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Income Tax - Case Laws
Showing 81 to 100 of 7776 Records
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2021 (12) TMI 1322
Late payments towards EPF and ESI u/s 36(1)(va) - payment before furnishing the return of income under section 139(1) - HELD THAT:- As relying on Mohangarh Engineers and Construction Company [2021 (9) TMI 1319 - ITAT JODHPUR] since assessee had deposited the employees contribution before filing of Return of Income. Therefore, the assessee succeeds.
Impugned additions made by the Assessing Officer and sustained by the Ld. CIT(A) on account of deposits of employees contribution of ESI & PF prior to filing of the return of income u/s 139(1) of the Act, in both the years under consideration prior to the amendment made by the Finance Act, 2021 w.e.f. 1.4.2021 vide Explanation 5, are deleted. - Decided in favour of assessee.
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2021 (12) TMI 1321
Demand of Outstanding dues including taxes - respondent-Company has gone in liquidation - Company in question was in liquidation and was not in a position to pay its outstanding dues including its taxes - HELD THAT:- As per order passed in MOSER BEAR INDIA LTD. [2020 (7) TMI 760 - SC ORDER] held Official Liquidator has filed a report that the Respondent-Company (Moser Bear India Ltd.) is not financially viable and is under liquidation in proceedings pending before the National Company Law Tribunal. Even if the Appellant-Revenue were to succeed, the Official Liquidator is not in a position to pay the tax amount involved in these appeals.
Indisputedly, the respondent-Company has gone in liquidation. The company in liquidation is not in a position to pay its outstanding dues including taxes. Moreover, the tax effect in the concerned appeals is just over ₹ 2,00,00,000/- (Rupees Two Crore Only).
Taking overall view of the matter, we deem it appropriate to dispose of these appeals, leaving the question of law open to be decided in appropriate case.
Revenue is directed to obtain instruction as to whether the Revenue would like to pursue the appeals filed by it. To await instruction, list on 16th March, 2022.
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2021 (12) TMI 1320
Penalty u/s 271(1)(c) - assessee has furnished inaccurate particulars of income - inaccurate particulars of income v/s inaccurate claim - whether the assessee has furnished inaccurate particulars of income with respect to research and development activity carried out by it to the tune of 50% of the total claim? - HELD THAT:- The claim of the assessee at the most can be regarded as inaccurate claim which cannot be equated with the inaccurate particulars of income. It is for the reason that nothing has been brought on record by the authorities below suggesting that the assessee has furnished the particulars of income with dishonest intent.
As regards the explanation 1 to section 271(1)(c) of the Act, there was no iota of evidence suggesting that the explanation offered by the assessee was false. Since the research and development facility was maintained by the assessee and the expenditures were also incurred by it, claim of the assessee cannot be said amounting to concealment of particulars of income - there was no finding of the authorities below qua the fact that the assessee fails to substantiate the explanation offered by him and fails to prove that such explanation is bonafides with respect to material facts relating to the computation of total income. Thus in our considered view the provisions of expression 1 to section 271(1)(c) of the Act cannot be attracted in the given facts and circumstances.
We set aside the finding of the learned CIT (A) and direct the AO to delete the penalty levied by him under section 271(1)(c) of the Act. Hence the ground of appeal of the assessee is allowed.
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2021 (12) TMI 1313
TDS u/s 194J - NFS – ATM Charges paid - disallowance made u/s 40(a)(ia) for non-deduction of tax at source on payments fall under the category of technical services - HELD THAT:- Following the above said decision of co-ordinate bench rendered in the case of Canara Bank [2022 (1) TMI 124 - ITAT BANGALORE], we hold that the payments made to NPCI towards NFS ATM charges cannot be considered as “technical services” within the meaning of sec.194J of the Act. Hence there is no liability to deduct tax at source from those payments. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and direct the AO to delete the disallowance.
