|
Advanced Search Options
Income Tax - Case Laws
Showing 21 to 40 of 777 Records
-
2022 (11) TMI 1422
Validity of assessment framed u/s 153C - differential treatments for abated assessments and unabated assessments - Allowability of disallowances and additions without the existence of incriminating material for the year under consideration received from the AO of the searched person - Whether the addition could be framed u/s 153A of the Act in respect of a concluded proceeding without the existence of any incriminating materials found in the course of search is permissible?
HELD THAT:- The provisions of section 132 relied upon by the revenue would be relevant only for the purpose of conducting the search action and initiating proceedings u/s 153A - Once the proceedings u/s 153A are initiated, which are special proceedings, the legislature in its wisdom bifurcates differential treatments for abated assessments and unabated assessments.
As in respect of abated assessments (i.e pending proceedings on the date of search) , fresh assessments are to be framed by the ld AO u/s 153A of the Act which would have a bearing on the determination of total income by considering all the aspects, wherein the existence of incriminating materials does not have any relevance.
In respect of unabated assessments, the legislature had conferred powers on the ld AO to just follow the assessments already concluded unless there is an incriminating material found in the search to disturb the said concluded assessment.
In our considered opinion, this would be the correct understanding of the provisions of section 153A of the Act , as otherwise, the necessity of bifurcation of abated and unabated assessments in section 153A of the Act would become redundant and would lose its relevance.The arguments of the ld. DR deserves to be rejected herein.
Thus none of the additions that were made by the ld. AO were based on reliance placed on search materials received from the AO of the searched person. We hold that assessment for A.Y.2009-10 had originally been completed u/s.143(3) of the Act dated 30/12/2011. Notice u/s.153C of the Act was issued to the assessee only on 26/11/2014. Hence, on the said date i.e. 26/11/2014, no proceedings of the assessee were pending. Hence, we hold that A.Y.2009-10 becomes an unabated / concluded assessment on the date of assumption of jurisdiction u/s.153C.
The law is very well settled that in respect of concluded assessments, the earlier assessment completed should not be disturbed in the search assessments without existence of any incriminating material relatable to such assessment year.
Thus we direct the ld. AO to re-compute the total income of the assessee by accepting the income declared in the return filed in response to notice u/s.153C of the Act without making any additions or disallowances thereon, both under normal provisions of the Act as well as in the computation of book profits u/s 115JB of the Act. Decided in favour of assessee.
-
2022 (11) TMI 1420
Addition u/s 14A r.w.r. 8D - MAT computation - HELD THAT:- So far as this assessment year is concerned, it is the first assessment year post insertion of rule 8D and as is the settled legal position in this regard, rule 8 D is to be applied for computing the disallowance. To that extent, our decisions for the preceding assessment years will not hold good. However, since the assessee has not used any borrowed funds, no amount shall be disallowed under rule 8 D in respect of the interest.
Accordingly, while disallowance of the assessee is upheld in principle, the quantum shall stand reduced, upon verification of necessary facts, in the light of the above legal position. To this extent, this ground of appeal is allowed for statistical purposes.
Adjustment of book profits u/s 15JB for the 14A disallowance - We find that this aspect of the matter stands concluded, in favour of the assessee, by a special bench decision in the case of ACIT Vs Vireet Investments Pvt Ltd [2017 (6) TMI 1124 - ITAT DELHI] The assessee gets relief on this point as well.
Allowance of leave encashment claimed on provision - HELD THAT:- Deduction can only be allowed when it is otherwise admissible, and that aspect of the matter will have to be examined by the Assessing Officer. That is indeed the correct approach. While we dismiss the grievance of the asseseee, we make it clear that the Assessing Officer will take a call, as and when the payment is actually made, on the admissibility of deduction in accordance with the law.
Computation of total income - Excluding sales tax incentive availed under various schemes of different states in computing its total income holding the incentives to be capital in nature - HELD THAT:- Approach of discerning the purpose of the subsidy, solely from the specific words used in the preamble of the scheme and without examining the overall scheme of the Act- which is admittedly to promote the growth of industry, is incorrect and superficial. The subsidies so received can be said to be revenue in nature unless these subsidies are for augmenting the profits of the assessee, and that is not even the case of the revenue.
CIT(A) is simply swayed by the wording of the preamble of the scheme- something clearly impermissible. These subsidy schemes are materially similar in nature, and there are, by now, a number of decisions of the coordinate benches, as also Hon‟ble Courts above, dealing with these schemes. It is also important to bear in mind the fact that the subsidies received by the assessee are in the nature of sales tax subsidies, and dealing with sales tax subsidies, Hon‟ble Gujarat High Court, in the case of CIT Vs Nirma Ltd [2016 (6) TMI 1023 - GUJARAT HIGH COURT] that where the object of respective subsidy schemes of State Governments was to encourage the development of Multiple Theatre Complexes, incentives would be held to be capital in nature and not revenue receipts, and, following the same logic, the sales tax subsidy schemes, which are admittedly to encourage industrial growth in the specific areas and the overall scheme in all the sales tax subsidy and exemption schemes unambiguously indicate so, are capital receipts in nature.
Addition u/s 41(1) - Difference of the N. P. V. of the sales tax liability and the liability as not assessable to tax - HELD THAT:- As even going by the stand of the Assessing Officer, the issue is covered in favour of the assessee, by case of CIT Vs Sulzer India Ltd [2014 (12) TMI 267 - BOMBAY HIGH COURT] but yet the appeal has been filed because the revenue has challenged the correctness of the said judgment. That very approach is simply erroneous because it is only elementary in law that the mere pendency of the appeal, against a binding judicial precedent, in a higher judicial forum does not dilute, curtail or otherwise narrow down its binding nature. As long as the binding judicial precedent holds good in law, as it does unless it is upturned or reversed by a higher judicial forum, it binds the lower judicial forums.
That apart, even otherwise, the view taken by the Hon’ble Bombay High Court in Sulzer’s case 2014 (12) TMI 267 - BOMBAY HIGH COURT] now stands approved and confirmed by the Hon’ble Supreme Court in the case of CIT Vs Balakrishna Industries Limited [2017 (11) TMI 1626 - SUPREME COURT] wherein held what the Assessee was required to pay after 12 years in 6 equal installments was paid by the Assessee prematurely in terms of the NPV of the same. That the State may have received a higher sum after the period of 12 years and in installments. However, the statutory arrangement and vide section 38, 4th proviso does not amount to remission or cessation of the Assessee's liability assuming the same to be a trading one. Rather that obtains a payment to the State prematurely and in terms of the correct value of the debt due to it. There is no evidence to show that there has been any remission or cessation of the liability by the State Government. We agree with the Tribunal that one of the requirement of section 41(1)(a) has not been fulfilled in the facts of the present case
Nature of receipt - exclusion of excise duty incentive availed by the assessee, aggregatingin computing its total income by treating it as capital - HELD THAT:- The subsidy was granted under schemes framed by the State and the Central Government, to be given to the assesses who set up new industry in Kutch District. The scheme was envisaged to encourage investment which would in turn, provide fresh employment opportunity in the district which had suffered due to devastating earthquake. The computation of subsidy may be on the basis of sales tax or excise duty. Nevertheless, the purpose test would ensure that, the subsidy was capital in nature.
