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Income Tax - Case Laws
Showing 141 to 160 of 782 Records
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2022 (11) TMI 1246 - ITAT MUMBAI
Excess depreciation claimed - information received from the Investigation Wing and the inference are based on actual findings and evidence gathered during the course of survey action - to support the pricing of cost of acquisition of the assessee, the assessee had relied upon TEV study report of D.K.Jain and Co., who is an independent technical export appointed by State Bank of India and which report has been furnished to the Revenue in the past and has been consistently accepted - CIT(A) observed that as per the provisions of Section 43(1) of the Act, the actual cost means the actual cost of assets to the assessee reduced by that portion of the cost thereof, if any, as has been met directly or indirectly by any other person or authority - HELD THAT:- We find that the ld. CIT(A) had duly applied the provisions of Section 43(1) of the Act which defines actual cost. We find that the ld. CIT(A) had categorically observed that Rs.20,00,00,000/- is the actual cost of acquisition of FFS Machines for the assessee paid to M/s. Anitas Exports Pvt. Ltd. This factual finding and the application of provisions of Section 43(1) of the Act has not been challenged by the Revenue before us. Hence, there is absolutely no merit in the grounds raised by the Revenue before us. In any case, the issue in dispute is squarely covered by the decision of the Hon’ble Jurisdictional High Court in the case of CIT vs. Karma Energy Ltd.2015 (6) TMI 216 - BOMBAY HIGH COURT]
We hold that the ld. CIT(A) had correctly addressed the issue in dispute in favour of the assessee.
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2022 (11) TMI 1245 - ITAT MUMBAI
Unexplained cash deposits u/s 69A - assessee has made cash deposits into bank account during demonetization period - HELD THAT:- The source of cash deposits have been explained from the withdrawals made by him from his capital account from partnership firm.
Assessee had opening balance of Rs. 21,81,141/- and then further withdrawals of Rs. 3,57,920/-. Thus, there was clear cut cash available in the books amounting to Rs. more than 21,41,000/- which was deposited in the bank account. Thus, It cannot be held that the source of cash deposits remain unexplained and accordingly the addition as sustained by Ld. CIT(A) is deleted. Appeal of the Assessee is Allowed.
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2022 (11) TMI 1244 - ITAT MUMBAI
Unexplained cash loan and unexplained interest expenditure - Addition based on excel sheet found in search action carried out - HELD THAT:- As in terms of section 292C of the Act that if any document is found in possession or control of any person in the course of search action under section 132 of the Act, then it is presumed that said document belongs to such person and contents of such documents are true. In the instant case, the ledger account titled as “Kalpesh Shah A/c” has been found from the possession of Bhoomi Bhumi group and therefore in terms of section 292C, it is presumed that same belongs to Bhoomi Group. This presumption is rebuttable and onus to rebut is on the person from whom possession said document has been found.
Nothing on record shows that any enquiry from M/s JHP securities had been carried out by the Assessing Officer or by the CIT(A) to ascertain the connection of the assessee with JHP securities Ltd and Bhoomi Group, though the Assessing Officer reopened the assessment on one of the information that share transactions worth more than Rs.1.5 crore were carried out by the assessee quoting a duplicate PAN. Thus, there is no evidence on record, which could establish that assessee is the same Kalpesh Shah, the ledger account has been titled in whose name.
CIT(A) has noted that Mr. Akshay Doshi owned the noting recorded in excel sheet, as his own undisclosed income, therefore the Assessing Officer is not justified in making further addition in the hands of the assessee.Assessing Officer did not bring any record or evidence to show that assessee carried out any property transactions with Bhoomi Group.
The addition in the case has been made by the Assessing Officer under section 68 of the Act as unexplained cash credit, but we find that in the case source and nature of the transaction is clear from the seized document itself, nature of which is cash loan transactions and source of said loan is Bhoomi group. - Decided against revenue.
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2022 (11) TMI 1243 - ITAT AHMEDABAD
Unexplained cash deposit for settling credit card bills - unsatisfactory explanation being given by the assessee of the source of cash so deposited - HELD THAT:- The assessee had explained source of cash deposits as being from his cash on hand, withdrawals made from his bank account in ICICI Bank and SBI Bank. The CIT(A), NFAC surprisingly took no cognizance of this explanation of the assessee at all, and upheld addition for the reason that in assessment proceedings the assessee had given some other explanation of source, as being paid by his friends, who had used his card and this present explanation furnished by the assessee was not sufficient since the assessee had given no valid reason as to why he kept so much in cash, when he was holding bank account.
