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Income Tax - Case Laws
Showing 121 to 140 of 661 Records
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2021 (8) TMI 1157 - ITAT AMRITSAR
Exemption u/s 11 - Registration u/s 12AA denied - Assessment of trust - manipulative treatment of funds - genuineness of the activities carried out by the Appellant Society - contradictory treatment of the same amount in one year as Unsecured Loan and another year as Donation and that this is against the Accounting Principle - HELD THAT:- CIT exemption while denying the registration to the assessee had wrongly mentioned that as the assessee has shifted from the regime of 10(23C) to 12AA, the same is not permissible in the law and therefore the CIT exemption has denied the registration. Further CIT exemption mentioned above the acceptance of loan by the assessee in the previous year and thereafter the assessee in the financial year 2015-16 had claimed that the loan received by were in the nature of donation.
Reasoning given by the CIT exemption cannot be countenanced as the same is contrary to the law laid down in Beant College of Engineering & Technology[2019 (5) TMI 631 - PUNJAB AND HARYANA HIGH COURT] Therefore this ground of rejection is not sustainable and therefore we reject the same.
Acceptance of loan and thereafter in the financial year 2015-16, alleging it to be the donation - Merely on the basis of receipt of loan, and subsequent conversion of loan into donation, Assessee would not be disentitled for the registration under section 12AA of the income tax Act. The correct stage to examination of funds/utilisation of the amount/corpus by the assessee, would be at the time of assessment.
Disallowance can be made if any, on examination at the assessment stage it is found that the assessee is not entitled to the exemption under section 11 of the Act and the amount received was chargeable to income of the assessee - at the stage of registration, the CIT exemption cannot deny the registration merely on the basis of the receipt of loan amount. No other reason was given by the CIT exemption for rejecting the application for registration. For that purpose we may rely upon decision in the matter of Ananda Social & Educational Trust [2020 (2) TMI 1293 - SUPREME COURT] - assessee is entitled to registration under section 12AA - Decided in favour of assessee.
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2021 (8) TMI 1156 - ITAT JAIPUR
Reopening of assessment u/s 147 - eligibility of reasons to believe - HELD THAT:- AO has failed to discharge the obligation cast upon him by the Statute by verifying the correctness of the information before initiating the proceedings.
Before issuing a notice u/s 148 of the Act, the ITO must have either reasons to believe that by reason of the omission or failure on the part of assessee to make a return for any assessment year to the Income tax Officer or to disclose fully or truly all material facts necessary for assessment for that year, income chargeable to tax has escaped assessment for that year or alternatively notwithstanding that there has been no omission or failure as mentioned above on the part of assessee, the ITO has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment for any assessment year.
The records regarding filing of ITR is accessible on line as refund granted to the assessee for the assessment year under review, without information of ITR filed by him clearly indicated in Form No. 26AS, copy of which is enclosed, had the A.O. taken due care to verify the facts before reaching to the above reasons, there could have been not valid reasons for reopening the case u/s 147/148 - unless the requirement of clause (a) and (b) of Section 147 are satisfied, the ITO has no jurisdiction to issue a notice u/s 148 - The important safeguard provided in Sections 147 and 151 of the Act were lightly treated by the A.O. as well as by the Commissioner. Both of them appear to have taken the duty imposed on them under those provisions as of little importance. They have substituted the form for the substance. - Proceedings u/s 147 of the Act stands quashed and resultantly, the demand of tax stands deleted - Decided in favour of assessee.
