the hon’ble jurisdictional high court. Coupled with this, it has further brought on record that the Revenue has lost on the very issue in DRP’s directions in AY 2006-07 as well. We accordingly conclude that in this factual back-drop that the CIT(A) has rightly held that the impugned section 163 mechanism set into motion by the Assessing Officer against the assessee is not sustainable in law.
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2021 (11) TMI 98 - ITAT GAUHATI
Nature of income - MAT - Computation of book profit u/s 115JB - Subsidy received under the Industrial Promotion Policy of the Assam Government - application of object/purpose test to the subsidy received contention of the assessee that the impugned subsidy is capital in nature and therefore not exigible to income-tax, both under normal computational provisions as well as book profit u/s 115JB - HELD THAT:- Hon’ble Supreme Court in the cases of Sahaney Steel & Press Works [1997 (9) TMI 3 - SUPREME COURT] and Ponni Sugar & Chemicals Ltd. [2008 (9) TMI 14 - SUPREME COURT] had held that the object or purpose for which the subsidy was given is what matters, and the source of subsidy is immaterial, form of subsidy is equally immaterial and the time at which the subsidy is paid is also immaterial. Therefore, we need to examine as to what was the purpose of the scheme which enabled the grant of subsidy to the assessee.
Gainful reference may also be made to the decision of this Tribunal in the case of DCIT vs. M/s. Century Plyboards (I) Ltd. [2020 (12) TMI 55 - ITAT KOLKATA] wherein the excise & VAT subsidies received by the assessee post commencement of commercial production, from the Central Government and State Government for setting up new units in the States of Assam and West Bengal respectively, was held to be capital in nature
We find merit in the claim of the assessee that the VAT subsidy received by it for undertaking substantial expansion at their unit was in the nature of capital receipt not liable to tax, since the object of granting of subsidies was to bring about industrial development, encourage fixed capital investment and generate employment in the State of Assam.
Allow the grounds taken by the assessee and direct the AO to deduct the VAT subsidy both while computing income under normal computational provisions and book profit u/s 115JB of the Act for the relevant AY 2014-15.- Decided in favour of assessee.
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2021 (11) TMI 97 - ITAT DELHI
Deduction u/s 80IA - income on the business of running of Inland Container Depot (ICD) - business of ICD covered under the definition of infrastructure facilities - HELD THAT:- CIT (A) deleted the impugned addition made by the AO by way of disallowance made u/s 80IA by thrashing the facts at hand in the light of the decision rendered in case of Container Corporation of India Ltd. [2012 (5) TMI 260 - DELHI HIGH COURT], hence we find no scope to interfere into the same. So, ground no.1 of AYs 2013-14 & 2014-15 is determined against the Revenue.
Disallowance u/s 14A r.w.r.8D - disallowance deleted on the sole ground that assessee company has not earned exempt dividend income from the investment during the year under consideration and as such, no disallowance can be made - HELD THAT:- Hon’ble Delhi High Court in case of Holcim India Pvt. Ltd. [2014 (9) TMI 434 - DELHI HIGH COURT] and Hon’ble Supreme Court in case of Godrej & Boyce Manufacturing Company Ltd. [2017 (5) TMI 403 - SUPREME COURT] have categorically held that, “when the assessee has not earned any dividend income forming part of the total income during the year under consideration, section 14A read with Rule 8D is not attracted.” Consequently, we find no scope to interfere into the deletion of disallowance made by the ld. CIT (A) u/s 14A read with Rule 8D. - Decided against revenue.
Addition u/s 37 - proportionate disallowance of interest qua the amount made by the assessee to its subsidiary and sister concern on the ground that the same was not for business purpose - CIT (A) has deleted the addition by thrashing facts in the light of the submissions made by the assessee on the ground that when the AO has failed to establish a reasonable nexus between the borrowing fund and interest free advances, addition is not sustainable - HELD THAT:- CIT (A) brought on record the fact that the assessee was having surplus fund in its kitty. When the assessee was having surplus fund of ₹ 133.06 crores during the year under consideration, advancing of interest free loan of ₹ 35.42 crores to its subsidiaries is not to attract any disallowance on account of proportionate interest on advances made to the subsidiaries. So, ld. CIT (A) has rightly deleted the addition, hence ground no.3 of AY 2014-15 is determined against the Revenue.
