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Income Tax - Case Laws
Showing 501 to 520 of 7776 Records
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2021 (12) TMI 536
Levy of penalty u/s. 272A(2)(e) - assessee did not voluntarily file its return of income within the time limit prescribed under the Income Tax Act - Proof of deliberateness or deceptiveness in not filing the return of income - HELD THAT:- We find that assessee has submitted reasonable cause for the delay and placed reliance upon several case laws in support of these both before the AO as well as CIT(A). None of them have been dealt with by the AO or CIT(A). This is complete disregard of judicial discipline. It is noted that in the case of HTSL community Service Trust [2012 (4) TMI 152 - ITAT BANGALORE] has held that an attempt of deliberateness or deceptiveness is the associated with word “failure” - also in the case of Vatavaran Trust [2006 (2) TMI 225 - ITAT DELHI-I] and held that there was excess of expenditure over income in all assessment years, assessee’s belief that it was not obliged to file return of income u/s. 139(4A) was bona fide and this constituted reasonable cause, hence penalty u/s. 272(A)(2) (e) is not leviable.
We are of the considered opinion, there was a reasonable cause for the assessee for the delay and the case laws referred above are duly applicable. Hence, in the background of aforesaid discussion and precedent, we set aside the orders of the authorities below and delete the penalty.
We find that assessee’s plea in the present case duly falls under the ken of aforesaid case laws wherein similar penalty has been deleted. No contrary decision has been produced before us. As held by Hon’ble Supreme Court in Motilal Padampat Sugar Mills' [1978 (12) TMI 45 - SUPREME COURT] that there is no presumption that everyone known law. - Decided in favour of assessee.
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2021 (12) TMI 535
Benefit of deduction u/s 54 v/s 54F - CIT(A) allowed the Claim U/s 54F instead of Section 54 - HELD THAT:- The sale deed was executed for sale of residential plot on 28/10/2009 and the assessee had given contract for construction of the house on 12/11/2009. It is a trite law that the benefit of Section 54 is available only to an individual or HUF when the asset transferred should be a long-term capital asset, being a residential house property and sold within a period of one year before or two years after the date of - transfer of old house, the -taxpayer should - acquire- another residential house or should construct a residential house within a period of three years from the date of transfer of the old house.
In case of compulsory acquisition the period of acquisition or construction will be determined from the date of receipt of compensation (whether original or additional). In the present case, the sale deed was executed on 28/10/2009 and the construction was started within one year from the date of sell. Therefore, considering the totality of facts and circumstances of the case, the assessee is entitled to get benefit of deduction u/s 54 and we allow the claim u/s 54 of the Act to the assessee
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2021 (12) TMI 534
Exemption u/s 11 - Denial of exemption as assessee society had made the interest free advances to its Members which transaction was covered under the provisions of Section 13(1)(c) and 13(1)(d) read with Section 13(3) and the assessee Society had paid excessive salary to its Members having contravened the provisions of Section 13(2)(c) - CIT(A) deleted the disallowance so made by the AO - HELD THAT:- In our view, it is not a case of any undue favour by the assessee to its members. In this case, the ld. CIT(A) has discussed that the Members of the Society had already offered their land for the construction of building for technical activities of the assessee Society. The assessee Society, as per its convenience, paid the sale consideration in installments, which were spread over a period and ultimately the Sale Deeds have been executed at the Collector rate. We, therefore, do not find any infirmity in the order of the ld. CIT(A) on this issue - in the case in hand, it is duly proved on the file that the payments were made to the members for the purchase of land and such payments were made at arms length price. Therefore, in view of the above, we do not find any infirmity in the order of the CIT(A) and the same is upheld on this issue.
Payment of salary to certain members of the society - only objection by the AO was that the payment during the year was increased to large extent as compared to the payments made in earlier years - The total percentage of expenses incurred by the society on account of payments made to these persons constitute less then 1% of the total expenses incurred by the society. Further the total payments made by the society on account of salaries to these persons are less then 2.5% of the total expenditure incurred on account of salaries.
These facts and figures have not been considered by the AO before making the disallowance. Also, find that no adverse material has been brought on record by the AO to hold that services have not been rendered by these persons and payments made to these specified persons are excessive and unreasonable. We hold that there is no justification in the action of the AO for making a disallowance under this head. Accordingly, this ground of appeal is allowed. - Decided against revenue.
