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Income Tax - Case Laws
Showing 321 to 340 of 7776 Records
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2021 (12) TMI 824
Cancellation of Assessment u/ 153C - HELD THAT:- Tribunal after taking note of the factual position which was available both before the Assessing Officer and the Commissioner of Income Tax (Appeals) [CIT (A)] held that there is nothing to indicate that the seized documents were disclaimed by NKG in whose case search was conducted. Furthermore, the Tribunal pointed out that the Assessing Officer has not referred to any material to indicate that the assessee is the owner of those seized documents. Thus, on facts, the Tribunal held that the Assessing Officer was not justified in exercising jurisdiction under section 153C of the Act. Thus, we find that there is no question of law much less substantial question of law arising for consideration on this issue.
Additional depreciation under Section 32(1)(iia) on mining of coal - Tribunal had taken note of the decision of this Court in the case of CIT Vs. G. S. Atwal & Company [2001 (2) TMI 32 - CALCUTTA HIGH COURT] for the proposition that mining of coal is production - HELD THAT:- Applying the said decision the Tribunal granted relief to the assessee. This issue has also been settled by the Hon’ble Supreme Court in the case of CIT vs. Sesa Goa Ltd. [2004 (11) TMI 14 - SUPREME COURT] wherein it was held that extraction and processing of mineral ore amounts to “production” within the meaning of word under Section 32A(2)(b)(iii) of the Act”. Thus, the finding rendered by the Tribunal does not call for any interference.
Disallowance u/s 14A r.w.r. 8D - Whether investments made by the assessee in the group companies shall not be considered while applying the provisions of Section 14A read with rule 8D? - HELD THAT:- As assessee contended that when their own funds have been deployed for the investment, there is no income which is not included while computing the total income of the assessee and Section 14A would not apply. The assessee also challenged the finding of the Assessing Officer as being not a speaking order and criptic. Though such was the contention, the CIT(A) noted that the assessee has furnished the position of its own funds vis-à-vis the total investment but declined relief to the assessee by observing that the assessee has not shown that the shares were acquired from its own fund without taking benefit of loan. When this finding was challenged before the Tribunal, we find that the Tribunal has proceeded on a different footing by making a reference that the investment is in the interest of a strategic investment. Though such a contention has been raised during the course of argument, the issue itself was whether this investment was from the own funds or borrowed funds. This exercise appears to have not been done by either the Assessing Officer or the CIT(A) or the Tribunal - thus issue requires to be remanded to the Assessing Officer for a fresh decision.
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2021 (12) TMI 823
Deduction under Section 80HHC - eligibility of profits and deductibility of profits arising under Section 115JB - HELD THAT:- Referring to reported judgments in Ajanta Pharma Ltd. v. Commissioner of Income-Tax [2010 (9) TMI 8 - SUPREME COURT], order of the Supreme Court in Kerala Chemicals and Proteins Ltd v. Commissioner of Income Tax [2012 (9) TMI 1214 - SUPREME COURT] and Commissioner of Income-Tax v. Bhari Information Tech. System (P) Ltd. [2011 (10) TMI 19 - SUPREME COURT] the issue is concluded by these judgments in favour of assessee
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2021 (12) TMI 822
Reopening of assessment u/s 147 - Eligibility of reason to believe - “Reason to believe” or ‘Reasons to suspect” - accommodation entry transaction - transaction of assessee with M/s. Bridge & Building Pvt. Ltd. to be accommodation entry availed by the assessee in the form of bogus billing - statement of Shri Ajit Kumar Jindal recorded by the Investigation Wing wherein he admitted to be an accommodation entry provider through his entities in lieu of commission And the AO notes that the bank account number of M/s. Bridge & Building Pvt. Ltd. wherein the assessee had transferred the amount - HELD THAT:- It has to be kept in mind the assessee’s scrutiny assessment u/s 143(3) was completed on 02.12.2016 and the information which the AO relies on is the statement of Shri Ajit Kumar Jindal was recorded as early as on 29.10.2014 (i.e. 2 years before). A reading of the reason recorded by the AO as discussed and analysed reveals that information from the Investigation Wing only says about the statement of Shri Ajit Kumar Jindal who on 29.10.2014 has admitted before them, that he is providing accommodation entry through his entities which includes M/s. Bridge & Building Pvt. Ltd.