As decided in P. J. Chemicals Ltd., [1994 (9) TMI 1 - SUPREME COURT] Where Government subsidy is intended as an incentive to encourage entrepreneurs to move to backward areas and establish industries, the specified percentage of the fixed capital cost, which is the basis for determining the subsidy, being only a measure adopted under the scheme to quantify the financial aid, is not a payment, directly or indirectly, to meet any portion of the 'actual cost The expression 'actual cost' in section 43(1) needs to be interpreted liberally. Such a subsidy does not partake of the incidents which attract the conditions for its deductibility from 'actual cost'. The amount of subsidy is not to be deducted from the 'actual cost' under section 43(1) for the purpose of calculation of depreciation etc.
Pooja expenses, Temple expenses, Community Welfare Expenses need to be allowed as expenditure is incurred for the smooth functioning of the business
Mines Prospecting Expenses - HELD THAT:- As expenditure in question is incurred on identifying the nature of deposits of limestone at various sites to plan mining operations, that the AO has made the addition even as he took note of the Tribunal decisions on the said issue, in favour of the assessee in its own cases, but added that the views of the Tribunal has not attained finality, and that the CIT(A) gave relief on the ground that as the Assessing Officer has not challenged the relief granted by the Tribunal, the matter has attained finality. No material has been brought before us to dislodge the findings of the learned CIT(A). In any event, even going by the observations of the Assessing Officer, the matter is squarely covered, in favour of the assessee
Disallowance u/s 14A r.w.r. 8D - HELD THAT:- So far as this assessment year is concerned, it is an assessment year post insertion of rule 8D and as is the settled legal position in this regard, rule 8 D is to be applied for computing the disallowance. To that extent, our decisions for the preceding assessment years will not hold good. However, since the assessee has not used any borrowed funds, no amount shall be disallowed under rule 8 D in respect of the interest. Accordingly, while disallowance of the assessee is upheld in principle, the quantum shall stand reduced, upon verification of necessary facts, in the light of the above legal position. To this extent, this ground of appeal is allowed for statistical purposes.
Nature of expenses - Expenditure incurred on capital jobs abandoned & written off - HELD THAT:- The views expressed by the tax auditor on what constitutes capital expenditure cannot dilute, curtail or override the views expressed by the Hon’ble Courts above. What an auditor holds is his accounting perspective, and it has no effect on the legal position. Similarly, just because a claim is made in the revised return, the admissibility of the claim cannot be declined for that reason alone. Nothing turns on these factors, and the Assessing Officer was thus clearly in error, as was the CIT(A) -we uphold the plea of the assessee and direct the Assessing Officer to delete the expenses incurred on these abandoned projects
Excise duty exemption availed by the assessee as capital receipt allowed.
Disallowance of Community Welfare Expenses - principle of consistency - HELD THAT:- This is a legacy issue and pertains to the expenditure incurred for community welfare as the factories of the assessee are concerned in backward areas and the expenditure is incurred for the smooth functioning of the business. Right from the assessment years 1988-89 to 1994-95, the coordinate benches have allowed the appeal of the assessee on this point, and from the assessment years 1995-96 to 2004-05, in which the first appellate authority has deleted similar disallowance, the coordinate benches have rejected the grievances of the Assessing Officer, against the reliefs so granted by the CIT(A). Learned Departmental Representative does not dispute this position but relies upon the stand of the Assessing Officer nevertheless.
Additional depreciation on all the eligible assets acquired before 01.04.2008 - only objection of the AO is that the provisions refer to "new machinery or plant" and therefore the machinery will cease to be a new machinery after the end of the first year in which it is installed or put to use - HELD THAT:- In our view this stand taken by the revenue is not supported by the language of statutory provision. The condition imposed by the relevant provisions is that Plant and Machinery must be new at the time of installation to be eligible for additional depreciation u/ s 32(1)(iia) and not new in subsequent years. The expression "new machinery" is therefore to be construed as referring to the condition that at the time of acquisition or installation the machinery or plant should be new. Going by the legislative history of the relevant provision, we are of the view that the condition for allowing additional depreciation only in the initial assessment year ceased to exist as and from 01-04-2006. The plain language of the section warrants such an interpretation.
Unutilized CENVAT credit - CIT(A) correctly deleted the addition.
Nature of expenses - pre-operative expenses - assessee itself claimed these expenses as capital expenses in the books of accounts adding it to capital work in progress/fixed assets - HELD THAT:- CIT(A) correctly after taking note of the detailed submissions, held that the expenses, being in the nature of expenses incurred for the expansion of existing business, cannot be disallowed. Short grievance raised before us by the Assessing Officer is whether, even when the expenditure is shown in the books of accounts, it can be treated as revenue in nature, in our considered view, stands concluded in favour of the assessee
MAT computation u/s 115JB - Exclude the sales tax incentive subsidy for computing book profit under section 115 JB
-
2022 (11) TMI 1419
Nature of receipt - revenue or capital receipt - payment of Net Present Value of deferred sales tax liability, granted under the incentive scheme of State Government of Himachal Pradesh AND pre-payment of deferred sales tax liability - HELD THAT:- As the material facts of the case are admittedly identical with the facts of the assessment year 2006-07, and the learned CIT(A) has categorically observed so, we have no reasons to take any other view of the matter than the view taken by the Tribunal for the assessment year 2006-07. Respectfully following the same, we hold that the impugned receipts as capital receipts.
Special Capital Incentive availed in respect of unit situated in the state of Maharashtra and Excise Duty Incentive is required to be treated as capital receipt and to be excluded from the total income of the assessee
Disallowance of Employees Stock Option Expenses should be deleted as relying on Kotak Mahindra Bank Ltd [2018 (1) TMI 320 - ITAT MUMBAI] and taking note of the special bench decision in the case of Biocon Ltd. v. Dy. CIT [2013 (8) TMI 629 - ITAT BANGALORE]
Disallowance u/s 14A r.w.r. 8D - HELD THAT:- We restrict the disallowance under section 14A to 1% of tax-exempt income. Ordered, accordingly.
