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Income Tax - Case Laws
Showing 41 to 60 of 735 Records
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2021 (7) TMI 1342
Validity of assessment/reassessment against company filled petition under Insolvency Bankruptcy Code, 2016 - refund processed by the respondents in favour of the petitioner shall be adjusted against the outstanding demand existed from Assessment Year 2007-2008 till 2015-2016 - whether respondent Income Tax Authorities were legally justified in raising the aforesaid demand and issuing notices and orders cum intimations and whether the respondent Income Tax Authorities were legally justified in initiating reassessment proceeding and continuing with the assessment proceeding for the Assessment Year 2012-13 and 2016-17 respectively and completing the assessments for the period prior to the transfer date and whether such an Act of the respondent is in breach of violation of the order passed by the National Company Appellate Tribunal approving the Resolution Plan - initiation of penalty proceedings under Section 271 (1) (C) for the periods prior to the Transfer Date - HELD THAT:- As for proper adjudication of the issues involved in this Writ Petition, elaborate hearing upon affidavits is required. Petitioners have prima facie been able to make out a case for the interim order.
Let there be an interim order restraining the respondent Income Tax Authorities from taking any step or further steps or acting in any manner contrary or inconsistent with the approved Resolution Plan dated 14th November, 2018 which was confirmed by the order passed by the Hon’ble Supreme Court dated 26th July, 2019 and the respondents are also restrained from taking any further steps or to give further effect to the orders dated 24th December, 2019, 31st December, 2019 and the Notices dated 3rd January, 2020, 20th January, 2020 and 23rd January, 2020 till 30th September, 2021 or until further orders whichever is earlier.
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2021 (7) TMI 1341
Exemption u/s 11 - corpus donations - absence of 12AA registration of the Trust - Scope of amendment brought in Section 12A by Finance Act 2014 with effect from 01.10.2014 by way of insertion of first proviso to Section 12A (2) - whether the corpus donations in the form of voluntary contributions made with a specific direction would form part of the corpus of the trust and are exempted under Section 11(1)(d) of the Income Tax Act in the absence of 12AA registration of the Trust? - HELD THAT:- As amendment in Section 12A, the intention of the statute is to confer the benefits of exemption under Section 11 of the Act on genuine trusts which are registered under Section 12AA. It is true that equity and taxation are strangers. They cannot co-exist together. It may also be argued that equity has to prevail over the taxation even if the literal constructions of law attempts to cause such an interpretation. But philanthropy in taxation of trusts gets complicated due to the complex situation in our country. If the provision of law is interpreted in such a manner to allow all donations to corpus as exempted from tax, it would certainly open the floodgates to all and sundry, making it difficult for the Income Tax authorities to differentiate between the original and fake. The registration of trust, in case the trust has to accept donations and build corpus, is one way of regulating the flow of money into the trust and avoid unscrupulous elements trust from evading tax by seeking exemptions indiscriminately. - Decided against assessee.
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2021 (7) TMI 1336
Income deemed to accrue or arise in India - Taxability of amount received - PE in India - Indo-China DTAA - whether payments made by the assessee’s customers to it constituted royalty, in respect of software supplied? - HELD THAT:- We find no ground to interfere with the impugned order(s) passed by the High Court. The Special Leave Petitions are, accordingly, dismissed.
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2021 (7) TMI 1335
Addition u/s 68 - Unexplained loan - addition based on recording statements under Section 131 - statement was later on retracted by the Assessee, but the time gap between the such retraction and the said statement is more than one year - HC held we cannot find any fault with the findings concurrently rendered by the three authorities below, that the said addition deserves to be made under Section 68 - Merely because other two loan transactions, with two other persons was believed to be genuine and additions were set aside, that is not a sufficient ground to hold that a similar treatment should have been given with respect to the alleged loan transaction of M/s.AR.Com also - HELD THAT:- SLP dismissed.
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2021 (7) TMI 1333
Validity of Faceless Assessment - no personal hearing in terms of Section 144B(7)(vii) given - HELD THAT:- As standing Counsel accepts notice and submits that he needs to seek instructions as to whether the Petitioner can be afforded a hearing even at this stage. He will also inform the Court whether the aforesaid order of Delhi High Court has been implemented.
List the matter on 24th August, 2021.
