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Income Tax - Case Laws
Showing 261 to 280 of 7776 Records
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2021 (12) TMI 974
Levy of penalty u/s. 221 - AO passed, orders u/s 201(1) and 201(1A) treating the appellant as assessee in default - appellant's main arguments before the AO were that it was facing severe financial hardship and that the same constitutes a 'good and sufficient reason' for not levying the penalty - As contented AO levied exorbitant penalty for non-remitting of TDS within the stipulated time which requires to be deleted - HELD THAT:- The only reason now shown is financial difficulties which under these circumstances does not appeal to be sufficient. It is no doubt that a mere default is not sufficient for levy of penalty but as the lower authorities pointed out that the assessee has been using the deducted TDS amount for meeting various business commitments and assessee continuously default the payment of TDS to the government account which is very serious in nature.
Being so, the assessee cannot escape its consequences, it had kept back the tax deducted at sources with it. One can understand the financial difficulties of assessee is facing, if it was in defaulter for a short period. But in the present case, conduct of the assessee is that it continuously defaulting the payment of TDS amount to the government account by one was other reasons without remitting the same to the government account and these action of defaulter cannot be condoned by deleting the penalty. Accordingly, levy of penalty is confirmed. However, the Assessing Officer levied penalty at very exorbitant rate that 5% pm for which there is no legal sanction when the department itself has paid interest at 6% pa to the assessee on the refund due to the assessee. Being so, in our opinion, it is reasonable and fair to levy penalty at 1% pm i.e. 12% pa instead of 5% pm levied by AO. Accordingly, we direct the AO to recompute the penalty for both Assessment Years at 1% pm or 12% pa. Accordingly, the appeal of the assessee is partly allowed.
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2021 (12) TMI 973
Disallowing certain bad debts written off in respect of revenues pertaining to the financial year 2009-2010 - HELD THAT:- As deduction on account of bad debt as allowed u/s 36(l)(vii) read with section 36(2), after amendment by the Direct Tax Laws (Amendment) Act 1987, envisage merely wiring off the debt as irrecoverable in the accounts of the assessee as a condition for such an allowance. Before the amendment by the DTL (Amendment) Act 1987, of course, there was a condition to establish that the debt has become bad.
The Hon'ble Supreme Court in the case of T.R.F. Limited vs C.I.T [2010 (2) TMI 211 - SUPREME COURT] has clearly observed that after 01.04.1989, it is not necessary for the assessee to establish that the debt, in fact, has become irrecoverable. It is enough if the bad debt is written off as irrecoverable in the accounts of the assessee - we are of the view that the assessee is entitled to claim deduction on account of bad debts and the AO is directed to allow claim of assessee.
Deduction u/s 80-IC in respect of the amount added back under Section 40(a)(ia) - HELD THAT:- There is no dispute regarding genuineness of the expenditure that was disallowed and the fact that the said expenditure is otherwise allowable as deduction in computing income from business. In such circumstances, even if the expenditure is disallowed u/s.40(a)(i) of the Act, the result will be that the disallowance will go to increase the profits of the business which is eligible for deduction u/s.80-IC of the Act and consequently the deduction u/s. 80-IC of the Act should be allowed on such enhanced profit consequent to disallowance u/s. 40(a)(i) of the Act.
Hon'ble Bombay High Court in the case of CIT v. Gem Plus Jewellery India Ltd. [2010 (6) TMI 65 - BOMBAY HIGH COURT] and Hon'ble Gujarat High Court in the case of ITO vs. Kewal Construction, [2013 (7) TMI 291 - GUJARAT HIGH COURT] have taken the view that when disallowance u/s. 40(a)(ia) of the Act goes to enhance the profits that are eligible for deduction under Chapter VIA of the Act, the deduction under Chapter VIA should be allowed on such increased profit.
In view of the aforesaid decisions and the CBDT Circular No.37/2020, we hold that the revenue authorities erred in not allowing deduction u/s.80-IC. The claim of the assessee in this regard is accepted and the AO is directed the give necessary relief to the assessee in this regard.
