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Income Tax - Case Laws
Showing 461 to 480 of 506 Records
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2021 (11) TMI 88 - ITAT PUNE
Exemption u/s 11 - denying grant of registration u/s. 12AA - whether the objects of the applicant are charitable in nature or not and genuineness of the activities carried on by the trust - HELD THAT:- During the course of proceedings before the ld. CIT(Exemption), Pune, the appellant company was called upon to file certain information as to the details of expenditure incurred by it in the preceding financial year vide letter dated 13.08.2020 so as to enable the ld. CIT(Exemption) to form an opinion as to the genuineness or otherwise of the activities carried on by the appellant company.
It is an admitted position that the appellant had not complied with the said notice for whatever reasons. However, keeping in view the difficulties being faced on account of Covid-19 pandemic, we are of the considered opinion that the interest of justice would be met if the matter is remanded back to the file of the ld. CIT(Exemption) to grant one more opportunity to the appellant company to comply with the notice issued on 13.08.2020 and with direction that the ld. CIT(Exemption) to decide the issue of grant of registration u/s. 12AA of the Act on the touchstone of the law laid down by the Hon'ble Apex Court in M/s. Ananda Social and Educational Trust [2020 (2) TMI 1293 - SUPREME COURT]
Accordingly, the matter is remitted back to the file of the ld. CIT(Exemption). Appeal filed by the assessee is partly allowed for statistical purposes.
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2021 (11) TMI 87 - ITAT HYDERABAD
Limited scrutiny or limited scrutiny - HELD THAT:- After vehemently arguing for some time, learned counsel stated very fairly that the assessee no more wishes to press for the instant additional ground(s) as it emerged from a perusal of the case file that it was indeed a case of complete scrutiny assessment only.
Estimating 10% of her sub-contract receipts as her business income - HELD THAT:- As assessee has been assessed at very high rate of 10% deposits the fact that she is only a sub-contractor wherein the margin does not cross maximum rate of 3 to 4% - no merit in the assessee's instant arguments since both the lower authorities have already granted her substantive relief in estimating the impugned profit element @10% despite the fact that she has not maintained any books, details of sub-contracts (project-wise) corresponding and all other overhead expenses. We sought to know from the learned counsel about the assessee's alleged regular business activity in civil construction business wherein he failed to throw any light. We therefore hold that the assessee does not deserve any further relief over and above the impugned profit estimation @10%.
Disallowing bad debts, interest expenses followed by un-explained cash credits - HELD THAT:- When there is no indication in the case file regarding the learned lower authorities to have specifically issued any show cause notice regarding verification of the instant twin claims of bad debts interest disallowances, we deem it appropriate to restore the same back to the Assessing Officer for his afresh adjudication as per law within three effective opportunities of hearing.
Un-explained cash credits - HELD THAT:- Assessee during the course of hearing that assessee had not only submitted the list of the creditor parties but also their confirmations before the Assessing Officer and the sums in issue had come from the banking channel only. There can hardly be any dispute that it is the assessee's onus only to prove identity, genuineness and creditworthiness of such cash credits wherein she cannot simply take recourse to filing list thereof followed by mechanical confirmations. We therefore deem it appropriate to restore the install issue as well back to the Assessing Officer with a clear-cut direction that it shall be the bounden duty/risk of the assessee only to produce the corresponding parties in issue; as and when required to do so, in consequential proceedings within three effective opportunities of hearing in order to prove their genuineness and creditworthiness. The instant last substantive ground is accepted for statistical purposes in above terms.
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2021 (11) TMI 86 - ITAT DELHI
Penalty u/s. 271(1) (c) - HELD THAT:- Revenue has not controverted the fact that the facts are identical as were in the Assessment Year 2010-11 and the penalty proceeding pertaining of this year was dropped. The assessee has placed on record the order of the Assessing Officer pertaining to the Assessment Year 2010-11 wherein, the Assessing Officer had himself dropped the penalty proceedings.
