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Income Tax - Case Laws
Showing 161 to 180 of 9304 Records
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2022 (12) TMI 1273
Revision u/s 263 - As per CIT, AO has not examined corpus donations and AO has wrongly allowed exemption u/s 11 / 12 despite the fact that the assessee was not registered u/s 12AA and hence not eligible for exemption - HELD THAT:- We find that during the course of assessment-proceeding, there were specific queries raised by Ld. AO with regard to the corpus donation and the assessee too made detailed replies / submissions. To this extent, there is no dispute or rebuttal by revenue. Clearly, therefore, it is discernible that the Ld. AO has considered those replies / submissions. Regarding non-registration of assessee u/s 12A, we are convinced with the legal provisions of section 12A(2) as well as CBDT Circular according to which the Ld. AO has rightly allowed the exemption u/s 11 / 12 to assessee.
Regarding introduction of Explanation 2 to section 263, as claimed by Ld. PCIT in his order, we only need to state that it is by now well-settled in several decisions that the said Explanation does not give unfettered power to the PCIT to assume revisional-jurisdiction to revise every order of the AO to re-examine the issues already examined during assessment-proceeding. It is judicially interpreted in several decisions that the intention of legislature behind introduction of Explanation 2 could not have been to enable the PCIT to find fault with each and every assessment-order in unlimited terms, since such an interpretation would lead to unending litigation and there would not be any point of finality of assessment-proceeding done by Ld. AO.
Hon’ble ITAT, Rajkot in M/s Pramukh Realty, Junagadh [2022 (7) TMI 384 - ITAT RAJKOT] has extensively dealt a case where the AO raised queries during assessment-proceeding and the assessee filed details / documents. After a thorough analysis, the Hon’ble Bench has held that in such circumstances, revision u/s 263 cannot be done.
Thus we are persuaded to hold that the facts of the present case do not warrant application of section 263. - Decided in favour of assessee.
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2022 (12) TMI 1272
LTCG - year of assessment - as argued by assessee that once the amount is brought to tax in A.Y 2014-15, therefore, the addition of the same in this year amounts to double addition of the same amount - whether the income on sale of 23 flats has been brought to tax during the A.Y 2015-16 correctly or not? - HELD THAT:- The various other decisions relied on by assessee support the arguments of assessee that the same amount cannot be taxed twice in two different A.Ys. Under these circumstances, we deem it proper to restore the issue to the file of the AO with a direction to verify the record and if the amount of Rs.2,91,07,000/- has been brought to tax in A.Y 2014-15, then the same should be deleted from A.Y 2015-16. We hold and direct accordingly. Needless to say, the AO shall give due opportunity of being heard to the assessee while deciding the issue. The first issue raised by the assessee in the grounds of appeal are accordingly allowed for statistical purposes.
Deduction of indexed cost of acquisition wherein the assessee has challenged the order of the Assessing Officer in not granting indexed cost of acquisition - DRP has directed the AO to reduce the indexed cost of acquisition from the sale consideration and arrive at the correct LTCG. A perusal of the assessment order shows that the Assessing Officer has not granted the benefit of indexed cost of acquisition from the sale consideration to arrive at the correct LTCG. We, therefore, direct the Assessing Officer to follow the direction of the DRP and allow indexed cost of acquisition from the sale consideration. Ground raised by the assessee on this issue is accordingly allowed.
Reversing 54F deduction granted in A.Y 2012-13 - HELD THAT:- A perusal of the order of the DRP at para 2.4.5 shows that the Assessing Officer in the draft order for A.Y 2014-15 has already brought to tax the amount of Rs.6,77,04,992/- as LTCG which was allowed u/s 54F in A.Y 2012-13. However, the DRP at Para 2.4.6 of the order sustained the addition made by the Assessing Officer on the ground that the same is made on protective basis. Since in the instant case, the flats were allotted to the assessee as per the JDA on 13.01.2012 and the flats were sold on 24.3.2015, therefore, the new asset was sold after a period of 3 years and therefore, the provisions of section 54F(3), in our opinion, shall not apply. Further, when the entire sum of Rs.6,77,04,992/- was reversed in A.Y 2014-15, therefore, again addition of the same, under protective basis, in A.Y 2015-16, in our opinion, is also not justified. We, therefore, direct the AO to verify the record and if the amount of Rs.2,99,46,438/- has already been brought to tax in A.Y 2014-15 or the transactions for the year under consideration is beyond a period of 3 years, then not to make any addition by reversing the deduction already allowed u/s 54F in A.Y 2012-13. Needless to say, that the AO while verifying the record shall give due opportunity of being heard to the assessee and decide the issue as per fact and law. We hold and direct accordingly. Grounds of appeal are accordingly allowed for statistical purposes.