Disallowance of interest earned by the assessee company on FDR - HELD THAT:- We have perused the aforesaid findings which are strictly on facts in the light of the law laid down in case of CIT vs. Jaypee DSC Ventures Ltd.[2011 (3) TMI 309 - DELHI HIGH COURT] the ratio of which is that, “when a bank guarantee is furnished as a condition precedent to entering into a contract and further it has to be kept alive to fulfill certain obligations and the fixed deposits have not been made out of the surplus funds available with the assessee, the same is to be treated as business income.” Since judgment of by Hon’ble jurisdictional High Court in case of CIT vs. Jaypee DSC Ventures Ltd. (supra) is squarely applicable to the facts of the case at hand, ld. CIT (A) has rightly deleted the addition. - Decided in favour of assessee.
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2021 (11) TMI 96 - ITAT BANGALORE
Addition u/s 69A - As submitted that considering the seized material there was sufficient material before AO who have made additional u/s 69/69A of the Act in these asst. years and the same to be confirmed - HELD THAT:- In this case, addition made towards unexplained investment and mentioning the wrong section is not fatal, though such addition to be made under section 69 of the Act but the AO mentioned the same as section 69A of the Act. Accordingly, this ground of appeal is dismissed.
Addition based on seized loose sheet - HELD THAT:- The loose sheet found during the course of search are undated and did not bare the signature of the assessee or any other person. Hence, they are not in the nature of self speaking documents having no evidentiary value and cannot be taken as sole basis of determination of undisclosed income of the assessee. When document like loose sheets of paper are recovered and the revenue wants to make use of it, the onus is on the revenue to collect cogent evidence to corroborate the noting. The revenue has failed to corroborate the noting by bringing some cogent material on record to prove conclusively that the noting in the seized paper reveled the unaccounted income of the assessee. Further, no circumstantial evidence in the form of any unaccounted cash, jewelry or investment outside the books of account was found in the course of search action in the case of assessee. Thus, the impugned addition was made by the AO on gross relief in advocate material or rather no sufficient material at all and as such neither to be deleted. We are of the view that an assessment carried out in pursuance of such action, no addition can be made on the basis of un-corroborative noting and scribbling on loose paper made by unidentified person having no evidentiary value, is unsubstantiated and is bad in law.
Addition towards unexplained expenditure - addition on the basis of loose sheet - HELD THAT:- As we have deleted the various additions in all these assessment years, which are based on the seized material marked as A/BHB/11 and not supported by any material evidence. Being so, the amount voluntarily offered by the assessee in his return of income at ₹ 3,03,05,017/- is to be taxed and as such there is no question of giving any telescopic benefit and the AO not at all required to deduct ₹ 1.35 crores from the computation of income in assessment year 2011-12. He has to go by return filed by the assessee on 26/11/2011 in acknowledgment No.292359831260911 for the asst. year 2011-12 while passing the giving effect order to our findings in this order. This ground of appeal is dismissed accordingly
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2021 (11) TMI 95 - ITAT AHMEDABAD
Addition on account of mismatch between the TDS and income shown in as much as it is duly reconciled - HELD THAT:- Admittedly, there was the difference between the income shown from 26AS viz a viz income shown in the books of accounts. However, such difference were duly explain by the assessee in the reconciliation statement available on record. But on perusal of the order of the authorities below, we note that such reconciliation statement was not considered by them. To our mind, the consideration of the impugned reconciliation statement is necessary to put an end on the ongoing dispute. Accordingly, we are inclined to restore the issue to the file of the AO for fresh adjudication as per the provisions of law and after considering the reconciliation statement filed by the assessee. Hence the ground of appeal of the assessee is allowed for the statistical purposes.