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2021 (8) TMI 1147 - ITAT CHENNAI
Addition u/s 40A(2) - unreasonable professional fees to spouse - commission/professional fees paid the husband of the assessee - HELD THAT:- Once the assessee has placed all the relevant materials before the Assessing Officer and submitted that the assessee's spouse is having specialized knowledge and looking after all the medical, technical and administration of all the Hitech Diagnostic Centre and discharge all the duties and responsibilities in conducting various tests and therefore, the agreed payment was made, in our opinion, the assessee has discharged the burden casted upon her to satisfy with the payment is reasonable as per the MOU. If at all the AO is not agreed, he should have brought comparable case and by giving reasons, the disallowance ought to have been made. Assessing Officer has not examined any details and has not given any valid reason and no comparable was brought on record and simply rejected the submissions made by the assessee. Therefore, we are of the opinion that the disallowance made by the Assessing Officer under section 40A(2) of the Act is not correct.
Unexplained expenditure u/s. 69C - CIT(A) has given a categorical finding that the assessee has paid professional fees to her husband. However, the ld. CIT(A) has not discussed anything about the 69C addition. Once the assessee has shown payment made to her spouse as professional fees and the same was offered by the assessee's spouse for taxation by filing the return of income, the provisions of section 69C of the Act has no application.
Whether the assessee is in default under section 201 of the Act on account of failure to deduct TDS under section 194J of the Act warranting invocation of section 40a(ia)? - whether the operation of second proviso to section 40a(ia) of the Act introduced through Finance Act. 2012 with effect from 01.04.2013 is prospective or retrospective? - The effect of the said proviso is to introduce a legal fiction where an assessee fails to deduct tax in accordance with the provisions of Chapter XVII B. Where such assessee is deemed not to be an assessee in default in terms of the first proviso to sub-section (1) of section 201 of the Act, then, in such event, it shall be deemed that the assessee has deducted and paid the tax on such sum on the same of furnishing of return of income by the resident payee referred to in the said proviso. In the present case, the assessee's spouse filed return of income offering the professional fee receipt for taxation. Thus, the assessee cannot be considered as an assessee in default under section 201 of the Act. Therefore, we are of the considered opinion that no disallowance can be made under section 40(a)(ia) of the Act.
Addition on account of capital gains - according to the assessee, the capital gain has to be taxed in the assessee and her spouse in the assessment year 2013-14 and not in the assessment year 2009-10 - HELD THAT:- The case of the Assessing Officer is that the acquisition as well as sale consideration received by her and recorded in her books of accounts and therefore, the same is taxed in her hands alone. We have gone through the sale agreement and find that in the sale agreement, both the wife and husband i.e., the assessee and her spouse are vendees. Not only that, the said property was purchased by the assessee along with her husband. The transaction towards sale consideration reflected in her books of account. It does not mean that the same is taxed in assessee's hands alone for the reason that the assessee along with her husband both purchased the property and both entered into sale agreement.
Whether capital gain has to be taxed in the assessment year 2009-10 or in the assessment year 2013-14 - Before the authorities below, the AR of the assessee has not filed copy of the assessment order of the assessee reflecting the advance tax paid by her when she has offered the sale consideration for taxation. Under these facts and circumstances of the case, we are of the considered opinion that once the Assessing Officer has already taxed the same amount in the assessment year 2013-14, again it cannot be taxed in the assessment year 2009-10, which amounts to double taxation. Therefore, we set aside the orders of authorities below on this issue and remit the matter back to the file of the Assessing Officer to decide the issue afresh in accordance with law by considering the above observations after affording sufficient opportunities of being heard to the assessee. Thus, the ground raised by the assessee is allowed for statistical purposes.
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2021 (8) TMI 1145 - ITAT PUNE
Disallowance of expenses and interest - assessee though appeared in person on two occasions but did not furnish any supporting bills/vouchers - CIT(A) has deleted the addition towards interest by observing that the same cannot be disallowed without proper verification - HELD THAT:- Observation of the CIT(A) is not correct inasmuch as it was the assessee who did not furnish any details of the expenses including interest paid to others. There can be several reasons for the disallowance of interest.
