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Income Tax - Case Laws
Showing 101 to 120 of 661 Records
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2021 (8) TMI 1191 - ITAT MUMBAI
Penalty u/s.271(1)(c) - computation of income added back the provision for substandard asset for the purpose of sec 115JB - HELD THAT:- There is no case that the profit and loss account prepared is not as per law - provision for standard asset is duly reflected in the profit and loss account. It cannot be said that it was not a mistake of the assessee not to add back the same under section 115JB. Once having disclosed the provision for substandard asset which is a normal feature in the preparation of profit and loss account, it will certainly be a mistake not to add the same under the 115JB computation of income.
CIT(A) has completely erred in observing that the provision for substandard asset was not disclosed in any of the enclosures of computation of income. CIT(A) has misled himself. Assessee’s claim that it was a genuine mistake and the assessee has suo moto revised the same during the assessment proceedings is cogent. The authorities below have not been able to cogently rebut the submission of the assessee - set aside the orders of the authorities below and delete the penalty - Appeal by the assessee stands allowed.
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2021 (8) TMI 1190 - ITAT MUMBAI
Disallowance u/s.14A r.w.r. 8D - whether only activity of the assessee which is exempt from tax is the agriculture activity and that during the year assessee had incurred loss from agricultural activity which was duly disallowed by the assessee in the return of income - HELD THAT:- Entire expenses attributable to the agricultural division had already been subject matter of voluntary disallowance by the assessee - Other expenses incurred are only expenses attributable to the regular business of the assessee and it could be safely concluded that the same cannot be construed to have incurred for the purpose of earning any exempt income - assessee had vehemently pleaded before the lower authorities that interest paid on loans are used only for the purpose of non-agri division activities of the assessee which does not require any apportionment towards the agri- division.
This fact has not been controverted by cogent evidences by the lower authorities - there cannot be any disallowance of interest under second limb of Rule 8D(2) of the Rules - disallowance made under first and third limb of rules, the same gets subsumed in the disallowance of loss incurred from agricultural division which had already been made by the assessee in the return of income. Accordingly, there cannot be any disallowance of expenses separately u/s.14A of the Act in the peculiar facts of the instant case. Ground No.1 raised by the assessee is allowed.
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2021 (8) TMI 1189 - MADRAS HIGH COURT
Reopening of assessment u/s 147 - objections in reassessment proceedings - whether violation of procedures since the reopening of the assessment proved ? - reasons for reopening that assessee has not fully and truly disclosed the material fact and that they had not commenced its business during the year and mere production of the account books or other evidence before the AO will not necessarily amount to disclosure -whether the notice sent by the 1st appellant for reopening of the assessment in respect of returns submitted by the assessee for the assessment year 2009-10, is right or wrong? - HELD THAT:- The appellants issued notice u/s.148 of the Act and on the request by the respondent herein/assesee seeking reason for reopening, reasons recorded was provided to assessee. Again the assessee raised objections and after considering the objections, 2nd appellant passed the order dated 25.10.2016 disposing the objections. So the answer is, each case shall be examined on its own merits keeping in view the scope of the judicial review while entertaining such matters. When a notice under Section 148 of the Act has been issued to the assessee for reopening the assessment, it shows it involved complex facts and circumstances and the same are to be adjudicated by producing documents and by adducing evidence by the assessee.
Power exercised by the assessing officer to reopen the assessment - In this case, the appellants clearly stated that there is escapement of assessment and also stated the reason by its letter dated 04.05.2016, pointing out that the assessee company has not commenced its business during the year, therefore, the expense claimed needs to be capitalised. During the year, the assessee company has received other income and the same has to be treated as ‘income from other sources’. The material fact has not been disclosed fully and truly during the course of assessment proceedings. Therefore, there are definite reasons to believe that income has escaped assessment.
Maintainability of writ - alternative statutory remedy - When there is hierarchy of appeals provided under the statute, the assessee must exhaust the statutory remedies. When there is an alternative statutory remedy, writ jurisdiction of this court under Article 226 of the Constitution of India ought not to be invoked. There is no bar to entertain the writ petition when alternative remedy is available if it is the case that the order passed by the concerned authority is prejudicially affecting their rights or interest.
