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Income Tax - Case Laws
Showing 381 to 400 of 7776 Records
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2021 (12) TMI 746
Penalty u/s 271(1)(c) - initiating penalty proceeding u/s 271(1)(c) while assuming jurisdiction u/s 263 - HELD THAT:- The facts are not in disputed. No doubt, the AO has initiated the penalty proceedings in the original assessment order passed under section 143(3) of the Act dated 26.03.2013. AO while reframing the assessment in lieu of appeal effect to the order of the Tribunal passed order under section 143(3) read with section 254 of the Act dated 28.12.2018 has not initiate the penalty proceedings.
The question arises whether the revision proceedings for initiation of penalty proceedings can be done in the set aside assessment. We noted that the entire jurisprudence on the above subject is against Revenue and in favour of assessee and more particularly Hon’ble Punjab and Haryana High Court has considered this issue and finally, after considering the authorities, held that the initiation of proceedings under section 263 of the Act is not permissible because initiation of penalty proceedings is highly debatable issue.
We are of the view that the CIT cannot set aside the Assessment Order for the sole purpose of initiating penalty proceedings in exercise of revisional jurisdiction. Hence, we quash the revision order passed by the PCIT and allow the appeal of the assessee.
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2021 (12) TMI 730
Rectification of mistake u/s 154 - Miscellaneous Applications are filed by the assessees’ seeking recall of the order of the Tribunal [2021 (6) TMI 669 - ITAT HYDERABAD] - Deduction u/s 54F - ITAT remitted the issue to file back to the AO for verification for the allotment of flats, which have been allotted to the assessee in a Block/Tower or in different Blocks/Towers - AR submitted the note along with case law on 28/05/2021, which was not taken into consideration while passing the order - HELD THAT:- To avoid physical contacts due to the global pandemic COVID-19, drop box system for filling any physical documents has been arranged in the office premises w.e.f. 14/08/2020. The ld. AR filed the documents in physical in the drop box, which could not be placed before the Bench at the time of hearing of this appeal as well as up to passing of the order and, therefore, there was no occasion to consider the said documents while passing the order. The said documents were also filed before the office of the DR, ITAT. We make it clear that the main cases had been heard on 27/05/2021 on virtual mode because of Covid-19 pandemic lockdown imposed and the same only forms the sole reason of these assessees’ as well as their learned counsel having not able to place on record various judicial precedents deciding the issue herein against the department; we find our order dated 18/06/2021 suffering a mistake(s) apparent on record.
As considering the case laws we conclude there was a mistake apparent on record in the order passed in [2021 (6) TMI 669 - ITAT HYDERABAD] and, therefore, the same are hereby recalled and disposed off.
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2021 (12) TMI 728
Deduction u/s 80IB in respect of “common expenses”of its Units at Pandicharry, Goa and Jammu - HELD THAT:- Tribunal followed the assessee’s own case for the assessment years, namely, 2000-01 and 2001-02 and allowed the deduction as claimed under Section 80IB of the Act. As against the said order of the Tribunal, the revenue preferred appeal before this Court and the appeal preferred by the revenue in . was dismissed by [2009 (11) TMI 1017 - CALCUTTA HIGH COURT] a judgement dated 20th November, 2009 on the ground of unexplained and inordinate delay.
With regard to the assessment year 2002-03, the Tribunal granted relief to the assessee and the revenue carried the matter on appeal to this Court [2019 (9) TMI 1621 - CALCUTTA HIGH COURT] which was dismissed by judgement on the ground that no question of law arises for consideration. Thus, the decision rendered by the Tribunal does not call for any interference.
Claim for deduction under Section 80IB on the sale of scrap - This issue is no longer res integra and there are several decisions which are in favour of the assessee and the Tribunal had followed the decision of this Court in the case of Reckitt Benckiser (India) Ltd. [2015 (2) TMI 506 - CALCUTTA HIGH COURT] and granted relief to the assessee. We find that the revenue has not made out any ground to interfere with the said finding rendered by the Tribunal which is taken note of the correct legal position.
Disallowance u/s 14A r.w.r. 8D - there were borrowed capitals and investments out of such borrowed funds were also made in making investments that yielded exempt income - HELD THAT:- Tribunal granted relief taking note of the decision in favour of the assessee by placing reliance in the case of Commissioner of Income Tax, Central-I, Calcutta –vs- Ashish Jhunjhunwala [2015 (12) TMI 905 - CALCUTTA HIGH COURT] The said decision lays down the correct legal principle. Therefore, there is no error in the order passed by the Tribunal.