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2021 (7) TMI 1326
Employee’s contribution to PF and employees contribution to ESI on account of delay in deposit as per concerned statutes - HELD THAT:- As relying on PRO INTERACTIVE SERVICE (INDIA) PVT. LTD. [2018 (9) TMI 2009 - DELHI HIGH COURT] in view of the judgement of the Division Bench of Delhi High Court in Commissioner of Income-Tax versus Aimil Limited, [2009 (12) TMI 38 - DELHI HIGH COURT] the issue is covered against the Revenue and, therefore, no substantial question of law arises for consideration in this appeal.
The legislative intent was/is to ensure that the amount paid is allowed as an expenditure only when payment is actually made. We do not think that the legislative intent and objective is to treat belated payment of Employee's Provident Fund (EPD) and Employee's State Insurance Scheme (ESI) as deemed income of the employer under Section 2(24)(x) of the Act.- Decided in favour of assessee.
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2021 (7) TMI 1325
Exemption u/s 11 - delay in filing Form No.10 - HELD THAT:- This writ petition is disposed of by granting liberty to the petitioner to file an application before the CBDT under Section 119(2)(b) of the Income Tax Act making prayer for authorising the concerned officers to consider for exemption by condoning the delay in filing Form No.10 for the relevant assessment year. If such application is filed by the petitioner within three weeks from date, the CBDT will consider and dispose of such application within four weeks from the date of receipt of such application in accordance with law with intimation to the petitioner.
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2021 (7) TMI 1324
Revision u/s 263 - only grievance of the appellant/assessee is that the Pr. CIT has wrongly exercised the jurisdiction u/s 263 of the Act directed the AO to pass the assessment order afresh - HELD THAT:- Under section 263 of the Act, the CIT has jurisdiction to call for and examine the record of any proceeding under the Act and if he considers that any order passed by the AO is erroneous in so far as it is prejudicial to the interest of the revenue, to pass order enhancing or modifying the assessment or cancelling the assessment and directing a fresh assessment after affording an opportunity of being heard to the assessee. So, as per the settled law, in order to exercise jurisdiction u/s 263 of the Act, the CIT has to be satisfied of twin conditions that the order sought to be revised is erroneous and that the order is prejudicial to the interest of the revenue.
In the case of CIT vs. Indo German Fabs [2015 (1) TMI 437 - PUNJAB & HARYANA HIGH COURT] has inter alia held that under section 263 the CIT has power to examine an assessment order to ascertain as to whether it is erroneous and prejudicial to the interest of the revenue, but does not confer jurisdiction to substitute his opinion for the opinion of the AO.
Therefore, u/s 263 of the Act CIT has power to revised only those orders which are erroneous and prejudicial to the interest of the revenue. In the present case, the Ld. CIT has revised the assessment order on the ground that the AO has not taken any adverse view in respect of the payment made to the retiring partner, without pointing out as to how the assessment order is erroneous.
In the case of CIT vs. Krishna Capbox (P) Ltd [2015 (3) TMI 17 - ALLAHABAD HIGH COURT] has held that where the assessing officer passes assessment order after raising queries from the assessee, mere non discussion or non-mention thereof in assessment order could not lead to the assumption that the AO did not apply his mind. Invoking of revisional jurisdictional on the said ground was held unjustified.
We hold that the impugned order is not in consonance with the law laid down by the Hon’ble Courts discussed above. Since the AO had passed the assessment order after making proper enquiry, the Ld. CIT has wrongly exercised the jurisdiction u/s 263 - Appeal of assessee allowed.
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2021 (7) TMI 1323
Validity of reopening of assessment - whether notice under Section 148 could be issued in the name of a deceased? - HELD THAT:- It is a settled principle of law that reopening notice issued in the name of a deceased person is not tenable in the eye of law. Neither the reopening notice under Section 148 issued to a dead person could be continued against legal representatives. Reliance is placed on the judgment passed by the Hon’ble Jurisdictional High Court in the case of Urmilaben Anirudhsinhji Jadeja [2019 (9) TMI 356 - GUJARAT HIGH COURT], MARUTI SUZUKI INDIA LIMITED [2019 (7) TMI 1449 - SUPREME COURT] AND CHANDRESHBHAI JAYANTIBHAI PATEL [2019 (1) TMI 353 - GUJARAT HIGH COURT]
Thus we find no merit in the initiation of the proceeding against the person who died more than three years prior to the date of issuance of notice under Section 148 - Decided in favour of assessee.