When the AO required the assessee to furnish the relevant details, it was the assessee who was at fault. AR submitted that the assessee had to shift its business premises because it was required to surrender under lock and key to the bank. No doubt, the assessee put in its appearance twice before the AO but did not furnish books of account which could have enabled the AO to examine and verify the details. AO in such circumstances should have found out a reasonable amount of deductible expenses on a certain parameter rather than disallowing the entire expense.
Neither the AO was justified in making total disallowance of expenses nor the CIT(A) was justified in coming to the conclusion that no interest disallowance could be made without proper verification and further deleting disallowance by 90% of the remaining expenses. On a pertinent query, the ld. AR submitted that the books of account and vouchers, which were earlier under lock and key of the bank, are now available and can be produced before the AO. - Matter remanded back.
Penalty u/s.271(1)(b) - HELD THAT:- We find that the AO imposed penalty on account of failure of the assessee to put in any appearance and furnishing the necessary evidence - the premises of the assessee was under lock and key of the bank. Despite that, the assessee put in its appearance twice before the AO during the course of assessment proceedings. Evidence could not be furnished because it was not available at the material time - no penalty u/s. 271(1)(b) can be imposed because there was a ‘reasonable cause’ in terms of section 273B of the Act for not producing the evidence.
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2021 (8) TMI 1143 - ITAT AHMEDABAD
Disallowance u/s 14A r.w.r. 8D - suo moto disallowance by assessee - mandation of recording satisfaction - whether AO has recorded any dissatisfaction as regards suo-moto disallowance made by the appellant ? - HELD THAT:- Though it is incumbent upon the Ld. AO to record a satisfaction as to why the disallowance offered by the assessee was not sufficient which is sine qua non before proceeding to apply Rule 8D. Although there is no particular format or manner in which the satisfaction was to be recorded but the same should have been discernible from the order passed by the Ld. AO. We make it clear that no observation, howsoever, has been made as to the sufficiency or insufficiency of suo-moto disallowance offered by the assessee -no irregularities in the order passed by the Ld. CIT(A) in deleting such addition made by the Ld. AO in the absence of any dissatisfaction recorded by the Ld. AO as regards the amount of disallowance computed by the appellant under Section 14A without any ambiguity so as to warrant interference - Decided against revenue.
Appellate authority had the power to admit the new ground - ESOP compensation expenses during assessment proceeding as the said claim was not made while filing of return of income by the assessee - HELD THAT:- Since the appellate authority had the power to admit the new ground or a legal contention in view of the order passed by the Hon’ble Jurisdictional High Court in the case of CIT vs. Mitesh Impex, [2014 (4) TMI 484 - GUJARAT HIGH COURT] the said claim has been admitted by the Ld. CIT(A).
No explanation is forthcoming as to how without verifying the records as regards the actual expenses incurred by the appellant’s claim has been allowed - As considered the order passed in the case of Biocon Ltd.[2013 (8) TMI 629 - ITAT BANGALORE] where it has been held that ESOP compensation expenditure is not a notional expenditure but an allowable expenditure under Section 37(1) - object of issuing of shares at a lower issue price than the market price to the employees under ESOP must be taken into consideration and thereby it cannot be treated as short receipt of securities premium but a cost on account of compensation of employees - as principally the claim on account of deduction of ESOP compensation is allowable but in our considered opinion it would be in the fitness of things to remit the issue to the file of the Ld. AO to verify the actual expenses incurred by the appellant - Assessee’s claim is allowed for statistical purposes.
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2021 (8) TMI 1142 - ITAT KOLKATA
Revision u/s 263 by CIT - as per CIT disallowance u/s 14A read with Rule 8D was not at all considered or examined by the AO during the course of assessment proceedings - HELD THAT:- As observed that a specific opportunity was given by the Ld. Pr. CIT to the assessee-company to offer its explanation on the issue of disallowance u/s 14A read with Rule 8D during the course of proceedings u/s 263. The assessee-company however did not avail this opportunity by offering any satisfactory explanation and as noted by the Ld. Pr. CIT in his impugned order, a very cryptic remark was made by the assessee in answer to every query raised in the notice issued u/s 263.