Applicability of sec.115JB on banking company - case of the assessee is that clause (b) of sec.115JB(2) is made applicable to banking companies, since banking company is included in sec. 211 of the Companies Act. However, it is the contention of the assessee that it is not a ‘banking company”, i.e., it is a “corresponding new bank” - HELD THAT:- As decided in M/S. CANARA BANK (ERSTWHILE SYNDICATE BANK) VERSUS DEPUTY COMMISSIONER OF INCOME-TAX CIRLE-1 UDUPI AND (VICE-VERSA) [2022 (1) TMI 124 - ITAT BANGALORE] provisions of sec.51 of the Act specifically states that only certain provisions of BR Act are applicable to “Corresponding new bank”. We noticed earlier that the Ld CIT(A) has proceeded to decide this issue by observing that all provisions of BR Act are applicable to the Company. We notice that the Ld CIT(A) did not consider the effect of provisions of sec.51 of the BR Act upon the assessee. Hence the decision taken by him under the impression that all the provisions of BR Act are applicable to the assessee is faulted one. In our view the Ld CIT(A) should considered the effect of provisions of sec. 51 of BR Act and accordingly he should have appreciated the contentions of the assessee on the definition of “banking company”, provisions of sec.211(2) of the Companies Act etc. Since these aspects go to the root of the issue, in our view, this issue needs to be examined at the end of Ld CIT(A) afresh. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and restore the same to his file for examining it afresh.
Disallowance of bad debts claimed u/s 36(1)(vii) - HELD THAT:- We notice that the Ld CIT(A) has followed the decision rendered by the co-ordinate bench in the assessee’s own case [2018 (1) TMI 1575 - ITAT BANGALORE] and deleted the disallowance of bad debts claimed by the assessee u/s 36(1)(vii) of the Act. Accordingly, we do not find any reason to interfere with his order passed on this issue.
Disallowance of depreciation on HTM Securities - AO took the view that the RBI has allowed banks to claim depreciation on securities which are “Held for Trade” and “Available for sale” only thus he held that the depreciation is not available on securities “Held to Maturity - CIT-A deleted the addition - HELD THAT:- As decided in own case [2018 (1) TMI 1575 - ITAT BANGALORE] depreciation claimed on investments 'held on maturity' by a bank has to be treated as stock-in- trade in accordance with RBI guidelines and CBDT Circular.
Disallowance made u/s 14A - HELD THAT:- We notice that the co-ordinate benches have decided this issue prior to rendering of decision by Hon’ble Supreme Court in the case of Maxopp Investment Ltd [2018 (3) TMI 805 - SUPREME COURT] However, before us, the Ld A.R relied upon certain other decisions in order to contend that no disallowance u/s 14A is called for. In view of the subsequent development of law on this issue, in our considered view, this issue requires fresh examination at the end of AO by duly considering the various decisions on the subject. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and restore the same to the file of AO for examining it afresh.
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2021 (12) TMI 1303
TDS u/s 194A - Addition u/s 40(a)(ia) - assessee did not discharge the required onus and failed to file Form 26A which justify the confirmation of impugned disallowance - HELD THAT:- As decided in case of M/s Royal India Gems & Jewels Pvt. Ltd.[2018 (9) TMI 2072 - ITAT CHENNAI] by virtue of the judgment of Hon’ble Delhi High Court in the case of Ansal Land Mark Township P. Ltd (supra), first proviso to Section 201(1) as well as proviso to Section 40(a)(i) of the Act had to be construed retrospectively. Considering the facts and circumstances of the case, we are of the opinion that issue requires a fresh look by the ld. Assessing Officer. Ld. Assessing Officer can use the powers vested on him for getting the required information from M/s. Reliance Capital Ltd, so as to ascertain whether they had included the interest paid by the assessee, as a part of their income and filed return after paying due taxes.
We find that the assessee could escape the rigors of Sec.40(a)(ia) in terms of second proviso to Section 40(a)(ia) read with first proviso to sub-section (1) of Section 201 by demonstrating that the payee had duly offered the payment in their Income tax returns and paid due taxes thereon. In such a case, no disallowance u/s 40(a)(ia) is called for. As per the submissions of Ld. AR, the assessee could demonstrate the fulfillment of these conditions and is ready to file the requisite certificate / declaration from the payee. Therefore, we deem it fit to restore the matter back to the file of AO on similar lines as above to provide an opportunity to the assessee to demonstrate fulfillment of these conditions by adducing requisite documentary evidences - Appeal stand allowed for statistical purposes.
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2021 (12) TMI 1296
Reopening of assessment u/s 147 - non passing of speaking order - petitioner has not been filed a reply to Section 143(2) notice - HELD THAT:- Assessment orders have to be passed within the time. Therefore, no fault can be found with the respondent as otherwise entire exercise taken would have lapsed due to limitation.