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2021 (12) TMI 533
Assessment u/s 153C/153A - Addition u/s 68 - HELD THAT:- Whatever document which has been mentioned in the seized document, are ROC, TDS returns banks cheque books for payment of taxes, fees, etc. pertaining to the assessee. Ostensibly, such documents cannot be held to be incriminating and ld. CIT(A) has already noted that none of these documents are the basis or premise of the impugned additions. Another fact noted in the appellate order is that the AO himself has concurrently assessed all the investor companies’ right from the Assessment Year 2009-10 to 2012-13 and similar additions have been made in respect of the same amount in their hands which again does not warrant any addition in the hands of the assessee company.
The documents as mentioned in the seized document has already been held to be not incriminating in nature which has been duly explained by the assessee and appreciated by the ld. CIT(A) in the foregoing paragraphs as noted above. Apart from that, even before us there has been no rebuttal that the impugned additions are based on any incriminating seized documents which is also evident from the grounds raised by the Revenue wherein it has been stated that SLP has been filed against the decision of Hon’ble Delhi High Court in the case of Kabul Chawla (2015 (9) TMI 80 - DELHI HIGH COURT] - any statement recorded of a different person in the case of another search cannot be held to be incriminating material for the purpose of assessment within the scope of Section 153A and Section 153C has held by the Ld. CIT (A) following the decision of Hon’ble Jurisdictional High Court.
Hon’ble Supreme Court in case of CIT Vs. Sinhgad Technical Education Society [2017 (8) TMI 1298 - SUPREME COURT] wherein the Hon’ble Apex Court upheld the order of the Tribunal that addition cannot be made for the assessment years for which there are no incriminating documents found during the course of search in the assessments framed u/s 153C.
Seized incriminating material has to pertain to the assessment year in question and have co-relation, document-wise, with the assessment year. This requirement u/s 153C is essential and becomes a jurisdictional fact. It is an essential condition precedent that any money, bullion or jewellery or other valuable articles or thing or books of accounts or documents seized or requisitioned should belong to a person other than the person referred to in S. 153A.
No addition can be made where the assessment have not abated and were pending at the time of search, no addition can be made without any incriminating material. Thus, the finding by the ld. CIT (A) which is based on various judicial principles and on the facts of the case cannot be tinkered with without any contrary material or rebuttal by the Department, therefore same is confirmed. Appeal of the Revenue is dismissed.
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2021 (12) TMI 532
Validity of reopening of assessment u/s 147 - reopening beyond period of four years - A.O. in the instant case completed the assessment under section 143(3) determining the total income of assessee more than returned income - HELD THAT:- We find the assessment in the instant case was completed under section 143(3) on 15.12.2009 and the assessment year involved is A.Y. 2007-2008. We find the assessee had given sufficient information of all the primary facts regarding the amount of ₹ 1.07 crores subsidised by Sharecap Exchange, Chicago, USA towards Risk Management, Strengthening Middle Management and Business Process Reengineering of the company operations which have already been reproduced in the preceding paragraph. Further a perusal of the reasons recorded shows that there is no allegation of any failure on the part of the assessee to disclose fully and truly all material facts necessary for completion of the assessment.
In the instant case the primary facts were already disclosed in the Notes to Accounts filed along with the balance-sheet which is the subject matter of reopening of the assessment and since the original assessment was completed under section 143(3) and since there is no allegation by the A.O. of any failure on the part of the assessee to disclose fully and truly all material facts necessary for completion of the assessment and since there is no tangible material for belief that income chargeable to tax has escaped assessment, therefore,we hold that the reassessment proceedings initiated by the A.O. in the instant case after a period of four years from the relevant assessment year are not in accordance with Law. - Decided in favour of assessee.