Adjustment of book profits under section 15JB for the 14A disallowance - we find that this aspect of the matter stands concluded, in favour of the assessee, by a special bench decision in the case of ACIT Vs Vireet Investments Pvt Ltd [2017 (6) TMI 1124 - ITAT DELHI]
Additional depreciation u/s 32 (1)(iia) - eligible assets acquired during the Previous Year - Ceasure of asset after first year use - only objection of the AO is that the provisions refer to "new machinery or plant" and therefore the machinery will cease to be a new machinery after the end of the first year in which it is installed or put to use - HELD THAT:- As decided in M/S. GLOSTER JUTE MILLS LTD. [2017 (3) TMI 1807 - ITAT KOLKATA] stand taken by the revenue is not supported by the language of statutory provision. The condition imposed by the relevant provisions is that Plant and Machinery must be new at the time of installation to be eligible for additional depreciation u/ s 32(1)(iia) and not new in subsequent years.
The expression "new machinery" is therefore to be construed as referring to the condition that at the time of acquisition or installation the machinery or plant should be new. Going by the legislative history of the relevant provision, we are of the view that the condition for allowing additional depreciation only in the initial assessment year ceased to exist as and from 01-04-2006. The plain language of the section warrants such an interpretation. Decided in favour of assessee.
Addition of unutilized CENVAT credit as on last day of accounting year is to be deleted as appellant himself has already carried out necessary adjustment u/s 145A which was duly certified by Tax Auditors and hence any further adjustment was not warranted.
Deduction u/s 80-IA on Infrastructure facility, being Rail Systems - Claim denied as prescribed certificates were not filed along with the return of income - HELD THAT:- As noted by the authorities below, the form 10CCB is not filed in this case, and that is a mandatory requirement under section 80IA(7) for making a claim under section 80IA. While it has been contended before us that the form 10CCB was filed alongwith the revised return of income, the material before us does not evidence so. In the orders of the AO as also the CIT(A), it is specifically submitted that the form 10CCB is not filed by the assessee. In this view of the matter, and the absence of clarity on this factual aspect, we deem it fit and proper to remit the matter to the file of the Assessing Office for fresh adjudication by way of a speaking order.
TP Adjustment - interest paid by the appellant under Bare Boat Charter cum Demise Arrangement entered with its Associated Enterprise - CIT(A) directing the TPO/AO to apply LIBOR Plus 350 point as a benchmark for determining the ALP regarding payment of interest for purchase of ships under BBCD arrangement - HELD THAT:- As decided in own case [2022 (12) TMI 740 - ITAT MUMBAI] 2005-06 CIT(A) has rightly noted, what needs to be benchmarked is the transaction between the assessee and its AE, and that transaction, in our considered view, is to be considered in a broader context- rather than as a simplistic borrowing transaction, which it is not. The assessee has taken the vessels under a BBCD arrangement and, while entering into this arrangement, the AE essentially has to factor in the financing arrangement. The consideration for the BBCD instalments is based on the cost of finance, as also the cost of vessels, to the AE, and, as such, there is no occasion for sharing the difference between the interest rate implicit in the BBCD arrangement and the cost of borrowing to the AE.
While examining the rate of interest under the BBCD also, one has to bear in mind the fact that it cannot be compared with a borrowing arrangement simpliciter as are the transactions on which LIBOR plus rates apply. Learned Departmental Representative has not been able to show any justification for LIBOR plus 300 bps either, and his challenge primarily is even to this approach of benchmarking.
No material before us to support the findings of the CIT(A) in any case, and the findings of the AO, as noted above and in our considered view, are unsustainable in law anyway. In any event, interest is only one part of the working in the computation of instalments, and one cannot consider the same on a standalone basis in the transaction. The benchmarking is to be done for the entire transaction and not a small and isolated transaction segment. The interest rate of 7.5% implicit in the BBCD arrangement is a part of the pricing and cannot be considered separately. We uphold the grievance of the assessee and delete the impugned ALP adjustment
MAT computation u/s 115JB - We direct the AO to exclude the sales tax incentive subsidy for computing book profit under section 115 JB.
Sales Tax incentives received under various schemes of different states is capital in nature as decided in own case of assessee 2006-07.
Nature of expenses - expenditure grouped under the nomenclature Community Welfare Expenses, temple expenses, consultancy charges, service charges, mine prospecting expenses AND Pooja/ function expenses - Principle on consistency - HELD THAT:- Right from the assessment years 1988-89 to 1994-95, the coordinate benches have allowed appeal of the assessee on this point, and from the assessment years 1995-96 to 2004-05, in which the first appellate authority has deleted similar disallowance, the coordinate benches have rejected the grievances of the Assessing Officer, against the reliefs so granted by the CIT(A). Learned Departmental Representative does not dispute this position but relies upon the stand of the Assessing Officer nevertheless.
Deduction u/s 35 D being 1/5th of the expenditure incurred on issue of FCCB - CIT(A) allowed deduction - HELD THAT:- On a perusal of the impugned order, we find that the CIT(A) has merely remitted the matter to the file of the AO with a direction “to verify the facts from records and allow consequential relief to the assessee as per law, if any”. The grievance of the Assessing Officer is thus misconceived and devoid of any legally sustainable merits. We reject the same.
-
2022 (11) TMI 1417
TP Adjustment - determination of ALP of Management Fee - TPO made an adhoc unilateral estimation by assuming that around 750 hours would have been spent for providing the aforesaid services for which remuneration of INR 3,000/- per hour was appropriate - HELD THAT:- In the case before us pertaining to Assessment Year 2012-13 [2019 (12) TMI 1238 - ITAT MUMBAI] TPO has determined the ALP of the transaction without following any of the prescribed methods. The transfer pricing adjustment has been made by estimating the man hours (at 750 hours) and the cost of service per hour (at INR 3000/- per hour).
Tribunal deleted the addition holding that the TPO had resorted to an adhoc unilateral pricing of the Management Fee without applying any of the prescribed methods and disregarding the facts of the case by placing reliance upon the decision of the co-ordinate Bench of the Tribunal in the case of Kellogg India Pvt. Ltd. [2019 (8) TMI 698 - ITAT MUMBAI] M/s CLSA India Pvt. Ltd. v. DCIT [2019 (1) TMI 1351 - ITAT MUMBAI] Firmenich Aromatics India P. Ltd. v. DCIT [2018 (9) TMI 1007 - ITAT MUMBAI]
Identical approach adopted by the TPO stands rejected by the Tribunal in the above said decisions including in the case of the Appellant for the Assessment Year 2012-13. Thus, respectfully following the above decisions of the Tribunal, we delete the transfer pricing addition - Decided in favour of assessee.