The fact remains that the petitioner has also sent a representation/objection on 28.12.2018, the date on which the Impugned Orders have been passed without a speaking order proceeding these orders.
As the Impugned Assessment Orders are quashed and the cases are remitted back to the respondent to pass a speaking order in terms of the decision in GKN Driveshafts (India) Limited Vs. Income Tax Officer and Ors [2002 (11) TMI 7 - SUPREME COURT] and to thereafter pass appropriate Assessment Order. Since the dispute pertains to the Assessment Years 2010-2011 and 2011-2012, the respondent may pass a speaking order preferably within a period of thirty (30) days from the date of receipt of a copy of this order based on the representation/objection filed by the petitioner on 28.12.2018 in accordance with law and on merits. The respondent shall pass Assessment order within a period of thirty (30) days thereafter.
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2021 (12) TMI 1295
Disallowance of delayed deposit of employees contribution to provident fund and Employees state Insurance scheme - HELD THAT:- We find for the month of December, 2016 of employees’ contribution towards provident fund which was required to be deposited according to the respective Provident Fund Act on or before 15th January, 2017 was deposited on 16th January, 2017. The Ministry of Labour and Employment has issued a letter dated 12/01/2017 wherein as a special case due to the problems on the portal on allotment of UAN, the due date for payment of contribution for the month of December, 2016 was extended upto 20th January, 2017. Assessee has already deposited the same on 16th January 2017, therefore, there is no delay in payment of employees’ contribution of provident fund for the month of December, 2016. Therefore, the disallowance is incorrectly confirmed by the learned CIT(A).
With respect to the employees contribution to ESIC undisputed facts shows that though such contribution is deposited after the due date prescribed under the respective law, but before filing of the return of income. We find that identical issue is GHATGE PATIL TRANSPORTS LTD. [2014 (10) TMI 402 - BOMBAY HIGH COURT] which is the jurisdictional High Court wherein it has been held that both employees and employer’s contribution are covered under the amendment to section 43B of the Act relying on the decision of the Hon’ble Supreme Court in CIT vs Alom Extrusions Ltd [2009 (11) TMI 27 - SUPREME COURT] and therefore, if such payments are made on or before the due date of filing of the return of income, same are not disallowable. We find that instead of following the decision of jurisdictional High Court, the learned CIT(A) has followed the decision of non jurisdictional High Court, that is, Gujarat High Court.GUJARAT STATE ROAD TRANSPORT CORPORATION [2014 (1) TMI 502 - GUJARAT HIGH COURT] - As the jurisdictional High Court decision squarely covers the issue in favour of the assessee, we direct the learned assessing officer to delete the disallowance on account of delayed payment of employees’ contribution to ESIC. - Decided in favour of assessee.
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2021 (12) TMI 1294
Unexplained expenditure u/s 69C - difference of balances of creditors - HELD THAT:- Provisions of section 69 C of the Act provide if assessee for which no explanation incurs any expenditure or unsatisfactory explanation is provided. In the impugned appeal, there is no evidence that the difference in the credit balance in the books of assessee with the debit balance in the books of creditor is an expenditure incurred by assessee during financial year. It is not the case of the revenue that creditor has received sum but it are not recorded in books of assessee as payment. Therefore, according to us provision of section 69C cannot be attracted in this case, unless revenue brings on record any proof of incurring such expenditure. Hence, we reverse the orders of lower authorities and direct ld AO to delete the addition made u/s 69C of the Act. Accordingly, Ground no 1 of the appeal of the assessee is allowed
Disallowance of interest paid by the assessee on the pretext that assessee has given loans and advances to its employees without charging any interest and, therefore, interest to that extent is not allowable under section 36(1)(iii) - HELD THAT:- The natures of advances are festival loans, medical advances, educational advances and personal loans. Looking into the nature of the operation of the company where the employee benefit expenses are incurred and the annual turnover is shown, amount of advances to the staff is in the nature of business advances. The assessee has also stated that advances are given in accordance with the company policy. Therefore, we find that advances given by the assessee are for the purposes of the business. It can also not said that there is an absence of business expediency in giving loans to staff. There is no contrary evidences recorded by the lower authority that advances given to the staff are bogus or for any non-business purposes and is not in accordance with the nature of business policy of the assessee as well as the custom of the trade. In view of this, the amount disallowed by AO and confirmed by the learned CIT(A) is unsustainable. Accordingly, we reverse the orders of the lower authorities and direct the assessing officer to delete the above disallowance.