Capital gain computation - Addition under the provisions of section 50C - contention of the assessee by observing that the stamp value as determined for the purpose of stamp duty shall be taken as the sale consideration in pursuance to the provisions of section 50C - HELD THAT:- Admittedly, the capital asset was transferred by the assessee in the year under consideration through the agreement to sale with possession. All the conditions of section 53A of the Act have been duly satisfied. Therefore, in our considered view the provisions of section 50C of the Act shall be applicable for computing the capital gain.
In the present case the property has been transferred by way of an agreement as discussed above. Accordingly, the AO has taken the stamp value for the purpose of computing the capital gain under the provisions of section 50C of the Act which was worked out at ₹ 41,74,217/- only. In view of the above, we hold that the provisions of section 50C of the Act are applicable in the present case for computing the capital gain.
Rejection valuation report filed by the assessee - AO cannot reject the valuation report filed by the assessee without referring the same to the DVO under the provisions of sub section (2) of section 50C.AO has not referred the matter to the DVO for determining the fair value of the property as contemplated above - we are inclined to restore this issue to the file of the AO with the direction to refer the same to the DVO for the purpose of valuation and decide the issue a fresh as per the provisions of law. Hence the ground of appeal of the assessee is allowed for statistical purposes.
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2021 (11) TMI 94 - ITAT MUMBAI
Revenue recognition - recognized method of accounting - Estimation of business profits on sale of land as well as profits from construction activities separately - Computation of capital gain on land converted into stock in trade - HELD THAT:- Assessee converted its land into stock-in-trade and thus computed the capital gains as provided in Sec. 45(2) of the Act. The land stood converted into stock-in-trade and the assessee constructed premises / buildings on this land. During the year, the assessee entered into agreement for sale of these premises. For the purpose of revenue recognition, the assessee followed percentage completion of method of accounting. Since project was completed to the extent of 11% during the year as certified by the Architect, the assessee recognized projected revenues to that extent in its books of accounts.
The said method was recognized method of accounting as per Accounting Standards issued by ICAI and this method was consistently followed in subsequent years to recognize the revenue. This method was accepted in earlier years also. Therefore, Ld. AO, in our considered opinion, was not justified in rejecting the methodology adopted by the assessee and estimating the business profits on sale of land as well as profits from construction activities separately since the land merged into the stock-in-trade and the premises including the undivided share in the land was sold to various buyers during the year. The perusal of chart placed before us would show that finally, the project has been completed in AY 2010-11 and revenue has been recognized from AYs 2005-06 to 2010-11 based on percentage of completion method of accounting. Therefore, finding no infirmity in the impugned order on this issue, we dismiss ground no.1 of revenue’s appeal.
LTCG on conversion of land into stock-in-trade - FMV as on 01/04/1981 as well as FMV on 24/12/2003 i.e. the date of conversion - HELD THAT:- Viewed from any angle, the substitution of FMV as on 01/04/1981 by Ld.AO cannot be held to be in accordance with law. Therefore, finding no infirmity in the impugned order, in this respect, we dismiss ground no.2 of revenue’s appeal.
Disallowance of Professional fees - ad-hoc disallowance made by the AO of 75% - HELD THAT:- We find that the assessee has furnished name of payees, nature of expenses and the amount paid to each of them (Page no. 83 of the Paper Book). No defect has been pointed out in these details. The expenses are in the nature of certification work, management consultancy, fees for appearance before Tax Authorities, company secretarial work and these expenses are incurred for business purposes of the assessee. Therefore, no fault could be found in the impugned order deleting the estimated disallowance as made by Ld.AO.