As long as the explanation of the assessee is duly substantiated, the same has to be accepted notwithstanding the fact that a different explanation was offered by the assessee in an earlier point of time. What is relevant is that the assesses explanation is duly substantiated with evidence. Whichever explanation fulfils this criteria is undoubtedly the correct and valid explanation for all purposes.
Any other explanation of the assessee is of no relevance. If the assessee is able to demonstrate through evidence, in the appellate proceedings, the source of cash deposits,the same needs to be considered, examined, verified and only then a finding be given on the same. It could not be rejected or dismissed solely for the reason that some other explanation was given in the assessment proceedings.
As for the other reason given by the ld.CIT(A) for dismissing assesses explanation that there was no reason for the assessee to keep so much cash with him, thus find the same to be also irrelevant. It is upto the assessee to keep how much cash as he requires, hence, this is not a criterion for making any disallowance in the income tax proceedings.
How much cash an assessee keeps cannot be reason for dismissing the explanation regarding payment made in cash. In the present case, the assessee having explained the cash deposits as withdrawals from his bank account, CIT(A) having not found any infirmity in this explanation of the assessee, we see no reason for upholding the addition - Appeal of assessee allowed.
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2022 (11) TMI 1242 - ITAT KOLKATA
Addition u/s 68 - bogus LTCG - bogus share application money including premium - HELD THAT:- Here is a clear connection between both the share applicant company and the assessee company and, therefore, the transaction of making investment in equity share of the assessee company cannot be regarded as ingenuine. We, therefore, is of view that the assessee has successfully explained the identity and creditworthiness of M/s. KHPL and genuineness of the transaction carried on by it in the year under appeal. We would like to further make it clear that our this finding about the alleged transaction is only on the basis of the facts in the year under appeal and the same should not be taken as a precedence for any subsequent year unless the facts of the particular year/case indicate so. Therefore, this ground of appeal on merit filed by the assessee is also allowed.
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2022 (11) TMI 1241 - ITAT RAJKOT
Revision u/s 263 - unverified URD purchases - As per CIT no evidence submitted by the assessee or culled out by the AO that the 10% of URD expenses were made from commission agent - AO merely on the basis of assumption made addition of commission expenses instead of making the addition of entire unverified or non-genuine URD purchases - HELD THAT:- The assessee before the investigation wing of the Income Tax Department has also made a detailed reply - Thereafter, the proceedings were initiated under section 147 of the Act by issuing notice u/s148 - Finally the assessment was framed by the AO under section 147 of the Act after considering all the facts with respect to URD purchases which can be verified from the assessment order available on record. Thus it can be inferred that there was due application of mind of the AO while framing the assessment under section 147 - Accordingly, we are of the view that the assessment order on hand cannot be held as erroneous insofar prejudicial to the interest of revenue on account of non-verification as alleged by the CIT u/s 263 of the Act.
Whether the purchase shown by the assessee represents the bogus transaction in the absence of supporting documents? - We note that whatever purchases are made by the assessee, become part of stock in trade and subsequently sold to the parties. Thus the impugned amount of purchases were either shown by the assessee in the stock in trade in the year under consideration or sales were made against such purchases. The learned CIT has not disturbed either the stock in trade of the purchases
The entire exercise becomes tax neutral, in the sense that if the purchases are disbelieved and corresponding closing stock and the sale of the subsequent year should also be disbelieved on the same parameter. As such the revenue cannot take different stand with respect to the common transactions having impact on purchases, closing stock and the sales.
All these transactions are interconnected and linked with each other. If any of the transaction is doubted then corresponding transaction should also be carrying same shadow of doubt - part of the transactions cannot be accepted as genuine and part of the transaction cannot accepted as bogus. Either the entire transaction to held as bogus or should be treated as genuine without making any cherry pick-up. Thus, for this reason as well, the assessment order cannot be held either erroneous or prejudicial to the interest of revenue.
Contention of Assessee that the order of the AO got merged the order of the learned CIT-A is not agreeable - It is for the reason that the issue before the learned CIT-A was with respect to the deduction of the TDS. There was no issue with respect to the purchases from the unregistered parties. Thus, the issue raised by the learned PCIT with respect to the addition for the URD purchases wasn’t other before the learned CIT-A. I
Thus we hold that the order of the assessment does not suffer from any infirmity on account of non-verification as alleged by the CIT u/s 263 - Accordingly we quash the order framed under section 263 - Appeal of the assessee is allowed.