In the present case on hand, the appellants clearly stated the reason for reopening that particular fact has not been disclosed fully and truly in the assessment proceedings and so whether the assessee had disclosed it or not, can be decided by the authorities concerned. The respondent has got every right to make its submission during the enquiry under the reassessment proceedings and can furnish the required documents in support of its stand and if the statutory authority, not considered all the grounds, the assessee has right of appeal under the statutory provisions. Therefore, these questions cannot be decided in the writ proceedings - correctness of the reasons set out by the Joint Commissioner of Income Tax, and the rejection of objections raised by the respondent by order by the 2nd appellant, can be decided during the re-assessment proceedings and not in the writ.
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2021 (8) TMI 1188 - MADRAS HIGH COURT
Power of DRP to enhance the assessment u/s 144C - Assessment order u/s 144C(5) to make disallowance u/s 40(a)(i) in respect of Employees Secondment Charges and Reimbursement of Expenses - variations not identifiable in the Draft Assessment Order - HELD THAT:- As the present case is concerned, sub-section (8) is more relevant as the learned counsel for the petitioner states that the Dispute Resolution Panel has no power to enhance based on the variations which were not identifiable in the Draft Assessment Order.
The explanation clarifies that the Dispute Resolution Panel have the power to consider any matter arising out of the assessment proceedings relating to the Draft Order. Thus, the requirement is that the variations proposed for enhancement must be relatable to the Draft Assessment Order and such issues must be arising out of the assessment proceedings. The very purpose and object of explanation is to ensure that in the event of any non-consideration of a particular point in the Draft Assessment Order by the Assessment Officer, the Dispute Resolution Panel being a Specialised Panel is provided with the power to propose such variations, relating to any matter arising out of the assessment proceedings. Therefore, the power of enhancement contemplated under subsection (8) is clarified through the explanation. Such a clarification cannot be construed as 'excessive power' as in the absence of such clarification by way of an explanation, the very purpose and object of sub-section (8) to Section 144C would be diluted.
Explanation contemplates that any variation arising out of the assessment proceedings relating to the Draft Assessment Order shall be proposed and on such proposal, an opportunity is to be provided to the eligible assessee to defend their case. Thus, the requirement as contemplated is that the Dispute Resolution Panel is to provide pre-decisional hearing to the assessee in order to comply with the principles of natural justice. Once a Dispute Resolution Panel identified and picked up such variations arising out of the assessment proceedings relating to the Draft Assessment Order, then such variations are to be communicated to the Assessee, enabling them to file their objections on such variations. On receipt of objections, the same is to be disposed of meaningfully.
There is a clear nexus between sub-section (8) and the Explanations provided to the sub-section. Explanation fulfils the purpose and object sought to be achieved under the said provision. In the absence of the explanation, there is a possibility of misinterpretation by either of the parties and therefore, the explanation became necessary as far as the subsection (8) is concerned and thus, the contention raised by the petitioner that the Explanation exceeds the provision is incorrect and thus, rejected.
The Dispute Resolution Panel being an Expert Panel, is bound to ascertain the correctness or otherwise of the Draft Assessment Order passed by the Assessing Officer. In the event of identifying omission or commission or excessive exercise, the Dispute Resolution Panel is empowered under sub-section (8) to confirm or reduce or enhance the variations. - there is no impediment as such for the Dispute Resolution Panel to consider any matter arising out of the assessment proceedings relating to the Draft Assessment Order and no matter, such an issue was discussed in the Draft Assessment Order or not, but it should not be totally unconnected with the assessment proceedings or the Draft Assessment Order. This being the purposive interpretation to be adopted for the purpose of defining Section 144C and sub-section (8) as well as the Explanation, this Court is of the considered opinion that proposed notice issued to the writ petitioner is relatable to the assessment proceedings and to the Draft Assessment Order. Thus, there is no infirmity in respect of exercise of powers by the Dispute Resolution Panel and the notice issued for enhancement. The petitioner submitted its objections and such objections were also disposed of and finally, the assessment order was admittedly passed by the Assessing Officer on 05.10.2017.
