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Income Tax - Case Laws
Showing 381 to 400 of 9304 Records
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2022 (12) TMI 803
Proceedings u/s 276-C (l)/276-D and 277 - evasion of tax for the assessment year 2006-07 - deposit and transaction in the undisclosed foreign account - Scope of instruction No. 5051, dated 07.02.1991 issued by the CBDT which prohibits prosecution of persons above 70 years of age - whether the Circular/ Instruction No. 5051 dated 07.02.1991 applies to the present case or not? - petitioner, on the ground of his old age being 80 years and medical conditions, sought exemption from personal appearance - application under Section 245(2) Cr.P.C. before the learned trial court for dropping of the proceedings on the ground of his age and on the basis of Circular/Instruction No. 5051 dated 07.02.1991 - HELD THAT:- Admittedly the said foreign account was opened in the HSBC Bank, London on 20.08.1991 and not disclosed. Taking the date of birth of petitioner, as claimed by him, as 30.03.1936, this Court finds that at the time of commission of offence in the year 1991 he was more than 55 years of age. The Circular/ Instruction No. 5051 dated 07.02.1991 notes that prosecution normally be not initiated against a person who has attained the age of 70 years at the time of commission of offence. Meaning thereby, in terms of Circular/ Instruction No. 5051 dated 07.02.1991, the age at the time of commission of offence has to be taken and not when the proceedings initiated.
Even though petitioner claims to have filed a revised income tax return on 16.02.2015 declaring his additional income as Rs.2,53,00440/- under the head ‘income from other sources’ i.e. the maximum credit balance in the undisclosed bank account maintained in HSBC account, however, this Court cannot lose sight of the fact that on 26.09.2013 Show Cause Notice under Section 274 r/w 271 of the Act was issued against him and also that penalty under Section 271 (1) (b) of the Act for non-compliance of notice under Section 142(1) was also levied vide order dated 26.09.2013. It is only thereafter that the petitioner has chosen to file revised income tax return and by doing so, he cannot evade the judicial process of law for not disclosing his correct income and foreign account since the year 1991.
As decided in Pradip Burman [2015 (12) TMI 202 - DELHI HIGH COURT] as crystal clear that the petitioner had admitted to have bank accounts outside India only after the investigation by the Income Tax Department. The said foreign account was the undisclosed account and the deposits therein relates to his undisclosed income and the same needs to be examined.”
Thus in opinion petitioner cannot be permitted to take benefit of Circular/ Instruction No. 5051 dated 07.02.1991 to find an escape route for the wrong committed by him. Accordingly, the present petition is dismissed.
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2022 (12) TMI 802
Reopening of Assessment u/s 147 - change of opinion - Reopening permissible if the assessee had not disclosed all the relevant particulars fully and truly before the assessing officer - reopening on a standalone basis - disallowing the claim towards debiting to the profit & loss account due to reversal on account of cancellation and price revision - HELD THAT:- The fact that the reopening of assessment was ordered on mere change of opinion has been upheld by two lower appellate authorities. It is evident that respondent had disclosed fully and truly all material facts to the assessing officer during the assessment proceeding on the basis of which assessment order was passed u/s 143(3) of the Act.
By change of opinion holding that reduction towards reversal on account of cancellation and price revision and deducting the same from the profit and loss account was irregular thereby having reason to believe that taxable income had escaped assessment, the concluded assessment could not have been reopened. At the stage of third round of appeal we do not find any substantial question of law for interference by the High Court under Section 260A - We are, therefore, of the view that there is no merit in this appeal. - Decide against revenue.
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2022 (12) TMI 801
Reopening of assessment u/s 147 - order u/s 148A(d) - petitioner has received the gift from his father - As urged in the order u/s 148A(d) the officer accepts the limitation that the three years had elapsed from the end of relevant assessment year and for necessary sanction he refers the matter to the Commissioner of Income-tax instead of Chief Commissioner of Income-tax - HELD THAT:- Issue Notice, returnable on 13.12.2022. By way of interim relief, it is directed that the process of assessment shall continue with the cooperation of the petitioner, however, the final assessment order shall not be passed before the returnable date.
Over and above the regular mode of service, direct service through e-mode (on official Email address) is also permitted.
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2022 (12) TMI 800
Reopening of assessment u/s 147 - Notice issued to the present petitioner u/s 148A(b) - case of third party, who has alleged to have indulged in giving accommodation entries through various dummy persons - as argued scrutiny assessment has been completed and AO even if, has got the informations he is not paying heed to his request and the reply while passing an order u/s 148A(d) would amount to this being a mere ordeal - HELD THAT:- As emphatically urged that there is not a single entry or transaction with Ganpati Textile or the search person.
Issue Notice returnable on 19.12.2022. By way of interim relief, it is directed that the process of assessment shall continue with the cooperation of the petitioner, however, the final assessment order shall not be passed before the returnable date.
Over and above the regular mode of service, service of notice through e-mode on the official e-mail ID is permitted.