The Investigation Wing on the strength of his admission has taken out the transaction made by Shri Ajit Kumar Jindal’s entities viz. M/s. Bridge & Building Pvt. Ltd. and found that assessee had transaction with M/s. Bridge & Building Pvt. Ltd., so this information was passed on to the AO, who on receipt of it has jumped to the conclusion that since assessee had transacted with M/s. Bridge & Building Pvt. Ltd. and then assessee is a beneficiary who availed for the bogus bills which was paid through bank to it and later got it back as cash as per the modus-operandi admitted by Shri Ajit
According to us, when the AO receives information of such nature from investigation wing it certainly raises suspicion. Then the AO cannot and should not straight away issue notice u/s 148 of the Act and assume jurisdiction to reopen the assessment. Why because, there is subtle difference between ‘reason to suspect’ and ‘reason to believe’. Information adverse may trigger “reason to suspect” then the AO to make reasonable enquiry and collect material, which would make him believe that there is in fact an escapement of income
Simply because the assessee had transaction with M/s B & B Pvt. Ltd., cannot be the basis to believe escapement of income, unless there is any material there to suggest that so called assessee’s transaction was bogus & the cheque given by assessee had been returned as cash to assessee. Thus in the facts discussed and based on the analysis of the reason recorded by the AO according to us, the AO could not have formed a belief that income chargeable to tax has escaped assessment.
The information from Investigation Wing is only that Shri Ajit has admitted to be providing accommodation entry to “Bathwal Group” and to beneficiaries. However, when we examine the jurisdiction of AO, we have to look at the ‘reasons recorded’ on a standalone basis. So in the absence of the list of beneficiaries attached to the reasons recorded on the statement of Shri Ajit, we do not find the name of assessee as beneficiary. Just because, the assessee had transaction with M/s B & B Pvt. Ltd., cannot be a ground to believe that assessee’s income has escaped assessment. - Decided in favour of assessee.
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2021 (12) TMI 821
Disallowance u/s.14A - whether no satisfaction has been recorded by the AO as per requirement of Rule 8D, no such disallowance is warranted ? - HELD THAT:- As disallowance made by the AO and confirmed by ld. CIT(A) u/s 14A of the Act read with rule 8D of the Rules which is similar to the one involved in assessee's appeal for A.Y. 2012-13, which has already been decided by us. Since all the material facts relating to the said issue as involved in A.Y. 2014-15[2020 (12) TMI 188 - ITAT PUNE] are similar to A.Y. 2012-13, we follow the conclusion drawn by us in A.Y.2012-13 and delete the disallowance made by the Assessing Officer and confirmed by the ld. CIT(A) u/s.14A of the Act read with rule 8D of the Rules.- Decided in favour of the assessee.
Claim of the assessee u/s.80IB/80IC on sale of scrap - HELD THAT:- As relying on own [2017 (12) TMI 1826 - ITAT PUNE] in favour of the assessee by virtue of .Madras High Court judgment in the case of M/s Fenner India Ltd [1998 (4) TMI 67 - MADRAS HIGH COURT] for the proposition that the profit on sale of scrap material since had a direct link or nexus with the industrial undertaking and therefore, it is eligible for deduction u/s 80IB, considering the similarity in language used in sections 80HH and 80IB of the Act, we are of the considered opinion that the assessee should succeed in this regard also.
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2021 (12) TMI 820
Disallowance of rate difference and discount - HELD THAT:- Assessee was consistently making the claim of discount and rate difference on the sale of seeds to its customers. Such claims though disallowed at the end of the AO, but the same were allowed by the CIT(A) and thereafter in appeal by the Revenue, order of the ld. CIT(A) was upheld by the Tribunal. Though the fate of earlier claim of the assessee was very much on record, the ld. AO has ritually rejected claim of the assessee year after year without making any logical end. It has time and again stated by the assessee, recorded by the ld. CIT(A) and taken note by the Tribunal that the assessee is giving discount/rate deduction to customers as per its business policy, which are supported by circulars issued from time to time. The entire payment has been reflected in the ledger account of various dealers and supported by the evidences. The ratio of discount to the turnover is very consistent from year 2008-09, which has been demonstrated before the lower authorities, so was the ratio of gross profit.