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2021 (12) TMI 518
Deduction u./s 10A - Set-off of losses of STP/SEZ units against other income - Whether losses of 10A units cannot be set off against income of non-10A units? 0 principles of red-judicata - Whether High Court has erred in holding that deemed export, reimbursement of expenses, expenses incurred in foreign currency, delayed export proceeds and VAT/GST will form part of export turnover for the purpose of computation of deduction U/s. 10A - HELD THAT:- This Special Leave Petition challenges the judgment and final order [2020 (12) TMI 1300 - KARNATAKA HIGH COURT] which was disposed of in terms of the judgment passed [2020 (12) TMI 687 - KARNATAKA HIGH COURT] which in turn was disposed of in terms of the judgment passed [2020 (12) TMI 678 - KARNATAKA HIGH COURT] issues covered by decisions of this Court in M/s. WIPRO Ltd. [2015 (10) TMI 826 - KARNATAKA HIGH COURT] and Commissioner of Income Tax & Another v. TATA Elxsi Ltd.,[2016 (3) TMI 460 - KARNATAKA HIGH COURT]are pending adjudication at the instance of the revenue before the Supreme Court. In view of the aforesaid submission needless to state that the Assessing Officer shall decide the issues in accordance with the decision which may be rendered by the Supreme Court.
As held no interference is called for with the order passed by the tribunal. The Supreme Court in Radhasoami Satsang [1991 (11) TMI 2 - SUPREME COURT] has held that even though principles of res judicata do not apply to income tax proceedings, but where a fundamental aspect permeating through the different Assessment Years has been found as the fact one way or the other and the parties have allowed the position to be sustained by not challenge the order, it would not be at all appropriate to allow the position to be changed in subsequent year. For this reason also, in the facts of the case, a different view cannot be taken. In the instant case, the tribunal has answered all the substantial questions of law in favour of the assessee
In view of the observations made by the High Court, we dispose of the instant petition by reiterating the observations and clarifying that as and when the decisions with respect to the Questions No.(i), (ii) and (viii) are rendered by this Court, the matters shall be governed in terms of directions issued by the High Court.
Expenses of corporate office are to be allocated on ad hoc percentage of 20% and not based on turnover of various undertakings/business for the purpose of deductions U/s. 10A, 80-IB and 80-IC - Whether High Court has erred in holding that deemed export, reimbursement of expenses, expenses incurred in foreign currency, delayed export proceeds and VAT/GST will form part of export turnover for the purpose of computation of deduction U/s. 10A? - HELD THAT:- Matter was disposed of in terms of the judgment passed by the High Court in [2020 (12) TMI 678 - KARNATAKA HIGH COURT] stating all the remaining issues covered by decisions of this Court in WIPRO Ltd. [2015 (10) TMI 826 - KARNATAKA HIGH COURT] and Commissioner of Income Tax & Another v. TATA Elxsi Ltd.,[2016 (3) TMI 460 - KARNATAKA HIGH COURT] are pending adjudication at the instance of the revenue before the Supreme Court. In view of the aforesaid submission needless to state that the Assessing Officer shall decide the issues in accordance with the decision which may be rendered by the Supreme Court.
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2021 (12) TMI 517
Reopening of assessment u/s 147 - Notice issued after four years - eligibility of reasons to believe - HELD THAT:- As stated in the reasons that giving amount received towards corpus fund has to be treated as income of the current year and brought to tax but it remained to be added to the income. It then says “after perusal of the case reference” revealed that the assessee is having income from holding of exhibition and other related activity from members and non-members; the assessee has received ₹ 3,50,00,000/- on account of education fund, Trade & Industry Development Fund, Research Fund, RSDC Skill Development Fund; these funds were not routed through Income and Expenditure Account and directly credited to corpus fund. As per the details available on record, the assessee has been denied the benefits of trust etc.
Therefore, there is nothing in the reasons recorded to show that petitioner had failed to disclose all material facts. Moreover, petitioner has annexed to the petition a copy of the audit query or revenue audit, DCIT (Exemption) which indicates that decision to re-open the assessment is purely based on this audit query.
Income Tax Officer must determine for himself what is the effect and consequence of the law mentioned in the audit note and whether in consequence of the law which has come to his notice he can reasonably believe that income had escaped assessment. The basis of his belief must be the law of which he has now become aware. The opinion rendered by the audit party in regard to the law cannot, for the purpose of such belief, add to or colour the significance of such law. The true evaluation of the law in its bearing on the assessment must be made directly and solely by the Income Tax Officer. This is not the case with the matter at hand. We found support for this view in Ananta Landmark (P) Ltd. vs. Deputy Commissioner of Income-tax, Central Circle 5 (3), Mumbai[2021 (10) TMI 71 - BOMBAY HIGH COURT]
When the primary facts necessary for assessment are fully and truly disclosed, the Assessing Officer is not entitled on change of opinion to commence proceedings for reassessment. Where on consideration of material on record, one view is conclusively taken by the Assessing Officer, it would not be open to re-open the assessment based on the very same material with a view to take another view.
