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Income Tax - Case Laws
Showing 501 to 506 of 506 Records
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2021 (11) TMI 35
CIT(A) dismissed the appeal of assessee in ex-parte proceedings - Reopening of assessment - unexplained cash deposited in his bank accountHELD THAT:- AO while passing the assessment order made on account of unexplained cash credit on the basis of deposit in his bank account. The ld.CIT(A) confirmed the action of AO by taking view that there is non-compliance on the part of the assessee. Before, us the ld. AR for the assessee undertook to be vigilant and to appeal before the ld. CIT(A). We, instead of going into controversy, whether the assessee defaulted in attending the proceedings before the ld.CIT(A). We find that the order of the ld. CIT(A) is not in accordance with mandate of section 250(6) of the Income Tax Act. Section 250(6) of the Act mandates that the Ld. CIT(A) while deciding the appeal is required to pass order on points of determination (grounds of appeals), decision therein on and reasons for such decision. Therefore, considering the facts and circumstances of the case, the appeal of the assessee is restored back to the file of the ld. CIT(A) to decide all the grounds of appeal on merit in accordance with law. The assessee is directed to appear before the ld. CIT(A) as and when the date of hearing is fixed and to provide all necessary evidence - Assessee appeal allowed for statistical purpose.
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2021 (11) TMI 34
TDS u/s 194J - Non deduction of TDS on channel placement charges - cable operators are providing "technical services" - CIT(A) deleted the demand of tax raised u/s 201(1) - HELD THAT:- When placement charges are paid by the respondent to the cable operators/ MSOs for placing the signals on a preferred band, it is a part of work of broadcasting and telecasting covered by sub clause (b) of clause (iv) of the explanation to Section 194C. As a matter of fact, it was found by the Commissioner (Appeals) that whether the payment is towards a standard fee or placement fee, the activities involved on the part of the cable operators/ MSOs are the same. When placement fee is received, a channel is placed on a particular prime band.
It was found that by an agreement to place the channel on a prime band by accepting placement fee, the cable operator/ MSO does not render any technical service. As far as Appellate Tribunal is concerned, again the definition of work in clause (iv) of the explanation to Section 194C was looked into. We must note here that a grievance was made by the learned counsel appearing for the appellant that there are no detailed findings recorded by the Appellate Tribunal. Commissioner (Appeals) has recorded detailed findings on the basis of material on record and by referring to the findings, the Appellate Tribunal has expressed general agreement with the findings recorded by the first Appellate Authority. While affirming the judgment of the first Appellate Authority, it is open for the Appellate Tribunal to express such general agreement - Decided against revenue.
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2021 (11) TMI 33
Validity of revisionary jurisdiction u/s.263 - No enquiries were carried out on certain expenditure with regard to application which includes application on account of education - Whether relevant and sufficient enquiries were indeed carried out by the ld. AO in the original assessment proceedings? - HELD THAT:- Detailed examination has been carried out by the ld. AO with regard to entire expenditure incurred on the objects of the trust (charity expenses). We find that the ld. AO on examination of various details filed from time to time together with the supporting evidences, was indeed satisfied with the replies given thereon and had taken a plausible view in the matter and assessment completed accordingly u/s.143(3) of the Act. While this is so, in our considered opinion, it is incorrect on the part of the ld. PCIT to conclude that no enquiries were carried out by the ld. AO with regard to the impugned issue. In these facts and circumstances, we have no hesitation in quashing the revision order passed u/s.263 of the Act by the ld. PCIT on the issue of expenditure incurred for objects of the trust.
Transfer of two plots of land and alleged capital gains resulting thereon - We find that in the original assessment, the case was selected under ‘limited scrutiny’. One such point of examination under ‘limited scrutiny’ was “mismatch in income / capital gain on sale of land or building”. The ld. AO had duly questioned the assessee in the original assessment proceedings regarding the same vide notice u/s.142(1).