Appeal decided against revenue.
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2021 (12) TMI 727
Nature of expenditure - Addition of Net Present Value - treating the Net Present Value as revenue expenses whereas true nature is capital expenditure - HELD THAT:- Substantial questions of law were considered by this Court in the case of group company of the respondent/assessee in dictum in Bikaner Gypsums Ltd. [1990 (10) TMI 2 - SUPREME COURT] is squarely applicable in the present case. This is not a case where the assessee, upon payment of the NPV, obtaind a fresh right to undertake any business. That right of the assessee was covered by the licence previously granted in its favour by the State of Odisha. The NPV payment is a king of a compensation for using forest land for non-forest purpose pursuant to an order of the Supreme Court. The payment of the NPV in this case, like in the case of Bikaner Gypsums Ltd., has to be regarded as a revenue expenditure in accordance with the ration in the Bikaner Gypsums Ltd. case, since it was a one-time payment made to remove an obstacle from the path of the assessee carrying on its business operations. - Decided against revenue.
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2021 (12) TMI 726
Addition on account of alleged on money received on sale of flats - search and seizure operation under section 132 - assessee is a resident company and is stated to be engaged in Real Estate Development - search and seizure operation under section 132 of the Income Tax Act, 1961 was carried out on 26.05.2011 in case of M/s Rohan Developers Pvt. Ltd. and other companies and entities promoted by Shri Haresh N Mehta and late Jitendra N. Mehta as well as in the residential premises of the Directors and employees of the entities being part of Rohan Group. - Based on the seized document and statement recorded, proceedings under section 153A of the Act was initiated in respect of the searched persons - HELD THAT:- To prove the content of seized document, the only other corroborative evidence available with the AO is the statements recorded from the Directors and employees of the Rohan Group. It is relevant to observe, in the statement recorded from Ms. Chaulla Joshi, a specific query was raised regarding the figures appearing against Siddhesh Jyoti E & F Wing. In reply, it has been stated that the figures represent the quoted price for per square feet carpet area and the figure of ₹ 5,400/- represent rate per sq.ft. of built up area to arrive at the lump sum registered aggregate value.
Except these evidences no other concrete evidence is available with the AO to establish on record that on money was actually received by the assessee. Therefore, proper enquiry has to be made with regard to the entries appearing in the name of Siddhesh Jyoti E & F Wing, as mentioned in seized document.
In course of hearing, it was brought to the notice of the Bench that based on the same seized document additions on account of on money was also made in case of Rohan Developers Pvt. Ltd. It was also brought to our notice that appeals relating to Rohan Developers Pvt. Ltd. involving identical issue have already been heard by the Tribunal.
Decision in case of Rohan Developers Pvt. Ltd will have a crucial bearing on the issue involved in the present appeals, since, the additions therein have been made based on the very same seized document. In view of the aforesaid, we are inclined to restore the issue to the AO for fresh adjudication considering other materials on record including the orders passed by the Commissioner (Appeals) and Tribunal in respect of other group entities. Grounds are allowed for statistical purposes.
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2021 (12) TMI 725
Revision u/s 263 by CIT - bogus purchases - assessee was reopened u/s 147 by issuing notice under section 148 after the AO received information from DGIT (Inv.) Mumbai that assessee is beneficiary of hawala purchase bills and accommodation entries - HELD THAT:- Undisputedly the issue of bogus purchases has been examined in the reassessment proceedings by the AO and after following the decision of CIT vs. Bolanath Polyfab Pvt. Ltd. [2013 (10) TMI 933 - GUJARAT HIGH COURT] and CIT vs. Simit P. Sheth [2013 (10) TMI 1028 - GUJARAT HIGH COURT] the AO has taken a view of 12.5% of the bogus purchases to be added to income. Thus the issue has been examined in detail in the reassessment proceedings and a reasonable view has been taken.
According to the Ld. PCIT the assessment order is contrary as on the one hand the AO is holding that purchases are bogus whereas on the other hand the AO is applying a rate of 12.5% to tax the bogus purchases and thus came to the conclusion that the assessment order is erroneous and prejudicial to the interest of the revenue and thus set aside the assessment.