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2022 (11) TMI 1240 - ITAT LUCKNOW
Treatment to rental income - income from other sources - ownership of the property - distribution of income by assessee amongst the co-owners - AO held that the claim of the assessee that property was owned by other family members was not substantiated and therefore, he assessed the income as ‘income from house property’ in the hands of the assessee and allowed deduction u/s 24 of the Act and made the addition in respect of rest of the income - HELD THAT:- The name of Shri Paras Mehrotra, Shri Vineet Mehrotra, Smt. Asha Mehrotra and Shri Amit Mehrotra and Ashish Mehrotra are appearing in this sale deed as owners of the property therefore, the finding of the Assessing Officer that no evidence was filed before him, substantiating the ownership of the property, is wrong. CIT(A) has also not considered all the submissions of the assessee in right perspective.
Since the income received by the assessee has been distributed amongst the co-owners of the property and the co-owners had declared the income in their respective income tax returns, the non allowability of deduction to the assessee u/s 57 will amount to double taxation of the same income which is not permissible. The receipt of income in the hands of the assessee had only occurred due to the fact that the assessee had entered into an agreement with United Spirits for letting out the godown but merely letting out the property, belonging to others, by one of the family members, does not entitle the assessee to earn the rental income.
The rental income received by assessee in fact belongs to these persons who are owners of that part of the property. We direct the Assessing Officer to allow the deduction to the assessee u/s 57 of the Act as the distribution of income by assessee in this case is equivalent to amount spent for earning of the income which is allowable deduction u/s 57 - Appeal of the assessee stands allowed.
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2022 (11) TMI 1239 - ITAT VARANASI
Reopening of assessment u/s 147 - Unexplained bank deposits - assessee contended that the assessee is an Insurance Agent received premium from his clients and same were deposited in the bank account and later withdrawn for making of payment of premium - HELD THAT:- The name appearing in the list of policy holders recorded in the diary are not matching with the names of the persons who have issued the receipts. Further, the receipts are in the nature of certain amount received by those persons and not the amount given or deposited by those persons in the bank account of the assessee.
AO reproduced one of the receipts and all the receipts are identical in language except the name and amounts and dates which are separately filled up. Therefore, neither the list of the policy holders nor the receipts are supporting the claim of the assessee that the cash in the bank account of the assessee was deposited by the policy holders for payment of the policy premium.
The assessee has not produced a single document showing the payment of premium on behalf of the any of the policy holders. The assessee has not filed a single receipt issued by the insurance company to show that the assessee paid the premium of the amount which was received in the bank account. Therefore, the facts analyzed by the CIT(A) in the impugned order are found to be correct and proper. Accordingly, No infirmity or error in the order of the CIT(A), the same is upheld.Appeal of the assessee is dismissed.
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2022 (11) TMI 1220 - BOMBAY HIGH COURT AT GOA
Stay of demand - petitioner had averred a categorical case of financial hardship - AO rejected the petitioner's application of a stay on the demand, without assigning any reasons - Principal Commissioner praying for stay of the demand, reiterating the specific grounds in that regard contending that the Assessing Officer has not applied his mind to the aspect of financial stringency and therefore the demand needs to be stayed - HELD THAT:- On perusal of the orders by which the stay of the demand has been rejected by the Assessing Officer as also by the Principal Commissioner of Income tax, we may observe that in the petitioner's application the petitioner had averred a categorical case of financial hardship. AO rejected the petitioner's application of a stay on the demand, without assigning any reasons.
The petitioner accordingly approached the Principal Commissioner praying for stay of the demand, reiterating the specific grounds in that regard contending that the Assessing Officer has not applied his mind to the aspect of financial stringency and therefore the demand needs to be stayed.
The fate of the petitioner before the Principal Commissioner was not different. Although other issues on merits are considered by the Principal Commissioner, we find that there are no reasons in the context of financial hardship, in both the orders passed by the Principal Commissioner being orders dated 11.08.2021 and order dated 29.12.2021.
The case of the petitioner on financial stringency is not at at all considered in the perspective it ought to have been considered by the Principal Commissioner, after applying his mind to the specific plea as taken by the petitioners in that regard. Such plea was required to be decided by considering the facts and figures from the materials as placed on record, so as to determine by giving reasons as to whether the plea was at all genuine and acceptable.
As clearly seen from the decision cited by Mr. Pardiwala in the case of Mumbai Metropolitan Region Development Authority v/s. Deputy Director of Income -tax (Exemption- 1) [2014 (12) TMI 15 - BOMBAY HIGH COURT] that this Court considering the earlier decisions on such issue as noted by us, has held that the aspect of financial hardship is one of the grounds which is required to be considered by the authority concerned and the authority concerned should briefly indicate whether the assessee is financially sound and viable to deposit the amount or the apprehension of the revenue of nonrecovery later is correct warranting deposit. We find that at this stage such test is not applied in passing of the impugned orders by the Principal Commissioner who has simplicitor referred to the Assessing Officer's report in rejecting stay on deposit of the tax.