As submitted by CIT DR, this issue relating to the disallowance u/s 14A read with Rule 8D was not at all examined by the Assessing Officer during the course of assessment proceedings and there is nothing brought on record on behalf of the assessee-company to show that any enquiry whatsoever was made by the AO on this issue during the course of assessment proceedings.
As held in the case of CIT vs Maithan International [2015 (4) TMI 479 - CALCUTTA HIGH COURT] the role of the Assessing Officer is that of an investigator as well as adjudicator and where relevant enquiry was not undertaken before allowing the claim of the assessee, the order become erroneous as well as prejudicial to the interest of the revenue calling for revision u/s 263 - as specifically provided in clause (a) of Explanation 2 below Section 263, if in the opinion of Pr. CIT, an order passed by the AO is without making enquiries or verifications, which should have been made, the same shall be deemed to be erroneous in so far as it is prejudicial to the interest of revenue for the purpose of Section 263 calling for exercise of revisionary power. - Decided against assessee.
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2021 (8) TMI 1141 - ITAT JAIPUR
GP estimation - Rejection of books of accounts - fresh estimation of gross profit of 13% by the ld CIT(A) in the second round of litigation - G.P rate of 15.42% has already been applied by CIT(A) which has been upheld by the Tribunal in the first round of litigation - HELD THAT:- AO has made an addition towards unverified purchases to revised total income as computed after giving appeal effect u/s 143(3)/250 dated 16.02.2007 to order passed by the ld CIT(A) wherein he has estimated G.P rate of 15.42% - addition of ₹ 15,39,905/- is made over and above the G.P addition made in the first round of litigation wherein G.P rate has been taken at 15.42% as against 12.14% declared by the assessee.
CIT(A) has rightly deleted the addition as we have noted above as there cannot be separate addition other than estimation of profits where the books of accounts have been rejected. CIT(A) has estimated G.P @ 13% failing to take into the consideration the fact that G.P has already been estimated earlier @ 15.42% and which has been accepted by both the parties and has attained finality and necessary effect given to by the AO while passing the impugned assessment order. In the contention so advanced by the AR and the addition so sustained by the ld CIT(A) amounting is hereby directed to be deleted. - Decided in favour of assessee.
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2021 (8) TMI 1140 - ITAT BANGALORE
Understatement of income - treatment of lease transactions as sales transaction - - Transfer of property under lease - Lease deed is unregistered one - efficacy of registration of lease deed and the impact of the same when it is unregistered one - HELD THAT:- Hon’ble Kerala High Court in the case of CIT v. C.F.Raju [2006 (6) TMI 509 - KERALA HIGH COURT] had followed the judgment of case of Anthony v. K.C.Ittoop & Sons [2000 (7) TMI 970 - SUPREME COURT] and held that even though the lease deed is unregistered, the same would not stand in the way to determine whether there is in fact a lease.
In the instant case, the assessee is a statutory body constituted u/s 5 of Karnataka Industrial Areas Development (IIADB Act), 1966. The KIADB Act, 1966 is a special Act, which provides for expeditious acquisition of land for industrial and infrastructure purposes. The Income Tax Authorities has not doubted the legal effect of the lease deed (being unregistered one). When the lease is transfer of right to enjoy the property, such transfer can be made expressly or by implication. The mere fact that it is an unregistered lease deed would not stand in the way to determine whether in fact it was a transfer of property under lease - Appeal filed by the assessee is allowed.