Credit of tax paid in A.Y 2016-17 to A.Y 2015-16 - HELD THAT:- Respectfully following the decision of M/S. INTERGLOBE ENTREPRISES PVT. LTD. [2022 (8) TMI 98 - ITAT DELHI] we restore the issue to the file of the Assessing Officer with a direction to verify the record and if any other benefit is not claimed by the assessee in respect of the amount of tax of Rs.1,00,07,393/- paid in A.Y 2016-17, in respect of the income then allow the credit of the same for the A.Y 2015-16. Ground of appeal No.4 raised by the assessee is accordingly allowed for statistical purposes.
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2022 (12) TMI 1271
Penalty u/s. 271(1)(c) - disallowance of depreciation on land, disallowance u/s. 14A r.w.r 8D and addition on account of income from house property shown under the head income from other sources - HELD THAT:- The issue in the present appeal is with respect to levy of penalty u/s. 271(1)(c) - We find that identical issue of levy of penalty was before the coordinate bench of Tribunal for A.Y. 2015-16 in assessee’s own case [2022 (10) TMI 1137 - ITAT DELHI] - no penalty u/s. 271(1)(c) of the Act, is leviable in the present case. Thus the ground of assessee is allowed.
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2022 (12) TMI 1270
Levy of penalty u/s 271(1)(c) - addition on account of short term capital gains on sale of Helicopter - addition made u/s 50 - Disallowance of excess depreciation and disallowance of Helicopter expenses - HELD THAT:- The addition was made based on the information provided by the appellant during the course of assessment proceedings and on the basis of information contained in the Return of Income. Therefore, the appellant cannot be held guilty of furnishing of inaccurate particulars of income nor concealing of particulars of income. Since the information filed along with return of income, unequivocally stated that the Helicopter was sold for a consideration but, the appellant had failed to reduce the entire consideration received on sale of Helicopter from opening WDV of the block of assets under which the Helicopter falls and offered to tax the excess of sale consideration over opening value WDV of block of the assets.
It is not even a case of wrong claim made by the assessee in the return of income. The fact that the entire information regarding the sale of the Helicopter was available in the return of income, an accompanied document, would go to show that it is bona-fide inadvertent error and the ratio of the decision of Price Waterhouse Coopers (P.) Ltd [2012 (9) TMI 775 - SUPREME COURT] is squarely applicable. The mere fact that the assessee had chosen not to contest the addition in the appellate forum, cannot automatically entail levy of penalty as held by the Hon’ble Supreme Court in the case of Sir Shadi Lal Sugar & General Mills Ltd.[1987 (7) TMI 3 - SUPREME COURT]
The appellant cannot be held guilty of furnishing inaccurate particulars of income or concealing the particulars of income and it is not a fit case for levy of penalty u/s 271(1)(c) of the Act. Hence, we reverse the orders passed by the lower authorities and quash the penalty order. Thus, the grounds of appeal filed by the assessee stand allowed.
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2022 (12) TMI 1269
TDS u/s 195 - Scope of “make available” - payment made by the assessee to its non-resident group company as Fees for Technical Services [FTS] by concluding that services “make available”, technology, knowledge, skill, know-how or processes to the assessee as per Article 13 of India-UK DTAA [DTAA] - AO noticed that the assessee has paid an amount to its holding company CPP Limited, UK but has not deducted tax at source claiming that Information Support System Services availed by the assessee company do not fall under the definition of FTS under Article 13 of the DTAA - HELD THAT:- As in order to invoke make available clauses, technical knowledge and skill must remain with the person receiving the services even after the particular contract comes to an end and the technical knowledge or skills of the provider should be imparted to and absorbed by the receiver so that the receiver can deploy similar technology or techniques in the future without depending upon the provider.