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2021 (12) TMI 516
Revision u/s 263 by CIT - additions on account of additional depreciation, suppression of sale and disallowance in case of depreciation - HELD THAT:- While deciding the controversy and rendering a finding, the tribunal in paragraph-9 held that the assessee has given an explanation which is acceptable and there was nothing to disturb the concluded assessment for the assessment year 2009-10. In our considered view such conclusion appears to be without sufficient reason. We say so because when the assessee's case was that the CIT had ignored the explanation and submission therefore, if the tribunal was of the view that the CIT did not consider the explanation, it would have been well justified to accept the explanation, submission and record a finding. The other option open would have been to send the mater back to CIT for re- examination of the explanation and submission of the assessee. Either of the two options had not been chosen by the tribunal but merely concluded by stating that the explanation offered by the assessee is acceptable without assigning any reasons therefore.
Thus our considered view would be an incorrect manner of rendering a conclusion which revolves entirely on facts and documents which were placed by the assessee before the CIT. Therefore, we are of the view that such finding of the tribunal requires to be set aside and the matter has to be remanded back to the Commissioner of Income Tax for fresh consideration on the said aspect.
So far as the issue with regard to the claim for direction under Section 80IB is concerned, it is submitted by the Counsel on either side that such issue does not arise in the assessment year 2009-10. In the result the appeals in so far as the assessment years 2008-09, 2010-11, 2011-12 and 2013-14 are dismissed on the ground of low tax effect. Consequently, the substantial questions of law raised in this appeal in so far as the assessment years, as indicated above, are left open.
So far as the order of the tribunal pertaining to the assessment year 2009-10 on two issues, namely, sales bill and depreciation on lorries is set aside and the matter is remanded to the CIT for fresh consideration after giving an opportunity of hearing to the respondent assessee. Since we have remanded the matter for fresh consideration by the CIT, we give liberty to the respondent assessee to raise all issues and more particularly the argument which has been placed before us that seized documents are not incriminating materials including the merits of the matter as well.
Consequently, the order passed by the CIT for the assessment year 2009-10 is also set aside and the matter is remanded to the CIT for fresh consideration.
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2021 (12) TMI 515
Reopening of assessment u/s 147 - Validity of reason to believe - deduction u/s 43B - HELD THAT:- In this case a regular assessment order was passed under Section 143 (3) of the said Act. In reply to the Director of Audit, two Assessing Officers had disagreed with the view expressed by the Revenue Audit. One of the two officers who had disagreed with the view of Revenue Audit, inspite of his disagreement has reopened assessment. It is therefore obvious that he has not formed his own opinion that income has escaped assessment. Similar situation had arisen in Il and Fs Investment Managers Ltd.[2006 (11) TMI 181 - BOMBAY HIGH COURT]
In view of the above it is not a case that petitioner has not disclosed anything to respondents and a pre-condition for reopening assessment as per proviso to Section 147 of the Act not having been complied, we will hold that the impugned notice to reopen has been issued without jurisdiction.
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2021 (12) TMI 514
Reopening of assessment u/s 147 - Notice after expiry of four years - assessee company is showing its income of rent from shops under the head “income from house property” and income from other services mainly common area maintenance income, Electricity Income, Parking income etc. under the head “income from business and profession” - onus to prove that income chargeable to tax has escaped the assessment - HELD THAT:- The figures and details are available not only in the return of income, profit and loss and balance sheet filed by petitioner but all these points have been raised and considered in the original assessment order passed. According to respondent no.1, independent field inquiries were conducted to verify the information as disclosed above. The details above are those details which were available in the profit and loss account and the balance sheet.Specimen agreement annexed to the petition indicate separate arrangement disclosed in the agreement. Agreements have also been provided to the Assessing Officer before the original assessment order was passed giving the break up as well.