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2021 (12) TMI 1293
Rectification of mistake u/s 154 - disallowance u/s 43B - HELD THAT:- Auditors have specifically answered as “NO” to the question as to whether any Sales Tax/GST, Customs Duty, Excise Duty or any indirect tax has been passed through profit & loss account. In response to intimation u/s 143(1), the assessee submitted that GST payable was not routed through the profit & loss account and therefore, disallowance u/s 43B was not warranted but these contentions were not accepted. The assessee also filed application u/s 154 mentioning the facts of the case.
The application u/s 154 was also rejected and aggrieved by the intimation u/s 154, the assessee filed this appeal. I find that the documents placed on record prove that the GST outstanding declared in the balance sheet was not routed through the profit & loss account and therefore, the addition sustained by learned CIT(A) u/s 43B is not warranted. In the case of CIT vs. S. B. Foundry [1990 (4) TMI 43 - ALLAHABAD HIGH COURT] has dismissed the appeal of the Revenue wherein under similar circumstances the additions were made by the Assessing Officer and Appellant Assistant Commissioner had deleted the same which were confirmed by the Tribunal.
As decided in INDIA CARBON LIMITED VERSUS INSPECTING ASSISTANT COMMISSIONER OF INCOME-TAX AND ANOTHER [1992 (9) TMI 83 - GAUHATI HIGH COURT] in the instant case, the question was whether section 43B would apply and not the question whether or not the sales tax collected formed part of the business or trading receipts. What would be the effect of showing such sum as payable by way of tax on the liabilities side in the balance sheet without actually paying the same was a different question. The petition, was, therefore, allowed and the addition was quashed. - Decided in favour of assessee.
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2021 (12) TMI 1292
Deduction u/s 80IA - Deduction in respect of Land Fill project No.I by holding it as not a new undertaken - HELD THAT:- We are of the view that once, the assessee has fulfilled all the conditions as laid down in section 80IA(4) of the Act and was allowed deduction in the earlier assessment years in respect of land fill project No.I in AY 2002-03 that is in the initial year, therefore, deduction under section 80-IA in respect of the infrastructure facility should have been allowed to the assessee.
So far as the objection of the Ld. Sr DR for the revenue is concerned that the assessee has made agreement with GIDC only after the claim of the assessee was disallowed by A.O and at the time of establishment of Land fill Project –II, no new establishment came in to existence. The nature of work being done by both the project is identical, therefore, the claim of the assessee based on the backdate agreement cannot be considered. We find that the submissions of the Ld. DR for the revenue is based on the finding of Ld. CIT(A). The assessee has entered into a separate agreement dated 16th October 2012 with GIDC with effect from 12th March 2007 and commenced its Land Fill Project-II in FY 2006-2007 and claimed deduction under section 80-IA of the Act from AY 2008-09 since the said unit is a separate infrastructure facility. Thus, Land fill II is a distinct and separate undertaking from Landfill I. In the result, the assessee succeeds on this ground of appeal.
Land fill project No. I and land fill project-II are not separate undertaking for deduction under section 80IA(4) - As brought to our notice that the assessee has also entered into a separate agreement dated 16th October 2012 with GIDC with effect from 12thMarch 2007. The assessee had commenced its Land Fill Project-II in FY 2006-2007 and claimed deduction under section 80-IA of the Act from AY 2008-09 since the said unit is a separate infrastructure facility. These facts are not controverted by ld SR DR for the revenue. Moreover, the Land Fill Project-II is set up on the separate land allotted by GIDC in Bharuch District, which was allotted to the assessee and separate agreement was entered with GIDC on 16th October 2012 with effect from 12.03.2007. We find that in appeal for AY 2007-08, the Ld. CIT(A) held that both the unit of the assessee i.e. Land fill Project No. I & Land Fill Project-II are different and independent unit by way of process, method, machine and infrastructure.