Intellectual property is with the supplier [UK based company]. Facts of the case in hand clearly show that there is no transfer of skill or technical services. The recipient [assessee] has not been enriched by receiving the services and making it capable to face similar challenges in future on its own and acquiring skills to deal with the issues. Rendition of these services by the UK company does not enable the recipient [assessee] to provide similar services without recourse to the service provider in future. Merely incidental benefit or enrichment is not sufficient.
Assessee is unable to make use of the said technology only by itself in its business or for its own benefit without recourse to the UK company.
We find that neither the AO nor the ld. CIT(A) has made any attempt to discuss the judicial decisions relied upon by the assessee but has only referred to a single decision of the co-ordinate bench in the case of HJ Heinz [supra] wherein the assessee was availing support services from group company in the area of human resources, strategic planning and marketing, finance and information systems.
The concept of make available which requires that fruits of services should remain unavailable to the service recipients in some concrete shape such as technical knowledge, experience, skill, etc and service recipient has to make use of such technical knowledge, skill, etc by himself in his business and for his own benefit.
Whereas the facts of the case in hand show that the assessee does not gain any technical knowledge, experience or skill as it is not involved in the process that service provider is following while rendering the services. The IT support services are rendered by CPP UK from UK itself and these services are rendered for the entire group and not just for CPP India.
The agreement between CPP group services and the assessee is perpetual and such services are provided by CPP group on recurring basis to the assessee and if the technical knowledge, skill etc. is being made available to the assessee, then there would be no need for the assessee to take recourse to the CPP UK for these services.
Thus IT support services do not satisfy the make available test as no technical know-how, skill etc were transferred to the assessee. Considering the facts of the case in totality, in light of judicial decisions discussed hereinabove, we direct the Assessing Officer to delete the disallowance - Appeal of assessee allowed.
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2022 (12) TMI 1268
Unsecured loans - assessee is not able to prove loans taken from certain persons and thus, out of unsecured loans - HELD THAT:- Assessee has satisfactorily explained the identity, genuineness of transaction and creditworthiness of loan creditors. AO without appreciating the fact simply made additions to part of loan taken from creditors, even though, he has accepted the fact that the assessee has filed all evidences to prove identity of the creditors. It is a well settled principle of law by the decision of various courts, including the decision in the case of CIT v. Lovely Exports Pvt. Ltd. [2008 (1) TMI 575 - SC ORDER] that once name and address of creditors are furnished to the AO, then, it for the AO to proceed in accordance with law to re-open the assessment of creditors, but sum received from creditors cannot be regarded as unexplained credit/ income of the assessee. In this case, the assessee has furnished all evidences to prove the identity of creditors and also satisfactorily explained the genuineness of transactions and creditworthiness of creditors. Therefore, we are of the considered view that the AO is erred in making additions towards unsecured loans from ‘7’ parties and thus, we direct the AO to delete the additions made towards loans.Appeal filed by the assessee is allowed.
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2022 (12) TMI 1267
Revision u/s 263 - AO in the instant case rejected the claim of exemption u/s. 11 and 12 on the ground that assessee trust has advanced loan to trustees in violation of provisions of section 13(1)(c) - as per CIT AO has not taken into consideration the income from business and income from other sources to arrive at the income to be assessed, the order has become erroneous as well as prejudicial to the interest of the revenue - HELD THAT:- As undisputed fact that the AO while completing the assessment did not consider the income form business and income from other sources to arrive at the income to be assessed. It is not the case of the assessee that the assessee trust has not earned the business income and income from other sources - Thus, the AO while completing the assessment u/s. 143(3) and denying the exemption u/s. 11 of the I.T.Act has failed to consider the above two items to arrive at the correct income to be assessed and taxed at Maximum Marginal Rate. Under these circumstances, the order passed by the AO in our opinion has become erroneous as well as prejudicial to the interest of the revenue and therefore, the ld.CIT(E), in our opinion was fully justified in invoking the provisions of section 263 of the I.T.Act. Accordingly, the order passed by the ld.CIT(E) is upheld and the grounds raised by the assessee are dismissed.