Assessing Officer has not given any reason as to why he dropped the penalty in Assessment Year 2010-11 and sustained the imposition of penalty for Assessment Year 2009-10 under the same set of facts - As in the impugned penalty order, the Assessing Officer has stated that non-filing of appeal goes to demonstrate the acceptance by the assessee of furnishing/concealing of income -. This observation goes to demonstrate that the AO had not specified the charge, whether it was far furnishing of inaccurate particulars of income or concealment of income. Therefore, looking into the facts where the Assessing Officer under the same set of facts has dropped the penalty in Assessment Year 2010-11, therefore, the penalty in this year also cannot be sustained, hence, deleted. Grounds raised in the appeal are allowed.
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2021 (11) TMI 85 - ITAT CHANDIGARH
Addition on account of repurchase of Foreign Currency Convertible Bonds (FCCB) - allocation of machinery under the head of depreciation @ 15% and 80% are to be allocated on pro data basis depending upon the WDV of the said block - whether CIT(A)-3, erred in law & on facts in not directing the assessing officer, not to allocate the amount of difference of discount on buying back of FCCB and reducing a sum from the cost of assets, while computing depreciation in the absence of any such findings in the appellate order? - HELD THAT:- As per RYAM SUGAR COMPANY LIMITED [1974 (3) TMI 10 - CALCUTTA HIGH COURT]AO has no power to go beyond the direction of the competent authority while passing order giving effect.
So far as the merit of the case is concerned the Ld. counsel has pointed out that the issue involved is covered in favour of the assessee by the order of the Hon'ble Supreme Court in the case of Tata Iron & Steel Ltd. [1997 (12) TMI 5 - SUPREME COURT] - However, we notice that the Ld. CIT(A) has passed the impugned order without taking into consideration the cases relied upon by the Ld. counsel. As alleged by the Ld. counsel the issue involved is also covered in favour of the assessee which has not been looked into by the authorities below. Under these circumstances, we deem it appropriate to restore the issue to the AO for passing order giving effect afresh to the appellate order passed by the Ld. CIT(A) in the first round of appeal. The Ld. DR has no objection in case the appeal is send back to the AO for fresh consideration. Appeal of the assessee is allowed for statistical purposes.
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2021 (11) TMI 84 - ITAT CHANDIGARH
Addition u/s 69 - investment made from undisclosed sources - CIT-A deleted the addition - HELD THAT:- AO has also not doubted the identity of the persons or entities from whom the assessee raised loans in question. CIT(A) further noticed that all the transactions had been made through banking channels.
CIT(A) rightly delete the addition made by the AO. AO has not pointed out any evidence on the basis of which he reached at the conclusion that the assessee had obtained accommodation entries from the parties concerned. In our considered opinion, since the AO had made the addition in question on assumption and presumption basis the Ld. CIT(A) has rightly deleted the addition. We are therefore, of the considered view that the order passed by the Ld. CIT(A) is based on evidence on record and as per the settled principles of law, hence, does not require any interference. Therefore, we find no merit in the appeal of the revenue.
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2021 (11) TMI 83 - ITAT HYDERABAD
Disallowance towards sales tax penalty - assessee submitted that it is not a sales tax adjustment though it is mentioned as penalty - HELD THAT:- We observe that it is payment raised for the period from 4/2005 to 5/2007 for under-declared tax and imposed penalty vide order dated 30/07/2009 by the commercial tax department. Any penalty paid for violation of any law, is not allowable u/s 37 - Our view is supported by the decision of CIT Vs. Bharat Steel Tubes Ltd. [1995 (11) TMI 10 - DELHI HIGH COURT] - No infirmity in the action of CIT(A) in confirming the disallowance made by the AO on this account and accordingly, upholding the order of CIT(A), we dismiss the ground raised by the assessee on this issue.