Deferred revenue expenditure u/s 35DDA - assessee disallowed VRS expenses amortized in books for ₹ 1143.92 Lacs but claimed VRS expenses of ₹ 1866.34 Lacs u/s 35DDA - deduction was claimed @1/5th of expenditure paid in FYs 2000-01 to 2003-04 - HELD THAT:- As the provisions of Sec.35DDA entitle the assessee to amortize the expenses incurred on voluntary retirement scheme and allow 1/5th of such expenditure starting from the year in which the expenditure has been incurred by the assessee. The perusal of computation of income would show that VRS expenditure has been incurred by the assessee during FYs 2000-01 to 2003-04 and the same are claimed as per the mandate of Sec.35DDA. The same has been claimed to the extent of 1/5th of expenditure incurred in earlier years. The deduction of the same has been allowed to the assessee in past assessments. Therefore, there could be no occasion to disallow the same in this year. Hence, the disallowance of ₹ 1866.34 Lacs has rightly been deleted in the impugned order.
So far as the balance expenditure of ₹ 558.65 Lacs is concerned, the perusal of above table would show that majority of these payments are in the nature of wages, ex-gratia payment, leave encashment, gratuity, VRS expenses etc. paid by the assessee. Upon perusal of the same, it could be seen that these are normal business liability of the assessee paid during normal conduct of the business. Therefore, these are incurred wholly and exclusively for the purpose of business and thus qualify for deduction u/s 37(1). This being so, we confirm the stand of Ld. CIT(A) in deleting the same.
Computation of Capital Losses - assessee claimed short-term capital loss (STCL) on sale of equity shares - HELD THAT:- AO has computed average price per share at ₹ 69.10 per share. The three prices of ₹ 93.81, ₹ 81 & ₹ 146 are the rates that were prevailing after the capital restructuring involving reduction of share capital was over which would lend support to assessee’s submissions. As rightly observed by Ld. CIT(A), merely on the basis of intention, a valid claim made within the four corner of the Act, could not be disallowed unless established to the contrary. The Ld. AO has not conducted any independent enquiry to prove that the above mentioned claims of capital losses were not bona-fide or lacked credentials. Concurring with the same, we would hold that the allegations of Ld. AO and conclusion drawn there-from has no legs to stand.
We also concur that the statutory provisions do not empower Ld. AO to substitute actual consideration received by the assessee with hypothetical sale consideration. The consideration which never accrued or which was never received by the assessee could not be brought to tax as capital gains or business income.
It could further be seen that similar allegations were leveled by Ld. AO in assessment order for AY 2004-05 and few of these allegations have merely been reproduced in the assessment of this year. However, all such allegations as well as disallowances as made in AY 2004-05 stood settled in assessee’s favor by the cited decision of Tribunal for AY 2004-05. We find no reason to deviate from the same - no error could be found out in the order of Ld. CIT(A) reversing the stand of Ld.AO, in this regard. This ground as well as the revenue’s appeal stand dismissed.
Disallowance of power & fuel expenses - HELD THAT:- It is undisputed fact that the assessee is flagship company of the group and the premises was being used by various other group entities which were subsidiary of the assessee company. However, these entities were dormant entities and had no substantial business activity. Therefore, the disallowance of 25% as confirmed by Ld. CIT(A) is without any sound basis. We direct Ld. AO to delete the same.
Addition of rent, rates and taxes are concerned, the assessee has incurred expenditure of ₹ 49.25 Lacs and already disallowed ₹ 11.77 Lacs in the computation of income. Out of balance, Ld. CIT(A) has confirmed disallowance of 25%. Similar estimation has been made for miscellaneous expenses. Considering the nature of expenses as placed on record, the disallowance, under both the heads, is on the higher side and therefore, we reduce the same to 10%. The ground raised by the assessee stand partly allowed.