We are satisfied that petitioner had fully and truly disclosed all material facts necessary for the purpose of assessment which are wrongfully alleged as not disclosed fully and truly. Not only material facts were disclosed by petitioner truly and fully but they were carefully scrutinized and figures of income as well as deduction were reworked carefully by the Assessing Officer. In the reasons for re-opening, the Assessing Officer has in fact relied upon the annual report and audited P & L A/c and balance sheet and he admits “various information/material were disclosed.” But according to the new Assessing Officer, the fact that other service charges were inseparably connected to the letting out of the building of the assessee is not acceptable. When on consideration of material fact one view is exclusively taken by the Assessing Officer it would not be open to re-open the assessment based on the very same material with a view to take another view. - Decided in favour of assessee.
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2021 (12) TMI 513
Deduction u/s 80P - HELD THAT:- As in assessee's own case [2016 (5) TMI 1164 - KERALA HIGH COURT] this Court has considered the standing of the assessee vis-a-vis Section 80P(2) of the Act and denied the claim for deduction as a Co-operative Society. The said judgment is in appeal before the Supreme Court. In Mavilayi Service Co-operative Bank Ltd.[2021 (1) TMI 488 - SUPREME COURT] from the paragraphs excerpted above, it is argued by refering to additional details, brought on record that the assessee is entitled to the claim as Co-operative Society registered under the Kerala Co-operative Societies Act, 1969 and merits acceptance of its claim for deduction under Section 80P(2) of the Act. There is consensus in the arguments of both sides that even for applying the principle of Mavilayi Service Cooperative Bank Ltd. case, independent of the judgment a few details are examined, a finding recorded and then the principle laid down in Mavilayi Service Co-operative Bank Ltd. case could be applied.
We are of the view that instead of following the assessee's own case and dismissing the appeals of the assessee or alternatively follow Mavilayi Service Co-operative Bank Ltd. without examination of a few details and grant the status of Society for enabling the assessee for deduction under Section 80P(2), the matter requires to be reconsidered by the Tribunal. These questions could be answered in favour of the assessee to the limited extent that the matter requires reconsideration by the Tribunal on the claim of assessee as a Co-operative Society and the entitlement to deduction under Section 80P(2) of the Act. The assessee and the Department are given liberty to place additional materials, now brought on record in the appeals before the Tribunal for decision and consideration.
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2021 (12) TMI 512
Revision u/s 263 by CIT - reassessment direction issued to the AO - issue noted by the CIT (Exemptions) arises under Section 11(1)d and the utilization of corpus donation for revenue expenditure allegedly incurred by the assessee - HELD THAT:- The participation of the assessee is not an empty formality as could be appreciated from the language employed in Section 263 of the Act. Had the assessee placed reply, deliberated on the nuances involved in the circumstances noted by the Commissioner, then, legitimately it could be argued that an adverse order was passed by the Commissioner dehors the objections of the assessee. But the assessee having become an onlooker or complacent of the ongoing procedure, now raises grounds on the findings recorded by the Commissioner before the Tribunal, on the material placed before the Tribunal.
This Court is not observing that the Tribunal ought not to have received material sought to be relied on by the assessee. The material brought on record before the Tribunal and a case for reconsideration u/s 263 is made out, the Tribunal would be doing well by sending the matter back to the Commissioner for consideration and decision afresh, instead of adjudicating on the merits of the conclusions recorded by the CIT (Exemptions).
By referring to the materials brought on record by the assessee and for allowing the appeal, the reasons recorded by the Commissioner are set aside. The exercise virtually amounts to upsetting the satisfaction recorded by the Commissioner on the material examined by the Tribunal. The material should be allowed to be considered by the Commissioner as the Commissioner is vested with the revisional power against the proceedings made under the Act for exercising his jurisdiction. Though an attempt has been made to independently justify the conclusions recorded by the Tribunal, the mistake we have noticed in the approach of the Tribunal ought not to be ignored by us while examining the legality of the order under appeal and pursue the same approach.
In cases like the present, what constitutes the subject matter of appeal before the Tribunal is the correctness or legality of the opinion formed by the Commissioner from the material on record and the reply of the assessee. The conclusion of the Commissioner is the subject matter of appeal, but the Tribunal recorded, in the case on hand, primary satisfaction under Section 263 of the Act. Such a course is impermissible.
Hence, we are of the view that the orders of the CIT (Exemptions) and the Tribunal in Annexures-B and C are set aside and the matter is remitted to the Commissioner for consideration and decision afresh in accordance with law.