The relief as sought for by the petitioner in the present writ petition stands rejected - The petitioner is at liberty to prefer an appeal against the final Assessment Order passed by the competent authority on 05.10.2017 within a period of four weeks from the date of receipt of a copy of this order in a prescribed manner and by complying with the provisions of the Act and Rules;
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2021 (8) TMI 1187 - MADRAS HIGH COURT
Characterization of income - trading receipts - undistributed amount received by the assessee in the year 1999 towards the terminal benefits of the employees - ITAT concluded not to be treated as trading receipt during the year in appeal - HELD THAT:- Tribunal took note of the factual position, which was placed before it to establish that the remaining amount of ₹ 7.29 Crores, which was left in the hands of the assessee, was used to be adjusted against the students concession subsidy due to the assessee from the Government of Tamil Nadu in the subsequent years. The assessee was able to establish the said fact by producing a Government Order in G.O.Ms.No.44 dated 24.03.2009. Taking note of the said Government Order, the appeal filed by the assessee was allowed by the Tribunal.
Government Order dated 24.03.2009 was not placed before the CIT(A), when it heard the appeal and passed the order dated 20.12.2011, but there can be no denying the fact that such an order was passed. The genuinity of the stand taken by the assessee was never in doubt before the Tribunal. No substantial question of law.
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2021 (8) TMI 1186 - ITAT DELHI
Disallowance of CSR expenses - allowable revenue expenditure or not? - Assessee argued that expediture incurred under the directions of BPE Govt. of India requiring Companies to spend a prescribed percentage of its profits on CSR and now also made mandatory under the Companies Act - HELD THAT:- As decided in own case [2018 (11) TMI 1717 - ITAT DELHI] and [2018 (4) TMI 1664 - ITAT DELHI] issue in dispute is squarely covered in favour of the assessee - thus direct the Assessing Officer to allow the assessee’s claim for expenditure on account of Corporate Social Responsibility. - Decided in favour of assessee.
Allowable business expenditure - expenses on tree plantation etc u/s 37 - HELD THAT:- As decided in own case expenses incurred as wholly and exclusively for the purpose of the business. Thus, the expenses incurred in the year under consideration are also eligible for deduction under section 37 of the Act.- Decided in favour of assessee.
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2021 (8) TMI 1185 - ITAT DELHI
Eligibility of exemption u/s 10B - Export of IT services from STP - AO observed that, assessee could not provide details of input software purchased for rendering IT enabled services as well as output software for IT enabled services rendered by the assessee. He also emphasized that the assessee could not submit any evidence regarding job work done from third parties. - CIT-A deleted the addition.
HELD THAT:- CIT(A) dealt with all the objections of the Assessing Officer of old service agreement, evidence in support of input software as well as output software, No. of employees, quantum of plant and machinery, difference in export figures reported in the return of income and softtex forms. The Learned DR could not rebut any of the factual finding of Ld. CIT(A).
Assessee has been allowed deduction under section 10B of the Act on the same activity for assessment year 2003-04 to 2008-09. Even in assessment year subsequent to the present assessment year i.e. AY 2010-11 also, the assessee has been allowed the deduction under section 10B - No justified reason for not allowing the deduction only in the year under consideration by the Assessing Officer. In our opinion, there is no infirmity or error in the order of the Learned CIT(A) on the issue in dispute of deduction under section 10B - Decided against revenue.
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2021 (8) TMI 1184 - ITAT KOLKATA
Addition u/s 43CA - Additions made without reference made to valuation officer (DVO) u/s 50C(2) / 50A - difference between the sale value recorded in books and stamp duty value - whether the A.O ought to have acceded to the request of the assessee to refer the dispute in respect of valuation of five (5) flats to the DVO in order to ascertain the fair market value of the property on the date of sale - assessee pleaded before the A.O that invoking blindly the provisions u/s 43CA and making additions based on the deeming provision would cause hardship to the assessee in genuine transfer of flats - HELD THAT:- As relying on SUNIL KUMAR AGARWAL [2014 (6) TMI 13 - CALCUTTA HIGH COURT] we set aside the order of the Ld. CIT(A) and remand the matter back to the AO with a direction to refer the valuation of flats to DVO for determination of the fair market value as on the date of sale of the property after giving opportunity to the assessee and thereafter to adopt the consideration of five (5) flats in question in accordance to law.