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2021 (11) TMI 93 - ITAT BANGALORE
Deduction u/s.36(1)(vii) r.w.s. 36(2) - irrecoverable amount has been identified by the assessee and in the course of statement u/s. 132(4) the assessee offered 40% of such advances as undisclosed income of such advances - quantum of amount to be allowed in the assessee’s appeal - HELD THAT:- In the present case, the assessee advanced money to various fishermen without keeping any legal and proper documents and if the result of search was any loss to the assessee, then it has to be considered as business loss. Therefore, the assessee’s claim has to be allowed in the absence of such enforceable books of account or legal documents. In the present scenario, even advances given with legal documents and securities were unable to be recovered and the assessee who has advanced money to various fishermen in the course of business activity which is undisclosed to the department, the claim of assessee has to be allowed as per statement recorded u/s. 132(4). The authorities cannot reject the statement recorded u/s. 132(4) without bringing any material on record to show that these debts are good so as to recovery from those persons.
More so, there was no proper addresses available on record of these debtors so as to contact them for recovery. In this situation, we are of the opinion that these amounts are irrecoverable and the advances made during the course of business activity of the assessee has to be allowed as bad debts (business loss) and on recovery the same has to be taxed. The assessee has confirmed in his sworn statement recorded u/s. 132(4) on 13.10.2000 that 60% of advances made to Canoe and Porceine boat owners are bad debts. With these observations, we allow the grounds raised in appeal by the assessee and dismiss the relevant grounds in the revenue’s appeal on this issue.
Estimation of net income - HELD THAT:- There is a bank balance of ₹ 26,07,363 and physical cash of ₹ 26,970 totalling to ₹ 26,34,333. It is an admitted fact that it is generated from sale transaction of fish. In our opinion, it is fair to estimate only net income at 5% of the deposit by placing reliance on the order of the Tribunal in the case of M.A. Siddique v. DCIT [2020 (8) TMI 835 - ITAT BANGALORE].
Condoning the delay in filing block return for the purpose of interest u/s. 158BFA - HELD THAT:- As mandatory and consequential in nature and to be computed accordingly in the light of the judgment in CIT & Anr. v. Smt. Sire Kanwar Bai [2009 (12) TMI 569 - KARNATAKA HIGH COURT] wherein it was held that the interest u/s.158BFA(1) is levied to compensate the Government for withholding the taxes by the assessee and therefore, interest is payable only on the sum found payable by the assessee as per the assessment order as reduced by the tax paid prior to the issue of notice or prior to the last date of filing of the return and it is also supported by the Supreme Court judgment in the case of R.C. Jewellers[2013 (12) TMI 317 - ALLAHABAD HIGH COURT] Thus interest u/s. 158BFA(1) being consequential and mandatory in nature to be computed accordingly by the AO while passing giving effect order to our findings in this order.
Assessment of undisclosed income as a result of search - Due date for filing the return of income u/s. 139(4) had not expired and assessee filed the return on 9.5.2001 - HELD THAT:- The income for AY 2000-01 which is included in the return of income filed by the assessee and not unearthed by the department by way of any incriminating material cannot be considered as undisclosed income of the assessee. Therefore, the deletion of addition is justified. These grounds of the revenue are dismissed.
Deletion of surcharge - HELD THAT:- In this case, the CIT(Appeals) deleted the surcharge levied by the AO on the reason that search took place in this case on 6.9.2000 and section 113 of the Act was inserted w.e.f. 1.6.2002 and for the assessment year under consideration there was no provision so as to levy surcharge. In our opinion, the finding of the CIT(Appeals) is justified as section 113 of the Act came into effect from 1.6.2002 and search took place in this case on 6.9.2000 and the findings of the CIT(Appeals) are in line with the provisions of the above section. Hence, these grounds are dismissed.