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2021 (7) TMI 1320
Stay of demand - relief sought to direct the first respondent to entertain the petitioners' appeals on merits without insisting for any pre-deposit amount at the rate of 20% of the demand - HELD THAT:- Under Section 246A of the Income Tax Act, 1961 no such pre-deposit for preferring an appeal is contemplated. Thus, the petitioners are not liable to pay any pre-deposit for the purpose of considering the appeals. If at all the appeals are in order and in accordance with the other procedures contemplated, the said appeals are to be taken on file and to be disposed of on merits and in accordance with law and by affording opportunity to the petitioners as expeditiously as possible. Thus, the petitioners are not liable to make any pre-deposit in view of Section 246A of the Act. It is made clear that if any stay petitions are filed along with the appeals, the said petitions are also to be considered before passing final orders in the main appeals in accordance with law.
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2021 (7) TMI 1315
Unexplained investment in purchase of the land - Penalty u/s 271(1)(c) - HELD THAT:- Special Leave Petition is dismissed on the ground of delay.
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2021 (7) TMI 1312
Extension of time for payment of the last installment of Tax under Income Disclosure Scheme, 2016 (IDS) - two instalments were paid by the appellant but there was default in respect of the third instalment - HELD THAT:- The request of the petitioner seeking extension of time to pay the third instalment and continue to avail the benefit under said Scheme was rejected by the High Court.
As petitioner submits that the limited relief that the petitioner seeks is with respect to adjustment of the amounts deposited towards first two instalments so that in the tax liability computed by the Department after revised assessment, appropriate relief can be afforded to the petitioner.
Issue notice limited to the aforesaid question, returnable on 27.08.2021.
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2021 (7) TMI 1308
TP Adjustment - benchmarking the international transactions - segments bifurcation - Software development services /ITES services - As per taxpayer he is engaged in two distinct activities i.e. CSDS and ITES services - HELD THAT:- All the facts substantiate the claim of the taxpayer that it has a full-fledged team of software development engineers to carry out its software development activities and they are carrying out software development activities independently. The taxpayer has also brought on record list of employees working in contracts of contract software development services /ITES services along with the monthly cost of each employee available of the convenience compilation.
When we examine this evidence in the light of the order passed by the AO/TPO in AYs 2010-11 & 2011-12, there is no change in the functional profile of the taxpayer company and likewise, there is no change in the international transactions as well as functions performed by the taxpayer. The TPO/DRP/Tribunal have reached the conclusion that because of paucity of evidence the taxpayer has failed to substantiate that it is carrying out activities in two segments viz. CSDS and ITES.
When Revenue has been accepting and benchmarking such international transactions in segregated manner in earlier years in taxpayer’s own case and there is no change in the nature of international transactions as well as functional profile of the taxpayer during the year under assessment vis-à-vis earlier assessment years, following the “rule of consistency” as has been held by Hon’ble Supreme Court in Radhaswami Satsang [1991 (11) TMI 2 - SUPREME COURT] we are of the considered view that both the segments viz. CSDS and ITES are required to be benchmarked independently/in segregated manner.
How to allocate certain common expenses incurred by the taxpayer in various segments for the purpose of calculation of the gross profit margin? - Keeping in view the evidence brought on record by the taxpayer and following the reasons rendered by Hon’ble High Court of Delhi in case of Fujitsu India Private Ltd. [2019 (2) TMI 1993 - DELHI HIGH COURT] we are of the considered view that ld. TPO should allocate common expenditure incurred by the taxpayer in two segments i.e. ITES & IT segment for the purpose of benchmarking the two separate transactions for calculation of the gross profit margin by applying the “head count” method.
In the first round of litigation, ld. TPO in this case had proceeded to benchmark international transactions qua CSDS and ITES segment by adopting aggregated approach. Now, as per our findings returned in the preceding paras, both the segments i.e. CSDS and ITES are required to be benchmarked independently. Ld. AR for the taxpayer as well as ld. DR for the Revenue have contended in one voice that the issue of benchmarking both the segments independently is required to be remanded back to the ld. TPO as the entire exercise of benchmarking international transactions are to be redone.
Since the issue of benchmarking the international transactions is required to be examined qua both the segments i.e. CSDS and ITES separately and independently for factual analysis of taxpayer’s TP study, the case is remanded back to ld. TPO who shall determine the ALP of international transactions of both the segments independently afresh after providing an opportunity of being heard to the parties. Consequently, the appeal filed by the taxpayer is allowed for statistical purposes.
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2021 (7) TMI 1306
Rectification u/s 254 - non maintainability of appeal on low tax effect - HELD THAT:- As noted that this bench had an occasion to deal with the common order [2021 (6) TMI 1065 - GUJARAT HIGH COURT] passed by the Income Tax Appellate Tribunal and the Court has dismissed the said petition by passing the detailed order.