Principal Commissioner of Income Tax is directed to hear the petitioner(s) on the stay application on the specific plea of the petitioner in regard to financial stringency and after granting an opportunity of a hearing to the petitioner(s), pass an appropriate order on such issue. Let such exercise be undertaken as expeditiously as possible and in any case within 2 months from today.
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2022 (11) TMI 1219 - ITAT DELHI
Unexplained Purchases - non compliance of notices u/s 133(6) to various parties for verification of purchases - AO made addition of the total purchases made by the assessee holding that the purchases were unverifiable - HELD THAT:- As the fact of production of the parties by the ld. CIT(A) in the presence of the AO has not been in dispute. The fact that the parties supplied milk to the assessee company could not be disputed. AO has also held that milk purchases were made not from farmers but through the intermediaries of the milk traders, thus contradicted the fact that the purchases remain unverifiable.
AO resorting to disallowance of entire purchases is bad in law. Since, the identity, genuineness and supply-worthiness of all the parties has been proved by the way of statement recorded u/s 131 of the Act and all the suppliers were duly paid, we refrain from interfering with the order of the ld. CIT(A) on this issue. Accordingly, Ground No. 1 & 2 of the Revenue’s Appeal are dismissed.
Disallowance Section 40A(3) - cash payments made to milk suppliers - AO held that the provisions of Rule 6DD(e) were not applicable to the facts of the assessee’s case - HELD THAT:- CIT(A) has gone to the root cause of the disallowance u/s 40A(3) and owing to the genuineness of the purchase, provisions of the rules and dates/days on which the payments have been made and the purpose thereof, has cogently held that the provisions of Section 40A(3) are not attracted in this case, the decision of which, we decline to interfere with the order of the ld. CIT(A). As a consequence, the adhoc estimation @ 0.23% of the sales made by the ld. CIT(A) is also liable to be deleted.
Ad-hoc estimated disallowances - AO made ad-hoc disallowance of 30% on the power fuel, packing material and repairs & maintenance and on administrative & distribution expenses and also on finance charges - CIT (A) restricted it to 10% on adhoc basis and deleted the disallowance made on financial charges - HELD THAT:- We hold that no disallowance is called for on financial charges owing to submission of complete documentary evidences. Hence, the order of the ld. CIT(A) deleting the financial expenses is affirmed. With regard to the ad-hoc disallowances on account of transport and administrative expenses, since they are ad-hoc in nature and indistinct rather than a generalized solution adaptable to collateral instances, we restrict to disallowance to 5% on ad-hoc basis. Accordingly, the Revenue’s Ground are partly allowed.
Deemed Dividend u/s 2(22)(e) - Common shareholders in company advancing loans - on perusal of annexure 12 of the balance sheet, assessee company has to pay amount as advance taken from said concern and Shri Malook Nagar was having 84.11% share holding in M/s AIMS Promoters Private Limited and 66.81% in the assessee company - CIT-A deleted the addition - HELD THAT:- The assessee company did not hold any shares in the AIMS Promoters Pvt. Ltd. Therefore, the assessee Company neither the registered nor the beneficial share holders of M/s AIMS Promoters Pvt. Ltd. Thus we do not find any infirmity or error committed by Ld. CIT(A) in deleting the addition on account of deemed dividend u/s 2(22)(e) of the Act.
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2022 (11) TMI 1218 - ITAT KOLKATA
Bogus purchases u/s 69C - receipt of information from DGIT(Inv.), Mumbai that the assessee company had received bogus entry in the form of purchases from three shell companies - CIT- A deleted the addition - HELD THAT:- CIT(A) has categorically discussed the evidences furnished by the assessee in respect of each of the party and has recorded that the assessee was maintaining proper books of accounts including all details such as stock register, bills and vouchers in respect of manufactured and traded goods and further that the assessee had furnished details of purchases together with quantity rate and value.
The payments were made through banking channel. It is not the case of the Revenue that the assessee had made purchase out of his unaccounted money as the purchases were made through account payee cheque/banks. The sales also have not been doubted by the AO. Even, as observed above, the diamond being of very particular quality, weight, clarity etc. and in the facts and circumstances of the case have also not been doubted to be the purchase from grey market. In view of this, we do not find any infirmity in the order of the ld. CIT(A)
Addition of unsecured loans and advances u/s 68 - CIT- A deleted the addition - HELD THAT:- We note that the ld. CIT(A) has given details of the documents furnished by the assessee in respect of each of the party and thereby has arrived at a conclusion that the assessee has duly established the identity and creditworthiness of the parties and genuineness of the transaction. Even the ld. CIT(A) has noted that subsequently the said loan has repaid by the assessee to the concerned parties.