Deduction under section 80-IC on reversal of commission expenses - Finding of the AO and the CIT(A) is that the assessee failed to produce evidence or explanation as to how the amount of commission was disallowed towards the unit claiming deduction u/s.80-IC of the Act. This finding has not been rebutted by the assessee in the proceedings before the Tribunal also. Therefore Grd.No.1 b raised by the assessee is dismissed.
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2021 (12) TMI 972
Additions in respect of employees contribution towards ESI/PF - assessee’s failure to pay the employee’s contribution of PF/ESI within the prescribed due dates as per Section 36(1)(va) - HELD THAT:- In the instant case, admittedly and undisputedly, the employees’ contribution to ESI and PF collected by the assessee from its employees have been deposited well before the due date of filing of return of income u/s 139(1) of the Act. Further, the ld D/R has referred to the explanation to section 36(1)(va) and section 43B by the Finance Act, 2021 and has also referred to the rationale of the amendment as explained by the Memorandum in the Finance Bill, 2021, however, we find that there are express wordings in the said memorandum which says “these amendments will take effect from 1st April, 2021 and will accordingly apply to assessment year 2021-22 and subsequent assessment years”.
In the instant case, the impugned assessment year is assessment year 2019-20 and therefore, the said amended provisions cannot be applied in the instant case. See SHRI GOPALAKRISHNA ASWINI KUMAR VERSUS THE ASSISTANT DIRECTOR OF INCOME TAX, BENGALURU [2021 (10) TMI 952 - ITAT BANGALORE] - Decided in favour of assessee.
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2021 (12) TMI 946
Penalty u/s 271 - assessment under section 153C has been completed on the figures disclosed by it in the return filed under section 153C -Whether Tribunal was justified in law in invalidating the penalty proceedings on mere mistake in the penalty notice? - HELD THAT:- AO stated that the mere fact that the assessee has correctly quantified its concealed income, which has been accepted by the department, has no co-relation with the fact that the assessee has not concealed its income. Further, during the course of search, incriminating documents were found which revealed that the assessee was having concealed income and when the assessee was confronted with the same he had no other alternative but to admit that he had indeed concealed the particulars of income and he in the due course of time came out with a correct calculation of his undisclosed income. Thus, the assessee having not disclosed the income in the return of income filed under section 139[1] but has shown the same in the return in response to the notice under section 153C cannot be said to be voluntary.
With regard to the alleged defect in the notice issued under section 274 of the Act, either on the ground that the relevant portions have not been clearly indicated or that satisfaction of the Assessing Officer has not been properly made was not canvassed before the CIT[A]. This contention appears to have been canvassed for the first time before the Tribunal. It may be true that the Tribunal being the last fact finding forum in the hierarchy is entitled to examine an issue qua the assumption of jurisdiction of the authority to initiate proceedings as it may be argued by the assessee that the said issue goes to the root of the matter.
Be that as it may, if the Tribunal proposes to undertake such an exercise then it should do so after hearing the assessee and the Revenue also and the reasons of its satisfaction for accepting the case of the assessee should be clearly spelt out.
More thorough exercise is required to be done by the Tribunal on the issue with regard to the levy of penalty which was sustained by the CIT[A] on the ground whether the additional income offered by the assessee in the return filed pursuant to notice under section 153C could be taken to be not voluntary and whether it could be treated imposition of penalty. Similarly, with regard to the validity of the notice also needs to be considered after taking note of the factual position.
For the above reasons, the appeal is allowed and the order passed by the Tribunal is set aside and the matter is remanded to the Tribunal for fresh consideration .
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2021 (12) TMI 945
Penalty levied u/s 271(1)(c) - whether penalty is being levied for concealment or for furnishing of inaccurate particulars of income, the penalty levied consequent to the impugned notice was without jurisdiction and liable to be quashed? - HELD THAT:- The assessee cannot be non-suited from raising such a contention that too before a Tribunal, even assuming it is for the first time. This is so because the Tribunal is the last forum which will decide the factual issue. Therefore, assessee cannot be prevented from raising such a contention. We say so because in the case on hand, the assessee is an individual. It may be true that there are other decisions of the various High Courts which have refused to entertain such a ground at the appeal stage, namely the penalty notice was defective.