-
2022 (11) TMI 1416
Deduction u/s 80IA - sale/supply of electricity to its own units adopting the rate at which SEB's supply electricity to other consumers - adopting the market price of power supplied to captive unit at the rate of which the State Electricity Board supplies electricity, with regard to deduction - HELD THAT:- We note that on this issue the Ld.CIT(A) has decided in favour of assessee by following the decision of the Tribunal in AY 2006-07 and deleted sum as disallowed by AO wherein as ITAT has adopted the selling rate of electricity to SEB's as the market rate rejecting the department's finding that the rate adopted by Power Distribution Agencies is the market rate to be adopted.
We note that the Tribunal in AY 2007-08 to AY 2009-10 has allowed assessee’s appeal regarding this issue. Since the Ld.DR could not point out any change in facts or law vis a vis that of the earlier years as decided by the Tribunal in assessee’s case as noted (supra), we are inclined to uphold the impugned action of CIT(A). Appeal of the Revenue stands dismissed.
-
2022 (11) TMI 1415
Selective appeal/issues addressed by ITAT - Consolidation of revenue and assessee appeal denied - Tribunal passing order only in relation to the Respondent’s appeal even though the Appellant has also filed an appeal from the same order of the CIT(A) - charging interest u/s 234B - tax was deductible at source on assessee’s income u/s 195 - HELD THAT:- Right course for the Tribunal should have been that a comprehensive view be taken upon hearing of the appeal preferred by the assessee as well.
As decided in COMMISSIONER OF SALES TAX, UP., LUCKNOW VERSUS VIJAI INT. UDYOG [1984 (10) TMI 42 - SUPREME COURT] since both the parties were before the Tribunal, it was proper that when the assessee’s appeal was taken up first, the Tribunal’s attention should have been drawn to the fact that the Commissioner’s appeal against the same decision of the Assistant Commissioner was pending and both should have been clubbed together. If that had been done the unfortunate situation which has necessitated the present appeal to be carried to this Court would not have arisen.
Course of action adopted by the Tribunal in deciding only the appeal of the Revenue in fact results in a lot of prejudice to the case of the appellant, whose appeal is still pending before the Tribunal. In fact the Tribunal would not be able to take a contrary view if at all it were to take one in the appeal preferred by the appellant, having already expressed an opinion in the appeal preferred by the Revenue.
Situation could have well been avoided if both the appeals were taken for decision together. We also find in the order impugned that the Tribunal has not at all dealt with the request of the appellant herein, for purposes of a consolidation of the appeals preferred by the contesting parties, which prayer should have been dealt with appropriately in the order impugned.
-
2022 (11) TMI 1414
TDS u/s 194H - amount retained by the banks/credit card agencies for rendering credit card processing service - ITAT held that assessee was not required to deduct TDS on charges retained by the Banks/credit card agencies out of sale consideration of tickets booked through credit /debit cards - HELD THAT:- ITAT in the present case has correctly held that the issues involved in the present appeals are covered by the judgment of JDS Apparels (P.) Ltd [2014 (11) TMI 732 - DELHI HIGH COURT] wherein held Section 194H would not be attracted. HDFC was not acting as an agent of the respondent-assessee. Once the payment was made by HDFC, it was received and credited to the account of the respondent-assessee. In the process, a small fee was deducted by the acquiring bank, i.e. the bank whose swiping machine was used.
On swiping the credit card on the swiping machine, the customer whose credit card was used, got access to the internet gateway of the acquiring bank resulting in the realisation of payment. Subsequently, the acquiring bank realised and recovered the payment from the bank which had issued the credit card. HDFC had not undertaken any act on "behalf" of the respondent-assessee.
The amount retained by the bank is a fee charged by them for having rendered the banking services and cannot be treated as a commission or brokerage paid in course of use of any services by a person acting on behalf of another for buying or selling of goods. Decided against revenue.
-
2022 (11) TMI 1413
Condonation of delay in filing the appeal - delay in preferring the appeal is 2428 days - delay condoned subject to payment of costs
HELD THAT:- If we peruse the order in this appeal, a decision can be taken wherein held that order allowing the prayer for condonation is subject to payment of costs assessed at Rs. 50,000/- to be paid by the appellant to the respondent. This cost shall initially be paid by the Government, thereafter the department concerned shall make an enquiry as to who are at fault for not taking care for preservation of the records and papers. If any of the officers and/or staff are found to be negligent, costs awarded by us shall be recovered from their salaries in proportionate to their lapses, of course after giving a chance of hearing to the concerned officer and staffs.
The cost has to be paid within a period of three weeks from date as prayed for the learned Counsel for the appellant. In default of payment of costs this order will stand recalled and subsequent order, if any passed in favour of revenue will also stand recalled.
As respondent submits that till date the costs has not been remitted. In such circumstances, the order dated 21st November, 2011 itself provides for the contingency. It has been ordered that in default of payment of costs, the order condoning the delay will stand recalled. Thus, in absence of compliance of the direction issued by the Hon’ble Division Bench in its order and the costs having not been paid to the assessee, the order is required to be recalled and is accordingly recalled.
-
2022 (11) TMI 1412
Validity of reopening of assessment - determine the date of issuance of the notice issued u/s 148 -Assessment order relies upon a Suspicious Transaction Report (‘STR’) regarding a credit - HELD THAT:- There is no dispute that the assessment order dated 26th March, 2022, was passed in contravention of the interim order dated 24th March, 2022. Further, the said order has been passed without providing any opportunity to the petitioner to respond to the alleged information against it, in accordance with the judgment of GKN Driveshafts (2002 (11) TMI 7 - SUPREME COURT] - Therefore, the said assessment order is null and void and is hereby set aside.
AO is directed to provide a copy of the STR relied upon in its order within two (02) weeks. The Assessee shall furnish its reply and explanation to the transactions reported in the STR within a period of two (02) weeks thereafter. The AO shall also adjudicate on the plea of the Assessee that the tracking report available on the official website of the postal department records the date of issuance as 02nd April, 2022, while determining the date of issuance of notice. The AO shall after determining the date of issuance of notice proceed with the matter in accordance with the directions issued by this Court and in accordance with law.