Since the CIT(A) has not only discussed in details the various evidences proving the identity, creditworthiness of the parties and genuineness of the transaction but also the fact that assessee has subsequently repaid the loan amount to the concerned parties and TDS was also deducted on the interest paid to the parties on such loan amount. In view of this, we do not find any reason to interfere with the order of the CIT(A) on the above issue also. This ground of the Revenue is also dismissed.
Disallowance u/s 14A - Purpose of investment made - CIT- A deleted the addition - HELD THAT:- Investments were made by the assessee not for the purpose of earning of exempt income, rather the investment, in question, was made in immovable property, therefore, the provisions of section 14A were not attracted. CIT(A), therefore, rightly deleted the addition in respect of disallowance made by the AO in relation to the investment in immovable property. Therefore, there is no merit in this ground of the Revenue and the same is accordingly dismissed.
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2022 (11) TMI 1217 - ITAT KOLKATA
Addition u/s 68 - unexplained cash credit received during the year - creditors did not respond at all to the notices issued u/s 133(6) - HELD THAT:- Liabilities were incurred as trading liabilities with corresponding purchases and therefore can not be subject matter of addition u/s 68 of the Act as the provisions of section 68 of the Act are applicable to the credits in the books of accounts of the assesse which could not be explained with respect to identity , creditworthiness and genuineness. The case of the assesse finds support from several decisions of the coordinate benches namely i) Nallam Manium textiles P Ltd [2012 (7) TMI 390 - ITAT, CHENNAI], ii)Sugam Construction (p) Ltd [2013 (2) TMI 71 - ITAT AHMEDABAD] and iii) Sharda commercial Co. Ltd. Vs ITO [2014 (1) TMI 1924 - ITAT KOLKATA].Considering these facts and circumstances and the ratio of law laid down by various Courts of law as discussed hereinabove , we dismiss Ground Nos. 1 & 2 of the revenue.
Addition u/s 41(1) - Validity of order of the ld. CIT(A) on the ground that the ld. CIT(A) has co-terminus powers with the Assessing Officer and could have enquired the matter himself instead of deleting the addition - HELD THAT:- We find that the revenue has accepted that the provisions of Section 68 are not applicable. The ld. A/R submitted that at most Section 41 of the Act could have been resorted to, but in the present case the same is also not applicable as there was no cessation of liability. Thus we do not find any merit in the contentions of the ld DR that the ld CIT(A) have the co-terminus power and could have enquired the issue himself for the reason that these liabilities have not ceased to exist and even the ld CIT(A) could not have invoked section 41(1) to these liabilities. Accordingly this ground of the revenue is dismissed as devoid of merit and is dismissed.
Addition u/s 56(2)(vii) in consonance with the provisions of Section 43CA - assessee had purchased immovable properties for a consideration the stamp value whereof is much higher and thus, there was difference - purchase of property by the assessee the value whereof is less than the market value - HELD THAT:- We observe that the assessee has purchased a land for consideration of Rs.2,05,00,000/- whose stamp value as per the stamp valuation authority was Rs.2,21,97,688/- and thus there is a difference of Rs.16,97,688/- which was added by the AO to the income of the assesse u/s 43CA of the Act. We note that this transaction of purchase done by the assessee has much higher stamp value. We have also perused the provisions of Section 43CA of the Act and considered the rival contentions on this issue and are of the considered view that provisions of Section 43CA of the Act are not applicable to the purchase of property but section 43CA of the Act deals with the case where the sale value of property held as stock-in-trade is sold during the year at a price lesser than stamp value. Accordingly, we uphold the order of the ld. CIT(A) on this issue by dismissing the ground raised by the revenue.
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2022 (11) TMI 1215 - CALCUTTA HIGH COURT
Addition u/s 41(1) - assessee’s liability to the tune to be a case of cessation of liability - HELD THAT:- Undisputed factual position which was rightly taken note of by the learned tribunal and in particular, noting that there is no dispute about the assessee to have been carrying forward the impugned liability in its books for a time span of almost three decades and the department did not raise any issue in all the intervening assessment years in question.