There was nothing on record before the ld. AO that claim of the assessee was not genuine or non-existent, he has mechanically followed his predecessor's order to reject, otherwise a justifiable claim of the assessee. Therefore, as observed earlier, since identical issue has been considered in favour of the assessee by the co-ordinate benches of the Tribunal from the Asstt. Year 2010-11 upto the Asstt. Year 2012-13, following the same, we reject this ground of appeal, and dismiss appeal of the Revenue.
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2021 (12) TMI 819
Direct expenses incurred on behalf of the client shown in the Contract Account - HELD THAT:- Issue is squarely covered by the order of this Bench of the Tribunal in the assessee’s own case for assessment year 2010-11 [2019 (5) TMI 1669 - ITAT LUCKNOW] held that it remains undisputed that the labour cess is part of the contract account; that this being so, the assessee is correct in contending that addition, if any, is maintainable only in the hands of the client of the assessee Corporation and not in the hands of the assessee; that the provisions made for labour cess, do not stand debited to the profit & loss account and the profitability of the Corporation in the form of centage earned as gross profit, is not affected; and that the assessee Corporation is only a collecting agency for the purposes of the labour cess and deposit thereof in the Government account. The facts for the year under consideration are, mutatis mutandis, exactly similar.
The issue is found to be covered squarely in favour of the assessee. We further notice that in assessment years 2011-12 [2019 (8) TMI 46 - ITAT LUCKNOW] and 2012-13.[2021 (2) TMI 1229 - ITAT LUCKNOW] also, an identical issue had come up for consideration before the Lucknow Bench of the Tribunal, wherein also, the Tribunal decided the issue in favour of the assessee. Therefore, respectfully following the order of the Tribunal in the assessee’s own case for the preceding years, i.e., assessment years 2010-11, 2011-12 and 2012-13, the grievance of the assessee is found to be justified and is accepted as such. Accordingly, the ground of appeal taken by the assessee is allowed and the addition is deleted.- Decided in favour of assessee.
Addition on account of prior period expenses - HELD THAT:- The Tribunal, for assessment year 2010-11, held that the liability arose in the year under consideration, as is evident from the bill raised by the Electricity Department on 30/10/2019; that moreover, as claimed by the assessee, the amount pertains to the contract account and, therefore, in case the addition is made, an equivalent amount is to be reduced from the work-in-progress; and hence, no infirmity was found in the order of the ld. CIT(A) on this issue - grievance of the Revenue is not found to be justified and accordingly, ground of appeal taken by the Revenue is rejected.
Accrual of income - Addition on account of interest on ‘Client Interest Account”- HELD THAT:- As decided in own case for the preceding assessment years, i.e., 2010-11, 2011-12 and 2012-13 CIT(A) has rightly observed that the interest earned by the assessee on unutilized fund is credited to the respective accounts and are the income of the concerned clients and not of the assessee. We do not find any infirmity in the well-reasoned order of the ld. CIT(A) on this issue. We accordingly confirm his order on this issue and reject ground - Decided against revenue.
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2021 (12) TMI 818
Exemption u/s 11 - Registration u/s.12AA rejected - corpus donation received - HELD THAT:- CIT(E) ought not to have rejected an application for grant of registration u/s. 12AA - In our considered opinion, CIT(E) ought to have seen and examine the aim and object of the trust whether same are consonance to the spirit of law or not. CIT(E) should have seen the genuineness of activities of the trust. In this present case, Ld. CIT(E) has not exercised the same before rejecting the registration. CIT(E) has neither pointed out any defect in aim and object of the society nor doubted the genuineness of the activity of the society.
We direct Ld. CIT(E) to grant registration u/s.12AA of Income Tax Act to the applicant within 60 days from the receipt of this order. - Decided in favour of assessee.