But those decisions are distinguishable on facts and in most of the cases assessee like a big corporate house having a large legal team to advise and therefore, the question of inadvertence can never be pleaded by the assessee. In contrast to the same, the present case in which the assessee before us is an individual.
We are of the view that assessee should not be shut out from raising the jurisdictional issue. The Tribunal on going through the record and in particular, the show-cause notice dated 29th December, 2010 has recorded a finding of fact that the irrelevant portions of the show-cause notice has not been struck off and thus prejudiced the assessee from putting forth an effective objection. The Tribunal also rightly took note of the decision in CIT & ANR V. MANJUNATHA COTTON AND GINNING FACTORY, [2013 (7) TMI 620 - KARNATAKA HIGH COURT] - Thus, we find there is no error in the decision of the Tribunal nor the decision making process for us to interfere with the said order.
Accordingly, appeal filed by the revenue is dismissed and the substantial questions of law are answered against the revenue.
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2021 (12) TMI 944
Assessment u/s 144C - HELD THAT:- In view of the CBDT Circular dated 30.04.2021, the objections filed by the petitioner before the DRP were clearly within the time. The same has now been heard on merit by the DRP. Therefore, keeping in view of the scheme of Section 144C of the Act we set aside the Impugned Final Assessment Order dated 30.06.2021, directing the respondent to act in accordance with the procedure stipulated in Section 144C.
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2021 (12) TMI 943
Deduction u/s 80IA - claim denied as assessee was not engaged in the process of manufacture, but only assembling the parts procured from others - ITAT allowed the claim - HELD THAT:- As decided in ELGI ULTRA INDUSTRIES LIMITED [2012 (8) TMI 809 - MADRAS HIGH COURT] assessee himself is not personally engaged in the manufacture, would not disentitle the assessee from claiming the relief as one engaged in manufacturing activity, for, so long as the assessee exercises control in the work entrusted to job workers, the assessee would be entitled to the relief under Section 80IA of the Act. Being a deduction provision, taking note of the present day outsourcing of various activities, we need to give a meaningful expression to "assessee engaged in the manufacturing process", to hold that so long as the effective involvement of the assessee is there in the form of quality control or supply of material and dyes for the manufacture of parts of the grinders or machinery, even in the case of assembling done through job work, the assessee would be entitled to have the benefit under Section 80IA of the Act.
In the circumstances, guided by the decision of RAMALINGAM [1994 (11) TMI 14 - MADRAS HIGH COURT] we hereby rejecting the Revenue's appeal, thereby, confirming the order of the Tribunal.
Addition of bad debts written off - conditions laid down under section 36(1)(vii) read with section 36(2) were not satisfied by the assessee -claim for deduction was disallowed by the assessing officer on the ground that the debts have been taken over from the sister concerns voluntarily only as a measure of support to it and knowing fully well that the same was irrecoverable and hence, the same was liable to be denied - ITAT allowed the claim - HELD THAT:- Tribunal taking note of the position that the Memorandum and Articles of Association permitted the assessee to carry on the business of money lending and the transactions in question have been held to be in the realm of business activity. When there is no dispute raised on the aforesaid factual position, this court finds no reason to differ with the view taken by the Tribunal. In view of the same, the second substantial question of law is also answered in favour of the assessee and against the Revenue.
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2021 (12) TMI 942
Rectification of mistake u/s 154 - Delayed Employees’ contribution to the Employee Provident Fund and Employee State Insurance Fund - addition u/s 2(24)(x) r/w s. 36(1)(va) - scope of amendment - HELD THAT:- In the Tribunals’ decision in Nikhil Mohine [2021 (11) TMI 927 - ITAT JABALPUR] while confirming the Explanations under reference to be explanatory of the law, even as signified by the clear, unambiguous language employed therein, are yet stated to be prospective inasmuch as they are applicable assessment year 2021-22 onwards.