Tribunal also noted that the assessing officer after the matter was remanded to him had issued summons to six directors of the concerned entities on test check basis, and four out of the six directors had appeared in response to the summons. The statements were recorded. Tribunal also notes that the creditors have given written reply in response to the summons reiterating their liability as also the fact that the assessee had settled some of the creditors even after 31.03.2001. Thus the assessee has fulfilled the duty cast upon them to provide evidence that the liability exist at the end of the year. The duty on AO is to prove that the liability has ceased to exist which in our considered view has been miserably failed to be established.
We find that the learned tribunal rightly declined to interfere with the orders passed by the CIT(A) by dismissing the appeal filed by the revenue.
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2022 (11) TMI 1214 - CALCUTTA HIGH COURT
Assessment u/s 143(3) r.w.s. 144B - violation principles of natural justice as AO failed to issue notice as required to be issued under Section 144B (1)(xii) (b) - whether existence of an alternate remedy under the relevant statute will be a total bar for the exercise of jurisdiction under Article 226 of the Constitution of India? - HELD THAT:- This Court has discretion to entertain or not to entertain a writ petition and one of the exceptions to the rule of alternate remedy is in cases where there has been violation of principles of natural justice. See Radha Krishan Industries Vs. State of Himachal Pradesh & Ors. [2021 (4) TMI 837 - SUPREME COURT]
What are the statutory requirements? - The assessment unit shall, after taking into account all the relevant material available on record, has two options, namely, (a) to prepare in writing an income or loss determination proposal, where no variation prejudicial to the assessee is proposed and send a copy of such income or loss determination proposal to the National Faceless Assessment Centre (for short, “NFAC”). The second alternative is as mentioned in clause (b) is to issue a show cause notice stating variations prejudicial to the interest of the assessee proposed to be made to the income of the assessee and calling upon him to submit as to why the proposed variation should not be made and serve such show cause notice on the assessee through NFAC. Admittedly, clause (b) of Section 144B (1)(xii) has not been followed in the case on hand.
In Sardar Co-op. Credit Society Ltd. Vs. Additional/Joint/Deputy/Assistant Commissioner of Income-tax [2022 (4) TMI 1184 - GUJARAT HIGH COURT] it was held that the obligation is on the assessing officer to serve a show cause notice calling upon him to show cause as to why the proposed variation should not be made failing which the assessement would be non-est.
Thus in the absence of such a show cause notice, the assessment order has to be held in violation of principles of natural justice and in violation of the statutory provision and therefore, non-est. Consequently, the writ petition is allowed and the assessment order dated 8th September, 2022 is set aside and the matter is remanded to the assessing officer for a fresh decision.
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2022 (11) TMI 1213 - MADRAS HIGH COURT
TDS u/s 194N - deduction of tax on cash withdrawal - Primary Agricultural Co-operative Credit Society - case of the petitioners that there should be no deduction at all, that could be effected from the withdrawals made by them from the banks - HELD THAT:- An avenue provided for a recipient falling outside the scope of the exceptions, to seek exemption from the application of Section 194N and hence, if at all the petitioners believe that they qualify for the exemption, they may seek redressal under the in-built statutory mechanism provided as above, if they so choose.
To a query from the Court, as to who would constitute the specific authority before whom such prayer was to be made, the respondents have reported written instructions from the Commissioner of Income Tax (TDS), Coimbatore stating thus: ‘As per business allocation rule, Central Government for tax purposes is Finance Minister of India. Hence, any request may be in the name of the Finance Minister with copy to CIT ITA CBDT North Block who would process such requests.’ The petitioners may thus approach the competent authority in the Government seeking relief from the application of Section 194N of the Act.
The submissions in relation to the grant of deduction under Section 80P are premature as is reliance upon the judgement in the matter of Eli Lilly [2009 (3) TMI 33 - SUPREME COURT]. Eligibility to deduction must be tested by the authorities in the course of assessment as it involves the determination of several questions of fact. The society is always entitled to, in the return of income filed by it, seek credit of the taxes attributable to the income returned by it and any excess deduction, if the stand of the societies is accepted in assessment, would have to be refunded to them.
Ld. Judge also proceeds to state that it was open to the banks to establish before the assessing officers that the sums withdrawn by the member societies did not represent income in their hands, after considering the evidence available in that regard. In my considered view, the aforesaid examination can be carried out only in the instance of the societies and not at the instance of the banks, who are payers, with statutory responsibility to deduct.
The challenge to the impugned Circulars cannot be entertained as the District Central Cooperative Banks have, therein, merely sought to bring to the notice of the petitioner societies the statutory provisions in regard to deduction of tax, enjoining that they adhere to, and comply with the same, scrupulously. There could be no fault attributed to R2 Banks in this regard.