In order to avoid duplication of the order, the present petition is dismissed in terms of the said order. This petition stands dismissed accordingly.
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2021 (7) TMI 1301
TP adjustment - comparable selection - HELD THAT:- Companies functionally dissimilar with that of assessee need to be deselected.
Value of domestic transaction for making adjustment instead of restricting the adjustment to the international transaction - Statutory provisions under chapter X of the Act mandates ALP to be determined only in respect of transactions with associated enterprises. Any adjustment which is in close of domestic transactions is uncalled for under this chapter. We accordingly direct the Ld. AO/TPO to restrict the adjustment if any that may be computed are wildly or giving effect to the order only in respect of the transactions that assessee had with its associated enterprises. Accordingly this ground raised by assessee stands allowed for statistical purposes.
Depreciation disallowed on computer peripherals at 60% - As AR submitted that DRP had directed the Ld.AO to grant depreciation at 60% on computer peripherals which has not been followed while passing the final assessment order. We thus direct the Ld. AO to comply with the directions of DRP in accordance with law.
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2021 (7) TMI 1299
Treating the assessee as a dummy/facilitator and/or an accommodation entry provider - Estimation of income - Acceptance of book results - re-computation of the total income from the business and other heads as in the return of income - HELD THAT:- Assessee in the course of the proceedings before the lower authorities had placed on record substantial documentary evidence which proved to the hilt the genuineness of the imports, purchases and sales that were made by him during the year under consideration i.e A.Y. 2011-12.
Now when the imports of the assessee had been physically cleared under the supervision of the Customs authority, therefore, there would be no justification in stamping the said transactions as bogus. Also, the fact that the majority sales of the assessee were to exporters of repute was a material fact that substantiated the genuineness of his business transactions which we find had been disregarded and brushed aside by the lower authorities.
As rightly observed by the CIT(A), the fact that the assessee’s books of accounts had been audited by a Chartered accountant further substantiates the genuineness and authenticity of his business transactions for the year in question. Also, the VAT paid by the assessee to the Maharasthra Sales Tax Authority qua the sales made to the various parties during the year under consideration instills confidence as regards the claim of the assessee of having carried out genuine business transactions during the year.
Standalone reason for treating the assessee as a dummy/facilitator and/or an accommodation entry provider is his statement that was recorded in the course of the post-survey proceedings i.e way back as on 23.01.2009, which had been acted upon by the A.O without placing on record any material that would otherwise support drawing of such adverse inferences in the hands of the assessee during the year under consideration before us.
Arbitrariness on the part of the A.O in treating the assessee as a dummy/facilitator and/or an accommodation entry provider during the year under consideration can safely be gathered from the fact that he had vide his respective orders passed u/s 143(3) for the succeeding years i.e A.Y 2012-13, A.Y 2013-14 and A.Y 2014-15 not drawn any such adverse inferences and had accepted that the assessee was carrying on actual/genuine business of imports/exports/trading in diamonds in the ordinary course of his business activities during the said respective years.
As a matter of fact, the only reasoning given by the A.O, for concluding as hereinabove, was the support that was drawn by him from the fact that in a like manner the A.O had framed the assessment in the case of the assessee for A.Y. 2010-11 and estimated his commission income qua the import/purchase/sale transactions, which had not been assailed by the assessee any further in appeal. Be that as it may, we are absolutely not at all inclined to accept the aforesaid reasoning given by the A.O for holding the assessee as a dummy/facilitator and/or an accommodation entry provider during the year under consideration.
A similar estimation of income made by the A.O in the case of the “sister concerns” of the assessee, viz. M/s Sunshine Import and Export Pvt. Ltd. and M/s Shine Star Impex Pvt. Ltd[2016 (9) TMI 1504 - ITAT MUMBAI] with a direction to the A.O to accept the “book results” of the aforesaid respective assessee’s further fortifies our aforesaid observations as regards the genuineness of the business activities of the assessee. In fact, the aforesaid order of the Tribunal in the case of the aforementioned “sister concerns” of the assessee had thereafter been upheld by the Hon”ble High Court of Bombay in Pr. CIT Vs. Sunshine Import and Export Pvt. Ltd.[2020 (3) TMI 554 - BOMBAY HIGH COURT]wherein the appeal filed by the revenue was dismissed. Accordingly, in the backdrop of our aforesaid observations, finding no infirmity in the very well reasoned and balanced view taken by the CIT(A), the present appeal filed by the revenue being absolutely bereft and devoid of any merit is dismissed.