-
2022 (11) TMI 1411
Recovery proceedings - addition u/s 68 - whether petitioner was duly intimated about the proceedings and show-cause notices received? - HELD THAT:- As the respondents have proceeded to pass the impugned order on the premise that the petitioner has not submitted his response/reply or documents to the show-cause notices. In this regard, in the light of the specific assertion on the part of the petitioner that the said notices were not received by him, though the said contention is opposed by the respondents, by adopting a justice oriented approach and to provide one more opportunity to the petitioner to submit his reply to the show-cause notices along with the documents in support of his claim we deem it just and appropriate to set aside the impugned order and remit the matter back to the respondent for reconsideration afresh in accordance with law.
Applicability of E-Assessment Scheme, 2019 - As in view of findings above that the impugned assessment order deserves to be set aside and the matter be remitted back to the respondents for reconsideration afresh, the issue / question regarding the requirement of following the scheme in respect of the proceedings, which were initiated after to coming into force of the said Scheme of 2019 may not be relevant for adjudication of present petition.
In so far as the contention urged by the petitioner, the judgment of the Apex Court in the case of the Orissa Corporation [1986 (3) TMI 3 - SUPREME COURT] it is needless to state that after providing an opportunity to the petitioner to submit its reply and documents to the aforesaid show-cause notices, the respondents would necessarily have to follow the procedure prescribed in law bearing in mind the judgment and other judgments of the Apex Court rendered in relation to Section 68 of the Income Tax Act, 1961.
-
2022 (11) TMI 1410
Bogus purchases - Estimation of income - CIT(Appeals) erred in restricting the disallowance to 17.96% of the alleged hawala purchases over & above the profit shown by the assessee even through the assessee could not produce primary evidences like octroi receipt, lorry receipt, delivery challans, stock register, weighing slips etc., to prove the genuineness of purchases - HELD THAT:- When it has been categorically established that, the amount of bogus purchases is debited to P&L by fictitious tax invoices and the respondent assessee failed to establish the consumption of such goods in the execution of civil contract by adducing such stock movement records to the satisfaction of AO., then taxing such bogus purchases GP rate of goes against the principles of taxation embedded in chapter VI of the Act and against the ratio laid down in“N K Proteins Ltd” [2017 (1) TMI 1090 - SC ORDER] and “PCIT Vs Pinaki D Pinani” [2020 (1) TMI 700 - BOMBAY HIGH COURT] for the reason, we are of the considered view that, the Ld. AO was right in making 100% disallowance towards bogus / hawala purchases, and thus we are inclined to uphold the order of assessment and reverse the order the Ld. FAA. Appeal of the appellant revenue is allowed.
-
2022 (11) TMI 1409
Disallowance u/s. 14A r.w.r. 8D - suo moto made disallowance - scope of amendment - HELD THAT:- Whether the aforesaid amendment by the Finance Act, 2022 is prospective or retrospective in operation, in PCIT vs M/s Era infrastructure (India) Ltd,[2022 (7) TMI 1093 - DELHI HIGH COURT] held that the amendment by Finance Act, 2022 in section 14A is prospective and will apply in relation to the assessment year 2022–23 and subsequent assessment years. Thus, in view of the aforesaid decision of Hon’ble Delhi High Court, we find no merits in the submission of learned DR.
We further find that in Cheminvest Ltd [2015 (9) TMI 238 - DELHI HIGH COURT] held that section 14A will not apply if no exempt income is received or receivable during the relevant previous year. Respectfully following the aforesaid decision, the AO is directed to delete the disallowance made u/s 14A read with Rule 8D. As a result, ground No. 1 raised in assessee’s appeal is allowed.
Disallowance of interest expenses - AO disallowed the expenditure on the basis that interest expenditure has a direct nexus with the project undertaken and therefore same is to be allowed as business expenditure in the ratio of revenue offered from the project - HELD THAT:- Lokhandwala Constructions Inds. Ltd [2003 (1) TMI 93 - BOMBAY HIGH COURT] in case of a builder held that where the loan was obtained for the project of construction of flats, which is stock in trade, the assessee is entitled to deduction u/s 36(1)(iii) of the Act in respect of interest expenditure on such loans.
In the present case, undisputedly funds were borrowed for the purpose of the projects undertaken by the assessee, and only based on accounting treatment, the claim of the assessee was denied. It is pertinent to note that the allowability of any deduction is to be decided based on the provisions of the Act. In the present case, since the funds were borrowed for the purpose of projects undertaken by the assessee, therefore, the interest paid on such borrowing is allowable u/s 36(1)(iii) in view of the aforesaid decision of Hon’ble jurisdictional High Court. Accordingly, the AO is directed to grant the deduction under section 36(1)(iii) of the Act in respect of the interest expenditure claimed by the assessee. As a result, ground No. 2 raised in assessee’s appeal is allowed.
Disallowance of commission expenses - assessee claims that the commission expenses incurred by the assessee are not in respect of any particular project and these expenses are required to be incurred under all circumstances while carrying on the business - as per AS 7 para 19 selling costs cannot be attributed to contract activity and the same cannot be allocated to the contract and therefore are to be excluded from the cost of the construction contract - HELD THAT:- As evident that in the present case the commission expense has been identified by the assessee not only in respect of each project undertaken by it but also in respect of each flat for which such commission expenses were incurred. Insofar as the decision in Rustomjee Evershine Joint-Venture Private Ltd [2017 (12) TMI 579 - ITAT MUMBAI] we find that in para 7 the coordinate bench after perusal of AS-7 noted that general administrative costs and selling costs are not considered as part of the contract cost unless they are contract specific. C. Thus we find no infirmity in the impugned order passed on this issue. As a result, ground No. 3 raised in assessee’s appeal is dismissed.
Disallowance of interest - HELD THAT:- We find that even now no details regarding the expenditure incurred under the head Interest - Others have been filed by the assessee. Therefore, we find no infirmity in the impugned order passed upholding the disallowance - As a result, ground raised in assessee’s appeal is dismissed.
Disallowance of interest on late payment of TDS - In its appeal before the CIT(A) the assessee raised no ground challenging the disallowance of interest on late payment of TDS. Thus, when the assessee has agreed to disallowance of interest on late payment of TDS, we find no infirmity in the order passed by the AO on this issue.
In any case, nothing has been brought on record to show that the said expenditure was incurred wholly and exclusively for the purpose of the business for being allowed u/s 37 of the Act. Therefore, in view of the above, additional ground No. 1 raised by the assessee is dismissed.
Disallowance u/s 14 A r/w Rule 8D - HELD THAT:- We find that Hon’ble jurisdictional High Court in Nirved Traders (P.) Ltd. [2019 (4) TMI 1738 - BOMBAY HIGH COURT] has held that disallowance under section 14A of the Act cannot be more than exempt income. Thus, respectfully following the aforesaid decision of the Hon’ble jurisdictional High Court, we direct the AO to restrict the disallowance made under section 14A of the Act to the extent of exempt income earned by the assessee, during the year under consideration. As in assessee’s appeal is partly allowed, while additional ground No. 1 is allowed.