Incinerator is not a separate undertaking eligible for deduction under section 80IA(4) - AO while passing the assessment order allowed deduction under section 80IA in respect of Land Fill I, Land Fill II and Incinerator project by treating the said undertakings as a composite undertaking. The ld CIT(A) held that Incinerator is a new infrastructure facility and hence eligible for deduction under section 80- IA(4) of the Act for 10 years from AY 2007-08. This finding of ld CIT(A) is not challenged by revenue before Tribunal, thus, it has attained finality. So far as finding of the ld CIT(A) with regard to Incinerator-II is concerned it was not a subject matter of appeal before ld. CIT(A) for the year under consideration, therefore, we are in agreement with the submissions of the learned Senior Counsel for the assessee that such finding given by the CIT(A) is totally incorrect and uncalled for while deciding the appeal for AY 2008-09.
Disallowance of post closer expense - disallowance of provisions of pit covering expenses - HELD THAT:- Considering the consistent decision of the Tribunal on similar set of fact on similar component of income, and following the principle of consistency, we direct the AO to follow the order of Tribunal in AY 2007-08 [2017 (2) TMI 1493 - ITAT AHMEDABAD] and allow / delete the disallowance of provisions of post closer expenses.
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2021 (12) TMI 1291
Addition u/s 68 - unexplained cash credit being the amount received from issuance of shares - HELD THAT:- AO examined this issue at length and noticed that the assessee had shown investment in shares in the name of M/s. Nakshatra Electricals and Engineers Pvt. Ltd. at ₹ 25 lakhs. On perusal of the return of income of M/s. Nakshatra Electricals and Engineers Pvt. Ltd., it was noticed that the said company had shown investment of ₹ 25 lakhs as on 31.03.2011 and 31.03.2012. But, in fact, the payment received only on 03.05.2011.
DR submits before the Bench that it is not certain whether share capital relates to assessment year 2011-12 or assessment year 2012-13? We find merit in the submissions of ld DR for the Revenue and therefore, we remit this issue back to the file of the assessing officer to examine the fact whether share capital was introduced in assessment year 2011-12 or in assessment year 2012-13, and after ascertain this basic facts the assessing officer should adjudicate the issue afresh in accordance with law. Therefore, statistical purposes, ground no.1 and 2 raised by the assessee are allowed.
Disallowance of interest on account of interest free loan to the sister-concern - assessee has accepted interest bearing funds from bank and have been utilized for giving interest free loans and advances to P G Glass Pvt. Ltd. Moreover, M/s P G Glass Pvt. Ltd. is a related party covered u/s 40A(2)(b) - HELD THAT:- As AR submits before the Bench that assessee-company has interest free own fund, out of that interest free advance have been given to assessee, therefore no disallowance should be made - As DR argues that interest free advance to the sister concern was given out of cash credit account bearing interest burden, therefore addition made by the assessing officer should be upheld. We find merit in the submissions of Revenue, therefore, we remit this issue back to the file of the assessing officer to examine whether interest free advance to the sister concern was given out of cash credit account bearing interest burden. Thus, ground no.3 raised by the assessee is allowed for statistical purposes.
Disallowance of expenditure on repairs - Revenue or capital expenditure - HELD THAT:- On perusal of the details available on record, learned CIT(A) observed that except for 2 items of expenditure being bills of Vijay engineering, Vadodara at ₹ 1,34,102/- and ₹ 1,69,298/-, other items pertained to so called road repairing. Looking to the quantum of expenditure, it emerges that the assessee had constructed the new roads in its business premises. Since, the construction of road has got enduring benefits, the cost incurred has to be capitalized. We note that ld CIT(A) allowed routine repair expenses to the tune of ₹ 1,34,102/- and ₹ 1,69,298/- respectively. Thus, ld CIT(A) has passed a reasoned and speaking order and we do not find any infirmity in the order of ld CIT(A). That being so, we decline to interfere in the order passed by ld CIT(A), therefore, we dismiss ground no. 4 raised by the assessee.
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2021 (12) TMI 1290
Assessment u/s 153C - Short Term Capital Gain - transfer within the meaning of section 2[47] - Assessee has relinquished his rights in the property - AO held that the assessee's right to transfer further in the property and earn out of it have been extinguished upon entering into of the agreement dated 21/02/2012 - HELD THAT:- Since extinguishment of right in the immovable property in the impugned property, the AO brought on the difference between purchase and sale price as short terms capital gain in the assessment year under consideration. The contention of the ld.DR is that the assessee having acquired the right in a property under an agreement with the owners and later relinquishment of his right in favour of new purchaser for the year under consideration by the assessee for relinquishing the right for the property would attract provisions of sec.45(1) of the Act, which arises to short term capital gain and as such the ld.CIT(A) order to be confirmed. But in the present case, vide an agreement dated 20/12/2012, the assessee has not received the possession of the property and the delivery of the possession of property will be given to the assessee only on payment of balance consideration of 3.5 crores out of 4.5 croers.