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2021 (7) TMI 1298
Validity of assessment u/s 144C (3) - objections to draft assessment order were filed and the same were pending disposal with the DRP - HELD THAT:- Respondents states that in view of the facts of the present case, she has no objection if the present matter is remitted to the DRP.
The final assessment order dated 30th June, 2021 as well as the demand notice of ₹ 56,76,09,018/- (Rupees Fifty Six Crores Seventy Six Lakhs Nine Thousand and Eighteen only) issued under Section 156 of the Act for the assessment year 2017-18 is quashed and the matter is remitted to the DRP for consideration under Section 144(C) of the Act. Thereafter, the assessment order shall be passed in accordance with the procedure stipulated under Section 144B(1) (xxix) to (xxxi) as well as Section 144(C) of the Act.
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2021 (7) TMI 1291
Advance tax paid in Form-3 issued under the Direct Tax Vivad Se Vishwas Scheme - HELD THAT:- Today letter dated 19.07.2021 has been placed on record by Ms. Urvashi Dhugga, Sr. Standing Counsel for the respondents, as per which, it has been mentioned that after verification, it has been clarified that there was no wrong claim by the Assessee and credit for this challan has been given in AY 2007-08. It has further been mentioned that Form-3 earlier issued to the Assessee is proposed to be revised and a request mail has already been sent to cancel the earlier issued Form-3. Revised Form-3 giving credit of ₹ 57,26,440/- shall be issued as soon as the earlier Form-3 is cancelled. It is further mentioned that ITBA e-filing portal is not functioning and the process is likely to take some time.
In this view of the matter, nothing survives in the present writ petition, at this stage
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2021 (7) TMI 1289
Allowability of bad debts and provision for bad debts - HELD THAT:- These questions are covered by the decision of the Supreme Court in Catholic Syrian Bank v. Commissioner of Income Tax [2012 (2) TMI 262 - SUPREME COURT] answering the question in favour of the assessee
Method of valuation of unquoted securities adopted - HELD THAT:- The question is covered against the Revenue and in favour of assessee by following the precedents in Commissioner of Income Tax v. Nedungadi Bank Ltd [2002 (11) TMI 29 - KERALA HIGH COURT] and Commissioner of Income Tax v. Lord Krishna Bank Ltd. [2010 (10) TMI 860 - KERALA HIGH COURT].
Claim of assessee under Section 36(1)(viia) - HELD THAT:- The extent to which the assessee is entitled to claim provision under Section 36(1)(viia) is again considered by the reported judgment of this Court in Lord Krishna Bank Ltd [2010 (10) TMI 860 - KERALA HIGH COURT] - we answer the issue in favour of Revenue and against the assessee
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2021 (7) TMI 1287
Maintainability of appeal - low tax effect - review petitioners submits that this Court on the basis of Circular No.3/2018 dated 20.8.2018 and Circular dated 8.8.2019 opined that monetary limit was enhanced up to ₹ 1 Crore in respect of the High Court - review is prayed for in the teeth of Para 10(e) of the Circular dated 20.8.2018, which reads as where addition is based on information received from external sources in the nature of law enforcement agencies such as CBI/ED/DRI/ SFIO / Directorate General of GST Intelligence (DGGI) -
HELD THAT:- As observed by the assessing officer i.e. ACIT, Indore that the search and seizure operation was conducted by the Indore Tax Department and DG, Central Excise Intelligence, Indore which concluded that respondent is associated with Signet Group of Indore and was involved in organized activities of tax evasion, which led ultimately the addition made by the AO. Thus, Clause 10(e) aforesaid is attracted.
On more than one occasion, the Bench put a question to Ms. Mandlik when this scrutiny report was prepared and whether any such material in this regard is produced to show that such report falls within the ambit of Para-10(e) but no response is received by the Bench. Despite repeated query, learned counsel for the petitioners has not chosen to answer as to how the aforesaid falls within the ambit of review jurisdiction.
This is trite that the power of review is limited. Unless it is shown that there exists an error apparent on the record or any other ingredients which are in consonance with Order 47 Rule 1 CPC, interference in review jurisdiction cannot be made. Unfortunately no argument is advanced to bring the present matter within the ambit of principles analogous to Order 47 Rule 1 CPC. In absence thereof, the question of exercising the review jurisdiction does not arise. Review petitions fail and are hereby dismissed.
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