Deduction u/s 80IB(10) - whether deduction be allowed on the entire income including any income (if any) determined u/s 43CA - HELD THAT:- We find force in the submission of the Ld. AR that if the income/profits from the sale of flats, in question, falls in the eligibility project for claiming deduction 80IB(10) of the Act, then even if there is any enhancement in the income of the assessee by virtue of valuation made by the DVO, then the A.O after examination of this fact should give the benefit of the deduction under Chapter VI-A on the enhanced amount if any, in accordance to law.
Taking into consideration the Tribunal’s decision in the case of Radhika Sales Corporation [2018 (11) TMI 1788 - ITAT PUNE] we are of the opinion that the proviso explaining the tolerance limit has to be read retrospectively, therefore, if the difference between the declared value by the assessee and the value decided by the DVO is less than 10%, no addition is warranted. With the aforesaid observations, the issue raised by the assessee is disposed off and the A.O is directed to assess the income of the assessee as per the directions given.
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2021 (8) TMI 1183 - ITAT CHANDIGARH
Retraction of surrender of LTCG - Transaction were accepted as bogus but later claimed as Genuine - CIT-A did not admit the additional ground of appeal - claiming the Long Term Capital Gains earned as exempt - surrender made by the assessee of alleged bogus Long Term Capital Gain by way of filing a revised return revoked by SEBI order - HELD THAT:- We find merit in the contention of the Ld. Counsel for the assessee that the additional grounds raised by the assessee before Ld. CIT(A) were wrongly refused to be admitted by him.
The assessee has suitably demonstrated before us the reason for revoking the surrender originally made before the AO of Long Term Capital Gain as being on account of the scrip transacted in by the assessee having subsequently been found to be genuine by the order of the SEBI. The surrender no doubt was made on account of certain evidences collected during survey at the assessee’s premises to the effect that the claim of Long Term Capital Gains on the sales as exempt was bogus.
Subsequent event of the SEBI order holding the transaction in the said scrip to be genuine was sufficient enough for the assessee to raise a legitimate ground before the Ld. CIT(A) for claiming the Long Term Capital Gains earned as exempt. As rightly pointed out by the assessee it is settled law that the assessee is entitled to make a claim before the worthy CIT(A), for the first time. The decision of the Hon’ble Apex Court in the case of Jute Corporation of India [1990 (9) TMI 6 - SUPREME COURT] and the decision of CIT v. Pruthvi Brokers & Shareholders [2012 (7) TMI 158 - BOMBAY HIGH COURT] settles the said issue in favour of the assessee.
CIT(A) directed to admit the additional ground raised by the assessee and thereafter adjudicate the same in accordance with law
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2021 (8) TMI 1182 - ITAT DELHI
Penalty u/s 271(1)(c) - Defective notice u/s 274 - non specification of charge - HELD THAT:- Bare perusal of the notices issued u/s 274 read with section 271(1)(c) in order to initiate the penalty proceedings against the assessee goes to prove that the AO himself was not aware / sure as to whether he is issuing notice to initiate the penalty proceedings either for “concealment of particulars of income” or “furnishing of inaccurate particulars of such income” by the assessee rather issued vague and ambiguous notice by incorporating both the limbs of section 271(1)(c). When the charge is to be framed against any person so as to move the penal provisions against him/her, he/she is required to be specifically made aware of the charges to be leveled against him/her.
Following the decisions rendered in the cases of CIT vs. SSA’s Emerala Meadows [2016 (8) TMI 1145 - SC ORDER] and Pr. CIT vs. Sahara India Life Insurance Company Ltd. [2019 (8) TMI 409 - DELHI HIGH COURT] we are of the considered view that when the notice issued by the AO is bad in law being vague and ambiguous having not specified under which limb of section 271(1)(c) of the Act, the penalty proceedings initiated u/s 271(1)(c) are not sustainable. - Decided in favour of assessee.