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2021 (12) TMI 511
TDS u/s 194H OR 194G - assessee purchases lottery tickets from the agencies referred to above and claim to sell the lottery tickets to the retailers - the assessee purchased lottery tickets from the State of Kerala and claims to have sold to the retail vendors - According to the assessee, there is no relationship of Principal and Agent between the assessee and the end sellers of lottery tickets to the general public and the retailers have become eligible for receiving their entitlement as successful agents' prize money/commission, etc. - HELD THAT:- The assessee acts as a post-office by receiving counterfoils of prize winning tickets sold by different retailers in the organisation of lottery business presented to the State government and the prize/incentive/bonus received from the government is transferred to retailers. In the circumstances of the case our attention has been drawn to the flow of counterfoils into the hands of assessee and presentation of counterfoils to government and receipt of incentive by assessee and subsequent transfer of incentive to retailers. The person responsible for making the payment is the government.
Admittedly, the government after affecting TDS has paid the amount to the assessee towards prize incentive etc. The assessee has collected the amount and claims to have made over the incentive to the end retailers. Section 194G, as rightly held by the Commissioner of Income Tax and the Tribunal, is not attracted to the instant payment inasmuch as assessee is not under obligation to pay towards commission etc to any of these persons.
The substantial questions of law framed by the Revenue are examined by keeping in perspective the confirming order of the Tribunal. And the findings of facts recorded by the Tribunal on which no exception is pointed out to the effect that Sections 194H and 194G are not attracted. It is definitely a case for consideration of substantial questions of law, had the Revenue established the basic ingredients required for attracting any one of the sections to the controversy covered by the appeal.
We are of the view that the assessee being a wholesale dealer/Stockist of lottery has purchased from the government and sold to the retailers. It is accepted as a purchase from the organizing agency of lottery and sale to retailers. The amount covered is incentive payable by the organizing department to the agent and none of the ingredients required for adding the disputed amount is established. The questions, in our view, do not arise for consideration particularly having regard to the findings appreciated by the CIT (Appeals) and the Tribunal and accordingly the questions are answered in favour of the assessee and against the Revenue.
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2021 (12) TMI 510
Addition u/s 68 - unexplained cash credit - Unsecured loan - CIT- A deleted the addition - AO as per ground 1(b), has stated that even the carry forward of unsecured loans are required to be added under section 68 - HELD THAT:- On plain reading of provisions of section 68 of the Act, we do not agree with the above contention - departmental representative stated that the learned Commissioner of Income tax (Appeals) should have given a direction for making an addition of the above sum in the year in which such sum was received. We fail to appreciate this argument because of the reason that the learned Assessing Officer raises no such ground of appeal.
Even otherwise, what order the learned Commissioner of Income tax (Appeals) should have passed, could not be the matter of argument before us unless the same is raised in the grounds of appeal. We are also not empowered to suggest to the parties about what grounds should have been raised by them. Commissioner of Income tax (Appeals) has reached to the above conclusion after obtaining the remand report of the AO. DR could not show us the argument of LD AO before LD CIT (A) to give him direction to make addition in the year in which it is received. In view of this, we find no infirmity in the order of the learned Commissioner of Income tax (Appeals). Accordingly, ground 1 raised by the learned Assessing Officer is dismissed.
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2021 (12) TMI 509
Rectification of mistake u/s 154 - scope of alternate remedy - deduction u/s. 57(iv) i.e. @ 50% of interest on compensation as received on acquisition of his agricultural land by Land Collector, Rohtak - HELD THAT:- As per the clear mandate of law, an intimation or a deemed intimation under sub-section (1) of Section 143 falls within the realm of clause (b) to sub-section (1) of Section 154 of the Act, therefore, a mistake emanating therefrom, as long as the same is apparent from record, is beyond any doubt rectifiable under the said statutory provision. As regards the view taken by the CIT(A) that the remedy for claim of the aforesaid deduction can be traced in Sec. 119(2)(b) of the Act, the same too does not find favour with us.
Where a remedy available to an assessee falls within the four corners of a specific statutory provision, then, the same cannot be declined to him, for the reason, that an alternative remedy is available elsewhere. Be that as it may, we are of a strong conviction that as the A.O remains under a statutory obligation to deduce the ‘true income’ of an assessee, therefore, the entitlement of the assessee before us towards deduction u/s 57(iv), which is inextricably interwoven or in fact intertwined with the corresponding interest income which had duly been disclosed by him in his return of income, could not have been declined by the A.O on the basis of hyper technical reasons.