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2022 (12) TMI 1266
Revision u/s 263 - CIT setting aside the assessment framed u/s 143(3) read with 153A of the Act in which the AO has not made any addition because there was no incriminating evidences found during the course of search - claim of deduction u/s 35(2AB) of the Act and also in respect of excess allowance of unabsorbed depreciation - HELD THAT:- Undisputedly the instant year is an unabated assessment year and there was no incriminating documents/ materials found during search with respect to claim of deduction u/s 35(2AB) of the Act and also in respect of excess allowance of unabsorbed depreciation. As on date that in an unabated year the addition can only be made on the basis of incriminating material. Therefore having regards to the legal position, the AO framed the assessment u/s 143(3) r.w.s. 153A of the Act without making any addition in respect of claim u/s 35(2AB) of the Act or with regard to the unabsorbed depreciation in consonance with provisions of the Act as interpreted by various judicial forums discussed hereunder.
The case of the assessee is squarely covered by the decision of Continental Warehousing Corporation (Nhava Sheva) Ltd.[2015 (5) TMI 656 - BOMBAY HIGH COURT] and in the case of CIT vs. Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT] wherein it has been held that in case of unabated assessment year on the date of search the addition can only be made on the basis of search material and not otherwise.
Therefore the order passed by the AO u/s 143(3) r.w.s. 153A of the Act is neither erroneous nor prejudicial to the interest of the revenue and therefore jurisdiction invoked by the ld. PCIT as not in consonance with the provisions of section 263 - Before exercise of jurisdiction u/s263 of the Act the AO has to satisfy the twin conditions as provided in section 263 of the Act .i.e. the order purported to be revised has to erroneous as well as prejudicial to the interest of the revenue and even if first conditions is satisfied or vice versa , the jurisdiction is not available to the ld PCIT as has been held in the case of Malabar Industrial Co. Ltd. [2000 (2) TMI 10 - SUPREME COURT] - Accordingly, we quash the order passed u/s 263 of the Act by the Ld. PCIT. The appeal of the assessee is allowed on legal issue.
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2022 (12) TMI 1265
Amortization of leasehold land and land development expenses - On the lands taken on lease are ranging for periods from 21 years to 99 years AO was of the view that the purpose of the expenditure made by the assessee does not satisfy the conditions laid down under the provisions of the act - HELD THAT:- From perusal of the above finding of this Tribunal in case of Greenply Industries Limited [2022 (7) TMI 1045 - ITAT GUWAHATI] we find that the same is squarely applicable on the issue raised before us in the instant appeal and therefore, taking a consistent view, the expenditure claimed by the assessee on account of amortization of leasehold land and land development charges deserves to be allowed. Therefore, ground no. 1 raised by the assessee is allowed.
MAT computation u/s 115JB - excise duty exemptions as capital receipt - whether they are to be excluded for the purpose of computing book profit u/s 115JB? - HELD THAT:- Decision of this Tribunal in assessee’s parent company case of Greenply Industries Limited [2022 (7) TMI 1045 - ITAT GUWAHATI] we find that they are squarely applicable on the issues raised in the instant appeal and there remains no dispute that the alleged sum of excise duty exemption received by the assessee is a capital receipt not chargeable to tax and it is to be excluded for the purpose of computing book profit u/s 115JB - We also find that this Tribunal after considering the settled judicial pronouncements has clearly held that the excise duty exemption received by the assessee during the course of running manufacturing units in the backward areas, notified by the Ministry of Commerce and Industry are to be considered as capital receipt not chargeable to tax and they also need to be excluded from the book profit for the purpose of computing MAT u/s 115JB of the Act.
We, therefore, are of the considered view that the alleged sum of excise duty exemption is a capital receipt not chargeable to tax and even for the purpose of computing MAT u/s 115JB the said sum needs to be reduced from the net profit shown in the audited profit and loss account. Therefore, ground nos. 2 & 3 raised by the assessee are allowed.