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2021 (8) TMI 1181 - ITAT BANGALORE
Disallowance u/s 80IA - reasoning of the Assessing Officer to make the disallowance was that the assessee had incurred expenditure like managerial remuneration, audit fee, staff welfare expenses, legal and professional expenses, etc. and the same have to be apportioned between 80IA units and non 80IA units - HELD THAT:- As relying on own case [2020 (9) TMI 1206 - ITAT BANGALORE] we direct the CIT(A) to consider the issue afresh. It is ordered accordingly.
Addition of total income interest received on refund u/s 244A - HELD THAT:- Admittedly, the Income Tax Department had issued interest u/s 244A on Income-tax refund for assessment year 2012-2013 amounting to ₹ 1,53,504 on 08,07.2013. Since the assessee had received a sum of ₹ 1,53,504 during the relevant assessment year, the same has to be brought to tax as income from other sources, in view of the judicial pronouncements cited by the Assessing Officer at para 8.1 of the impugned assessment order. Therefore, the ground relating to interest income received on refund u/s 244A of the I.T.Act whether it can be taxed in the relevant assessment year, is rejected.
Allowable expenditure of interest u/s 201(1A) - HELD THAT:- The Hon’ble Apex Court in the case of Bharat Commerce & Industry v. CIT [1998 (3) TMI 2 - SUPREME COURT] had held that interest for late payment of direct taxes is not a deductible expenditure. In view of the clear dictum laid down by the Hon’ble Apex Court, the interest expenditure paid u/s 201(1A) of the I.T.Act cannot be allowed as a deduction.
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2021 (8) TMI 1173 - ORISSA HIGH COURT
Assessment u/s 153C - disallowance of expenditure u/s 140A(3) - whether any incriminating materials concerning the present Petitioner were found in the search? - HELD THAT:- There is no denial that no incriminating materials concerning the present Petitioner were found in the premises of the two searched persons i.e. Sri Jami Ramesh and Sri Jami Sivasai. The absence of the satisfaction note of the AO of the searched persons about any such incriminating material vis-à-vis the present Petitioner is also not disputed - Assessment order challenged in the present petition relates to disallowance of expenditure u/s 140A(3) that is payable to the cultivators, expenses towards Hamali i.e. labour charges, unexplained money u/s 69A of the Act, negative cash and unaccounted stock. This was not on account of the discovery of incriminating materials concerning the Petitioner found in the course of the search. In fact there was no search warrant under Section 132 of the Act against the Petitioner firm.
In the absence of incriminating materials vis-a-vis the present Petitioner being found in the course of the search of the searched persons viz., Sri Jami Ramesh and Sri Jami Sivasai, the impugned assessment order and the consequential demand order are unsustainable in law and are hereby set aside.
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2021 (8) TMI 1171 - MADRAS HIGH COURT
Unabsorbed depreciation loss set-off pertaining to assessment year 1997-98 against income of assessment year 2006-07 - HELD THAT:- Substantial questions of law framed for consideration have been answered against the Revenue in the case of CIT vs. Sanmar Speciality Chemicals Ltd. [2020 (9) TMI 770 - MADRAS HIGH COURT] - Decided against the Revenue.
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2021 (8) TMI 1167 - ITAT BANGALORE
Leasehold rights amortised by assessee during the lease period - HELD THAT:- Assessee obtained right to operate and manage Asian Heart Foundation by virtue of an agreement dated 20/01/2008 for 25 years, as paid by assessee. Assessee amortised the said amount over the lease period. When this issue came up before this Tribunal for the first time for assessment year 2009-10 - CIT(A) deleted the disallowance by following the above view taken by this Tribunal. Admittedly there is no difference in the facts considered by the co-ordiante bench for asst. year 2009-10 and the year under consideration.
Amount paid towards the leasehold rights of Modern Medical Institute of society, Raipur - HELD THAT:- Admittedly the laundry observes that the said payment is made by assessee to operate and manage Modern Medical Institute of society, for a period of 15 years with an extension of five years. In the terms and conditions the consideration payable by assessee to Modern Medical Institute is 2.5% per annum of the gross revenue for each financial year of hospital or 1.25 crore per annum whichever is higher - Parties that in the first year 2.5% of the gross revenue shall be payable by assessee as in advance. Assessee has thus paid sum of ₹ 1.25 crore which stands adjusted towards the payment of outstanding loans as a precondition - as agreed between the parties that, all payment made by assessee to Modern Medical Institute shall be subjected to tax deducted at source - amortisation amount paid to Modern Medical Institute is different for every year. Under such circumstances, how the amortisation amount is determined by assessee for every year needs to be verified in terms of the payment condition agreed between the parties. We therefore remand this issue back to the AO for verification of the working. AO to apply the principle laid down by coordinate bench of this Tribunal while considering the payment made by assessee to Asian Heart Foundation.