As per the sec.2(47)(i), transfer in relation to capital asset includes sale and exchange are realized on the asset so as to relinquish the asset. The assessee shall be in a possession of impugned property but in the present case, the property which was said to be existed or relinquished was not in the possession of the assessee and both purchase and sale agreement were unregistered agreement and it cannot be said that the assessee was in a physical possession of the property so as to relinquish the same in favour of the assessee. Being so, we are of the opinion that sec.2(47)(i) cannot be complied. Accordingly, we allow the appeal of the assessee.
Chargeability of penalty u/s 271AAB - As decided in the case of Shri Suresh H. Kerudi [2019 (10) TMI 1175 - ITAT BANGALORE] we are of the view that the penalty in the case of assessee cannot be sustained as the assessee was not a person who was subjected to search u/s. 132 of the Act and consequently the provisions of section 271AAB could not be invoked in his case. - Decided in favour of assessee.
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2021 (12) TMI 1289
Employees’ contribution to PF and ESI which has been deposited beyond the due date prescribed under relevant Act and deposited within due date by filing the return on u/s 139(1) - DR contention is that as per sec.43B(b) of the Income-tax Act and explanatory notes to Finance Act 1983, that Employees’ Contribution was never intended to be covered by sec.43B - scope of amendment - HELD THAT:- We find no merit in the argument of the 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. - Decided in favour of assessee.
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2021 (12) TMI 1288
Deduction u/s 80P(2)(a)(i) - entitlement to deduction u/s 80P(2)(a)(i) on interest income - HELD THAT:- Assessee has not claimed deduction of interest from bank under section section 80P(2)(a)(i) of the Income Tax Act, therefore, no disallowance should be made. However, the assessing officer made disallowance under section section 80P(2)(a)(i) of the Income Tax Act, on account of interest other than co-operative bank.
As the assessee society had received interest other than from Co-op. Societies which was not claimed by the assessee but disallowed by the assessing officer. Therefore, we remit this issue back to the file of the assessing officer to examine whether assessee has claimed the deduction or not? If the assessing officer finds that assessee has not claimed deduction then in that situation the assessing officer should not make addition, hence, for statistical purposes, the additional ground raised by the assessee is treated to be allowed.
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2021 (12) TMI 1287
Rejection of books of accounts - addition to the extent of 1.00 % of Gross Profit - HELD THAT:- AR simply made is submission that addition restricted by the ld. CIT(A) is on higher side and concluded his submissions in a single sentence. We find that even before ld CIT(A), the assessee only submitted that in one of the comparable companies in Hari Om Agro Products Pvt. Ltd., the ld.CIT(A) restricted addition to the extent of 0.5% and in case of Jalaram Cultivation addition was restricted to 1% by the ld.CIT(A). We find that no documentary evidence was furnished before ld CIT(A). In our view the ld. CIT(A), in a very reasonable manner restricted the addition to 1.00 % of total sale/turnover of assessee.
Even now neither the copy of order in case of Hari Om Agro Products Pvt. Ltd. nor any other comparable company or the alleged audited accounts of the assessee is placed. At the addition cost of repetition, we may note that this appeal pending appeal for more than five years, the assessee failed to bring any evidence on record to substantiate their plea that their books result should be accepted. In view of the aforesaid discussion, we do not find any reason to interfere with the order of ld. CIT(A), which we affirm. In the result the ground No. 1 & 2 of the appeal is dismissed.