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2021 (8) TMI 1132 - ITAT DELHI
Addition of interest on overdue deposits - ascertained liability or not - Additions made in the rectification proceedings u/s 154 - CIT(A) deleted the addition made in rectification on the ground that addition made under normal provisions was also deleted by the Learned CIT(A) in appeal against order u/s 143 (3) by the assessee holding that liability is ascertained liability - HELD THAT:- We find that in assessment year 2009-10 the matter was restored by the Tribunal to the file of the Assessing Officer. Assessing Officer in his order passed in compliance to the order of the Tribunal, has allowed the claim of the assessee of interest on overdue deposits. In the circumstances, when the Assessing Officer himself has accepted the claim of the assessee in assessment year 2009-10, then action of the assessing officer in rectifying the assessment order and making addition on the same ground in assessment year 2013-14 i.e. present assessment year, is not justified. We accordingly, uphold the order of the Learned CIT(A) on the issue in dispute. The ground of the appeal raised by the Revenue is dismissed.
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2021 (8) TMI 1124 - MADRAS HIGH COURT
Addition u/s 68 - share capital of more than ₹ 316 Crores invested by the foreign company in assessee - argument of the appellant is that no show cause notice was issued before the addition was made by resorting to Section 68 - HELD THAT:- The statutory provision does not specifically state that a show cause notice is required to be issued. What is required is that where any sum is found credited in the books of the assessee and it is pointed out by the Assessing Officer, the assessee is required to offer an explanation about the nature and source thereof and if the assessee offers no explanation or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income tax. Admittedly, in the instant case, the assessee has been put on notice and the assessee had participated in the assessment proceedings and submitted their explanation.
AO questioned the source for the fund for the share application money and the assessee stated that an amount of ₹ 127,47,05,650/- was received from M/s.Rakeen (P.) Ltd., Mauritius and ₹ 5,00,000/- was received from Indian Promoter. The Assessing Officer has stated that there was no proof filed by the assessee to substantiate its existence and claimed to have 100% share capital transferred from Rakindo Developers PJSC (FZE) Dubai. Further, the company has no entity, but it is just a conduit to transfer funds to India from Mauritius and this, according to the Assessing Officer, is evident from the consolidated balance sheet of the Dubai company. Assessing Officer proceeds to analyse the Dubai company and has mentioned that on perusal of the balance sheet of the Dubai company, it is noticed that the promoters of the Dubai company had diverted/transferred funds to various concerns during the year. Once again, the assessee has been called upon to explain and the assessee was represented by an authorized representative, who had stated that Reyada Investment Ltd., was holding 48% of shares in the Dubai company originally.
On a perusal of the above findings, as recorded by the Assessing Officer, it will be evidently clear that the entire controversy involved in the matter is fully factual.
We do not agree with the submission that the assessee did not have adequate opportunity to put forth their case, as the Assessing Officer has recorded that the assessee has been represented by the authorized representative and if according to the assessee, the documents have not been properly appreciated or to be appreciated in the manner as decided by the assessee, it is for the assessee to agitate the same before the appellate authority and there is no justifiable or valid reason for the assessee to bypass the appellate remedy available under the Act. - Decided against assessee.
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2021 (8) TMI 1103 - BOMBAY HIGH COURT
Interest sought to be recovered as disputed tax from the assessee in Form-3 under the DTVSV Scheme - interest sought to be recovered as disputed tax be understood as the one paid pursuant to Section 244A and not Section 234D - HELD THAT:- We quash and set aside Form-3 dated 31st March, 2021 issued by Respondent No.1 for Assessment Year 2010- 11 as being without jurisdiction, the Respondent No.1 Designated Authority having no power or authority to add/include this amount to the disputed tax under the provisions of the DTVSV Act. We direct Respondent No.1 to issue fresh Form-3 to Petitioner determining the amount of disputed tax in accordance with the above discussion within three weeks from the date of pronouncement of this order and thereafter Petitioner to make payment of the disputed tax so determined within a period of two weeks of the issuance of revised Form -3.