Lastly, no decision by Hon'ble jurisdictional High Court in the matter has been either cited before me, or found, which, where so, would, irrespective of the view expressed therein, hold for the relevant years, being prior to the year of applicability of the Explanations under reference. No adjustment, in view of the conflicting judicial opinion could, accordingly, be made to the returned income u/s. 143(1)/154, which sections admit only issues on which there could be conceivably no two views, rampant, irrespective of merits thereof, in the instant case, which aspect, as explained therein, has been given cognizance to in making the provision applicable not retrospectively. The assessee, accordingly, succeeds in his challenge to the impugned adjustments, which are held as bad in law and directed for deletion.
Explanations themselves had been proposed as prospective amendments, as stated in the Notes on the Clauses to, and the Memorandum explaining the Provisions of, the Finance Bill, 2021, with a view to, as explained, settle the controversy arising due to the contrary view expressed by some High Courts, for which reference may be made to para 5.4 of the Tribunal’s order (also refer paras 3.1 & 3.2 above). There is, accordingly, no question of the same being given a retrospective effect.
There is, in view of the foregoing, no question of the said Explanations being read as retrospective, so as to apply for the relevant year, sustaining the impugned additions, which therefore fail. This is, however, subject to any decision/s by the Hon’ble jurisdictional High Court, which would, where so, hold, even justifying a rectification u/s. 154/254(2), even where rendered after the date of the order sought to be rectified - See SAURASHTRA KUTCH STOCK EXCHANGE LTD [2008 (9) TMI 11 - SUPREME COURT] and SMT. ARUNA LUTHRA. [2001 (8) TMI 84 - PUNJAB AND HARYANA HIGH COURT]
No such decision has been found, or otherwise pointed out by the parties, as was the case before the Tribunal in Nikhil Mohine (supra). Any such decision, even if discovered later, may operate to amend this order, or the order giving appeal effect thereto, to bring it in conformity or agreement with the said decision/s, of course, after allowing a fair opportunity of hearing to the assessee.
The impugned additions, therefore, could not have been made under the given facts and circumstances of the case, and are directed for deletion. Assessee appeal allowed.
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2021 (12) TMI 941
Disallowance of expenses out of salary, Staff Welfare and Bonus etc. - entire addition has been made purely on the basis of conjectures and surmises - HELD THAT:- CIT(A) erred in sustaining the disallowance on the ground that expenses so claimed are excessive and abnormal without adverting to the evidences field in support of the claim. Even the A.O also made disallowance without assigning any reason as to how the expenses claimed are excessive and unreasonable. Revenue has not brought any adverse material on record except saying that the expenses are unreasonable. Therefore, such a casual approach by the authorities below cannot be affirmed. No disallowance is permissible under the law purely on the basis of guess work. There has to be some finding with regard to evidences filed by the assessee. Therefore, having regard to the facts of the present case the decision of the authorities below cannot be sustained. I, therefore, direct the A.O to delete the addition. The ground of assessee’s appeal is allowed.
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2021 (12) TMI 940
Late remittance of employees’ contribution to PF and ESI under the respective Acts - Scope of amendments - HELD THAT:- On identical facts, the Bangalore Bench of the Tribunal in the case of M/s. Shakuntala Agarbathi Company [2021 (10) TMI 1196 - ITAT BANGALORE] by following the dictum laid down by the Hon’ble jurisdictional High Court in the case of Essae Teraoka Pvt. Ltd [2014 (3) TMI 386 - KARNATAKA HIGH COURT] had held that the assessee would be entitled to deduction of employees’ contribution to PF and ESI provided that the payments were made prior to the due date of filing of the return of income u/s 139(1) - ITAT that amendment by Finance Act, 2021, to section 36[1][va] and 43B of the Act is not clarificatory.