Amount receivable on account of fish sales - HELD THAT:- Being so, the CIT(Appeals) allowed the claim of the assessee that only profit element of this transaction can be taxed as it would be an asset, since the total cost of fish sales was adjusted out of the advances given to the boat owners. This view of ours is supported by the judgment in the case of Smt. Daya Bai [1985 (1) TMI 39 - MADHYA PRADESH HIGH COURT] wherein it was held that under the Income-tax Act, levy of tax twice on the same income is not permissible. In the present case, since the advances made to boat owners was subject to tax out of which fish was supplied and Same was sold and the sale proceeds was shown as receivables from debtors. Allowing relief to the assessee as bad debts / business loss out of advances given to the boat owners is a separate issue. It is because of certain advances given to the boat owners was allowed as business loss, that cannot lead to the conclusion that the entire amount of unaccounted sales is to be taxed. Accordingly, these grounds of the revenue are dismissed.
Amounts due to boat owners - HELD THAT:- As assessee explained that seized material CS/CS/1 regarding transaction of ₹ 35.47 lakhs is advances made to Purse-sein boat owners and also explained from the chartwise details of advances, there was liability of ₹ 11.57 lakhs which is sum due to the boat owners and credit has been given towards this amount. In our opinion, the outstanding liability due to boat owners and assessee’s claim is supported by seized material. The same has to be allowed. We do not find any infirmity in the order of the CIT(Appeals). These grounds of the revenue are dismissed.
Liabilities for purchases not paid - HELD THAT:- It is an admitted liability on the part of the assessee and related receipt has been taxed in the hands of the assessee. Following the matching principle credit should be given on this account. The department cannot have any grievance on admission of this ground by the CIT(Appeals) as his power is coterminous. Accordingly, these grounds of the revenue are dismissed.
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2021 (11) TMI 92 - ITAT MUMBAI
Additions as interest income - Taxability of compensation received by the assessee company from Boeing Co.- aerospace project with Boeing Co.suspended - Capital gain or income from other sources - plea of the assessee that the compensation received would be capital receipt not chargeable to tax was rejected by the ld AO on the ground that the compensation received is akin to interest loss borne by the assessee for the delay in execution of the project by the Boeing Co. and accordingly the ld AO held that the said interest would be liable to be taxed separately under the head ‘income from other sources’ - whether the assessee was justified in claiming the expenses pertaining to Boeing project as revenue expenditure when the aerospace project had been suspended at the behest of Boeing Co.? - HELD THAT:- We find that the compensation so received by the assessee company from Boeing Co. would only go to reduce the cost of project as it is effectively meant to cover up for the expenses and investments incurred by the assessee for the said project. Hence we hold that the receipt of compensation would be capital in nature and would go to reduce the cost of project.
As the business of assessee was set up and had started and there was huge investment made by assessee and the project was only temporarily suspended by the Boeing Co - Here what is received by the assessee is part of overall cost of project in the form of compensation from Boeing Co. which cannot be treated as interest. Accordingly, we hold that the compensation received in the sum would go to reduce the cost of aerospace project of the assessee company. Hence the Ground raised by the assessee disposed of.
Claim of revenue expenditure - We find that the ld AO had given a categorical finding which remain uncontroverted by the ld AR before us, that the business in Boeing Project started from 10/09/2012 falling in Asst Year 2013-14 onwards. Hence all the expenditure and receipts upto 09/09/2012 pertaining to the project would have to be treated as capital in nature. Accordingly, we hold that the receipt of compensation should go to reduce the cost of project i.e Capital Work in Progress of the assessee company. Similarly all expenditure incurred by the assessee which was claimed as revenue expenditure by assessee should also be capitalized to the Capital Work in Progress. This treatment, in our considered opinion, would meet the ends of justice to both assessee as well as for the revenue.
Disallowance of expenses incurred on account of repairs to buildings - HELD THAT:- These expenses were incurred by Tata Motors Ltd on behalf of assessee and were later on billed to the assessee. We also find that similar disallowance made by the lower authorities in assessee’s own case for the Asst Year 2009-10 had been deleted by this Tribunal [2017 (12) TMI 1817 - ITAT MUMBAI] by placing reliance on the decision of Hon’ble Jurisdictional High Court in the case of CIT vs HEDE Consultancy Ltd. [2002 (6) TMI 19 - BOMBAY HIGH COURT] In view of the aforesaid observations and also by placing reliance on the judicial precedent relied upon hereinabove, we direct the ld AO to delete the disallowance made towards repairs to buildings.