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2022 (12) TMI 1264
Exemption u/s 11 - grant of registration u/s.12A(1) denied - Charitable object u/s 2(15) - HELD THAT:- The law requires a conjunctive test whereby objects of the applicant society have to be charitable and genuineness of charitable activities should be established for registration of application u/s. 12A. Mere recital of objects or activities without cogent or corroborative evidence is not sufficient by themselves to enable a registering authority to arrive at the satisfaction mandated by law. In the instant case, the documents on record do not suffice to establish the genuineness of activities. As such the findings of fact regarding its charitable activities or rather the lack thereof arrived at on the basis of the evidence filed and arguments addressed stand uncontroverted. This is fatal to the claim of the applicant.
It is clear that applicant has failed to provide sufficient material to corroborate the charitable nature of the objects and genuineness of the activities. Despite being provided timely opportunity the applicant has not been able to substantiate its claim.
We are unable to accept the applicants claim in absence of sufficient material required for formation of satisfaction. Therefore, no case fit for grant of registration u/s.12A(1) of the Income-tax Act, 1961.
Accordingly, the registration sought by the applicant u/s. 12A(1) of the Income-tax Act, 1961 is hereby rejected. Appeal of the assessee is dismissed.
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2022 (12) TMI 1263
Investment allowance u/s. 32AC(1A) - Investment in new plant or machinery. - AO has disallowed the claim of the assessee on the ground that the assessee has not furnished any explanation nor has it provided any supporting evidence to substantiate its claim - A.O. has disallowed the same on the ground that the assessee company has not earned any trading and manufacturing activity for the year ending 31.03.2017 and that the income from manufacturing and sale of sweets and namkeen is declared as Nil - Also assessee has shown fixed asset under “capital work-in-progress” and has not claimed any depreciation on fixed assets for the impugned year - HELD THAT:- The pre condition for claiming deduction as per the provision of section 32AC of the Act is that the assessee ought to have acquired and installed new assets during any previous year which exceeds Rs.25 crores on or before 31.03.2017. The assessee has in fact furnished copy of certificate of M/s. Khedkar and Associates Consultant P. Ltd. indicating that the said plant and machinery was installed by the assessee on or before 31.03.2017, along with supporting documents. This facts has not been denied by the lower authorities.
The assessee company has commenced sale on 29.04.2017 and state that the said fact is sufficient to prove that the plant and machineries were installed prior to this as it was impossible to commence the sale without preliminary work such as trial production of run, training of personnel, etc. much before the commencement of sale. The A.O. has only relied on the audited profit and loss account which disclosed loss due to excess of expenses and also the audited balance sheet and the return of income. It is pertinent to point out that the provision of section 32AC is a beneficial provision inserted vide Finance Act, 2014 to promote and encourage business of manufacture or production of any article or a thing by way of investment allowance for plant or machinery and for this purpose even the threshold limit of investment was reduced from Rs.100 crores to Rs.25 crores.
This clearly implies that the said beneficiary provision is to be construed so as to entitle the assessee with the benefit of additional deduction. A.O. in the present case has only relied on the audited P & L account, balance sheet and the return of income of the assessee and has not gone beyond to enquire into the credibility of the documentary evidences furnished by the assessee to substantiate its claim. We would also like to place our reliance on the decision of the co-ordinate bench in the case of SNJ Distillers Pvt. Ltd. (supra) which has dealt with the similar issues and has held in favour of the assessee.
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2022 (12) TMI 1262
Penalty imposed u/s 271(1)(c) - addition to the capital of the assessee firm - CIT-A deleted the addition - HELD THAT:- CIT (A) has considered that fact that the first proviso was inserted by the Finance Act 2012 w.e.f 01/04/2013 i.e. A. Y. 2013-14 and therefore, prior to the insertion of first proviso to section 68, the liability of the assesses was limited to establish the identity of the Creditor/Lender/Investor, the creditworthiness and genuineness of transaction, and further the proviso is not applicable to the appellant assessee being a partnership Firm. (Not a company in which the public are substantially interested).
According we find no perversity in the order of the CIT(A) to the facts on record inasmuch as the appellant firm succeeded in proving the three essential ingredients u/s 68 of the act to prove the identity, credit worthiness and the genuineness of the transactions. According, the order of the CIT(A), deleing the impugned addition of Rs.9,80,000/-, is sustained.