The challenge to the Circulars fail and these Writ Petitions are dismissed both on the ground of maintainability as well as merits.
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2022 (11) TMI 1212 - ALLAHABAD HIGH COURT
Stay of demand - direction for deposit of 20% of the disputed amount of tax - HELD THAT:- In the instant case, the Deputy Commissioner of Income Tax while passing the order dated 30.08.2022 had solely relied upon the circular of 2016, which was partially modified in the year 2017 and directed for deposit of 20% of the disputed amount of tax and rejected the stay application while the Principal Commissioner of Income Tax proceeded to consider the audit report and balance sheet partially and considering the assets while ignoring the liability part had rejected the stay application holding the financial position of the petitioner to be strong enough and directed for depositing 20% of the disputed amount of tax.
This Court finds that while considering the stay application, neither the Deputy Commissioner of Income Tax nor Principal Commissioner of Income Tax had considered three basic principles i.e. prima facie case, balance of convenience and irreparable loss, as held by Delhi High Court in Tata Teleservices Limited [2022 (3) TMI 1403 - DELHI HIGH COURT]
In the result, the writ petition is partly allowed. The orders impugned are hereby set aside and the matter is remitted back to the Deputy Commissioner of Income Tax, Circle 3(1)(1), Muzaffarnagar for consideration of stay application of the petitioner afresh.
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2022 (11) TMI 1211 - KARNATAKA HIGH COURT
Undisclosed income - on-money - retracted statement - Addition based on seized material documents - as in respect of the lands purchased in bits and pieces, the cost of acquisition of land under different heads has been described which includes cost of land, brokerage, legal expenses, etc. - HELD THAT:- As assessment orders of the purchasers prima facie show that the purchasers had offered the income which they had earned by transferring the lands to the Company for formation of Golf Club and Villas and declared their capital gains and paid taxes. Though it is recorded by Assessing Officer that the order is passed without prejudice to the assessment proceedings of assessee herein, the orders are passed u/s143(3) which is a substantive assessment.
Even if said orders are duly considered as 'without prejudice to the assessment proceedings' in respect of the assessee herein, we have noted that, there was no incriminating material seized, which could suggest that assessee had paid any 'on-money'. In substance AO has relied upon only two circumstances, firstly, the seized documents, which do not bear any signature, secondly, on the statement of the original owners, wherein the original owners have confirmed on oath the actual value of the land. One of the purchasers has stated on oath that a Police complaint was given against him and therefore, he had given statement before the Income Tax Authorities and subsequently retraced the same. In the circumstances, the assessment order passed based on seized material and the statements, which have been redressed, is perverse.
We are of the considered view that AO had no material to hold that the assessee had paid any 'on-money'. Hence, order passed by the AO, CIT(A) and ITAT are not sustainable. Since the assessment order is not sustainable, it is needless to mention that the current proceedings are not tenable. Decided in favour of assessee.
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2022 (11) TMI 1210 - ITAT BANGALORE
Exemption u/s 11 - Claiming of benefit of exemption for the assessment years which were pending on the date of registration u/s 12A - intimation u/s.143(1) denying benefit of deduction under section 11 - scope of powers of CPC - HELD THAT:- Where the registration has been granted to the Trust under Section 12AA, then, the provisions of Sections 11 and 12 shall apply in respect of any income derived from property held under Trust of any assessment year preceding the aforesaid assessment year, for which assessment proceedings are pending before the AO as on the date of such registration. The objects and activities of such Trust remain the same for such preceding assessment year.
The intimation u/s.143(1) does not spell out the reason as to why the benefit of Sec.11 of the Act was not given to the Assessee for AY 2018-19. The submissions of the parties were made on the premise that it is only for want of registration u/s.12A of the Act, that the benefit of exemption u/s.11 was not given to the Assessee. In terms of the 1st proviso to Sec.12A (2) of the Act, the action of the revenue authorities cannot be sustained.
DR made reference to CBDT Circular No.1/2015 dated 21.1.2015 wherein the purpose of the first proviso has been explained as a measure to remove hardship in genuine cases, where the application for registration u/s.12A is unduly delayed by the revenue authority and such facts do not exist in the present case.On a plain reading of the proviso, such condition for claiming the benefits of the proviso has not been laid down therein. Hence, the argument advanced by the learned DR cannot be accepted.