Disallowance made under corporate social responsibility - HELD THAT:- For year under consideration, it is not the case revenue that expenditure has not been incurred. As the facts are identical, and the expenditure incurred for CSR are of similar nature, in our opinion they are allowable as expenditure under section 37 of the Act, as it has been clearly incurred for furtherance of assessee’s business in other parts of the country. Respectfully following the view taken by the co-ordinate Bench herein above we do not find any infirmity in the view taken by the Ld.CIT(A).
Disallowance of provision of leave salary expenses - HELD THAT:- This issue now sand settle against assessee by the decision of Hon’ble Supreme Court in case of UOI vs. Exide Industries [2020 (4) TMI 792 - SUPREME COURT] as upheld constitutional validity for the allowability of deduction for leave encashment u/s 43B(f) of the Income Tax Act, 1961, on payment basis.We therefore direct the Ld.AO to compute the disallowance to the extent of unpaid amount, in accordance with the ratio of Hon’ble Supreme Court.
Claim raised under section 35AD - Authorities below rejected the claim of assessee as it was not made before the Ld.AO by way of revised return - HELD THAT:- Similar issue was considered in case of Goetze India Ltd vs.CIT [2006 (3) TMI 75 - SUPREME COURT] held that the claim of deduction not made in the return cannot be entertained by the assessing officer otherwise than by filing a revised return. The court also held that the decision does not impinge upon the powers of the Tribunal under section 254 of the Act. Respectfully following the above ratio, we remand this issue back to the Ld.AO for consideration
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2021 (8) TMI 1166 - ITAT MUMBAI
Addition u/s 68 - receipt of share capital and premium - whether Appellant has established the Identity, Credit worthiness and Genuineness (ICG Test) in respect of share capital and premium received from the three share holder companies during the assessment proceedings by filing various documents with the AO - HELD THAT:- We note that Hon’ble jurisdictional High Court in Veedhata Tower Pvt.Ltd. [2018 (4) TMI 1004 - BOMBAY HIGH COURT] has held that when all documentary evidences has been submitted by the assessee, and adverse inference is drawn only for non response by the concerned party, such adverse inference against the assessee is not sustainable.
No adverse inference has been noted from the bank statement, balance sheet and other document of the parties from whom share capital & share premium has been received, which were duly filed before AO. Hence, the addition on merits also is not sustainable. Accordingly, on the touchstone of above Hon’ble jurisdictional High Court decision, we set aside the order of the authorities below and decide the issue in favour of the assessee
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2021 (8) TMI 1165 - ITAT SURAT
Revision u/s 263 by CIT - proof of AO's order as erroneous or prejudicial to the interest of revenue - violation of the provisions of section 40A(3) - Disallowance u/s 40(a)(ia) - HELD THAT:- AO as made enquiries into transactions of cash payment in excess of ₹ 20,000/-, and the action of assessing officer in accepting the claim of assessee that transactions in question were not in violation of the provisions of section 40A(3) of the Act, after detailed enquiry, is a plausible view.
AO also made detailed enquiry about TDS to be deducted under section 40(a)(ia) of the Act, therefore, we find that the twin conditions required for exercising the jurisdiction u/s 263 is missing, that is, order passed by the assessing officer is neither erroneous nor prejudicial to the interest of revenue, therefore, the Ld. CIT ought not to have exercised his revisional jurisdiction under section 263 of the Act and, hence, we cancel the impugned revisional orders for assessment year 2010-11 and assessment year 2013-14 - Decided in favour of assessee.