Disallowance towards cash payments to labour - HELD THAT:- We find that before the AO the assessee requested to confine the disallowance to the extent of 10%, but, the AO made the disallowance @ 15% of the cash portion of labour payments. On considering the totality of the facts and circumstances of the case, we restrict the disallowance 10% of the cash portion of labour payments and the AO is directed accordingly. Thus, this ground is partly allowed.
Disallowance of interest on delay in remittance of TDS to the Govt. Treasury - AO noticed that the assessee claimed expenditure of interest on TDS - HELD THAT:- We observe that before the authorities the assessee submitted that the delay was caused in payment of TDS on account of paucity of funds whereas the revenue's grievance is that the assessee paid the interest for non-remittance of TDS to Govt. Account. Therefore, taking into consideration the request of the assessee that the issue may be remitted to AO for further verification, we remit the issue to the file of AO with a direction to verify whether the amount paid by the assessee towards delay or for non-remittance and decide the issue in accordance with law after providing reasonable opportunity of being heard to the assessee. The assessee is directed to substantiate its claim. Accordingly, this ground is treated as allowed for statistical purposes.
Deduction u/s 80IA - additional ground raised by the assessee - HELD THAT:- Hon’ble Bombay High Court in the case of "CIT vs. Pruthvi Brokers and Shareholders Pvt. Ltd [2012 (7) TMI 158 - BOMBAY HIGH COURT] has observed that the assessee is entitled to raise not merely additional legal submissions before the appellate authorities, but is also entitled to raise additional clams before them. The appellate authorities have jurisdiction to deal not merely with additional grounds, which became available on account of change of circumstances or law, but with additional grounds which were available when the return was filed. The words 'could not have been raised' must be construed liberally and not strictly. There may be several factors justifying the raising of a new plea in an appeal and each case must be considered on its own facts. In view of this, the additional ground taken by the assessee is admitted for adjudication - since the facts relating to this issue have not been examined by the lower authorities, hence, this issue is restored to the file of the AO for adjudication of the same as per law. The assessing officer is also directed that while deciding the additional ground of appeal regarding claim of deduction as per u/s 80IA if the Income Tax Act. 1961, the assessing officer will consider the CBDT Circular No. 37 of 2016 dated 2nd November, 2016 issued vide F.No. 279/Misc./140/2015/ITJ also. The assessee is directed to appear before the A.O. with necessary documents to substantiate its claim of deduction as per u/s 80IA and further directed to avoid unnecessarily delay to dispose-off the case. Thus, this additional ground is allowed for statistical purposes.
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2021 (11) TMI 82 - ITAT CHENNAI
TDS u/s 194C - Non deduction of TDS on payments to shipping companies and CFS Agents - Addition u/s 40(a)(ia) - assessee claims that payments made to shipping companies and CFS Agents on behalf of its clients is in the nature of reimbursement of expenses without any element of profit and thus, is outside the scope of provisions of TDS - HELD THAT:- If you accept the arguments of the assessee, then the purpose of legislature is defeated and the intend to subject the contract payment to deduction of tax at the point of payment is defeated by D transaction in such a manner that the purpose is defeated. It is also important to note that it is the assessee who has booked the expenditure towards container storage charges on payment to shipping companies/CFS Agents and debited in their books of accounts. Similarly, the assessee has received charges from its clients including amount paid to shipping companies/CFS Agents and the same has been credited to its P&L a/c when it had received payments from its clients - payments made by the assessee to shipping companies/CFS Agents is not a reimbursement of expenses, but first hand payment between principal to principal on the bill raised by the service providers. Since, the assessee has made payment on behalf of their customers; the assessee ought to have deducted TDS on such payments while making payments. Since, the assessee has failed to deduct TDS, on such payments the AO is right in disallowing such payments u/s. 40(a)(ia) of the Act. Hence, we confirm additions made by the AO.