Addition on account of transfer of interest-bearing borrowed funds at lesser rate of interest - CIT(A) has rightly followed case of ‘South Indian Bank Ltd. [2021 (9) TMI 566 - SUPREME COURT] wherein it is held that if assessee possesses sufficient interest free funds as against investment in tax free securities, then, there is a presumption that investment which has been made in tax free securities were out of interest free funds owned by the assessee. The case of ‘Principal Commissioner of Income Tax (Central) - 1 vs. NRA Iron and Steel Pvt. Ltd.’ [2019 (3) TMI 323 - SUPREME COURT] relied by the Department is distinguished of peculiar fact of the instant case. Accordingly, we find no infirmity in finding of the Ld. CIT(A) in deleting Addition.
Since the assessee gets relief in quantum appeal, the consequential penalty levied u/s 271(1)(c) is deleted. - Decided in favour of assessee.
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2022 (12) TMI 1261
Addition u/s 68 - unexplained loan - unexplained cash credit - liability on the assessee to provide the identity of the lenders, establish the genuineness of the transactions and creditworthiness of the parties - HELD THAT:- We find that during the remand proceedings, the details such copy PAN, ledger account and confirmation and other detail such as bank statement, audited books were made available before the AO. However, the AO without considering and pointing any deficiency in the above primary document held that the assessee failed to prove the identity of the creditor, explain the genuineness of transaction and establish the credit worthiness of the creditor.
Be that as it may be, the undisputed fact that the loan were received through banking channel and loan has been repaid by the assessee in the subsequent year through banking channel. Also undisputed that the assessee has also paid interest on such loan after deducting eligible tax at source as per the provision of section 194A - Therefore, in our considered view once the amount of loan received through banking channel and repayment of the same along with interest also made through banking channel then the genuineness cannot be doubted.
We hereby held that the assessee discharged the onus cast under section 68 of the Act. Hence, we do not find any reason to interfere in the finding of the learned CIT(A). Thus, the ground of appeal of the Revenue on merit is hereby dismissed.
Unexplained purchases - AO in absence of necessary details and supporting evidences disallowed 50% of purchases - CIT-A sustained part addition of Rs. 1 lakh only - HELD THAT:- Undeniably, the sales cannot be effected without the purchases. In other words the transactions of purchase and sale are contemporary to each other. In the event, if the purchases are doubted then the corresponding sale cannot be assumed to correct which is arising against the purchases.
Gross profit ratio and the net profit ratio of the assessee was improved in comparison to the earlier years. In other words, the revenue in the earlier years was pleased to accept the profitability of the assessee declared by it in the income tax return. Likewise the facts of the year in dispute as well as of the earlier assessment years are identical and no major difference has been pointed out by the AO. Thus, if we disallow the purchases by the amount i.e. 50% of total purchases which will eventually result better profitability but the same will not be acceptable as the gross profit ratio and GP ratio will increase manifold despite the fact that there was no change in the facts and circumstances for the year under consideration as well as in the earlier year.
Assessee has furnished the details of the suppliers and extract 7/12 form of the farmers from whom the purchases of the materials were made. Thus to our mind, the AO before pointing out any defect in the address of supplier furnished by the assessee should have issued at least notices on sample basis in order to verify the veracity of the transactions. But we note that no such power has been exercise by the AO during the remand proceeding. In view of the above and after considering the facts in totality, we do not find any infirmity in the order of the learned CIT(A). Accordingly, we uphold the same. Hence the ground of appeal of the revenue is hereby dismissed.
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2022 (12) TMI 1260
Reopening of assessment u/s 147 - addition u/s 50C - as argued AO relied only on the information received from third party without having any other material on record - HELD THAT:- As submitted that the AO was not having any material other than an information that the assessee has transferred immovable property, hence the reason to believe of the AO for escapement of income was based on borrowed satisfaction.