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2021 (8) TMI 1102 - CALCUTTA HIGH COURT
Assessment u/s 144B - violation of principle of natural justice - respondent concerned not giving adequate and effective opportunity of hearing to the petitioner - whether assessing officer has committed jurisdictional error and that the alternative remedy is no bar in entertaining this Writ Petition since violation of natural justice is a jurisdictional error? - HELD THAT:- It is established from record that series of adjournments were granted on the prayer of the petitioner from time to time and the petitioner did not comply with many notices and sometime in response to some of the notices on some occasion replied to the show-cause notice in detail and furnished material evidence and documents in support of its case before the Assessing Officer in course of impugned assessment proceeding. In my considered opinion petitioner could not make out a case of any patent jurisdictional error or that the assessing officer acted contrary to any specific provision of law in course of the impugned assessment proceeding.
In view of the discussion made above and after taking into the consideration records available/annexed to the Writ Petition, in my considered opinion, sufficient opportunities of hearing were given to the petitioner and there was no violation of principles of natural justice in course of impugned assessment proceeding and in passing the assessment order and in the instant case it cannot be said that the assessing officer/respondent concerned who passed the assessment order was having inherent lack of jurisdiction or his action in course of impugned assessment proceeding was contrary to any specific provision of law and the impugned assessment order is not liable to be interfered with in constitutional writ jurisdiction of this Court under Article 226 of the Constitution.
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2021 (8) TMI 1101 - ITAT DELHI
Disallowance u/s 40A (2)(b) - higher salary to the Directors or the Managers or other Officers or employees - HELD THAT:- The assessee company has paid the Directors remuneration during the previous year as well as the subsequent years, the Assessing Officer has observed that they are the Managers to Directors and control the company.
AO has not disputed that the Board meeting has approved the increase of remuneration payable to the Directors in accordance with the provisions of the Companies Act, 1956 during the previous year 2011-12 & 2012-13. When a Company pays higher salary to the Directors of the Managers or other Officers or employees it is for the commercial expediency of internal affairs of the company, it is not for the Revenue Authorities to decide that particular salary should not have been paid to the Directors. It is the business decision and, therefore, the disallowance u/s 40A(2)(d) is wrongly invoked - Decided in favour of assessee.
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2021 (8) TMI 1100 - ITAT DELHI
Disallowance of claim of business loss - loss if not allowed in the year under consideration then it be allowed in A.Y. 2015-16 - HELD THAT:- It is an undisputed fact that the aforesaid amount which has been disallowed by the AO represents the compensation paid by the assessee to Ms Susan Beer on account of the decision of the Hon’ble Delhi High Court. It is also an undisputed fact that the payment of the aforesaid amount arose on account of the decision of Hon’ble Delhi High Court which was pronounced on 30.05.2014. It is also an undisputed fact that out of the total compensation amount of ₹ 5,28,80,795/- was deposited with the Registrar of High Court during the year under consideration and the balance amount of ₹ 2,40,56,079/- was deposited with the Registrar on 26.08.2014.
The incurring of expenditure is not in doubt and genuineness of the claim is not in dispute - the amount that was paid during the year under consideration i.e. ₹ 5.28 crore (rounded off) be allowed as an expense in the year under consideration and the balance amount of ₹ 2.40 crore (rounded off) which was deposited with the Registrar High Court be allowed as deduction in A.Y. 2015-16. Thus the claim of the assessee is allowed.
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2021 (8) TMI 1099 - ITAT DELHI
Addition u/s 68 - difference in total revenue shown as per the books of account of the assessee and income shown in Form No. 26AS for that year - Mercantile system of accounting - HELD THAT:- CIT-A correctly deleted the addition as the amounts of service tax shown in the invoice are not reflected to the extent of service tax included in the gross value of payment. With respect to certain invoices, which were pertaining to assessment year 2012-13, included by the assessee in the income of those years whereas same were shown as payment made by the customer in the Form No. 26AS of this year.
Interchangeability of receipts from Reliance Communication Ltd and Reliance Communication Infrastructure Ltd pertaining to the same group. The ld CIT (A) examined the reconciliation of both the companies individually with Form No. 26AS and no difference were found.The failure of the ld AO to consider the income shown under the other segment of the assessee already shown as income in the profit and loss account and merely comparing with one of the segment of the income.