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2021 (12) TMI 817
Ad-hoc addition towards personal and non-business use of various expenses (like telephone expenses, staff welfare expenses, vehicle repair and maintenance expenses and depreciation on vehicles etc) - HELD THAT:- There is no mention of any such specific bill/voucher qua the aforesaid expenses in question, as regards which the A.O had carried any doubts; or was of the view that the same pertained to an expenditure that was not incurred wholly and exclusively by the assessee for the purpose of its business. In fact, we find that the A.O had both in the course of the assessment proceedings as well as remand proceedings tried to justify the ad-hoc disallowance on the basis of generalized observations and not on the basis of any concrete material. As observed by the Tribunal in the assessee's own case for the immediately preceding year i.e. A.Y 2013-14, an ad-hoc disallowance without pointing out the specific expenditure the claim for deduction of which by the assessee is not found to be in order, cannot be sustained and is liable to be vacated.
Even otherwise the expenses claimed by the assessee during the year under consideration had not witnessed any abnormal rise as in comparison to those of the last two preceding years, which would have otherwise justified drawing of adverse inferences qua the claim for deduction of such expenses during the year under consideration. In the backdrop of our aforesaid deliberations, we not being able to persuade ourselves to subscribe to the ad-hoc disallowance of expenses made by the A.O., thus, set-aside the order of the CIT(A) and vacate the ad-hoc disallowance - Decided in favour of assessee.
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2021 (12) TMI 816
Reopening of assessment - unexplained investment - Reopening on the basis of AIR information gathered from ITD System - addition being 12% of total sale turnover of assessee and income from other sources - HELD THAT:- We find that there is no discussion about the addition of income from other sources in the assessment order. Assessee vehemently submitted before us that the ld. AO has not made addition on the basis of reasons of reopening. The Hon'ble Jurisdictional High Court in CIT vs Mohmed Juned Dadani [2013 (2) TMI 292 - GUJARAT HIGH COURT] held that when on ground of which reopening of assessment was made by AO, he could not have made addition and some other grounds which did not form part of reasons recorded by him.
Similar view that taken by the Hon'ble Bombay High Court in CIT vs Jet Airways [2010 (4) TMI 431 - HIGH COURT OF BOMBAY] and Hon'ble Delhi High Court in Ranbaxy Laboratories Ltd. vs CIT[2011 (6) TMI 4 - DELHI HIGH COURT] Therefore, in view of the aforesaid legal position, we find merit in the submission of ld. AR of the assessee that in absence of addition on the ground which did not form part of reasons recorded, the AO could not have make addition on some other ground, therefore, the plea of the ld. AR of the assessee is allowed and assessment order dated 11.08.2017 is set-aside. - Decided in favour of assessee.
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2021 (12) TMI 815
Employees' share of contribution to ESI to the extent not paid on or before the due date as mentioned in Sec 36(1)(va) - It was the case of the assessee that employees' share of ESI has been paid before the due date for filing of return u/s. 139(1) - 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? - On this aspect, 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. In the decisions referred to by us in the earlier paragraph of this order on identical issue the 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. Appeal of assessee allowed.
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2021 (12) TMI 814
Nature of expenses - fees, taxes and other cost or any other charges on rented premises - impact fee levied by the municipal authority is penal in nature - as per AO assessee was not owner of rental premises and impact fee being penal in nature levied by the municipal authority for regularizing illegal construction, and expenditure being capital in nature, the assessee has no locus to claim benefit of the same - explanation of the assessee is that in order to run business, it was a necessary expenditure linked with the tenancy agreement - HELD THAT:- In the present case, it is pertinent to note that though municipal authorities have imposed an impact fee of ₹ 5,19,051/-, and the assessee has made provision of this amount also, but ultimately, assessee has recovered ₹ 2,40,193/- from his owner and only claimed expenditure of ₹ 2,78,858/- whereas the AO has disallowed total amount of impact fee. The expenditure claimed by the assessee is only ₹ 2,78,858/-.