It is pertinent to note that the assessee had not filed the return of income for the year under consideration. Subsequently the AO received an information from the land Revenue authority that assessee has transferred immovable property. Thus, in the absence of the return of income, the AO had no alternate to verify the veracity of the information received from the land revenue authority whether the assessee has disclosed any income on the transfer of the property. Accordingly, we are of the considered opinion that it cannot be said that the reopening proceedings were initiated on borrowed satisfaction. Thus on this count, the assessee fails.
No valid service of notice u/s 148 - We note that the notice under section 148 of the Act was issued well in time at the address available on record with the revenue Department. The fact that the assessment proceeding initiated was known to the assessee’s father. Merely for the fact that the assessee left home without informing anyone to unknown location the notices issued and duly served on last given address cannot held as illegal/invalid service of notice. See ATULBHAI HIRALAL SHAH [2016 (6) TMI 564 - GUJARAT HIGH COURT].
Thus we hold that the service of notice under section 148 of Act and other subsequent notices cannot held as invalid service of notice, for the reason that the revenue has issue notices on last known address of the assessee. Revenue cannot be held guilty for the fact the assessee has left that place without informing anyone for unknown location. Thus on this count also, the assessee fails.
Capital gain - We note that the property was transferred by the assessee to his mother by way of sale deed no. 3852 dated 13-04-2006 wherein the consideration on the transfer of the property in dispute was duly recorded. There was nothing mention in the sale deed justifying the stand of the assessee i.e. the transfer was in the nature of the gift or without consideration. Accordingly, we hold that there was a valid transfer of the property in the given facts and circumstances within the meaning of the provisions of section 45 of the Act. See PARAMJIT SINGH VERSUS INCOME-TAX OFFICER [2010 (2) TMI 262 - PUNJAB & HARYANA HIGH COURT]
Thus remain no ambiguity that the impugned property transferred by the assessee to his mother for consideration of Rs. 5 Lakh is liable to be brought under the ambit of capital gain. However, the question arise for determination of sales consideration. As the AO has taken consideration as per section 50C of the Act whereas the AR before us has challenged the value adopted by the AO and subsequently sustained by the learned CIT(A). In the interest of justice and fair play, we set aside the issue to the file of the AO to refer the matter to the DVO to determine the value of the property in pursuance to the provisions of section 50C of the Act. Hence the ground of appeal of the assessee is partly allowed.
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2022 (12) TMI 1259
Levy of interest for delay of 1 day in deposit of TDS - Levy of Fee u/s 234E - due to technical glitch the bank could not remit the amount immediately to the account of the department - HELD THAT:- Income Tax Department has authorized certain banks to collect TDS on their behalf. The Bank of Baroda being one of the authorized banks, thus, has acted as an agent of the Income Tax Department. In our view, the moment, the assessee deposited the TDS with the bank, the bank being an agent of the Income Tax Department, the amount is deemed to have been received by the principal i.e. Income Tax Department. The bank has issued letter in this respect that the amount was duly deposited by the assessee before the due date and that there was no default on the part of the assessee.
Though the Income Tax Department and other Government Organisations have shifted to the online system, however, the said system is in the developing stage and often there are technical glitches faced due to which certain acts of uploading of forms etc and as in the present case, the remittance of the amount by the bank to the account of the department are being faced, which are beyond the control of the concerned assessee or the person who is supposed to upload such information, form or to remit the amount, as the case may be. This type of technical glitches is beyond the control of concerned assessee/person for which the concerned assessee cannot be penalised.
The facts in this case are apparent that the assessee had deposited the amount with the authorized bank within the due date, however, due to technical glitch the bank could not remit the amount immediately to the account of the department and there occurred a delay of one day because of which the assessee cannot be burdened with levy of interest u/s 201(1A) - assessee cannot be burdened because of not doing an act which was beyond his control. Even otherwise, as observed above, the Bank has accepted the payment being agent of the Income Tax Department, and the assessee has deposited the payment with the bank before the due date.The impugned levy of interest by the lower authorities is set aside. Appeal of the assessee stands allowed.
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2022 (12) TMI 1258
TP Adjustment - comparable selection - HELD THAT:- We exclude the companies whose turnover is not within the range of Rs.200 crores to 2000 crores.