Alternative plea of the assessee that it has made payment to reputed shipping companies and all service providers has filed their return of income u/s. 139 of the Act and included payments made by the assessee in the return of income and thus, the assessee cannot be held as an assessee in default in terms of second proviso to section 40(a)(ia) of the Act inserted by the Finance Act, 2012 w.e.f. assessment year 2013-2014 - In this case, the assessee has failed to obtain Form No. 26A and file before the AO and CIT(A) to give the benefit of proviso to section 40(a)(ia) of the Act, and said lapse is continued even before us. Before us, the assessee could not file any Form no 26A obtained from its clients nor filed their ITR copies to prove that the recipients have included sum paid by the assessee in their income tax returns. Therefore, we are of the considered view that there is no merit in alternate ground taken by the assessee and hence, the same is rejected.
Disallowance u/s. 36(1)(ib) of the Act towards Key man Insurance Premium paid - HELD THAT:- As CIT(A), the assessee did not file any evidence to justify payment of insurance premium on Key man Insurance Policy taken in the name of the directors. Even before us neither any evidence was filed nor justified payment. There is no error in the reasons given by the CIT(A) to sustain additions made by the AO for disallowance of insurance premium paid on Key man Insurance Policy. Hence, we reject the arguments of the assessee and confirm additions made by the AO.
Appeal filed by the assessee is dismissed.
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2021 (11) TMI 81 - ITAT CHANDIGARH
TDS u/s 194H - Non deduction of TDS on the payment of incentive to various dealers - HELD THAT:- A.O. or JCIT didn't refer to any judgment in support of their observations that provisions of Section 194H read with Explanation 1 bring the case as one of services rendered in buying and selling. We don't find any merit: in the findings of A.O. read with the directions of JCIT and hold that no TDS deduction was required, keeping in mind the facts and circumstances in the appellant's case in respect, of incentives paid/payable to their franchise showrooms and distributors.
TDS u/s 194J - Findings of the Ld. CIT(A) are in accordance with the provisions of law and in consonance with the ratio laid down by the Hon'ble Supreme Court in the case of Hindustan Coco Cola Beverage (P) Ltd. vs. CIT [2007 (8) TMI 12 - SUPREME COURT] as held recipient of income has already paid taxes on amount received from deductor, the department cannot recover tax from deductor on the same income by treating deductor to be assessee-in-default for shortfall in its amount of tax deducted at source - Hence, we do not find any infirmity in the order of the Ld. CIT(A) to interfere with the same. Accordingly, uphold the findings of the Ld. CIT(A) and dismiss this ground of appeal of the revenue.
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2021 (11) TMI 80 - ITAT DELHI
Reopening of assessment u/s 147 - Addition of payment made from an unaccounted sources - Addition based on soft copy of a deed found from the computer of deed writer - HELD THAT:- No copy signed by the assessee and seller parties with a transaction has been found during the course of the search of Sh Naresh Gupta. The deed writer, himself has denied of having aware of any money transaction between the parties, which was recorded in the computer. He stated during the course of search that amount mentioned may be as a result of cut/paste of various documents in the computer. We find that the Assessing Officer has made addition only on the basis of said unsigned deed and no corroborative evidences have been brought on record to show that purchase transaction was executed by the assessee at the rate mentioned in the computer of Sh. Naresh Sharma.
Assessing Officer has not carried out any inquiries from the seller of the land also. The assessee cannot be penalised merely on the basis of an unsigned deed found from the premises of a third-party. In our opinion, the finding of the Ld. CIT(A) on the issue in dispute is well reasoned and we do not find any error in the same. - Decided in favour of assessee.
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2021 (11) TMI 79 - ITAT BANGALORE
Deduction u/s 54F - Denial of deduction assessee was owner of multiple houses as on date of purchase of new asset - assessee owned 6 residential units and that effective ownership was held by assessee - scope of amendment - HELD THAT:- As perused the joint development agreement wherein, the sale consideration determined as against the transfer of right title and interest in the land by assessee for the purposes of development was 42% of the constructed premises being 24 residential units. In the Assessment Year under consideration, assessee is owner of 6 flats that are unsold under the JDA.