This fact has duly been submitted by the assessee in his submission as discernible from the submissions noted above. Therefore, it is not justifiable at the end of the AO to make an addition of ₹ 5,19,051/- as against claim of ₹ 2,78,858/-. In the present case, the assessee was under obligation to bear the expenditure as per the tenancy agreement. Therefore, we are of the view that the ld. CIT(A) has erred in disallowing claim of the assessee. We allow this ground and delete the impugned addition - Decided in favour of assessee.
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2021 (12) TMI 813
Disallowance u/s 35(1)(iii) - assessee has given donation to one School of Human Genetics & Population Health (SHG&PH) - survey under section 133A - as per revenue information, the donation made by the assessee to the above Institution in the financial year 2013-14 relevant to Asstt. Year 2014-15 were bogus case of the assessee is that claim under section 35(1)(ii) of the Act for making donation to the institution notified by the Government of India in this behalf - HELD THAT:- When the assessee made the impugned donation, permission/approval granted by the Govt. of India with regard to provisions of sections 35(1)(ii) and 80G(5)(iv) was very much in force, and based on which, the assessee has made the donation to this institution. The assessee has provided sufficient evidence to prove its case before both the authorities below, and based on which, the ld. CIT(A) rightly allowed claim of the assessee.
We find that recent judgment of Hon'ble Gujarat in the case of PCT Vs. Thakkar Ganpatlal HUF, [2020 (2) TMI 31 - GUJARAT HIGH COURT] as dealt with the similar issue, and while allowing claim of the assessee, referred to the decision of S.G. Vat Care P. Ltd. [2019 (1) TMI 1694 - ITAT AHMEDABAD] which was authored by one of us. The Hon'ble Gujarat High Court recorded observation and finding of the Tribunal on this issue in page no. 3 to 5 of the judgment, and thereafter came to the conclusion that the onus placed on the assessee has been discharged and no interference in the order of the ITAT is required. The Hon'ble Court, thus allowed claim of donation made to M/s. Herbicure Healthcare Bio-Herbal Research Foundation).
Thus following principle of consistency, we find merit in the claim of the assessee and delete disallowance of deduction made of deduction under sections 35(1)(ii) of the Act.- Decided in favour of assessee.
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2021 (12) TMI 812
Reopening of assessment u/s 147 - AO initiated the reassessment proceedings by means of a notice u/s.148 opining that the assessee violated provisions of section 13(1)(c)(ii) and 13(2)(b) - HELD THAT:- Assessment in this case was originally completed u/s.143(3) of the Act on 31-12-2008. The initiation of re-assessment proceedings by means of a notice u/s.148 has taken place by virtue of a notice issued to the assessee on 31-03-2014.
Proviso to section 147 states that where an assessment under sub-section (3) of section 143 has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment by reason of any failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment for that assessment year.
The condition precedent for taking action u/s.147 after four years from the end of the relevant assessment year where the original assessment was completed u/s.143(3), is that there must be failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. It is only when there is such a failure on the part of the assessee and further the reasons recorded by the AO for initiating the re-assessment proceedings refer to such fact of the failure that a valid initiation of re-assessment can take place. We are confronted with a situation in which the original assessment was completed u/s.143(3).
Period of four years from the end of the relevant assessment year 2007-08 under consideration expires on 31-03-2012. Notice u/s.148 in this case was issued on 31-03-2014. As the proviso to section 147 is attracted in this case and the reasons recorded by the AO do not refer to any failure on the part of the assessee to disclose fully and truly all material facts necessary for reassessment, we are satisfied that the ld. CIT(A) committed no mistake in setting aside the reassessment on this preliminary legal score - Appeal of assessee allowed.
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2021 (12) TMI 811
Addition u/s 68 - unsecured loans treated as unexplained credit - Onus to prove - CIT- A deleted the addition - HELD THAT:- Assessee has taken unsecured loans and submitted all the relevant information in support of the sum credited in the books for which assessee has offered explanation in respect of the nature and source of the same and in the given case assessing officer is not satisfied due to the fact that none of the principal officers of the lender companies appeared before him. AO merely issued show cause notice to the lenders and apparently stopped without making any further verification. He cannot merely reject all the detailed submissions and supporting documents which were submitted before him and further he has not pointed out any defect in the documentary evidences submitted by the assessee before him and made addition merely because none appeared before him for explanation.