Scope of assessment proceedings in case of limited scrutiny - AR submitted that it was a limited scrutiny case and no approval was taken by the AO from CIT for expanding the scope of its jurisdiction - HELD THAT:- From the perusal of the record, it is evident that the AO vide assessment order passed under section 143(3) of the Act disallowed the interest expenditure and commission expenditure debited by the assessee in its profit and loss account. AO also made disallowance under section 14 A r/w Rule 8D after considering the interest expenditure debited to the profit and loss account.
Thus, in view of the above, we are of the considered opinion that the additions made by the AO are covered under aforesaid point (iii) and (iv) of the CASS reasons and the scope of enquiry by the AO was also limited to the verification of the aforesaid aspects. Therefore, we find no infirmity in the impugned order passed on this issue. As a result, grounds No. 1 and 2 raised in assessee’s appeal are dismissed.
Validity of assessment proceedings in the name of the erstwhile entity - At no stage the AO was informed about the order approving the scheme of amalgamation passed by NCLT - HELD THAT:- We are of the considered view that merely issuing notice to the income tax authorities in compliance provision of section 230(5) of the Companies Act 2013 as per directions of the Hon’ble NCLT intimating the continuation of merger proceedings cannot be treated as intimation regarding the merger of M/s Rustomjee Constructions Private Limited with Keystone Realtors Private Ltd., as it is only upon the passing of final order approving the scheme of the merger the entity can be said to have been merged and lost its legal existence, even though the merger took effect from the retrospective date.
As further pertinent to note that the date of effect of the merger also came into existence only on 14/09/2017. Therefore, in light of the decision of Mahagun Realtors (P.) Ltd, [2022 (4) TMI 347 - SUPREME COURT] we find no infirmity in the impugned order passed by the learned CIT(A) on this issue. As a result, ground No. 1 raised in assessee’s appeal is dismissed.
-
2022 (11) TMI 1407
Reopening Order u/s 148A(d) passed in different PAN number as already been surrendered by the petitioners and proper intimation was give to the respondent Department in this regard - Income Tax Authority submits that the petitioners had obtained two PAN numbers and the proceedings has been initiated relating to the PAN number which was very much valid during the transactions - HELD THAT:- As Petitioners are given liberty to make an appropriate representation before the respondent, Income Tax Authority concerned for redressal of its grievances by urging the points raised in this writ petition.
Such representation shall be filed by the petitioners within two weeks from date and if such representation is made by the petitioners within the time stipulated herein, the same shall be considered and disposed of in accordance with law by passing a reasoned and speaking order and after giving an opportunity of hearing to the petitioners or its authorised representative within four weeks from the date of receipt of such representation.
Till the disposal of such representation to be made by the petitioner, there shall be an order of status quo with regard to the impugned order under Section 148A(d) of the Act dated 30th April, 2022 for a period of eight weeks from date.
-
2022 (11) TMI 1406
Change in head of income in Assessment u/s 153A - making a new claim which is not a consequence of the search action in case of unabated assessment - eligibility to make a fresh claim which was not declared in the original return of income furnished u/s.139(1) - assessee claims to change his stand of the impugned deduction from the head ‘income from house property’ to ‘income from profit and gain of business' - whether the assessee is eligible to change his stand of the heads of income at the stage of section 153A proceeding, pertaining to unabated assessment year.? - HELD THAT:- As in the case of All Cargo Logistics Ltd [2012 (7) TMI 222 - ITAT MUMBAI(SB)] wherein it was held that in case of unabated assessment, the assessment u/s.153A can be made only on the basis of incriminating material, thereby restricting the scope of assessment or reassessment of total income u/s.153A to only the incriminating material seized during the search.
This interpretation categorically restricts the A.O. in altering the original assessment passed u/s.143(3) only when there are new materials found during search and which was not disclosed during the original assessment. This interpretation according to us holds good even in assessee’s case.
The assessee as per the decisions cited by the Revenue in case of Continental Warehousing Corporation (Nhava Sheva) Ltd [2015 (5) TMI 656 - BOMBAY HIGH COURT] , CIT Vs. Gurinder Singh Bawa [2015 (10) TMI 1761 - BOMBAY HIGH COURT] and All Cargo Logistics Ltd [2012 (7) TMI 222 - ITAT MUMBAI(SB)] restricts the fact that the assessment u/s. 153A is restricted only to incriminating material in case of unabated assessment. Also in case of Jai Steel (India) [2013 (6) TMI 161 - RAJASTHAN HIGH COURT] which held that both the assessee as well as the A.O. cannot make any claim which is not a consequence of the search action in case of unabated assessment.
Provisions of section 153A cannot be interpreted as enabling the A.O./assessee to make a fresh or additional claim, which was not raised during the original assessment in absence of incriminating material found during the search - Decided against assessee.
-
2022 (11) TMI 1405
Deduction u/s 80P (ii) (d) - interest income receipts - HELD THAT:- Since it is admitted that the judgment of Mavilayi Service Co-operative Bank Ltd. and others [2021 (1) TMI 488 - SUPREME COURT] was not considered while finalizing the assessment which was subject matter of challenge and since the decision in Peroorkada [2021 (12) TMI 1084 - KERALA HIGH COURT] was not considered while denying the benefit of deduction under Section 80P (ii) (d), the assessment orders which are impugned are liable to be set aside and the matter remanded to the respective assessing authorities for reconsideration after taking into consideration of the judgments referred to above.
Accordingly orders of assessment produced in all these writ petitions are quashed and the assessments are remanded to the National Faceless Assessment Centre for fresh consideration.
-
2022 (11) TMI 1404
Addition on account of shipping business - benefits of the provisions of section 115VO under the Tonnage Tax Scheme denied - AO has made this addition stating that the drilling of Oil is the main operation and it is not provided in the Act that drilling and exploration of Oil will be the shipping income, to be included in computation of income under Tonnage Tax Scheme - HELD THAT:- As decided in assessee own case A.Y. 2014-15 held that revenue's contention that the vessel is nothing but 'off shore' installations had no merit. Since the Hon'ble High Court has rendered the findings in the appellant's own case for the A.Y. 2006-07 & 2007-08, that the appellant is taxable under the provisions of Chapter XIIG, no change in the facts and circumstances are brought out by the AO in the assessment order vis-a-vis those years, it is held that the benefit of the said Chapter is to be allowed to the appellant.