As specifically pointed to the ld. AO by the assessee that, as assessee has received only advance against sale of land, the advance receipt of ₹ 71 Crores has been shown as liability in balance sheet as on 31/03/2015. It was also pointed out that the purchasers of the said property had deducted tax at source u/s.194IA while making payment of advance. Accordingly, the said amount is reflected in Form 26AS of the assessee. By this process, the assessee had explained the mismatch between the entry in Form 26AS and the income of the assessee. Later, vide letter dated 23/05/2017, the assessee enclosed a detailed note exclusively on receipt of advance pursuant to a specific query raised by the ld. AO during the course of personal hearing.
As explained by the assessee before the ld. AO that since the approval of the Charity Commissioner was obtained by the assessee trust only on 22/06/2016, the conveyance deed has been executed by the assessee thereafter and accordingly, there was no taxable capital gain that arises in A.Y.2015-16. Based on this explanation, the ld. AO on due examination of the documents, took a plausible view and the correct view that capital gains does not arise in A.Y.2015-16 to the assessee. Hence, we hold that the order of the ld. AO in this regard cannot be termed as erroneous so as to invoke revision jurisdiction u/s.263.
Though the remaining property is in possession of 41 Lessees/sub-lessees/their purported assignees, the purchase of the reversionary rights in respect of the Remaining Property is only by the said 6 Defendants. Since the sanction of the Charity Commissioner in the instant case was obtained only on 22/06/2016, there cannot be any taxable event in the form of capital gains that could arise to the assessee trust in A.Y.2015-16. The alternative argument advanced by the ld. AR was that even if there be any capital gains in A.Y. 2015-16 itself, the entire receipt of ₹ 71 crores was duly invested by the assessee in terms of Section 11(1A) of the Act and hence, there cannot be any taxable capital gain in the hands of the assessee trust.
We find that the conveyance deed was executed only after the Order of the Charity Commissioner ; that the assessee trust was never in possession, that the possession of the Purchaser in respect of certain portions was in their capacity as lessees. In the present case, the agreement i.e the Consent Terms is not registered and hence the doctrine of part performance cannot be applied and consequently section 2(47)(v) of the Act cannot be made applicable.
AO having taken a possible view in the matter after making adequate and requisite enquiries thereon and after examining the relevant documents, had framed the assessment u/s.143(3) of the Act, which in our considered opinion, cannot be termed as erroneous at all on the impugned issues - Revision jurisdiction u/s.263 of the Act invoked by the ld. PCIT on the alleged applicability of capital gains on transfer of two plots of land, is devoid of merit and against the provisions of the Act and decided judicial precedents thereon. - Decided in favour of assessee.
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2021 (11) TMI 32
TP Adjustment - Comparable selection - Functional dissimilarity - upward adjustment in respect of the international transactions pertaining to Information Technology ("IT"), Information Technology Enabled Services ("ITeS") and Business Support Service ("BSS") segment - HELD THAT:- Exclusion of companies functionally different with that of assessee from the final set of comparables in respect of the assessee for IT ,ITES segment and BSS Segment.
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2021 (11) TMI 31
Undisclosed investment u/s 69 - co-ownership - addition of 1/3rd amount of the total sale consideration - whether the documentary evidence oral evidence and the circumstantial evidence adduced by the assessee are sufficient to substantiate his contention that no payment was made by him towards sale consideration to Mr. Tejinder and Mr. Prabhu Parmatama and to further rebut the presumption that the sellers transferred the land in question to the assessee and two others for a total consideration as recorded in the sale deed? - HELD THAT:- We hold that the assessee and his co-purchasers had not paid any money towards sale consideration to their uncle Mr. Tejinder Singh or the other co-owners when the land in question was transferred in their names. The circumstantial evidence that the two purchasers transferred back their share to Mr. Tejinder Singh without any consideration further corroborates the contention of the assessee that the purchasers had not paid sale consideration to Mr. Tejinder Singh when the said land was transferred in their names. So far as the legality or permissibility of such transaction is concerned, the same is not the subject matter of this appeal. As per the settled law income tax is levied on the real income of the assessee. In the present case, since the assessee has adducing cogent and convincing evidence to demonstrate that no money was paid towards sale consideration or otherwise to Mr. Tejinder, the action of the Ld. CIT(A) is not sustainable in law.