After considering the detailed findings of Ld. CIT(A), we do not see any reason to interfere with his findings and in our view the assessing officer treated the unsecured loans as unexplained credit under section 68 even though all the documentary evidences were submitted before him. Therefore, we are inclined to dismiss the grounds raised by the revenue.
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2021 (12) TMI 810
Disallowing the deduction claimed u/s 80P(2)(a)(i) - income earned by the assessee on the money deposited with the bank - HELD THAT:- The provisions of section 80P(2)(a)(i) of the Act provides the deduction to a co-operative society engaged in the business of banking or providing credit facilities to its members. The provisions of the section are without any ambiguity - the income from the activity of financing from the members is only eligible for deduction under section 80P(2)(a)(i) - If there is any income arising to the co-operative society from the non-members that will not be subject to deduction under section 80P(2)(a)(i).
It is only the interest derived from the credit provided to its members which is deductible under section 80P(2)(a)(i) of the Act and the interest derived by depositing surplus funds with the Banks other than cooperative bank is not being attributable to the business as envisaged under the provisions of the Act. Thus the same cannot be deducted under section 80P(2)(a)(i).
No ambiguity that income earned by the assessee on the money deposited with the bank is not eligible for deduction under section 80P(2)(a)(i).
As in the case of Mavilayi Service Co-operative Bank Ltd. v. CIT [2021 (1) TMI 488 - SUPREME COURT] by the Hon'ble Supreme Court of India wherein, the primary agricultural credit societies were held to be entitled to the benefit of the deduction contained in Section 80P(2)(a)(i) of the Act, notwithstanding the fact that the society may also be giving loans to its members which are not related to agriculture. However, if it is found that there are instances of loans being given to the non-members, profits attributable to such loans obviously were not liable to be deducted. The essence of this decision is that absolute denial of deduction under Section 80P(2)(a)(i) of the Act to the assessee's (cooperative societies) engaged in the providing credit facilities to the non-members along with its members is not warranted under the Act and only that part of profit and gains that is attributable and/or pertains to the non-members shall not be allowed as deduction under Section 80P(2)(a)(i).
The profits and gains attributable to non-members arising as a result of advancement of loans was held to be not an allowable deduction under Section 80P(2)(a)(i) of the Act. In view of the above, we do not find any merits in the argument advanced by the learned counsel for the assessee. Thus, we hold that there is no infirmity in the order of the learned CIT (A), requiring any interference. Hence, we uphold the same. Hence, the ground of appeal of the assessee is dismissed.
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2021 (12) TMI 809
Capital gain computation - adoption the value determined by the DVO as sale consideration - HELD THAT:- The provisions of section 50C of the Act requires to adopt the value determined for the purpose of Stamp duty as the sale consideration on the transfer of capital asset being land and building if the consideration on the transfer of the capital asset is less than the value adopted or assessed or assessable for the purpose of stamp duty - the stamp value is deemed as the sale consideration under the provisions of section 50C - if the assessee disputes such stamp value than the matter can be referred to the DVO to determine the fair market value which shall be treated as sale consideration in pursuance to the provisions of subsection 2 of section 50C - in the present case the reference to the DVO has been made who determined the value at ₹70,54,000.00 in which the share of the assessee stands at ₹35,27,000.00 only - Accordingly, the learned CIT (A) has directed to the AO to adopt the sale consideration at ₹35,27,000.00 only for the purpose of computing the short-term capital gain.
The provisions of section 50C of the Act was introduced in the Income tax Act, 1961 by the Finance Act, 2002 with effect from 1-4-2003 for substituting valuation done for Stamp Valuation purposes as full value of consideration in place of apparent consideration shown by the transferor of capital asset, being land or building and, accordingly, calculating capital gains under section 48 of the Act.