Our aforesaid view is fortified by the Judgment of the Hon’ble Supreme Court in the case of Anchor Pressings (P) Ltd.[1986 (7) TMI 1 - SUPREME COURT] as observed, that where an assessee who was entitled to claim a deduction had omitted to raise such claim in his return of income or in the course of the assessment proceedings, then, he was entitled to make such claim by moving an application u/s. 154 of the Act.
We are unable to persuade ourselves to subscribe to the view taken by the lower authorities that the omission on the part of the assessee to claim deduction u/s. 57(iv) in his return of income was not in the nature of a mistake rectifiable under Sec. 154 of the Act. We, thus, set-aside the order of the CIT(A) and direct the A.O to allow the assessee’s claim for deduction u/s. 57(iv) i.e. @ 50% of the interest on compensation that was disclosed by him in his return of income for the year under consideration. - Decided in favour of assessee.
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2021 (12) TMI 508
TP Adjustment - Comparable selection - Functional dissimilarity - considering Info Edge (India) Ltd. as a comparable company - HELD THAT:- We find that CIT(A) after considering the nature of services provided by the M/s. Info Edge (India) Ltd. has given a finding that its primarily in the business of internet services where anyone on payment basis can have access to their websites as against the activities of assessee which is stated to be engaged in providing the administrative/facilitation assistance, providing product support and training to dealers and customers; assistance in relation to marketing/new business developments; communicating new business opportunity to AE; and providing assistance in negotiating the price of the products/terms of the contract with the customers.
CIT(A) after considering the nature of activities had thus given a finding that nature of activities carried between the assessee and M/s. Info Edge (India) Ltd. are completely different services and the two cannot be considered to be a comparables and he therefore directed its exclusion. Before us, no fallacy in the findings of CIT(A) has been pointed out by Revenue. In such a situation, we find no reason to interfere with the order of CIT(A) for directing its exclusion. Thus the ground of Revenue is dismissed.
Excluding CDSL Ventures Ltd. as a comparable - CIT(A) after considering the business profile and the details, has given a finding that it belongs to ITES segment, more than 80% of its income is by way of on-line data charges and therefore, it cannot be considered as comparable companies to that of assessee. Before us, no fallacy in the findings of CIT(A) has been pointed out by Revenue. In such a situation, we find no reason to interfere with the order of CIT(A) and therefore upheld the order of CIT(A) for its exclusion as a comparable company. Thus the ground of Revenue is dismissed.
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2021 (12) TMI 507
Professional income V/s Salary income - as per AO appellant did not provide details and nature of professional and technical services rendered to the company - whether the receipt from company is to be assessed as professional income or salary income - appellant failed to proof nexus between providing the loan taken on his name to the company - HELD THAT:- The assessee has not submitted the details of nature of professional and technical services rendered to the company. Even before the Tribunal, no efforts were made by the learned AR to substantiate the claim that the amount received by the assessee from the company are professional charges. A director may have duel capacity. He may be both director as well as employee. This principle is enumerated in the judgment of the Hon’ble Apex Court in the case of Ram Prashad v. CIT [1972 (4) TMI 1 - SUPREME COURT]
When an assessee insists that he is rendering professional / technical services to a company, the burden is on him to prove the same. As mentioned earlier, the assessee has not furnished any evidence to prove that the services rendered by him to the company are of professional in nature. The treatment in the company’s books of account that the remuneration paid to the assessee are professional charges and deduction of tax at source is made u/s 194J of the Act is not the determinative factor to decide in the hands of the assessee whether the remuneration is salary income or income from business or profession. Therefore, we have no hesitation to hold that the receipt from company is nothing but salary income. Moreover, the interest expenditure cannot be deducted from the amount received from the company because there is no nexus between them. Only such expenditure which has been incurred wholly and exclusively to earn a particular income is allowable as a deduction from such income. In the instant case, there is no relation whatsoever between the interest expenditure from a mortgaged loan and the payment received for rendering certain services. Advancing interest free loans to the employer company cannot be a ground for claiming deduction of interest expenditure from the salary income received from it.
In the instant case, it is not established that funds borrowed and diverted to SML are out of commercial expediency and for the purpose of assessee’s business. For the aforesaid reasoning, the common issue raised for assessment years 2013-2014 to 2015-2016, is dismissed.