The above reasons are verified by the ld CIT (A) to the extent of each rupee and have given detailed analysis with respect to each of the parties. The ld DR could not show us any infirmity in the order of the ld CIT(A) in deleting the above additions - Therefore, we confirm the order of the LD CIT (A) and dismissed the ground of appeal of the LD AO.
There can be overflow of income of one preceding previous year in the current year in form 26AS. However, there cannot be overflow of income pertaining to the preceding previous year in the current previous year in the books of accounts of the assessee because assessee is maintaining books of accounts on accrual system of accounting. AO should have considered the income shown by the assessee in the earlier year in its profit and loss account, when assessee has filed detailed reconciliation before the ld AO. The ld AO could also have verified the above with the books of account produced before him - difference between the revenue shown in the Form No. 26AS and the profit and loss account of the assessee , may trigger a doubt in the mind of the learned assessing officer, but that doubt needs to be further clarified by carrying out further examination of the details and reconciliation. Merely, issuing notices u/s 133(6) and not receiving the reply cannot result an addition into hands of the assessee. According to us, AO should have carried out further examination before making such a huge addition - Addition made by the ld AO has been correctly deleted by the CIT (A).
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2021 (8) TMI 1098 - ITAT DELHI
Set off of Business Loss and unabsorbed depreciation of scooter business against property dealing income - whether the income declared in the course of survey and disclosed in the return of income as business income, could be eligible for set off of loss or not? - HELD THAT:- More particular circular issued by CBDT, Circular No.1/2019 dated 18.06.2019, the claim of the assessee for set off of loss would be allowable. As it is clarified by the CBDT that section 115BBE(2) came into statute book w.e.f. 01.04.2017, we hold accordingly. AO is hereby directed to allow the claim of set off of loss against the business income disclosed during the course of survey proceedings. Thus, Ground Nos.1 & 2 raised by the assessee are allowed.
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2021 (8) TMI 1097 - ITAT DELHI
Disallowance u/s 37 (1) - AO has disallowed 10% of the expenses on ad-hoc basis claimed under the head ‘telephone expenses’, ‘travelling expenses’ and ‘staff welfare expenses’ on the ground that element of personal use cannot be overruled as no logbook was maintained for Vehicles, details of phone calls was not maintained in respect of telephones and proper vouchers of tour and travel expenses were not maintained - HELD THAT:- In our opinion, the Assessing Officer is not justified in making ad-hoc disallowance out of expenses without pointing out specific error or absence of particular voucher of expenses - Tribunal in identical circumstances has upheld the deletion of such disallowance. Respectfully, following the finding of the Tribunal in the case of the assessee in immediately preceding assessment year, we uphold the finding of the Learned CIT(A). The ground No. 1 of the appeal of the Revenue is accordingly dismissed.
Disallowance u/s 14A - CIT(A) deleted the disallowance in view finding of his predecessor and no exempt income earned by the assessee - HELD THAT:- We find that the Ld. CIT(A) has deleted the disallowance relying on the decision of the Hon’ble Delhi High Court in the case of Cheminvest Ltd [2015 (9) TMI 238 - DELHI HIGH COURT]. We do not find any error or illegality in the finding of the ld. CIT(A). Accordingly, the grounds No. 2 & 3 of the appeal of the Revenue are dismissed.
Disallowance of interest expenditure related to interest free advances u/s 36(1)(iii) - AO observed that building was put to use in the year under consideration and interest on money borrowed corresponding to the period for which the building was not put to use was computed - HELD THAT:- As assessee has already transferred the interest to preoperative expenses which has been allocated to fixed assets. The facts in the year under consideration are identical to assessment year 2010-11 [2019 (1) TMI 1062 - ITAT DELHI] thus, respectfully following the finding of the Tribunal (supra), we uphold the deletion of the addition by the Ld. CIT(A). The ground No. 4 to 6 of the appeal are accordingly dismissed.