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2021 (8) TMI 1164 - ITAT SURAT
Revision u/s 263 by CIT - proof of lack of enquiry - unaccounted income disclosed during the course of survey proceedings is taxable u/s68/69/69C being unaccounted income - no deduction in respect of any expenditure or allowance or set off any loss is allowable against such income in accordance with the provisions of section 115BBE - HELD THAT:- Assessee has no explanation to offer on this point and agrees that the claim of set off of brought forward loss against business income is a wrong claim, is required to be disallowed.
PCIT was of the opinion that AO was required to treat the entire income disclosed during the survey as income taxable u/s 68/69/69C and not allow any standard deduction u/s 24 of the Act. The unaccounted income admitted during the survey but not disclosed in the return of income was also required to be added by the AO - as per provision of section 115BBE, the wrong set-off of brought forward loss against unaccounted business income should have been disallowed by the AO. Since no such disallowance and addition have been made by the AO in the assessment order u/s 143(3) dated 14/03/2016, therefore ld PCIT held that assessment order is erroneous and prejudicial to the interest of the revenue. We uphold the above findings of ld PCIT for assessment year 2013-14.
Unaccounted income relating to the land at Katargam, Surat disclosed in the statement recorded during the survey proceedings - If test of human probabilities is applied to the facts of the case becomes evident that transaction reflecting in the above mentioned impounded document pertain to the assessee and have taken place otherwise no reason can be there to keep the record of any financial transaction. Shri Manjibhai Patel had admitted that these papers were found from his office which lends to credibility that the document impounded assumes much greater value than what it would have been otherwise - entries reflecting in the impounded document(s) cannot be washed away lightly. - impounded documents itself and more so because of the nature of entries contained therein do not make those papers as a dumb document - AO concerned ought to carry out enquiries in this aspect which was not done at all by him during the course of scrutiny proceedings - there are proof in form of receipts, who has received this payment, but the AO concerned failed to analyse the same and pass on the information to the jurisdictional AOs concerned.
On the pages as discovered it is mentioned that Karan is having share of 53% rest 47% is of Gopalji. However, the AO concerned has accepted the fact that Shri Karankumar M Dungrant is having only 53% share in the land and he did not enquired about the ownership of remaining 47% in the impugned land whether the ownership of the remaining 47% is in just a dummy name or in name of some real person, has not been investigated. All these facts narrated above have been accepted without proper verification which has resulted in the assessment order being erroneous and prejudicial to revenue - we hold that assessment order passed by the AO is erroneous in so far it is prejudicial to the interest of revenue. Therefore, we do not find any infirmity, so far the above findings of ld PCIT is concerned for assessment year, 2014-15.
We note that issues raised by the ld PCIT were not responded by the assessee during the assessment stage. The assessing officer also did not raised the queries by issuing notice under section 142(1) of the Act, therefore, it is a case of complete lack of inquiry. - Decided against assessee.
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2021 (8) TMI 1163 - ITAT SURAT
Revision u/s 263 - inadequate or improper enquiry by the AO - cash deposited in a particular Bank - HELD THAT:- AO has examined and verified the IndusInd Bank Account during the assessment stage, thus we note that, Ld. Pr. C.I.T. by invoking his jurisdiction u/s 263 of the Act, is giving another opportunity to the assessing officer to examine it again, which is not permissible. In the case of Ranka Jewellers [2010 (3) TMI 544 - BOMBAY HIGH COURT] relying on the decisions of Hon’ble Supreme Court in the cases of Malabar Industrial Co. Ltd. vs. CIT [2000 (2) TMI 10 - SUPREME COURT] and CIT vs. Max India Ltd. [2007 (11) TMI 12 - SUPREME COURT] has held that once the issue was considered by the A.O., the remedy of the revenue could not lie in invoking of the jurisdiction u/s 263 of the Act
Therefore, the order of the Ld. C.I.T. was definitely outside the purview of section 263 of the Act. As noted above, the exercise aimed at ascertaining the correct income of the assessee has been fulfilled by the Ld. A.O. by exercising his quasi-judicial functions vis-a-vis passing the assessment order u/s 143(3) of the Act. Therefore, certainly it is not a case wherein adequate enquiries at the assessment stage were not carried out or assessment was made in haste. However, what is an opinion formed as a result of these enquiries and verification of the materials is something which is in exclusive domain of the Assessing Officer, and even if Ld. Pr. Commissioner does not agree with the results of such enquiries, the resultant order cannot be subjected to revision proceedings. - Decided in favour of assessee.