Disallowance of commission paid - HELD THAT:- We find that the assessee had given an explanation that it had entered into agreement with those parties and commission is paid only if such agent solicits business for the assessee. The assessee also pointed out that due deduction of tax at source was made in accordance with provisions of Chapter XVIIB of the Act while making payment of such commission and payment made through regular banking channels. We find that the ld AO had merely followed his finding in Asst Year 2009-10 and made the disallowance for this year also in respect of the aforesaid two parties. No examination in any manner known to law was made by him for the year under consideration. - As decided in own case [2017 (12) TMI 1817 - ITAT MUMBAI].after considering the details furnished by assessee like copies of agreements, invoice copies, relevant extract of bank statements, TDS certificates, etc, the same issue was decided in favour of the assessee and against the revenue by holding that merely non furnishing of information by the third party cannot be sole criteria for disallowance, when it is provided that expenses per se had been incurred in the normal course of business.
Chargeability of interest u/s 234C - HELD THAT:- Interest u/s 234C of the Act could be levied only on the returned income and not on the assessed income - See Smt Premlata Jalani [2003 (7) TMI 62 - RAJASTHAN HIGH COURT] Decided in favour of assessee.
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2021 (11) TMI 91 - ITAT CHANDIGARH
Deductions u/s. 54 - assessee had purchased the house outside India - Scope of amended provisions - HELD THAT:- CIT(A) has allowed the deductions u/s. 54 of the Act basically holding that the amended provisions have no retrospective application as the claim of the assessee pertains to the assessment year 2013-14, whereas, the amendment was made applicable w.e.f. 01.04.2015. As pointed out by the ld. counsel, the ld. CIT(A) has decided the issue involved in the present case by following the judgement of the Hon'ble Gujarat High Court in the case of Leena Jugal Kishore Shah [2016 (12) TMI 351 - GUJARAT HIGH COURT] and case of Shri Jaswinder Singh Lota [2018 (3) TMI 1942 - ITAT CHANDIGARH].
Peculiar facts of the present case the claim of the assessee has to be allowed. It is seen that the amendment by the Finance Act of 2014 in section 54F comes into effect only from 01/04/2015. Thus, from the said date the benefit of deduction under section 54F for investments made outside India undisputedly can be denied as it can be said to be limited to the investment in residential house property made only within India. However, prior to the said date when the amendment kicks in, there is no statutory bar for the taxpayer to make investments outside India in residential house property in order to get the benefit of deductions 54F provided other conditions were fulfilled. Thus, since the assessment year under consideration is prior to the amendment of section 54F by the Finance Act, 2014 the law as on date stands that the claim of the assessee has to be allowed. - Decided in favour of assessee.
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2021 (11) TMI 90 - ITAT DELHI
Withdrawal of exemption as provided u/s. 12A - assessment was reopened on solitary ground that the registration u/s. 12AA of the Act as granted to the assessee was cancelled since inception - HELD THAT:- Tribunal in own case [2021 (6) TMI 621 - ITAT DELHI]was pleased to set-aside the impugned order whereby the registration of the assessee trust u/s.12AA of the Act was cancelled since inception, however, the Tribunal restored the Registration granted u/s. 12AA.
Revenue could not controvert the fact that the sole ground of re-opening of assessment was that the Registration granted u/s. 12A of the Act had been cancelled since inception, therefore, the assessee was not eligible for the benefit of sections 11 & 12 of the Act. Under the undisputed fact that the basis of reopening of the assessment now no more exists - assessment framed on the basis of such ground cannot be sustained. We, therefore, set-aside the assessment order and direct the AO to delete the addition and grant benefit of exemption as provided under law. The grounds raised in the present appeal are allowed in terms indicated hereinabove. - Decided in favour of assessee.
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