On perusal of the above provisions, we note that there is no scope for making any adjustment for the gift while determining the full value of consideration under the deeming provisions of section 50C of the Act. Accordingly, we are not satisfied with the contention of the learned AR for the assessee. Thus, we have no alternative except to confirm the order of the authorities below. Hence the ground of appeal of the assessee is dismissed.
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2021 (12) TMI 808
Reopening of assessment u/s 147 - Bogus LTCG - HELD THAT:- AO had arrived at a bonafide belief that at least the LTCG which the assessee in his return of income had claimed to have earned from sale of shares of M/s JMD Telefilm Industries Ltd., had escaped assessment, by reason of the failure on his part to disclose fully and truly all material facts necessary for assessment. In the backdrop of the aforesaid factual position, we are unable to comprehend as to on what basis it is claimed by the ld. A.R that that A.O had reopened the case of the assessee on the basis of a borrowed satisfaction and/or on the basis of suspicion, conjectures and surmises, de hors any concrete material.
A.O had before him sufficient material/information on the basis of which he had arrived at a bonafide belief that the income of the assessee chargeable to tax had escaped assessment. We may herein observe that at the stage of reopening of a case u/s 147 of the Act, the A.O is only required to have a cause or justification to know or suppose that income of the assessee chargeable to tax had escaped assessment and, no obligation is cast upon him to have finally ascertained the said fact by legal evidence or conclusion. Our aforesaid view is as per the mandate of the judgment of the Hon’ble Supreme Court in the case of ACIT Vs. Rajesh Jhaveri Stock Brokers (P) Ltd[2007 (5) TMI 197 - SUPREME COURT]
AO had validly assumed jurisdiction u/s 147 of the Act and reopened the case of the assessee. We, thus, finding no infirmity in the validity of the jurisdiction assumed by the A.O for reopening the case of the assessee u/s 147 of the Act, uphold the same. The Ground of appeal No. 1 is dismissed.
Addition u/s 68 - In the backdrop of our aforesaid deliberations are of the considered view that de hors any cogent material made available on record by the department which would prove to the hilt that the assessee had not carried out any genuine transaction of purchase/sale of shares of JMD Telefilms Industries Ltd. and, in the garb of bogus entry of a tax exempt LTCG u/s 10(38) of the Act, laundered his unaccounted money, the assessee”s duly substantiated claim of having carried out genuine transaction of purchase/sale of shares of JMD Telefilms Industries Ltd. which is duly supported by him on the basis of documentary evidence, could not have been dislodged. Accordingly, for the reasons discussed at length by hereinabove, not finding favour with the view taken by the lower authorities, we herein set-aside the orders of the lower authorities qua treating the transaction of purchase/sale of shares of JMD Telefilms Industries Ltd. by the assessee as a bogus transaction and, consequently vacate the addition made by the A.O under Sec. 68
Addition u/s 69C - Transaction of purchase/sale of shares of JMD Telefilms Industries Ltd by the assessee as a genuine transaction, therefore, the addition made by the A.O u/s 69C towards alleged commission which the assessee as per him would have paid for facilitating the bogus transaction of purchase/sale of shares has to meet the same fate and, is resultantly vacated.
Levy of interest u/s 234B - As the levy of interest as per the judgment of the Hon’ble Supreme Court in the case of CIT vs. Anjum M.H Ghaswala [2001 (10) TMI 4 - SUPREME COURT] is mandatory, therefore, the A.O is directed to rework out the same while giving appellate effect to our order. The Ground of appeal No. 5 is allowed for statistical purposes in terms of our aforesaid observations.
Assessee appeal is partly allowed.
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2021 (12) TMI 807
Reopening of assessment u/s 147 - legality of the re-assessment proceedings - Assessment against legal heir of Late assessee V.C. Mehta - HELD THAT:- As during the search operation information relating to the HSBC bank account was brought to the notice of Mr. Anoop Mehta, who is one of the legal heir of Late Vrajlal C. Mehta. Mr. Anoop acknowledges the information brought to his notice by the Department and he referred the same information to the executer of the estate of late Shri Vrajlal C. Mehta. This fact was disclosed to the revenue and the AO also acknowledges the same. The Revenue also initiated the proceedings in the name of executors of estate of Late V.C. Mehta in A.Ys. 2006-07 & 2007-08. For this AY in 2006-07, the AO completed the re-assessment in the name of Anoop Mehta as legal heir.