No infirmity in the view taken by the Ld.CIT(A) that assessee owned multiple flats as on date of purchase of new asset. The relevant assessment year being 2013-14, the amendment would be applicable to the present facts and assessee won’t be entitled to the benefit u/s. 54F. - Decided against assessee.
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2021 (11) TMI 78 - ITAT BANGALORE
Disallowance of travel expenditure - addition estimated at 5% of the total expenditure claimed by assessee - HELD THAT:- As on the submissions advanced by Ld.AR now before us, it is justifiable to restrict the disallowance only to the extent of travel expenses. Whereas other expenses stands explained as most of the payments are statutory payments. Considering the fact that assessee sumo to disallowed a portion of it in the computation of income, further 5% of the travel expenses incurred would cover the leakage. We therefore direct the Ld.AO to restrict the disallowance only to the extent of 5% of the travel expenses.
Addition u/s 68 - unexplained share application money and share premium money invested - HELD THAT:- As assessee filed its own audited accounts for assessment year under consideration, the share subscription and shareholders agreement, bank statement of current account held by assessee showing the receipt of the funds and a letter from the bank held by one of the promoter who is having the NRE account of having debited in amount of ₹ 140 lakhs in favour of assessee. As rightly observed by authorities below assessee has not discharge the primary onus of establishing the creditworthiness of all the directors. The right measure is to file the bank statements of the creditors/subscribers, copy of returns filed by them to establish that the promoters/share subscribers had sufficient funds to make such huge payments to assessee towards share capital/share premium.
In the interest of justice we deem it proper to remand this issue to the Ld.AO. Assessee is directed to file all documents/statutory forms to establish the creditworthiness of the all the promoters/share subscribers. Merely by showing that the funds have received in the hands of assessee through banking channels, would not establish the creditworthiness of such creditors. Ld.AO is directed to verify all the details filed by the assessee and consider the claim in accordance with law
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2021 (11) TMI 77 - ITAT MUMBAI
Bogus STCL - Disallowance of Loss arising from the trading in shares - accommodation entry of STCL -- AO has disallowed the claim of the assessee based on analysis of the information received from Directorate of Investigation as a result of enquires undertaken by the officers of the Directorate - HELD THAT:- Assessee has produced documents to substantiate the genuineness of the transactions carried out through banking channels, through the medium of portfolio management whereby there is no contact between the buyer and the seller. The fact remains that there is direct evidence placed on record by the assessee to support the genuineness of the impugned transactions such as contract notes, share certificates, corroborative evidence indicating purchase/ sale through registered broker as juxtaposed against the findings of the AO based on the general report from Investigation and the modus operandi adopted by unscrupulous entry providers. There is no denying that there is no assessee-specific material on record of the AO to pin-point that the assessee has entered into an unholy nexus with entry providers so as to stage manage accommodation entry of STCL.
Material furnished by assessee to substantiate its claim remains unchallenged and uncontroverted. The purchases were neither off-market nor through preferential allotment. Besides, no copy of any report of information received was supplied to the assessee. The assessee was not confronted with any statement or material allegedly detrimental to the assessee arising or culled out of the Investigation report. Thus, the fact remains that the findings of the lower authorities are not based on evidence but on generalizations and probabilities. The AO could not place anything on record, maybe through a process of his own enquiry, to decisively prove that assessee has obtained bogus STCL through his connivance with entry operators / exit providers.
The claim of the assessee appears to have been rejected more on the basis of presumption rather than evidence. An assessment purely based on suspicion, surmises and conjectures without any tangible evidence on record against the assessee of any connivance or collusion is unsustainable in law. - Decided in favour of assessee.