In our considered opinion the revisionary proceedings initiated by Ld. PCIT appears to be not correct as he has tried to unsettle a settled position by setting aside the assessment order which is otherwise not erroneous and is in accordance with law and also in consonance with the decisions of High Court and co-ordinate Benches of the Tribunal. The case of the assessee is squarely covered by the decision of the co-ordinate Bench of the Tribunal in the case of Rahul Cables Pvt. Ltd.[2018 (5) TMI 2102 - ITAT PUNE] wherein similar issue has been decided in favour of the assessee by quashing the revisionary proceedings as well as the order under section 263 - Decided in favour of assessee.
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2021 (12) TMI 718
Reopening of assessment post Application u/s 245D(4) accepted - Counsel submitted that the order passed under sub-section (4) of Section 245D of the Income Tax Act is a conclusive order and the same cannot be reopened in any of the proceedings - HELD THAT:- Issue notice of the writ petitions as well as stay applications, returnable on 24.01.2022.
In the meanwhile, the respondents are restrained to proceed further in furtherance of the notices issued to the petitioners under Section 148 of the Income Tax Act and notice under sub section (1) of Section 142 of the Income Tax Act.
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2021 (12) TMI 717
Residential status of assessee - grant of certificate of residence has been rejected by the authorities - benefit under the India-US double taxation avoidance agreement - dismissing the claim of the petitioner with respect to the grant of TRC [Tax Residency Certificate] - petitioner is a USA national, who has been appointed in India as a Dean-cum-Professor in O.P. Jindal Global University w.e.f. 01.01.2020 and owing to the Covid-19 pandemic, he departed from India on 21.03.2020 - HELD THAT:- Section 90 of the 1961 Act is an enabling provision for the Central Government to enter into an agreement with the Government of any country outside India for granting relief to the assessee in respect of various issues including for avoidance of double taxation of income. However, the relief of double taxation of income under the Treaty is subject to the condition of the assessee providing a certificate of his being a resident in any country outside India or specified territory outside India as enumerated under Section 90(4) of the 1961 Act.
In order to claim benefit from double taxation as provided under Article 22 of the Treaty, the petitioner is required to submit a certificate of him being a resident in country out side India i.e. USA in the present case from the Government of USA.
The claim of the petitioner is totally misfound. The objective of the Treaty is to avoid double taxation and not to avoid taxation. In order to claim benefit in India, the petitioner has to provide TRC from the Government of USA which admittedly he does not possess. Case of the petitioner in our view is hit by Section 90(4) of the 1961 Act which contemplates that a non-resident assessee claiming benefit under the double taxation avoidance agreement is not entitled for such benefit unless the said assessee obtains TRC from the country of which he is resident. In the absence of TRC as contemplated under Section 90(4) of the 1961 Act and having his source of income based in India, the petitioner cannot claim exemption under Article 22 of the Treaty. WP dismissed.
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2021 (12) TMI 716
Addition u/s 68 - bogus LTCG - Penny stock purchases - ITAT deleted the addition - HELD THAT:- Tribunal has held that no enquiry had been conducted and the assessee’s broker had not even been examined by the authorities below before passing the impugned orders. The ITAT also held that the scrips of M/s CCL International Ltd. were freely traded at the Bombay Stock Exchange between the years 2011 and 2014 and the assessee had purchased the shares in 2011 and sold the same in 2012. ITAT also found that the revenue from the operation of M/s CCL International Ltd. from March, 2010 to March, 2012 was between ₹ 55.25 crores to ₹ 79 crores and the share price during the period 2010 to 2014 had increased from ₹ 50 per share to ₹ 609 per share.
This Court is of the view that there is no perversity in any of the findings given by the Tribunal.
The Supreme Court in the case of Ram Kumar Aggarwal & Anr. vs. Thawar Das [1999 (8) TMI 1008 - SUPREME COURT] has reiterated that under Section 100 of the Code of Civil Procedure, the jurisdiction of the High Court to interfere with the orders passed by the Courts below is confined to hearing on substantial question of law and interference with finding of the fact is not warranted if it involves re-appreciation of evidence.