In the light of the fact that benefit of registration granted u/s.12A of the Act from AY 2019-20, would be available for earlier years also that are pending as on the date of grant of registration as per the 1st proviso to Sec.12A(2) the denial of benefit of exemption u/s.11 on the ground of absence of registration u/s.12A of the Act, cannot be sustained. We therefore hold that the adjustment made in the intimation u/s.143(1)(a) of the Act, cannot be sustained as it is beyond the scope of powers u/s.143(1)(a) of the Act and the adjustment so made is directed to be deleted. The appeal of the Assessee is accordingly allowed.
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2022 (11) TMI 1209 - ITAT MUMBAI
Reopening of assessment u/s 147 - reasons to believe - Whether reopening was made based on incorrect assumption of fact as is evident from the reasons recorded? - HELD THAT:- From the perusal of the entire reasons recorded by the ld.AO for reopening the assessment, we have absolutely no hesitation to hold that the entire reopening had been triggered by AO based on complete incorrect assumption of fact that no return of income was filed by the assessee for the A.Y. 2011-12, wherein a financial transaction of purchase of property was made.
The letter to assessee by the AO calling for income tax return based on report received in the non-filers list was never issued by the AO for A.Y. 2011-12 i.e. the year under consideration before us. Factually it was issued only for A.Y.2010-11 as stated supra. Hence, we hold that the reasons recorded for reopening has been made without application of mind by the ld. AO. Now the moot question that arises for our consideration is as to whether the reopening which is made based on incorrect assumption of fact and non-application of mind by the ld. AO could be held to be valid.
No infirmity in ld. CIT(A) quashing the re-assessment proceedings. Hence, the ground raised by the Revenue challenging the validity of quashing the re-assessment is dismissed.
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2022 (11) TMI 1208 - ITAT DELHI
Rectification of mistake u/s 154 - Credit for TDS deducted on sale of property - short TDS relates to sale of a property by the Assessee, being residential apartment - Correct AY - assessee claimed the TDS in the AY 2016-17 relevant to FY 2015-16 in which the transaction took place - HELD THAT:- TDS has been deducted and deposited, however, the credit originally appeared in the AY 2016-17 and later shifted to AY 2014-15. The Deductor has not corrected the TDS returns submitted by him, which could have been done and should have been done by the AO or the matter should have been referred to Jurisdictional AO to call the Deductor and direct him to correct the TDS return.
CIT(A) has not considered the detailed submissions of the Assessee wherein it was clearly established that amount of TDS has been deducted, wrongly shifted to AY 2014-15, when the transaction related to sale of property made in FY 2015-16 (AY 2016-17). The entire payment was received in the FY 201516 and the TDS was deducted as well in FY 2015- 16, and the Deductor deposited the TDS in that year.
Challan counterfoil dated 14.12.2015 issued by the bank also shows that the TDS deposited is for AY 2016-17.
TDS return in Form 26QB as downloaded also shows that the return is for the AY 2016-17 (FY 2015-16) however the date of payment and date of deduction are erroneously and wrongly mentioned as 01.06.2013 instead of 10.12.2015, the date of transaction on which the payments were made by the Deductor through RTGS on the same day i.e. 10.12.2015 and the sale deed also registered on the said same date that is 10.12.2015.
Assessee continued to follow up with the deductor of tax to submit correction statement for correcting the year of the TDS for due appearing in the relevant and applicable Assessment Year, i.e. 2016-17. Due to continuous persuasion the deductor, Shri Umesh Khaturia, the rectification was done and the same now appears for the AY 2016-17. Copy of the Form 26AS showing the above TDS of Rs. 231500/- for the year 2016-17 is attached in the Paper Book.
In the meanwhile pending hearing in the present appeal, the Assessee submitted an application dated 15.02.2022 as per the Ack. No. 213052110255 dated 16.02.2022 to the Jurisdictional Assessing Officer. Till now, no action has been taken for giving credit by Assessing Officer.
Form 26AS downloaded on 14.02.2022 that the due credit for Rs. 2,31,500/- is appearing therein. The application for rectification as mention above in this para is dated 12.03.2022 and the order of rejection is also same i.e. on 12.03.2022, when the credit was available on the said date as evidenced from the Form 26AS downloaded on 14.02.2022. A Grievance was lodged in regard to the above rejection of rectification as per Ack. No. 7674856 on 22.08.2022 which has not been resolved and is pending.
From the entire sequence of events mentioned above, it is clear that the assessee is eligible for credit and refund - Hence, the AO is hereby directed to give credit of the TDS deducted and issue the refund of same to the assessee within 90 days from the receipt of this order. The ld. Jurisdictional PCIT shall monitor the issue of refund and see that the grievance of the assessee is redressed. Appeal of the assessee is allowed.
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