It may be mentioned here that on specific requisition by the undersigned the AR has filed an additional paper book enclosing herewith the computation of total income filed with the return of income and the computation of such income separately in respect of shipping unit and port infrastructure unit. The relevant certificates of registration, tonnage certificate, mobile offshore drilling unit (MODU) safety certificate, and all other such certificates in respect of the three vessels namely Deepsea Matdrill, Deepsea Fossil and Deepsea Fortune have also been filed. Although not discussed by the AO in the Assessment Order perusal of these certificates show that the three vessels owned by the appellant are of the same nature as that of the Deepsea Matdrill on which the Hon'ble High Court rendered its decision, Accordingly, ground is allowed.
Applicability of MAT provisions - HELD THAT:- CIT(A) held that income of assessee is taxable under provisions of section of Chapter XIIG of the Act, and since income of shipping unit is exempt u/s 115V-I of the Act, in view of section 115VO of the Act, same is liable to be excluded from the computation of book profit under section 115JB of the Act. Since, the decision of the ld. CIT(A) is in-consonance with the provisions of the Act, we decline to interfere with the order of the ld. CIT(A).
Disallowance of interest - assessee has given interest free loans to its subsidiary company without substantiating commercial expediency - HELD THAT:- Hon'ble Supreme Court [2015 (11) TMI 1314 - SUPREME COURT] approved of the view taken by Delhi High Court in Dalmia Cement Pvt. Ltd.[2001 (9) TMI 48 - DELHI HIGH COURT].and disapproved of the Punjab & Haryana High Court decision in the case of Abhishek Industries [2006 (8) TMI 123 - PUNJAB AND HARYANA HIGH COURT] Incidentally in the case of Hero Cycles, it was found that the interest liability of the assessee towards the bank on borrowings made had no bearings on the issue as otherwise, the assessee had sufficient funds of its own to advance the funds to the sister concern.
Under such circumstances it was for the AO to establish such nexus between the borrowings and advances to prove that the expenditure was for non-business purposes, which the AO failed to do. In the present case also, it is found that the appellant has sufficient funds of its own which he could have advanced and therefore the interest liability on the borrowings made could not be disallowed, particularly when the AO failed to prove that the expenditure was for non-business purposes.
Accordingly, it is held that no notional interest can be attributed towards the interest free advances made during the impugned year. The decision of the ld. CIT(A) is affirmed.
Disallowance on account of late deposit of PF& ESI - HELD THAT:- As the issue of payment of employees contribution towards the PF has been ruled against the assessee by the Hon’ble Supreme Court in the case of Checkmate Services P. Ltd.[2022 (10) TMI 617 - SUPREME COURT] Hence, the appeal of the revenue on this ground is allowed.
Disallowance u/s 14A - CIT(A) held that no exempt income has been earned by the assessee, hence, in view of the judgment of the Hon’ble Jurisdictional High Court in the case of Cheminvest Ltd [2015 (9) TMI 238 - DELHI HIGH COURT] no disallowance is called for. Hence, we decline to interfere with the order of the ld. CIT(A).
Disallowance u/s 40(a)(ia) – TDS u/s 195 - HELD THAT:- As services rendered by the foreign consultants cannot be said to amount to a permanent establishment or a fixed place for a business through which the foreign enterprise carries out its business in India, wholly and partly. It is also seen that during the appellate proceedings relating to A.Y. 2011-12 my Ld. Predecessor considered the letter issued by Nobel Denton Middle East Ltd. clarifying that they did not have a permanent establishment in India as per Article 5 of the DTAA and were assessed to tax in the UAE. Also find from the tax audit report for the impugned years placed at pages 28 & 69 of the paper book that the auditors have clarified that no amount is inadmissible u/s 40(a). Keeping in view the above facts it is held that neither the provisions of section 40(a)(ia) nor 40(a)(i) are applicable. Ground are allowed.
-
2022 (11) TMI 1403
Disallowances u/s 14A r.w.r. 8D - Expenditure incurred on earning exempt income - HELD THAT:- This is a settled principle of law that where there is no exempt income no disallowance under section 14A of the Act is permissible. This issue has been decided in favour of the assessee by ERA Infrastructure (India) Ltd. [2022 (7) TMI 1093 - DELHI HIGH COURT]
We are of the considered view that disallowance made by the AO and confirmed by the Ld. CIT(A) over and above the suo-moto disallowance made by the assessee is not sustainable in the eyes of law in all the aforesaid appeals and as such ordered to be deleted.
MAT computation for disallowance u/s 14A - HELD THAT:- AO while computing the book profit under section 115JB of the Act has also considered disallowance of expenses made under section 14A of the Act which is not in consonance with the order passed by Special Bench of Delhi Tribunal in case of Vireet Investment [2017 (6) TMI 1124 - ITAT DELHI] AO can only consider the amount of disallowance made by the assessee under section 14A qua the exempt income earned during the years under consideration under section 115JB of the Act. In other words disallowance made under section 14A under the normal provisions of the Act can only be considered for computing book profit under section 115JB of the Act.
This issue was also decided in favour of the assessee in its own case in A.Y. 2012-13, 2013-14 & 2014-15 by the Tribunal. So the AO is to verify the facts if the disallowance made by the assessee under section 14A under the normal provisions of the Act is considered while computing the book profit under section 115JB of the Act. However, the disallowance made by the AO by invoking the provisions contained under section 14A read with rule 8D while computing the book profit under section 115JB of the Act is not sustainable in the eyes of law, hence ordered to be deleted.
Short TDS credit - case of the assessee that because of delay in deposit/non deposit of the TDS by the deductor the assessee failed to take the benefit of TDS as the same is not reflected in 26AS AND and relied upon the memo dated 11.03.2016 issued by the CBDT which says that, “in case the deductor fails to deposit TDS amount to the government account the deductee shall not be called upon to pay the payment to the extent tax has been deducted from his account.” - HELD THAT:- The assessee cannot be deprived of taking credit of TDS already deducted. So this issue is remanded back to the AO for the purpose of verification of the TDS amount that has been deducted but not reflected in 26AS statement of the assessee and give the credit to the assessee accordingly.
-
2022 (11) TMI 1402
Depreciation on Goodwill - Assessee claimed depreciation at the rate of 25% on the opening WDV of goodwill - assessee had acquired a brewery, namely, ‘Karnataka Breweries and Distilleries Limited’ through a process of demerger - HELD THAT:- As Tribunal has decided the issue against the assessee in the cases for AY 2007-08 to 2009-10 [2016 (9) TMI 1527 - ITAT BANGALORE] and the decision will apply to the present AY also. The learned AR submits that the assessee has preferred appeal on the allowability of claim of depreciation before the Hon’ble High Court of Karnataka in ITA No.61/2017 and the same is pending adjudication. The learned DR was duly heard.