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2021 (12) TMI 1286
Revision u/s 263 by CIT - addition of share premium - addition u/s 68 - CIT in second assessment/re-assessment order proposed to exercise his revisional jurisdiction - second round before the AO for de novo re-assessment, the second AO as per the direction of the First Ld. Pr. CIT conducted the reassessment proceeding - HELD THAT:- Second AO has conducted enquiry on the specific subject matter i.e. share capital and premium collected by the assessee-company (CASS items). Therefore, the finding of Second Pr. CIT that the Second AO has not conducted enquiry is incorrect and is flowing from suspicion only. And as discussed, the allegation/fault pointed out by the Second Ld. Pr. CIT that the Second AO failed to collect total facts also cannot be accepted for the simple reason that Ld. Pr. CIT has not spelt out in the impugned order what he meant by total facts or in the alternative when the assessee has discharged its onus, as required by the law in force in this AY 2012-13, then the Ld. Pr. CIT ought to have called for which ever additional documents/materials or issued summons or issued notices and collected those facts which according to Second Ld. Pr. CIT, the AO omitted to collect and then demonstrated that those actions/documents which he collected in that process gave result to a different finding of fact which will turn upside down the claim of the assessee and thus able to show that the actions/omission of AO in conducting the investigation was erroneous, which unfortunately is not the case before us.
Second Pr. CIT has not carried out any such exercise or even spelled out in his impugned order, which all documents the second AO failed to collect for considering the total facts; and even if we presume he has conducted such an exercise, then he has not been able to bring out any adverse factual finding to upset the view of Second AO. So we find no merit in the vague allegation of second Pr. CIT that the second AO has not collected the full facts necessary to decide the issue of share capital & premium.
Second Ld. Pr. CIT – 4 by passing the second revisional order dated 15.03.2019 has substituted the First Pr. CIT’s order passed u/s. 263 of the Act dated 28.03.2016 with his own order which he cannot do since the second assessment order/re-assessment of the Second AO dated 08.06.2016 was pursuant to the first revisional order of the First Ld. Pr. CIT and on the very same subject matter which inter alia was the issue flagged by CASS, which exercise since having been complied by the AO, brings into operation the doctrine of merger the subject matter i.e. share capital & premium collected by assessee company. Resultantly the second Ld. Pr.CIT, again cannot rake-up the same subject matter without the second Ld. Pr.CIT in the second revisional order spells out where the error happened to second AO as an investigator or adjudicator, which exercise the Second Ld. Pr.CIT has not done, so the second Ld. Pr. CIT cannot be permitted to again ask the AO to start the investigation in the way he thinks it proper on the very same subject on which merger has taken place by virtue of the order of First Ld. Pr. CIT. And if this practice is allowed, then there will be no end to the assessment proceedings meaning no finality to assessment proceedings and that is exactly why the Parliament in its wisdom has brought in safe-guards, restrictions & conditions precedent to be satisfied strictly before assumption of revisional jurisdiction.
We find that the Second Ld. Pr. CIT without satisfying the condition precedent u/s 263 of the Act has invoked the revisional jurisdiction (second time), so all his actions are ab initio void.
Pr. CIT has made a bald statement that the AO’s assessment order attracts Explanation 2(c) u/s. 263 of the Act. However, he failed to spell out in his impugned order how the action of AO while framing the assessment order is not in accordance to any order, direction or instruction issued by the Board under section 119 of the Act. So, the deeming fiction as envisaged in Explanation (2) u/s. 263 of the Act cannot be used to interfere with the order of AO. This action of Ld. Pr. CIT is bad for non-application of mind. - Decided in favour of assessee.
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2021 (12) TMI 1285
Penalty levied u/s 271(1)(c) - Defective notice - non specification of charge - HELD THAT:- AO has neither mentioned in the assessment order nor in his Penalty notice as to whether the penalty is initiated for concealment of income or for furnishing inaccurate particulars of income. He has also not mentioned in the order that the penalty is initiated under explanation 5 of section 271(1)(c) of the Act. We find that the only words used in the Assessment order are, “It is found that the assessee has shown additional income of ₹ 24,00,000/- in the computation of income filed with the return, hence proceedings for penalty under section 271(1)(c) of the Act are to be initiated”. Further, the Final Show-cause notice issued on 29/12/2016 alongwith the Assessment order clearly mentions the words “Whereas in the course of proceedings before me for A.Y.2014-15, it appears that you have concealed the particulars of your income or furnished inaccurate particulars of such income”, and the AO has not stricken off the not applicable words
We find that the AO has sent one printed form, wherein the specific finding of the AO as to whether he is initiating penalty for concealment of income or for furnishing inaccurate particulars of income is not mentioned. Further, the AO has also not mentioned that he intends to levy penalty under explanation 5 of Section 271(1)(c) and hence the said penalty U/s. 271(1)(c) is not justified and is directed to be deleted. Therefore, we direct to the delete the same. - Decided in favour of assessee.