Disallowance u/s 14A - CIT(A) restricted the disallowance u/s 14A of the Act to the exempted income earned during the relevant assessment year - HELD THAT:- CIT(A) has relied on various judicial pronouncements in granting relief to the assessee. The assessee has not made out a case that the CIT(A)’s order is erroneous. Therefore, we confirm the CIT(A)’s order as correct and in accordance with law. It is ordered accordingly.
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2021 (12) TMI 506
Correctness of deduction claimed u/s.54F - purchase of residential flat by the assessee on 09.05.2016 at Mumbai whether it amounts to purchase of a new asset or construction of a new asset - AO regarded the acquisition of the flat as amounting to purchase of a new flat as purchased beyond the period of 2 years from the date of sale of the industrial lands and hence, the assessee had not complied with the conditions for grant of exemption since the purchase was made 5 days after the period of 2 years had expired - HELD THAT:- The date of purchase of the new asset is admittedly on 09.05.2016 which falls within the previous year relevant to Assessment Year 2017-18. The date of transfer is on 05.05.2014 falling within the previous year 2015- 16. In terms of proviso to section 54F(4) of the Act, the non-utilisation of net consideration deposited in the capital gain scheme account can be considered only in Assessment Year 2018-19. We are therefore of the view that the directions given by the CIT(A) holding that the purchase of a new flat will not amount to putting up construction and therefore the benefit of deduction will not be available to the assessee is a finding which is not necessary to be given in the appeal for AY 2015-16. The question whether the acquisition of flat by the assessee would amount to construction or purchase, is a issue which ought to have been left open by the CIT(A) for consideration in AY 2018-19. We leave this issue open for decision in Assessment Year 2018- 19.
DR, however submitted that directions may be given to the AO, to take appropriate remedial action in Assessment Year 2018-19. We are of the view that it would be just and appropriate to make an observation that the AO will take appropriate measures as is open to the Revenue in law. With these observations, we allow the appeal of the assessee. Assessee appeal allowed.
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2021 (12) TMI 505
Delayed Employees’ contribution to PF and ESI - Deposit beyond the due date prescribed under relevant Act and deposited within due date by filing the return on u/s 139(1) - HELD THAT:- We find no merit in the argument of the ld.DR since the explanation as provided in Finance Act 2021 prescribes that the amendment in both sec.36(va) as well as 43B by inserting corresponding explanation that although impugned PF comes in the form of provision and the same is applicable from 1/4/2021 onwards only. In the present case we are concerned with the asst. year 2017-18 and the amended provision could not be applied retrospectively as it is only applicable w.e.f 1/4/2021. Being so no disallowance could be made by the AO in respect of PF/ESI paid within the due date of filing return of income. Though, it was beyond the date mentioned in the respective Act. This view of ours is supported by various judgment relied on by the ld.AR. Accordingly the appeal of the assessee is allowed.
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2021 (12) TMI 504
Penalty levied u/s 271B - not getting the books of account audited u/s 44AB - HELD THAT:- As stated that an indemnity bond was filed by the society with the Punjabi University, Patiala for getting affiliation of course in the college run by the society. Also on perusal of the income and expenditure account of Guru Nanak Dev Khalsa Girls College as dated 01.12.2021 we find that the gross receipts mainly includes the fees received from college students for various educational courses imparted by the college. Prima facie the particulars of income and expenditure account looks to be from the activity not in the nature of any business or commerce and purely looks of an educational institutions. This fact asserts the submission made by the Ld. Counsel for the assessee that the society was under a bonafide belief that since it is an education institute, its income was exempt u/s 10(23C)(iiad) of the Act and as it was not carrying out any business activity, it was not required to get its books of account audited u/s 44AB.
We are of the view that the finding of this Tribunal in the case of Sant Baba Rangi Ram Charitable Trust, Hoshiarpur [2012 (8) TMI 1121 - ITAT AMRITSAR.] is squarely applicable on the isuses raised in the instant appeal so much so that the assessee society is also running an educational institution and was under the bonafide belief that since it is not carrying out any business or commercial activity, provisions of section 44AB of the Act are not attracted. In the instant case penalty u/s 271B of the Act was not leviable and we accordingly delete the penalty levied u/s 271B of the Act. Accordingly all the effective grounds raised in the instant appeal are allowed.
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