As the amended provisions of section 43B as well as 36(1)(va) of the I.T.Act are not applicable for the assessment years under consideration. By following the binding decision of the Hon’ble jurisdictional High Court in the case of Essae Teraoka Pvt. Ltd Vs. DCIT (supra), the employees’ contribution paid by the assessee before the due date of filing of return of income u/s 139(1) of the I.T.Act is an allowable deduction. Accordingly, we decide this issue in favour of the assessee
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2021 (12) TMI 939
Delayed payment of employees contribution to PF and ESI paid after the due dates prescribed in the relevant Statutes but before the due date of filing of return under section 139(1) - HELD THAT:- As the issue involved in the present appeal as well as the material facts relevant thereto are similar to the case of Lumino Industries Limited [2021 (11) TMI 926 - ITAT KOLKATA] respectfully follow the decision rendered by the Tribunal in the said case and delete the disallowance made by the Assessing Officer and confirmed by the ld. CIT(Appeals) on account of delayed payment of employees contribution towards PF and ESI. - Decided in favour of assessee.
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2021 (12) TMI 938
Employees’ share of contribution to ESI to the extent not paid on or before the due date as mentioned in Sec 36(1)(va) - HELD THAT:- The Hon’ble Karnataka High Court in the case of Essae Teraoka Pvt. Ltd., [2014 (3) TMI 386 - KARNATAKA HIGH COURT] has taken the view that employee’s contribution under section 36(1)(va) of the Act would also be covered under section 43B of the Act and therefore if the share of the employee’s share of contribution is made on or before due date for furnishing the return of income under section 139(1) of the Act, then the assessee would be entitled to claim deduction. Therefore, the issue is covered by the decision of the Hon’ble Karnataka High Court.
In this case there is no dispute that the assessee made payment of the Employees share of PF/ESI on or before the due date for filing return of income for AY 2017-18 u/s.139(1) of the Act.
Whether the amendment to the provisions to section 43B and 36(1)(va) of the Act by the Finance Act, 2021, has to be construed as retrospective and applicable for the period prior to 01.04.2021 also? - We find that the explanatory memorandum to the Finance Act, 2021 proposing amendment in section 36(1)(va) as well as section 43B is applicable only from 01.04.2021. These provisions impose a liability on an assessee and therefore cannot be construed as applicable with retrospective effect unless the legislature specifically says so - tribunal has taken a view that the aforesaid amendment is applicable only prospectively i.e., from 1.4.2021. We are therefore of the view that the impugned additions made under section 36(1)(va) of the Act, deserves to be deleted.- Decided in favour of assessee.
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2021 (12) TMI 937
Determining total income of the assessee - survey under section 133A - evidentiary value of statement made at the time of survey - assessee did not maintain any books of accounts - addition based on declaration made at the time of survey - HELD THAT:- The statement alone without substantiating material cannot be the basis to make any addition but in the present case, the circumstances under which the statement was made and declaration of income at the time of survey have also to be seen viz., the assessee admitted receiving receipts from producers in cash which are not recorded in the books of accounts, evidence found in the course of survey showing that the assessee had made cash payments for construction of house which are not appearing in the books of account and admission of the assessee that he earned income which was not disclosed in the books of accounts.
The period after 17.8.2011 is concerned, the proportionate income declared by the assessee would be 198 days/ 365 days x 15,35,527/-, which would be a sum of ₹ 8,32,970/- (approx.). In my view it would be just and appropriate and fair to assess the total income of the assessee at a sum of ₹ 18.77 lacs + ₹ 8,32,970, i.e., at a sum of ₹ 27,09,970 – ₹ 1,13,347 being Chapter VI A deduction, i.e., a sum of ₹ 25,96,623/- as against the total income returned of ₹ 14,22,180/-. - Decided partly in favour of assessee.
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2021 (12) TMI 936
TP Adjustment - ALP of international transactions with its AE - reclassification of the assessee’s business profile from contract marketing service provider to a full-fledged technical/business support service provider - HELD THAT:- The entire international transaction of the assessee was based on the agreement dated 8.8.1994 with its AE i.e. Parametric Holdings Inc. Parametric India is engaged in marketing and support services in India on behalf of its AE. On this basis, the international transactions have taken place - TPO in the impugned assessment order observed that the services provided by the taxpayer to the AE are in the nature of marketing support services. However, while making the TP adjustment, he changed the business profile of the assessee recorded of the TP order.