The copies of assessment orders dated 25.12.2019 & 27.09.2019 passed by the concerned AOs u/s 147 read with section 143(3) in the case of the co- purchasers Sh. Gurjit Singh and Sh. Jagdeep Singh respectively, show that the concerned AOs have accepted the identical contention raised by the assessee during assessment proceedings and accepted their nil returns. But in the case of the assessee the AO rejecting the same contention made addition of 1/3rd amount of the total sale consideration.
Proceedings u/s 263 of the Act are being contemplated in the cases of Gurjit Singh and Jagdeep Singh is concerned, it is clear from the copies of official correspondences placed on record that the Ld. AICT Patiala Range and the Ld. JCIT Panchkula have sent proposals for initiating proceedings u/s 263 of the Act in the case of Jagdeep Singh and Sh. Gurjit Singh to the concerned Principal Commissioners on 28.12.2020 and 31.12.2020 respectively. As pointed out by the Ld. counsel, these proposals have been moved by the concerned officers during arguments of the present appeal before the Tribunal. Under these circumstances, the action of the Ld. CIT(A) cannot be justified.
In the case of Smt. Amarjit Kaur [2019 (6) TMI 1645 - ITAT CHANDIGARH] following the ratio laid down by the Hon’ble Supreme Court in the case of Berger Paints India Ltd.[2004 (2) TMI 4 - SUPREME COURT] and in the case of Leader Valves Ltd. [2007 (1) TMI 70 - HIGH COURT, PUNJAB AND HARYANA] has deleted the addition sustained by the Ld. CIT(A) in violation of the principle of consistency.
CIT(A) has passed the impugned order without taking into consideration the direct and circumstantial evidence placed on record by the assessee to substantiate his contention. Further, since the Ld. CIT(A) has passed the impugned order without taking into consideration the view taken by the department in the cases of co-purchasers, the impugned order passed in violation of principle of consistency is also bad in law. Hence, in view of the discussions made on facts, evidence on record and the cases discussed in the foregoing paras, we allow the appeal of the assessee and set aside the impugned order passed by the Ld. CIT(A). Accordingly, we direct the AO to delete the addition. - Decided in favour of assessee.
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2021 (11) TMI 1
Deduction u/s 80IA - benchmarking analysis was performed by the assessee to determine the ALP of power transferred by the CPP to the manufacturing unit - DRP held transfer pricing adjustment made by the TPO is distinct from claim of deduction u/s 80-IA and any transfer pricing adjustment would result in enhancement of business income of the assessee and not reduction in the claim made u/s 80-IA - HELD THAT:- For the AY 2016-17, the assessee had disclosed Gross Total Income before setting-off of brought forward business losses. After setting off the losses brought forward from the earlier years, the Gross Total Income in terms of Section 80A of the Act was NIL. Accordingly, the assessee could not have claimed any deduction under Part-C of Chapter VI-A of the Act, because as per the provisions of Section 80A(2), the deduction permissible under Chapter VI-A cannot exceed the gross total income, which in the present case was NIL. Hence, when no deduction has been claimed u/s 80-IA(4)(ii) of the Act, then even if, any transfer pricing adjustment is made to the transactions of the eligible unit referred to u/s 80-IA(8)/(10), the same will not have any bearing on the computation of total income, as the revised claim u/s 80-IA of the Act, even after the transfer pricing adjustment, would continue to remain NIL. The manner of computation of income, had the downward adjustment made u/s 80-IA(8)/(10) of the Act been upheld, as explained by the assessee in the above illustration, is thus held to be justified and in accordance with law.