This is clearly an initiation of proceedings with wrong jurisdiction similar to AY 2007-08. We observe that in AY 2007-08, the Co-ordinate Bench has quashed the order passed by AO and findings of Ld. CIT(A). We also observed from the record that in AY 2006-07, AO accepted the RoI filed by the executors of Late Vrajlal C. Mehta under the PAN of Late Shri Vrajlal C. Mehta.
But the assessment order was passed in the name of Shri Anoop V. Mehta as a legal heir of Late Vrajlal C. Mehta. Since the issue was already decided by the Co-ordinate bench and the Executors of the Estate also declared the income and paid the relevant taxes on the same amount which is the subject matter in this appeal. Therefore, we do not see any reason to interfere with the findings of ld. CIT(A). Therefore, we are inclined to dismiss the grounds raised by the Department.
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2021 (12) TMI 806
Deduction claimed u/s 80P(2)(a)(i) - interest on the deposits from non-members - AO computed the proportionate amount of interest on the deposits from non-members which was not eligible for deduction under section 80P(2)(a)(i) - HELD THAT:- The provisions of section 80P(2)(a)(i) of the Act provides the deduction to a co-operative society engaged in the business of banking or providing credit facilities to its members. The provisions of the section are without any ambiguity. In other words, the income from the activity of financing from the members is only eligible for deduction under section 80P(2)(a)(i) of the Act. If there is any income arising to the co-operative society from the non-members that will not be subject to deduction under section 80P(2)(a)(i) of the Act
As relying on STATE BANK OF INDIA (SBI) VERSUS COMMISSIONER OF INCOME TAX [2016 (7) TMI 516 - GUJARAT HIGH COURT] it is only the interest derived from the credit provided to its members which is deductible under section 80P(2)(a)(i) of the Act and the interest derived by depositing surplus funds with the State Bank of India is not being attributable to the business as envisaged under the provisions of the Act. Thus the same cannot be deducted under section 80P(2)(a)(i) of the Act. Thus there remains no ambiguity that income received by the assessee for ₹ 9,43,170.00 on the money deposited with the bank is not eligible for deduction under section 80P(2)(a)(i).
As decided in THE MAVILAYI SERVICE COOPERATIVE BANK LTD. [2021 (1) TMI 488 - SUPREME COURT]absolute denial of deduction under Section 80P(2)(a)(i) of the Act to the assessee's (cooperative societies) engaged in the providing credit facilities to the non-members along with its members is not warranted under the Act and only that part of profit and gains that is attributable and/or pertains to the non-members shall not be allowed as deduction under Section 80P(2)(a)(i) of the Act
Thus the profits and gains attributable to non-members arising as a result of advancement of loans was held to be not an allowable deduction under Section 80P(2)(a)(i) of the Act. Thus, we hold that there is no infirmity in the order of the learned CIT (A), requiring any interference. Hence, we uphold the same. Hence, the ground of appeal of the assessee is dismissed.
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2021 (12) TMI 805
Delayed employees’ contribution towards Provident Fund - addition u/s 2(24)(x) and section 36(1)(va) - HELD THAT:- As decided in PLANMAN HR (P) LTD., 48, COMMUNITY CENTRE, NARAINA INDUSTRIAL AREA, PHASE-I, NEW DELHI. [2021 (7) TMI 686 - ITAT DELHI] Delayed payments of employee’s contribution to Provident Fund/ESIC is allowable if it is deposited before the return is filed u/s 139(1). In view of the legal position on the issue and the order of the Hon'ble ITAT, Delhi in the appellant’s own case [2017 (1) TMI 1598 - ITAT DELHI] the company is eligible for deduction made by the AO by invoking provisions of Section 36(1)(va) read with 2(24)(x) and 43B of the Act. The AO is, therefore, directed to delete the addition. - Decided in favour of assessee.
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