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2021 (11) TMI 76 - ITAT DELHI
Allowable business expenses - Expenses incurred for retaining the status of the company - assessee did not carry out any business activity during the assessment yea - HELD THAT:- Assessee was incorporated on 10.09.2087, made investments in V. Hotels Ltd, which had acquired Centaur Hotel in Mumbai from the Government intending to revive the business of such hotels, but in view of legal dispute with regarding to Centaur Hotel and also on account of economic slowdown, the assessee could not start running of hotel, but, however, to keep the status of the company, the assessee had to incur expenses in the shape of salary of few key personnel, payments made towards statutory funds, communications, professional fees etc.
CIT(A) while following the decision of Hon’ble jurisdictional High Court in the case of Integrated Technology Ltd. [2011 (12) TMI 48 - DELHI HIGH COURT] and also order of Mokul Finance Pvt. Ltd [2007 (7) TMI 351 - ITAT DELHI-I] granted relief on the ground that the expenses incurred for retaining the status of the compare are allowable deduction, even though the assessee did not carry out any business activity during the assessment year. - Decided against revenue.
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2021 (11) TMI 75 - ITAT CHENNAI
Nature of receipt - receipt in respect of Renewal Energy Certificates akin to carbon receipts - revenue or capital receipt - HELD THAT:- Hon’ble Jurisdictional High Court in the case of CIT v. Ambika Cotton Mills Ltd. [2021 (3) TMI 442 - MADRAS HIGH COURT] has held that the proceeds received by the assessee company carrying on business of power generation on sale of certified emission reduction credit (carbon credit) is a capital receipt and not business income as carbon credit is not an offshoot of business, but an offshoot of environmental concerns.
We hold that the proceeds received by the assessee is capital receipt. No reason to interfere with the order of the ld. CIT(A) and accordingly, the ground raised by the Revenue is dismissed.
Belated payment towards PF & ESI contribution - AO disallowed the same on the ground that the payment was delayed, which cannot be allowed under section 43B - HELD THAT:- As appellant has made the remittance of employees contribution towards PF/ESI account before the due date of filing of the Return of Income u/s 139(1) of the Act and, therefore, it is held that no disallowance can be made u/s 43B - As gone through the assessment order and appellate order and find no infirmity in the order passed by the ld. CIT(A). Accordingly, this ground of appeal of the Revenue is dismissed.
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2021 (11) TMI 74 - ITAT MUMBAI
Violation of section 144C(1) - whether the impugned assessment order passed by the AO without proposing a draft assessment order makes it invalid? - HELD THAT:- Undisputedly, the conditions of section 144C(1) of the Act are satisfied in case of the present assessee, as, the assessee has entered into international transaction with the AE and there is a variation to the income which is prejudicial to the interest of assessee. In fact, initially, based on the adjustment proposed by the TPO, the AO had framed the draft assessment order and ultimately the Tribunal restored the issue back to him. However, though, the TPO again proposed adjustment and there is a variation to the income of the assessee which is prejudicial to its interest, the AO without following the mandatory provisions of section 144C(1) of the Act has proceeded to pass a final assessment order making the addition proposed by the TPO.
There cannot be any doubt that the AO has not followed the statutory mandate contained under section 144C(1) of the Act. Keeping in view the aforesaid factual position, it has to be decided whether the assessment order so passed is valid in the eye of law. Undoubtedly, by not proposing a draft assessment order, the AO has effectively denied the assessee the remedy available under the statute of raising objections before the DRP. As we find, while deciding identical nature of dispute involving similar facts, the Hon’ble jurisdictional High Court in case of Dimension Data Asia Pacific Pte. Ltd. [2018 (7) TMI 1256 - BOMBAY HIGH COURT] has held that assessment order passed in violation of section 144C(1) is invalid - Hon’ble Delhi High Court in case of Turner International India (P) Ltd. vs. DCIT [2017 (5) TMI 991 - DELHI HIGH COURT] has expressed same view. We hold that the impugned assessment order passed under section 143 (3) r.w.s. 254 of the Act is invalid. Accordingly, we quash it. This ground is allowed.