Supreme Court in Hero Vinoth (Minor) vs. Seshammal [2006 (5) TMI 478 - SUPREME COURT] has also held that “in a case where from a given set of circumstances two inferences of fact are possible, the one drawn by the lower appellate court will not be interfered by the High Court in second appeal. Adopting any other approach is not permissible.” It has also held that there is a difference between question of law and a “substantial question of law”. Consequently, this Court finds that there is no perversity in the findings of the ITAT. Appeal dismissed.
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2021 (12) TMI 715
Income accrued in India - DTAA between India and Switzerland - deduct tax @ 10% on dividend income to be paid to the Petitioner for the relevant Financial Year - HELD THAT:- As in the present writ petition are no longer res integra as they are fully covered by the judgments of this Court in Concentrix Services Netherlands B.V. [2021 (4) TMI 1051 - DELHI HIGH COURT] as well as in Nestle SA [2021 (4) TMI 1267 - DELHI HIGH COURT] In Concentrix Services Netherlands B.V. [2021 (4) TMI 1051 - DELHI HIGH COURT] it has been held that no separate notification is required insofar as the applicability of the protocol is concerned and the same forms an integral part of the Convention.
It is well settled law that the Department cannot refuse to follow binding jurisdictional decision merely on the basis that the Department proposes to file an appeal. The Supreme Court in UOI v. Kamlakshi Finance Corpn Ltd. [1991 (9) TMI 72 - SUPREME COURT] has held that order of higher appellate authorities should be followed ‘unreservedly’ and mere fact that decision is not acceptable to the Revenue cannot be a ground for not following the decision of higher authority.
Keeping in view the aforesaid, the impugned order and certificate are set aside and the respondent is directed to issue a certificate under Section 197 of the Act indicating therein, that the rate of tax, on dividend, as applicable qua the Petitioner is 5% in India v/s Switzerland DTAA as held in Nestle SA (Supra) which was also under the India-Switzerland DTAA
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2021 (12) TMI 714
Validity of reopening of assessment u/s 147 - notice against company non existing - notice to company had ceased to exist having been amalgamated with petitioner - HELD THAT:- The notice issued under Section 148 of the said Act to a non existing company is bad in law and therefore, even the order disposing of the objections passed will also be bad in law.
The Principal Chief Commissioner is directed to hold an enquiry against the concerned officers as to why despite being brought to their notice that Vadinar Power Company Limited is a non existing entity having been amalgamated with petitioner notices were continued to be issued in the name of Vadinar Power Company Limited and even the order disposing of the objections came to be passed in the name of Vadinar Power Company Limited resulting in the notice under Section 148 of the said Act itself being quashed. The Principal Chief Commissioner, after holding an enquiry, may take such action as required against the erring officers, if found guilty.
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2021 (12) TMI 713
Nature of receipts - sale of Carbon Emission Reduction (CER) also known as Carbon Credits - revenue or capital receipts - HELD THAT:- As decided in S.P. SPINNING MILLS PVT. LTD.[2021 (1) TMI 1081 - MADRAS HIGH COURT] such receipt should be treated as a capital receipt. As decided in MAHESHWARI DEVI JUTE MILLS LIMITED [1965 (4) TMI 10 - SUPREME COURT] amount received out of sale of loom-hours can be termed as capital receipt and not income out of business. - Decided in favour of assessee.
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2021 (12) TMI 712
Refund claim after adjustment of the tax liability for the aforesaid assessment year - petitioner had not filed returns either under Section 139(1) or within the extended period under Section 139 (4) - Mandation to issue notice u/s 147 - petitioner filed an application u/s 119 for condoning the delay in filing the return so as to claim refund of the excess amount of tax - HELD THAT:- Reading of Section 237 makes it clear that there is no limitation prescribed for filing a refund of income tax. As far as filing of returns beyond the period of limitation prescribed under Section 139 (1) and 139 (4) for efficient management of the work of assessment and collection of revenue, The Central Board of Direct Taxes may issue general or special order under Section 119 of the IT Act, 1961 - The Central Board of Direct Taxes has issued circulars Under Section 119 of the IT Act, 1961 from time to time.