Contrary to this, he reclassified the assessee’s business profile from contract marketing service provider to a full-fledged technical/business support service provider only on the reason that the assessee has not furnished proper bifurcation of employees involved in the two activities. In our opinion, this cannot be a reason to reclassify the business profile of the assessee. The engineers could have been appointed to carry out some work in the field of marketing services. There is no prohibition on this count. The assessee is not disentitled to appoint engineers for carrying out the marketing services with regard to international transactions to its AE.
Since judicial discipline requires consistency in its proceedings from year to year, the business profile of the assessee cannot be changed from year to year wherein the all the international transactions of the assessee are based on the same agreement dated 8.8.1994 with its AE. Being so, in our opinion, it is appropriate to vacate the findings of the revenue authorities on this count and allow the grounds taken by the assessee. Accordingly this ground is allowed.
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2021 (12) TMI 935
Revision u/s 263 - Profit on unaccounted sales - estimation of the gross profit at 0.7% without ascertaining profit from unaccounted purchases and unaccounted sales is erroneous and prejudicial to the interests of revenue - As per CIT A.O. should have ascertained the profit by considering unaccounted purchases and unaccounted sales noted down in the seized materials and that the A.O. has made the addition without making any enquiry or verification regarding the source of unaccounted purchases - HELD THAT:- We notice that it is nobody’s case that the cash payment represents unaccounted purchases as presumed by Ld PCIT. In that case, the AO could not have computed gross profit on the basis of entries noted in the seized materials. Under these set of facts, one of the courses of action available with the AO is to estimate profit from the unaccounted sales.
Since the assessee could not have sold materials without purchasing them, only profit element may be assessed. Thus, the AO has estimated the income and assessed the same in the hands of the assessee in all the three years. Thus, we notice that the AO has adopted one of the possible views in this matter. As held by Hon’ble Supreme Court in the case of Malabar Industrial Company (supra), if the AO has taken one of the possible views, then the same would not make the assessment order prejudicial to the interests of revenue.
PCIT has held the assessment orders to be erroneous for the reason that the AO should have estimated income from unaccounted sales at a higher figure, thus it is case where Ld PCIT is having a different view on the manner of estimation of income from unaccounted sales. As held by Hon’ble Bombay High Court in the case of Gabriel India Ltd (supra), the view so entertained by Ld PCIT would not give him power u/s 263 of the Act to initiate revision proceedings, since the view of the AO cannot be termed as erroneous.
We are of the view that the impugned assessment orders cannot be termed as erroneous and prejudicial to the interests of revenue. Accordingly, Ld PCIT was not justified in invoking revision proceedings in all the three years under consideration - Decided in favour of assessee.
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2021 (12) TMI 934
Estimation of income - Bogus purchases - HELD THAT:- As in the case of Pankaj K. Chaudhary [2021 (10) TMI 653 - ITAT SURAT] we restrict the disallowance @ 6% of impugned purchases.
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2021 (12) TMI 933
Addition u/s 68 - unexplained sundry creditors - outstanding balance at the year end appearing against two related party as being unexplained - HELD THAT:- Allegation of the AO that the financial statement of the sundry creditors do not support the creditworthiness, is not based on proper appreciation of the facts more so for the reason that the sundry creditors had purchased goods during the year under consideration from different parties and out of those goods purchased it had made sale to the assessee which was as per general business practice - allegation of the AO that M/s. Mandal Superfine Garments Pvt. Ltd. and M/s. Vikas Superfine Garments Pvt. Ltd. do not have creditworthiness to enter into large transaction of sale and purchase is factually incorrect - also noted that the transactions of purchases made by the assessee from its sister concern was at Arm’s Length Price and no adverse finding has been brought on record by the AO and the AO has never doubted the purchases made by assessee from those associated concern. Before us, no fallacy in the findings of CIT(A) has been pointed out by the Revenue. In such a situation, we find no reason the interfere with the order of CIT(A) and thus the Ground of Revenue is dismissed.