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2021 (11) TMI 65 - ITAT KOLKATA
Rejection of books of accounts - invoking the provision of section 145(3) - GP Estimation - gross turnover for the year as “Income from other sources” - HELD THAT:- As facts pertaining to discrepancies noticed in the financials of the assessee-firm and has also referred to various charts depecting the profitability of the assessee-firm in preceding years vis-à-vis other related concerns of the same group and operating in the same field and even the same area. We find merit in the finding of Ld. CIT(A) rejecting the book results and invoking the provision of section 145(3) of the Act and this action of the Ld. CIT(A) has also not been challenged before us by the assessee by raising a specific ground.
Assessee miserably failed to controvert the finding of Ld. CIT(A) by placing any material in its support. The only argument made by ld. counsel for the assessee is that the assessee-firm is consistently being allowed to the deduction u/s 80IC of the Act but had not said anything about the correctness of profit earned during the year.
The case relied by the assessee in the case of M/s. Goodcare Pharma Pvt. Ltd. [2019 (4) TMI 566 - ITAT KOLKATA] is also not be of any benefit to assessee since the fact are not similar and more specifically the issue of rejection of book results was not before the coordinate bench of Kolkata in the case of M/s. Goodcare Pharma Pvt. Ltd. (supra) and, therefore, it shall not be applicable on the instant issue raised before us.
Under the given facts and circumstances of the case and detailed enquiry conducted by the Ld. CIT(A), which remained uncontroverted by the ld. counsel for the assessee find no reason to interfere in the finding of Ld. CIT(A) applying the gross profit rate of 40% on the turnover disclosed by the assessee as against the gross profit rate of 57.01% disclosed by the assessee and accordingly has rightly charged the difference of the profit that is 17.01% (57.01% less 40%) on the gross turnover for the year as “Income from other sources”. Accordingly, ground no. 2, 3 & 4 raised by the assessee are dismissed. Appeal of the assessee for A.Y. 2013-14 is dismissed.
Conditional allowing section 80IC taking 40% G.P. Rate - HELD THAT:- As decided in own case we confirm the finding of the Ld. CIT(A) applying the gross profit rate of 40%.
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2021 (11) TMI 59 - BOMBAY HIGH COURT
Reopening of assessment u/s 147 - Change of opinion - HELD THAT:- As fact was not discussed by the AO while finalizing the assessment and the same has not been brought to the notice of the AO by the assessee with a view to conceal the above facts from the AO. The second part of this observation is incorrect inasmuch as in the Affidavit-in-Reply and as it appears from the reasons for reopening of assessment itself, the details have been brought to the notice of the AO when the original Assessment Order was passed. As regards non-discussion by the Assessing Officer while finalizing the assessment, it is settled law that it is not necessary that an Assessment Order should contain reference and / or discussion to disclose its satisfaction in respect of every item. If the AO has materials before him but has not chosen to deal with that in his Assessment Order, he is deemed to have accepted the explanation or returns of the assessee. We find support for this view in Aroni Commercial Ltd. [2014 (2) TMI 659 - BOMBAY HIGH COURT]
It is settled law that an Assessing Officer cannot reopen an assessment even within a period of 4 years merely on the basis of a change of opinion. In this case, the assessment is sought to be reopened after a period of 4 years and hence the proviso to Section 147 of the Act is applicable which stipulates a requirement that there must be a failure on the part of the assessee to disclose fully and truly all material facts necessary. It is also settled law that the AO has no power to review an assessment which has been concluded - In the reasons for reopening of assessment, there is not even a single ground for reopening mentioned. As noted earlier, the entire basis for reopening is based on the balance-sheet which has been filed by Respondents.
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2021 (11) TMI 58 - BOMBAY HIGH COURT
Reopening of assessment u/s 147 - Eligibility of reasons to believe - change of opinion - HELD THAT:- In the facts of the present appeal a query was raised by the Assessing Officer in original assessment in respect of waiver of loan on account of One Time Settlement with the banks and assessee had filed detailed submission as to why principal amount was waived by the bank on account of One Time Settlement is not taxable. Once there was query raised with regard to a particular issue during regular assessment proceedings it must follow that the Assessing Officer had applied his mind and taken a view in the matter as reflected in the assessment order. See Aroni Commercials Ltd. vs. Assistant Commissioner of Income Tax - [2014 (2) TMI 659 - BOMBAY HIGH COURT] - Decided in favour of assessee.