The facts on record indicate that the petitioner, being an income tax assessee had failed to file returns in time. The second respondent or the Jurisdictional Assessing Officer ought to have issued notice under Section 148 of the IT Act, 1961 on or before 31.03.2018 for the assessment year 2011-12 as there would have been a prima-facie presumption that income had escaped assessment for the aforesaid assessment year. The petitioner initially made an attempt to file a return belatedly before the second respondent on 26.02.2015. This return naturally could not have been accepted as it was beyond the period of limitation prescribed under Section 139 of the IT Act, 1961.
In this case, the petitioner has approached the first respondent under Section 119 of the IT Act, 1961 on 29.08.2018 with a request for adjustment of the tax Directorate source and for refund of the amount.
It would have been different if the application under Section 119 was made to claim exemption for the first time after the returns were filed in time and after the period prescribed for revising the assessment had expired, where the assessment had attained finality. Where no return was filed, it was incumbent on the part of the second respondent or the Jurisdictional Assessing Officer as was expected to have issued a notice under Section 148 to the petitioner within the time prescribed under the Act, in which case, the question of the petitioner filing an application before the first respondent under Section 119 of the IT Act, 1961 would have arisen at all.
Since the law mandates a particular thing to be done in a particular manner, it was incumbent on the part of the second respondent or the Jurisdictional Assessing Officer ought to have issued a notice under Section 148 to determine the tax liability of the petitioner. As this was not done, case deserves to be remitted back to the second respondent to first finalize the assessment of the petitioner for the assessment year 2011-12 within a period of three months from the date of receipt of copy of this order. Failure to issue a notice under Section 148 of the IT Act, 1961, cannot be to the prejudice of the petitioner, if ultimately it is found that petitioner was entitled to a refund. However, liberty is given to penalise the petitioner for failure to file returns in time and for levy of interest if any.
Respondents are therefore, directed to examine the refund claim independently and pass appropriate orders within a period of three months from the date of receipt of copy of this order. WP allowed.
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2021 (12) TMI 711
Refund Claim with Interest u/s 244A read with section 153 and section 240 - petitioners submits that it is the grievance of the petitioners that their claim for refund and sanction of the amount claimed by them has not been processed and no orders has been passed by the respondents so far. As such, the petitioners are before this Court by way of the present petition - respondents submits that if reasonable time is given to the respondents, they would take necessary steps to process the claim of the petitioners in accordance with law - HELD THAT:- We deem it just and appropriate to dispose of the writ petition directing the respondents to process the claim of the petitioners to refund of the excess amount in accordance with law as expeditiously as possible within a period of three months from the date of receipt of the copy of this order.
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2021 (12) TMI 710
Reopening of assessment u/s 147 - Addition u/s 68 - assessee had received some share capital from some foreign parties - money was actually undisclosed income of the assessee, which had been recycled by the said entity into the company of the assessee - CIT-A deleted the addition as this material could not be held to be justified for adding the amount of investment into the company as income of the assessee also confirmed by ITAT - HELD THAT:- As even if for the sake of arguments this assertion is accepted, the crux of the matter is whether the conclusion that the entity was a shell company, could inevitably give rise to the subsequent conclusion that the money received from that company was actually undisclosed income of the assessee without any material to show any link between the said entity and the assessee.
Learned counsel for the appellant - revenue has argued that under Section 68 of the I.T Act, such a presumption can be drawn and it was for the assessee to prove that the income was infact not his income. In our considered opinion this argument is too far-fatched It may have been different if some link had been established between the said entity and the assessee, but in the absence thereof, it cannot be held that the presumption under Section 68 of the IT Act, is available.
No fault can be found with the judgments of the Commissioner and the Tribunal. - Decided against revenue.
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2021 (12) TMI 709
Disallowance towards employees’ contribution towards ESI and PF - disallowance made u/s 143 (1) on assessee’ s failure to pay the employees’ contribution of ESI & PF within the prescribed due date under the relevant Statute as per section 36(1) - scope of amendment - HELD THAT:- It is not in dispute that employees’ contribution to ESI and PF collected by the assessee from its employees had been deposited well before the due date of filing of return of income u/s 139 (1) of the Act. We find that the issue is squarely covered by the decisions of the Hon’ble Rajasthan High Court, Hon’ble Himachal Pradesh High Court as well as Hon’ble Punjab & Haryana High Court. We further note that though the Id. CIT(A) has not disputed the various decisions of Hon’ble High Courts including the decision of the jurisdictional Himachal Pradesh High Court but has referred to the amendment brought in by the Finance Act, 2021.