We agree with assessee that the ALP determined u/s 92BA, is in the context of Section 80-IA(8) of the Act, and thus the consequent transfer pricing adjustment, if any, has to be made to the quantum of the eligible deduction u/s 80-IA of the Act and not to the ‘Business Income’ as held by the Ld. DRP. In the garb of making downward adjustment to the quantum of profits of the CPP eligible for deduction, the AO cannot artificially enhance the returned income, by making adjustment which is in excess of the deduction claimed under Chapter VI-A i.e. Section 80-IA of the Act. Such action is held to be unwarranted.
Disallowance of club expenses - As per AO such expenses incurred by the company were personal in nature and he therefore disallowed it u/s 37(1) - HELD THAT:- For subscription fees paid to different trade associations such as Indian Paper Mfg Association, Indian Chamber of Commerce, Tappi Journal etc., which are ex28 facie for business purposes. We do not find any infirmity in the deduction claimed for the aforesaid expenses and accordingly allow the same.
For expenses comprise of annual membership fees of clubs paid for the Directors of the company. It is noted that the Hon’ble Supreme Court in the case of CIT Vs United Glass Mfg. Co. Ltd. [2012 (9) TMI 914 - SUPREME COURT] has held that the club membership fees for employees incurred by the assessee is business expense u/s 37.
Assessee has also demonstrated that these club expenses were considered as non-monetary perquisite in the hands of the Directors and it formed part of their respective taxable salaries. The copies of the relevant Forms 16 of the Directors are available at Pages 129 to 136 of the paper book. Hence, the club expenses borne by the assessee was in sum and substance in the nature of employees’ compensation cost, which was rightly claimed as deduction u/s 37 of the Act. - Decided in favour of assessee.
Additional claim for deduction of entry tax paid under protest during the relevant year u/s 43B of the Act, which had not been claimed in the return of income - HELD THAT:- AR pointed out that, although the AO had categorically observed that the amount of ₹ 62,90,188/- was allowable u/s 43B of the Act, but while computing the taxable income, separate deduction in relation thereto, had not been granted by him. The limited prayed of the Ld. AR of the assessee is to direct the AO to follow his own observations and allow deduction for the entry tax paid in the computation of total income. DR appearing on behalf of the Revenue fairly stated that this appears to be an apparent mistake committed by the AO in the computation of assessable income. Having regard to the foregoing, we accordingly direct the AO to allow deduction for entry tax aid by the assessee during the year while assessing the total income for the relevant year. This ground therefore stands allowed.
Disallowance of mandi fees u/s 43B - HELD THAT:- Hon'ble Apex Court in the case of NTPC Vs CIT[1996 (12) TMI 7 - SUPREME COURT] and Goetze (India) Ltd. [2006 (3) TMI 75 - SUPREME COURT] has held that that, if a claim which is available in law is not raised either inadvertently or an account of erroneous plea of complex legal position, in the return of income such a relief cannot be shut up for all the times to come merely because it is raised for the first time in appellate proceedings in absence of a revised return filed before the Assessing Officer. For the aforementioned reasons, we therefore admit this ground raised by the assessee.
In the facts of the present case, the assessment year in question is AY 2016-17. Having regard to the provisions of Section 43B(1)(a) of the Act as applicable to this AY, we hold that ‘fees’ is indeed included within the fold of Section 43B of the Act and is therefore allowable only on actual payment basis. For the reasons as aforesaid, this ground of appeal therefore stands dismissed.
Direction to AO for re-computation of the set off and carry forward of unabsorbed business loss and depreciation brought forward from the earlier years - HELD THAT:- In terms of the above findings, we direct the AO to re-compute the set off and carry forward of unabsorbed business loss and depreciation brought forward from the earlier years while giving effect to this appeal. Accordingly, this ground stands allowed for statistical purposes.
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