Exclusion of companies as functionally dissimilar with that of assessee engaged in the provision of software development services to its Associated Enterprise [AE]
RPT filter has to be applied adopting the threshold limit of 15%.
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2022 (12) TMI 1257
TP Adjustment - benchmarking qua AMP expenditure - HELD THAT:- Similar views have also been taken in previous years by this Tribunal [2019 (4) TMI 1774 - ITAT DELHI], wherein this Tribunal has also looked into the all the records and materials including ‘memorandum of understanding for basic transaction entered into between the assessee and its AE dated 01/06/2009’. Therefore, the contention of the Ld. DR that, the Tribunal has not looked into the ‘memorandum of understanding for basic transaction rules” is not correct. In view of the above binding decisions of this Tribunal mentioned supra and in the light of the discussion made above, we are of the opinion that, when there is no international transaction, no separate benchmarking qua AMP expenditure can be made; hence the adjustments are liable to be deleted. Appeal of the assessee is allowed.
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2022 (12) TMI 1256
TP Adjustment - working capital adjustment to be considered for the difference in working capital levels between the comparable companies and the assessee - HELD THAT:- With regard to international transaction of provision of marketing services to Red Hat US, the assessee is seeking for working capital adjustment. We find that the Co-ordinate Bench of this Tribunal in assessee’s own case for A.Y.2016-17 [2022 (2) TMI 1283 - ITAT MUMBAI] had indeed accepted to the plea that working capital adjustment shall be eligible to the assessee and the same shall be reckoned for the difference in working capital levels between the comparable companies and the assessee.
Admittedly, the assessee had indeed furnished the workings for working capital adjustments before the ld. TPO as is evident - We direct the ld. TPO to grant working capital adjustment while determining the ALP of provision of marketing support related services to Red Hat US. The ground No.18 raised by the assessee for A.Y.2012-13 is allowed for statistical purposes.
Inclusion and exclusion of certain comparables - Exclusion of Infobeans Technologies Ltd. from the final list of comparables as it is into diversified services but its segmental financials are not available without which it is difficult to compute the correct profit margin of the relevant segment. So Infobeans is also ordered to be excluded as a comparable being not a comparable to the assessee.
Exclusion of Ingenuinity Gaming Solutions - In absence of segmental data for the software development segment alone, the same cannot be held to be comparable with the assessee in IT segment. Accordingly, we direct the ld. TPO to exclude the same from the list of comparables.
The segmental data for software development services segment alone also was not available in respect of this comparable. Hence, we direct the ld. TPO to exclude this company from the final list of comparables. As stated earlier, once the aforesaid two comparables are excluded and working capital adjustments are given, the ld. AR submitted that it would not be required to go into other grounds as the assessee would be well within the tolerance band of +/-5% range. Hence, the ground Nos.5-7 are not hereby adjudicated and they are left open.
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2022 (12) TMI 1237
Reopening of assessment u/s 147 - Necessity of taking approval from the appropriate authority u/s 151 before issuance of such notice - petitioner has challenged the impugned notice u/s 148A(b) on the ground that the impugned notice was issued in contravention of Section 151(ii) by not taking approval from the appropriate authority before issuance of such notice - HELD THAT:- Mr. Dutt, learned advocate appearing for the respondent shall take appropriate instruction in the aforesaid regard.
List this matter on 08.12.2022.
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2022 (12) TMI 1225
Deduction u/s 40(b)(v) - deduction of the amount of remuneration paid to the partners - Payment of remuneration to partners not authorized by the Partnership Deed - HELD THAT:- According to the Tribunal, the appellant has to be authorized by the partnership deed and the same has to be in accordance with the terms of the partnership deed. Referring to the partnership deed constituting the appellant, Tribunal held that the partnership deed did not contain any terms for payment to the working partners. In that view of the matter, Tribunal while confirming the order of the assessing officer held that payment made to the partners amounting to Rs.1,08,000.00 is not an allowable deduction as per Section 40(b)(v) of the Act.
On due consideration, we do not find any error or infirmity in the view taken by the Tribunal. No question of law, not to speak of any substantial question of law, arises from the said order of the Tribunal.Appeal is devoid of any merit and the same is accordingly dismissed.
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