It is a consistent position across various Benches of the Tribunal including Chandigarh Benches that the amendment which has been brought in by the Finance Act, 2021 shall apply w. e. f. assessment year 2021 - 22 and subsequent assessment years and the impugned assessment year being assessment year 2018- 19, the said amendment cannot be applied in the instant case. Therefore the addition made by way of adjustment while processing the return of income u/s 143 (1) of the Act, amounting to ₹ 11,99,710/- so made by the CPC towards the deposit of employees’ contribution towards ESI and PF paid before the due date of filing of the return of income u/s 139 (1) of the Act, is hereby directed to be deleted. - Decided in favour of assessee.
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2021 (12) TMI 708
Reopening of assessment u/s 147 - addition made on account of loss on exchange rate difference - addition solely on the basis of his view that rate of dollar adopted by assessee at ₹ 40/- per dollar while making payment on the same date, the rate was taken at ₹ 41.92 per dollar which is not in accordance with rate prescribed by RBI - whether assessee has suppressed loss and circulated black capital as the purchase rate at the time of purchase as well as the exchange rate at the time of payment are not taken in accordance with the prevailing Foreign Exchange Rate declared by the RBI for the date of Import and the date of payment? - HELD THAT:- We find that in the statement of fact, the Assessing Officer recorded that the case of assessee was re-opened on audit objection. The re-assessment order was passed after verification and consideration of submission made by assessee. We find that re-opening on audit objection is not valid as it has been held by Hon'ble jurisdictional High Court in the case of Torrent Power of SEC Ltd [2016 (12) TMI 871 - GUJARAT HIGH COURT]. However, we are conscious of the fact that issue is not raised before us for our consideration.
CIT(A) after appreciation on the fact held that Assessing Officer made the addition without understanding the accounting and facts of the case. CIT(A) held that assessee was right in booking the purchase at the custom rate which is fixed for some period as per trading norm and same point of method is followed by Custom Department for charging custom duty on the imported goods as the RBI rate fluctuating in daily at the time of actual payment in foreign exchange for imported bills.
The assessee had adopted actual rate, which the bank has debited to their accounts and it is the rate taken by the bank during the day, the trading rate which almost very closed to rate of RBI - all purchases of the assessee was settled during the year by payment through credit so difference, if any, booking rate at the time of purchase automatically being settled in the year itself in the profit and loss account - if the view of AO is accepted then the purchases would be booked at the time of RBI’s fixed rate and when actual payment will be made, the exchange rate difference would be less and the purchase cost would be increased by corresponding amount which is evident from the observation of AO as he has computed foreign exchange loss of ₹ 3.08 Crores in place of 1.91 Crores calculated by assessee. CIT(A) also held that the allegation of Assessing Officer is that assessee circulated black money is baseless and impounded. Thus, we do not find any infirmity or illegality in the order passed by ld. CIT(A), which we affirm accordingly. - Decided against revenue.
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2021 (12) TMI 707
TDS u/s 195 - Disallowance of sales commission paid to foreign agents u/s 40(a)(i) for non-deduction of tax at source - AO noticed that the assessee has paid sales commission to overseas agents located in Austria and Italy but has not deducted tax at source from the commission so paid - HELD THAT:- As the foreign agents have given certificates that they have received commission only for getting orders - assessee has mentioned about the necessity of appointing agents by stating that Agents are needed because of their knowledge in the respective country’s leather garments market, the competitive rates, the need and latest fashion trends, the design and quality of the products to be sold.
Ultimately, the assessee has received sales orders through the agents and the impugned commission payments have been made to the foreign agents for getting sales orders. Hence, the sourcing commission paid cannot be considered as fee for technical services.
Thus the tax authorities are not correct in law in holding that the commission was paid to the agents for rendering technical services in the form of managerial services. Thus, it shall constitute business income in their respective hands. There is no dispute that these foreign agents do not have permanent establishment in India and hence under Article 7 of India and Austria DTAA as well under Article 7 of India – Italy DTAA, no business profit is taxable in India. Since no income out of commission payment is chargeable to tax in India in the hands of foreign agents, there is no requirement of deducting tax at source u/s 195 - disallowance made u/s 40(a)(i) in all the three years is not justified. - Decided in favour of assessee.