Penalty levied u/s 271AAB - Undisclosed income - HELD THAT:- Assessee has been able to explain the source of the alleged ‘undisclosed income’ may be relevant for final imposition of the penalty, however, for initiation of the penalty proceedings, the provisions of section 271AAB are self contained and are not dependent upon commencement or finalization of the assessment proceedings. It is further pertinent to note here it is not mandatory for the AO to invoke provisions of section 271AAB of the Act in each every case of levy of penalty pursuant to search action. Assessee has neither made any surrender of any undisclosed income during the search action nor the penalty has been initiated on the basis of undisclosed income found during such search action. In view of the above factual position, the impugned order of the AO imposing the penalty on the assessee under section 271AAB of the Act does not pass the mandate of the provisions of section 271AAB of the Act, therefore, the same being bad in law is hereby quashed and we direct to delete the penalty levied U/s. 271AAB - Decided in favour of assessee.
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2021 (12) TMI 1284
Addition u/s 56(2)(viib) - difference between the fair market value (FMV) of the shares and the value actually received - HELD THAT:- FMV of the shares as on 15/07/2013 should have been determined on the basis of balance sheet drawn up on 31/03/2012 instead of 31/03/2013 cannot be accepted not being either fair or proper. Moreover, the definition of 'balance sheet' given in Clause (b) of Rule 11U for the purpose of sub-rule (2) of Rule 11UA contemplates the balance sheet of the company as drawn up on the valuation date which has been audited by the auditor of the company clearly suggests or indicates that the balance sheet referred to therein need not be available on the date of valuation simply because the balance sheet as drawn up on the valuation date and audited by the auditor of the company cannot be practically available as on the date of valuation itself.
We are, therefore, of the considered view that the balance sheet drawn up as on 31/03/2013 was rightly taken by the Assessing Officer as well as the ld. CIT(A) for the determination of the FMV of the shares sold by the assessee on 15/07/2013 as per Clause (b) of Rule 11U for the purpose of sub-rule (2) of Rule 11UA being the balance sheet drawn up immediately preceding the valuation date. In that view of the matter, we uphold the impugned order of the ld. CIT(A) on this issue and dismiss this appeal of the assessee.
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2021 (12) TMI 1283
Penalty u/s. 271AAB - commodity profit as falling in the ken of the 'undisclosed income' - HELD THAT:- We note that when the search took place on 13.12.2012 in the assessee's premises, the commodity trading which is itself is speculative transaction has been found to be recorded in the 'other document' (seized & marked as SA/1) even though not in the books of account of the assessee, which has been retrieved from the assessee's premises and the assessee during search declared u/s. 132(4) ₹ 45.50 lakhs (₹ 45,100/- from commodity trading profit and miscellaneous income of ₹ 4,40,000/-) and filed return of income pursuant to notice u/s. 153A of the Act which includes the total amount of ₹ 63,50,320/- has been declared and the same has been accepted in toto by the AO.
We note that since the penalty u/s. 271AAB of the Act is levied on the amount of ₹ 45,50,000/- and since the same has been found at the time of search and which has been found recorded in the 'other document' marked by the search team as SA/1, we are of the considered opinion that for the purpose of 271AAB of the Act, this amount from SA/1 cannot be termed as 'undisclosed income' as per the definition given under Section 271AAB of the Act (supra) and therefore penalty u/s. 271AAB of the Act cannot be levied in this case. - Decided in favour of assessee.
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2021 (12) TMI 1282
Disallowance of employees' contribution made to the respective funds of the Government under PF & ESI Act - assessee has not remitted the employees' contribution on the due date as prescribed by the PF & ESI Act, thus the contribution made belatedly cannot be allowed - Scope of amendment - HELD THAT:- Respectfully following the decision of M/s. Lumino Industries [2021 (11) TMI 926 - ITAT KOLKATA] we are inclined to allow the appeals of the assessee and direct the A.O to delete the addition and hold that the Amendment brought in Finance Act 2021 w.e.f. 01.04.2021 by inserting an Explanation to section 36(1)(va) and section 43B of the Act is prospective in nature in nature and would apply from AY 2021-22 onwards and therefore, the amendment is not applicable to these assessment years (AYs 2014-15, 2017-18 & 2019-20) under consideration.- Decided in favour of assessee.
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