Disallowance u/s 37(1) - assessee had claimed interest on Government dues - interest charged by the DGFT for the period upto 10.07.2014 - case of the Revenue that the interest paid by the assessee is penal in nature and therefore Explanation to Section 37 of the Act gets triggered and therefore the amount is not allowable - HELD THAT:- CIT(A) while deciding the issue in favour of the assessee has given a finding that Deputy DGFT vide letter dated 24.04.2013 had asked the assessee to refund the incentive received earlier along with interest and the letter nowhere mentioned that assessee had committed any offence under Foreign Trade Regulation. CIT(A) while deleting the addition ahd also placed reliance on the decision rendered by Hon’ble Delhi High Court in the case of Enchante Jewellery Ltd. [2012 (12) TMI 169 - DELHI HIGH COURT] Before us, no material has been placed by Revenue to point out that interest paid by the assessee was on account of any act of assessee which is prohibited by law.
Revenue has not placed any material on record to demonstrate that the payment is hit by Explanation 37 of the Act. Before us, Revenue has also not placed any contrary binding decision in its support not has pointed any fallacy in the findings of CIT(A). In such a situation, we find no reason to interfere with the order of CIT(A) and thus the ground of Revenue is dismissed.
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2021 (12) TMI 932
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2021 (12) TMI 931
Rectification of mistake - invoking section 154 rectification thereby seeking to recompute section 234B interest - HELD THAT:-Whether the learned lower authorities would invoke section 154 rectification in such an instance, in our considered opinion, goes in assessee’s favour and against the department. Hon’ble apex court’s landmark decision in T.S. Balram Vs M/s. Volkart Brothers [1971 (8) TMI 3 - SUPREME COURT] has settled the law that a mistake apparent on record must be an obvious and patent one than something which could be established by a long drawn process of reasoning involving more than one opinions.
The factual position is no different before us wherein the assessee’s case all along has sought to treat the cash seized as self-assessment and not advance tax covered u/s 132B Explanation 2 of the Act. We accordingly hold that the learned lower authorities have erred in law in invoking section 154 jurisdiction in the very terms as per strict interpretation of principles invoked in Commissioner of Customs Vs. Dilip Kumar[2018 (7) TMI 1826 - SUPREME COURT] - Decided in favour of assessee.
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2021 (12) TMI 930
Gross revenue chargeable to tax u/s 44BB - whether service tax is includable in the gross revenue for computing profits under presumptive provisions of section 44BB or not ? - HELD THAT:- The issue of excludability of service tax in the gross receipts is squarely covered by the judgment in the case of Mitchell Drilling International Pty Limited [2015 (10) TMI 259 - DELHI HIGH COURT] wherein the Hon'ble Delhi High Court has held that service tax being statutory levy should not form part of gross receipts as per provisions of section 44BB.
Hon’ble High Court of Uttarakhand in the case of DIT International Taxation Vs M/s Schlumberger Asia Services Ltd [1972 (10) TMI 4 - SUPREME COURT] held that the amount reimbursed to the assessee (service provider) by the ONGC (service recipient), representing the service tax paid earlier by the assessee to the Government of India, would not form part of the aggregate amount referred to in clauses (a) and (b) of sub-section(2) of Section 44BB of the Act. The Hon’ble Court is clearly spelt that even otherwise, it is not every amount paid on account of provision of services and facilities which must be deemed to be the income of the assessee u/s 44BB . It is only such amounts, which are paid to the assessee on account of the services and facilities provided by them, in the prospecting for or extraction or production of mineral oils, which alone must be deemed to be the income of the assessee.
Respectfully following the ratio of the judgment as laid down by the Hon'ble Delhi High Court and Hon’ble Uttarakhand High Court M/s Schlumberger Asia Services Ltd. [2019 (4) TMI 1177 - UTTARAKHAND HIGH COURT] we hold that the service tax receipts do not form part of receipts for computation of income in the section 44BB of the Income Tax Act. - Decided against revenue.
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