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2021 (8) TMI 1162 - ITAT MUMBAI
Disallowance u/s 14A r.w.r. 8D - Assessee contented that no disallowance in respect of interest expenditure should be made as the assessee has sufficient own interest free funds for making the investment, interest bearing funds were not utilized for the purpose of investments - HELD THAT:- For earning tax free income, the assessee made suo-motu disallowance - During the period relevant to the assessment year under appeal no new investments were made - assessee referred to Balance Sheet to show that own funds of the assessee are much more than the investments made. Since, this argument has been made for the first time at Second Appellate stage, we deem it appropriate to restore this issue to the file of Assessing Officer to examine availability of own funds of the assessee for investment. If own funds of the assessee are sufficient to meet the investments, no disallowance under Rule 8D(2)(ii) is warranted. Ground of the appeal of assessee is allowed for statistical purposes.
Disallowance of interest expenses on loan converted into share application money - HELD THAT:- As relying on ROHIT EXHAUST SYSTEMS PVT. LTD. AND VICE-VERSA [2012 (10) TMI 1101 - ITAT PUNE] interest paid upto the date of allotment of shares i.e. 21/12/2012 is allowable as revenue expenditure. - Decided in favour of the assessee.
MAT computation on disallowance u/s 14A - Inclusion of disallowance u/s 14A r.w. Rule 8D while computing Book Profit under Section 115JB - HELD THAT:- As decided in the case of ACIT vs. Vireet Investments Pvt. Ltd.[2017 (6) TMI 1124 - ITAT DELHI] has held that while determining book profit under section 115JB of the Act the provision of section 14A r.w. Rule 8D are not to be invoked. Thus, in light of the decision rendered by Special Bench, the assessee succeeds.
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2021 (8) TMI 1158 - ITAT AMRITSAR
Registration u/s 12AA - proof of charitable activities u/s 2(15) - power of Commissioner to look into objects of society and genuineness of same - CIT(E) has rejected the application of the Assessee by holding that there are certain defects and deficiencies in the basic documents and rules and regulations and doubts about the charitable activities to verify basic purpose of objectives of the Society and that the Appellant Society was not incorporated for solely education purpose and had been engaged in profit making activities - HELD THAT:- Under section 12A, the provisions of sections 11 and 12 shall not apply in relation to the income of any trust or institution unless various conditions are fulfilled. The power of the Commissioner to look into the objects of the Society and the genuineness of the same cannot be doubted when the basis is of non-supply of information. In such circumstances, it would be appropriate that the Commissioner undertakes the exercise afresh, on the basis of the application which has already been filed, keeping in view the material which can be produced by the assessee or filed on record by digital mode.
In the case of "CIT-1, Chandigarh vs. Sri Guru Gorakh Nath Charitable Educational Society",[2015 (5) TMI 363 - PUNJAB & HARYANA HIGH COURT] had answered the question that Whether power of Commissioner to look into objects of society and genuineness of same could not be doubted when basis was of non-supply of information and as such it would be appropriate for Commissioner to undertake exercise afresh on basis of application which had been filed keeping in view material which could be produced by assessee and matter remanded back.
Hon'ble Apex Court in the case of "Ananda Social & Education Trust Vs. CIT" [2020 (2) TMI 1293 - SUPREME COURT] has held that Even without any activity having been undertaken by trust, it is entitled to be considered for registration under section 12AA and various high court on the issue for grant of registration, that the CIT(E) has to be examine the genuineness of the objects only the stage of registration, and not genuineness of activities - we hereby set aside the order of the CIT(E) with a direction to decide expeditiously, the application, filed for registration under Section 12AA, afresh with the following observation verify that whether the objectives of the assessee trust are charitable in nature and activities carried out are genuine during the year for which the registration is sought for by the assessee society in the light of evidences prima facie relevant, for the year under consideration for the purpose of grant of registration u/s. 12AA - Appeal is treated allowed for statistical purposes.
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