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2021 (8) TMI 1096 - ITAT KOLKATA
Unexplained cash credit u/s 68 - cash received from partners - difference pointed out by the AO as capital introduced by both the partners of the assessee firm different from the capital contribution stated to be claimed by the assessee firm - HELD THAT:- The main source of cash in hand was explained by the assessee as capital contribution made by its partners and since the said source was clearly established on the basis of cash book showing introduction of capital by the partners, the difference as pointed out by the AO in the total capital contribution as claimed by the assessee to the extent of ₹ 31,00,000/- was not relevant to the issue and such shortfall cannot be treated as income u/s 68 in the hands of the assessee firm by treating the same as unexplained cash credit.
The issue was relating to the source of cash in hand as reflected in the balance sheet of the assessee as on 31.03.2015 and when the same was satisfactory explained by the assessee inter alia in the form of capital contribution by the partners of the assessee firm, it is of the view that the addition as made by the AO and confirmed by the Ld. CIT(A) u/s 68 is not sustainable. We delete the same and allow this appeal of the assessee.
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2021 (8) TMI 1095 - ITAT BANGALORE
TP Adjustment - comparable selection - HELD THAT:- E-Zest Solutions Limited - As in the case of GXS India Technology Centre (P.) Ltd. [2015 (8) TMI 227 - ITAT BANGALORE], since assessee in our case is into software development services, same cannot be functional compared with E-Zest Solutions Limited, which is into KPO services. Therefore, we direct the AO / TPO to exclude E-Zest Solutions Limited from the final list of comparables. It is ordered accordingly.
Softsol India Limited - On identical facts, the Tribunal in the case of GXS India Technology Centre (P.) Ltd. (supra) had held that Softsol India Limited is to be excluded from the comparables list of companies on account of that it was having related party transactions in excess of 15%. In view of the above order of the Tribunal and also for the fact that assessment year being the same (A.Y.2008-2009), we direct the AO / TPO to exclude Softsol India Limited from the final list of comparable companies.
Benefit of deduction u/s 10A in respect of additions agreed for the MAP proceedings - HELD THAT:- On identical facts, the Tribunal in assessee’s own case [2020 (6) TMI 699 - ITAT BANGALORE] had held that additions agreed under MAP proceedings was entitled to the benefit of deduction u/s 10A.
Deduction u/s 10A of the I.T.Act by excluding the expenditure deducted from the export turnover also to be reduced from the total turnover - HELD THAT:- We are of the view that the above issue raised by the Revenue is no more res integra. As in the case of CIT v. HCL Technologies Ltd. [2018 (5) TMI 357 - SUPREME COURT] had held that when expenditure are reduced from the export turnover, the same need to be reduced also from the total turnover while calculating deduction u/s 10A of the I.T.Act. In view of the dictum laid down by the Hon’ble Apex Court, ground No.1 raised in Revenue’s appeal is rejected.
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2021 (8) TMI 1094 - ITAT BANGALORE
Addition of share premium u/s 56(2)(viib) - Determination of value of shares - method of valuation - DCF method - assessee furnished a valuation report in support of the share premium amount, wherein shares had been valued under discounted cash flow method (DCF) - A.O. noticed that the projections given in the valuation report prepared under DCF method do not tally with the actual, as per the return of income - HELD THAT:- AO has proceeded to determine the value of shares by adopting different method without scrutinizing the valuation report furnished by the assessee under DCF method. Accordingly, we set aside the orders passed by Ld CIT(A) and restore the impugned issue to the file of the AO with the direction to examine this afresh as per the directions given by the co-ordinate bench in the case of Innoviti Payment Solutions P Ltd [2019 (1) TMI 688 - ITAT BANGALORE] - Appeal of the assessee is treated as allowed.
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