Nature of expenditure - Disallowance of payments made for software purchase - AO held that there was enduring benefit on purchase of computer software and it to be capital expenditure and allowed depreciation thereon - HELD THAT:- We notice that the Ld A.R is placing reliance on a case law in order to contend that software purchase is allowable as revenue expenditure. However, as rightly pointed out by Ld D.R, the assessee has not furnished any details relating to the computer software purchased by it. The assessee has not furnished the copy of contract entered with the supplier, nature of software purchased etc. Accordingly, in the absence of factual details, it will not be possible to apply the ratio of decision rendered in the case of IBM India Ltd [2013 (10) TMI 1225 - KARNATAKA HIGH COURT] - We notice that the AO has allowed applicable depreciation on the software purchases treated as capital expenditure. Accordingly, we do not find any reason to interfere with the decision rendered by Ld CIT(A) on this issue.
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2021 (12) TMI 706
Revision u/s 263 by CIT - Addition u/s 56(2) - assessee issued/allotted 560000 Equity shares at premium of ₹ 50/- each and as per CIT value of shares as per NAV method was ₹ 42.60/- as per CIT action of the AO in accepting the method of valuation contrary to Rule 11UA of the Rules was erroneous and prejudicial to the interest of the Revenue and Assessee did not give any valuation report as required under Rule 11UA of the Rule.- Whether AO called upon the assessee to show cause as to why the provisions of Sec.56(2)(viib) of the Act should not be applied? - HELD THAT:- It is no doubt true that as per explanation to section 56(2)(viib) of the Act apart from the determination of FMV of shares under Rule 11UA of the Rules, intrinsic value is also one of the methods prescribed method as per Sec.56(2)(viib) (a)(ii) of the Act, but the higher of the valuation as per Sec.56(2)(viib)(a) (i) or (ii) has to be considered by the AO before applying those provisions.
The admitted position in the present case is that the assessee did not file any valuation report to substantiate the fair market value of shares issued in terms of Sec.56(2)(viib) (a)(i) of the Act and Rule 11UA of the Rules. In such circumstances, we are of the view that the AO could not have accepted the intrinsic value without calling for a value in terms of Rule 11UA of the Rules to find out whether class (i) or class (ii) of explanation (a) to Sec.56(2)(viib) of the Act would be applicable - Thus the order of the AO was erroneous.
With regard to the argument that the money was received in the previous year relevant to Assessment Year 2014-15 and therefore the provisions of section 26(2)(viib) of the Act were not application to Assessment Year 2015-16, the admitted position is that the shares were issued in Assessment Year 2015-16 and this would be the appropriate year in which the applicability of provisions of section 56(2)(vii) of the Act should be considered. In this regard, we place reliance on the decision of M/S. Taaq Music Private Limited [2020 (10) TMI 28 - ITAT BANGALORE] in which the view as stated above was laid down by the Tribunal. We, therefore, find no merit in the appeal by the assessee.
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2021 (12) TMI 705
Exemption u/s 11 - assessee society is registered u/s 12A and is also notified u/s 80G - Whether activities of the assessee are commercial in nature and squarely fall under the ‘General Public Utility’ and hits the proviso to Section 2(15)? - assessee is engaged in imparting educating and training paramedics in the field of first aid, home nursing, hygiene safety and first-aid, fire safety, health and stress management, heart mark and care with CPR system, health management with diabetes care and Aids and Disaster management etc. - HELD THAT:- It is apparent from the activities of the assessee that it is imparting First Aid training to students, schools, companies and institutions etc and in lieu thereof, charging fees from participants. We find that the receipts shown by the assessee are in the nature of fees for rendering services. These facts have not been disputed by the AO.
Objects of ‘General Public Utility’ do not fall under any of these specific categories explicitly included in the definition of ‘Advancement of any other object of General Public Utility’ u/s 2(15) of the Act. There is no denial that the assessee society is imparting education and therefore, in our considered opinion, proviso to section 2(15) of the Act is not applicable to the assessee on the facts of the case.
The undisputed fact is that the assessee has been granted exemption since past many years and the nature of activities have not changed since its inception. Therefore, we do not find any reason why the Assessing Officer has taken a different view during the year under consideration. Considering the facts of the case in totality, in light of assessment history of the assessee, we do not find any merit in the appeal of the Revenue and the same is dismissed.
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9911796707