Disallowance u/s 14A r.w.r. 8D - HELD THAT:- The disallowance should be restricted to the amount of exempt income earned by the assessee. The amendment to section 14A of the I.T. Act, which states that disallowance u/s 14A of the I.T. Act is to be resorted, whether the assessee earns exempt income or not is only prospective and does apply to the relevant assessment year. In this context, we rely on the order of Bajaj Capital Ventures (P) Ltd. [2022 (7) TMI 23 - ITAT MUMBAI]. It is ordered accordingly.
Addition u/s 40(a)(ia) which were year-end provisions reported in the Form 3CD - HELD THAT:- We find on identical facts and circumstances, the co-ordinate Bench of the Tribunal in assessee’s own case for assessment years 2013-2014 [2022 (6) TMI 1433 - ITAT BANGALORE] has restored the issue to the A.O. with specific directions to verify the details of payments and tax deducted and allow the expenditure where the TDS is remitted to the Government account on or before the due date for filing the return of income.
Addition u/s 43B - Assessee did not remit statutory dues [CST, excise duty on closing stock] before the due date of filing of return of income - AO rejected the contention of the assessee and held that the CST, excise duty on closing stock collected and paid are included in the valuation of purchase, sale and inventory, then effect will be nil only if the said amounts are paid within the due date of filing return in terms of section 43B - CIT(A) held that the assessee has claimed an expenditure which is yet to be paid and is liable to section 43B disallowance - HELD THAT:- We find that on identical facts, the Tribunal in assessee’s own case for assessment year 2011- 2012 [2022 (10) TMI 1204 - ITAT BANGALORE] remitted the issue to the files of the A.O.with a direction to verify and allow the claim of the assessee taking into consideration the rectification order passed u/s.154.
Withholding tax amount on foreign royalty - AO during the course of hearing noticed that the assessee has disclosed only 90% of the Royalty amount for taxation on the ground that the balance 10% would represent tax withheld by the payer and the assessee had not received the said amount either in the form of TDS certificate or actual consideration basis till date - HELD THAT:- Tribunal in assessee’s own case for assessment year 2010- 2011 [2022 (10) TMI 1204 - ITAT BANGALORE] remitted the matter to the files of the A.O. with a direction to allow credit for the tax paid in foreign countries on the doubly taxed income in accordance with the provisions of section 90/91 r.w. Rule 128 based on the documents / evidences submitted by the assessee in this regard.
Addition on account of brand promotion expenses - AO held that ‘brand’ being an intangible asset, any expense incurred towards development of brand or brand promotion leads to an enduring benefit and should be capitalized - HELD THAT:- Following the above order of the Tribunal in the case of United Spirits Limited [2022 (4) TMI 1408 - ITAT BANGALORE] we allow deduction in respect of brand promotion expenses.
Capital gains and addition u/s 115JB - HELD THAT:- Assessee has rightly pointed out that if the shares were cancelled in the first instance, instead of creating the Trust to hold the same, the same would not have resulted in capital gains. Since under both the arrangements, i.e., cancellation of its beneficial holding or under the Trust, there is no resultant capital gains that will be liable to tax, there is no question of painting the arrangement as colourable device. When the subject income has already been offered to tax by the Trust whereby exemptions have been claimed, the lower authorities have failed to establish the reason why the very same income has to be once again considered in the hands of a different assessee. Even if, for academic reasons, it were to be held that the income of the Trust is the income of the Assessee, given the provisions of section 10(38) of the I.T. Act, there is no reason why the benefit of the exemption cannot be extended to the assessee as well.
With respect to the provisions of section 115JB of the I.T. Act, the lower authorities have sought to include the subject amount as a part of 'book profits' though the same is added to the General Reserves and not in the profit and loss account. In the event of books of accounts being prepared in accordance with the provisions of the relevant Companies Act, it is well accepted that the AO has no jurisdiction to go behind net profit shown in the profit and loss account except to the extent provided therein. As it has been held above that the said amount is not the income of the Assessee but of the Trust, there is no question of considering it as a part of book profits. On going through the impugned orders there is no effort to establish the same. Given the same, the CIT(A)/AO have erred in disturbing the book profit as considered by the Assessee.
Short credit of taxes - We restore the issue raised in ground to the files of the A.O. The A.O. is directed to verify and grant TDS and TCS credit as per law.
Disallowance u/s 14A added to book profits - HELD THAT:- The Hon’ble jurisdictional High Court in the case of CIT v. Gokaldas Images [2020 (11) TMI 345 - KARNATAKA HIGH COURT] had held that disallowance u/s 14A cannot be added to the book profits for the purpose of section 115JB of the I.T. Act - we delete 14A disallowance added to the book profit.
-
2022 (11) TMI 1396
Interpretation of the provisions in Section 3(1) of the Expenditure Tax Act, 1987 - whether room charges were less than ₹ 1,200/- per day per individual, no expenditure tax would be chargeable at all - As decided by HC [2019 (9) TMI 102 - BOMBAY HIGH COURT] assessee cannot claim benefit of the principle that such ambiguities in a fiscal statue deserve to be resolved in favour of the assessee. The principle that the ambiguities in a fiscal statute have to be resolved in favour of the assessee, applies in case of genuine ambiguities and not to ambiguities created by overemphasizing upon one of the expressions in a statute and ignoring or downplaying the other expression in the same statute. Substantial question of law relating to the interpretation of the provision in Section 3(1) of the said Act is required to be answered against the Appellants and in favour of the Revenue.
HELD THAT:- No good ground and reason to interfere with the impugned judgment and hence, the Special Leave Petitions are dismissed.
-
2022 (11) TMI 1392
Assessment u/s 153C - seized document as belongs to assessee or not? - Scope of amendment - HELD THAT:- CIT(Appeals) has not erred in facts and in law in holding that for the year under consideration, since the search was conducted prior to amendment in section 153C it was an essential pre-requisite that the incriminating documents on the basis of which the assessment was framed must “belong” to the assessee.
From the contents of the assessment order and the observations made by CIT(Appeals), even the AO has not alleged that the documents “belonged” to the assessee and the AO has himself stated in the order that the documents “pertain” to the assessee.
Therefore, in the instant set of facts, we find no infirmity in the order of the Ld. CIT(Appeals) wherein he has held that since the documents do not “belong” to the assessee, then the additions are not liable to be sustained. Decided in favour of assessee.
........
|