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2021 (11) TMI 57 - BOMBAY HIGH COURT
Reopening of assessment u/s 147 - undisclosed activity of money lending and borrowing - reasons that based on statements recorded of partners of M/s Evergreen Enterprises and employees - issuance of notice is that information was received from the Dy. Director of Income Tax Mumbai that a search and survey action u/s 132 was carried out in the case M/s Evergreen Enterprises and based on the statement recorded of the partner and documentary evidences found in the search of the premises of M/s Evergreen Enterprises unearthed an undisclosed activity of money lending and borrowing in unaccounted cash being operated at the premises of M/s Evergreen Enterprises - HELD THAT:- There is absolutely no mention as to how either the partners of M/s Evergreen Enterprises or the employees of Ms/ Evergreen Enterprises or this Bharat Sanghavi is connected to petitioner. Mr. Suresh Kumar relied upon the affidavit in reply to submit that Bharat Sanghavi was an employee of petitioner and, therefore, the reasons have been correctly recorded and the Assessing Officer has reason to believe that income had escaped assessment.
As noted earlier, the reasons for reopening of assessment has to be tested / examined only on the basis of the reasons recorded and those reasons cannot be improved upon and/or submissions much less substituted by an affidavit and/or oral submission. In the reasons for the reopening, the Assessing Officer does not state anywhere that Bharat Sanghavi was an employee of petitioner. In the reasons for reopening, the Assessing Officer does not even disclose when the search and survey action u/s 132 was carried out in the case of M/s Evergreen Enterprises, whether it was before the assessment order dated 30th December 2016 in the case of petitioner was passed or afterwards. The reasons for reopening is absolutely silent as to how the search and survey action on M/s Evergreen Enterprises or the statement referred or relied upon in the reasons have any connection with petitioner.
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2021 (11) TMI 56 - BOMBAY HIGH COURT
Maintainability of appeal - low tax effect - Order u/s 234E as maintainable under Section 260 - present petitions invoking Article 226 of the Constitution of India contending that the tax effect involved is below monetary limits as prescribed in Central Board of Direct Taxes (hereinafter referred to as ‘CBDT’) Circular No.17 of 2019 dated 8th August 2019 and the issue involved in the interpretation of Section has a cascading effect - HELD THAT:- It is undisputed that the subject-matter of present writ petitions does not fall within any criterion prescribed in clause 10 of Circular No.3 of 2018 as amended by Circular dated 20th August 2018.
The right to challenge the order passed by the Tribunal by way of statutory appeal has been circumscribed by the involvement of substantial questions of law to be decided by the High Court. While a High Court would normally not exercise its writ jurisdiction under Article 226 of the Constitution if an effective and efficacious alternate remedy is available, the existence of an alternate remedy does not by itself bar the High Court from exercising its jurisdiction in certain contingencies - See REGISTRAR OF TRADE MARKS, MUMBAI & ORS. [1998 (10) TMI 510 - SUPREME COURT].
None of the exceptions as laid down by the Supreme Court in the case of Radha Krishan Industries (Supra) has been fulfilled.
On an overall consideration of the issue involved, particularly in view of the case of the Petitioner that the issue involved is of interpretation of Section which has a cascading effect, it was open for the Petitioner to avail statutory remedy under Section 260A of the Act. Having failed to avail the statutory remedy and the case of the Petitioner does not fall into the exceptions laid down by the Supreme Court in the case of Radha Krishan Industries [2021 (4) TMI 837 - SUPREME COURT], we decline to exercise extraordinary jurisdiction under Article 226 of the Constitution of India.
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