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2022 (12) TMI 799
TP Adjustment - upward adjustment in imputing notional interest on the outstanding overdue receivables from Associated Enterprises (AEs) - AR submitted that the assessee has adopted Transaction Net Margin Method (TNMM) and therefore the interest on outstanding receivables is subsumed in the Arm’s Length Price (ALP) charged to the AEs - HELD THAT:- As find from working of assessee’s own case for the A.Y.2017-18 [2022 (9) TMI 587 - ITAT VISAKHAPATNAM] the assessee’s margin is significantly higher than the operating margin of the comparable companies. There may be a delay in the collection of receivables even beyond the agreed time limits due to a variety of factors which has to be decided on a case to case basis. When TNM method is considered as the most appropriate method, which was also not disputed by Revenue, the net margin thereunder would take care of such notional interest cost. As further explained by Ld.AR that the impact of the delay in collection of receivables would have a bearing on the working capital of the assessee. We find that these working capital adjustments on the ALP has been already factored in its pricing / profitability vis-à-vis that of its comparables. We therefore are of the considered view that any further adjustment to the margin of the assessee on the outstanding receivables cannot be justified and no separate upward adjustment on outstanding export receivables is required and therefore we direct the AO to delete the upward adjustment made towards overdue receivables from AE. We therefore allow this ground raised by the assessee.
Adjustment towards corporate guarantee - Addition of commission on the gross guarantee given to AE - HELD THAT:- As relying on assessee own case [2022 (9) TMI 587 - ITAT VISAKHAPATNAM] following the ratio laid down in the case of CIT vs. Everest Kanto Ltd [2015 (5) TMI 395 - BOMBAY HIGH COURT]. We are of the considered view that the corporate guarantee commission is an international transaction and should be charged @ 0.50% on the corporate guarantee amount utilized, by the AE. We therefore allow the grounds raised by the assessee.
Disallowance under section 14A r.w.r. 8D - As argued the assessee has not earned any exempt income warranting the disallowance u/s. 14A - AR pleaded that the assessee’s holding shares is merely to retain the controlling interest and no income has been received by the assessee during the impugned assessment year - HELD THAT:- As relying on assessee own case [2022 (9) TMI 587 - ITAT VISAKHAPATNAM] assessee has not earned any exempt income during the relevant assessment year mandating the invoking of provisions of section 14A - As in CIT vs. Chettinad Logistics (P.) Ltd [2017 (4) TMI 298 - MADRAS HIGH COURT] has dismissed the SLP [2018 (7) TMI 567 - SC ORDER] of the Revenue and held that section 14A can only be triggered if assessee claims any expenditure against an income which does not form part of the total income under the Act. The Hon’ble Supreme Court further observed that Rule 8D only provides for a method to determine the amount of expenditure incurred in relation to income which does not form part of the total income of the assessee. - Decided in favour of assessee.
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2022 (12) TMI 798
Penalty u/s 271(1)(b) - non-compliance of the notices - assessee did not participate in the assessment proceedings and ex parte order u/s 144 was passed - assessee was not aware of uploading of the impugned order of the NFAC/ld.CIT(A) - HELD THAT:- Director Shri Bhavesh Chhatbar was all the while available, having received all orders passed i.e. assessment order under section 144 of the Act and penalty order u/s 271(1)(b) of the Act and the order of the NFAC/ld.CIT(A) in penalty proceedings, having repeatedly filed appeals before the higher forums against the said orders.
There is no reason why the notices remained unresponded to. When the director of the assessee company, Shri Bhavesh Chhatbar, could have responded to the orders passed repeatedly, he could very well have responded to the notices also, and the statement made on behalf of the assessee that the directors were all absconding, therefore, appears to be totally false. Even before us, we find that after filing of the appeal, nobody has appeared. This appears to be a repeated pattern being adopted by the assessee to misuse the due process of law. We therefore see no reason to differ from the NFAC/ld.CIT(A)’s finding and accordingly uphold the order of the NFAC/ld.CIT(A) confirming the levy of penalty under section 271(1)(b) of the Act of Rs.30,000/-. The grounds of appeal of the assessee are rejected.
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2022 (12) TMI 797
Deduction u/s.80P(2)(a)(i) - interest earned from various Co-operative Banks - HELD THAT:- The Pune Bench in Rena Sahakari Sakhar Karkhana Ltd. [2022 (1) TMI 419 - ITAT PUNE] has held that though co-operative banks, other than primary agricultural credit society or a primary co-operative agricultural and rural development bank, are not eligible for deduction pursuant to insertion of section 80P(4) w.e.f. 1.4.2007, but this provision does not dent the otherwise eligibility u/s 80P(2)(d) of the Act of a co-operative society on interest income on investments/deposits parked with a co-operative bank, which is a registered co-operative society as per section 2(19) of the Act, defining co-operative society to mean a co-operative society registered under the Co-operative Societies Act, 1912 or under any law for the time being in force. The assessee is also a Co-operative society registered under the Cooperative Societies Act.
Respectfully overturn the impugned order and direct to grant deduction u/s.80P(2)(a)(i) of the Act on the amount of interest earned from various Co-operative Banks. Assessee appeal is allowed.
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2022 (12) TMI 796
Exemption u/s 54 - Payment made for the Purchase of the new property - Capital gain on transfer of certain capital assets not to be charged in case of investment in residential house - whether deduction u/s 54 should be allowed to assessee even if the investment in new asset under builder construction agreement made before transfer of asset? - HELD THAT:- The agreement for sale was signed on 08.08.2014 and the payments have been completed by 08.10.2014. Since, the amount equivalent to the capital gains has been utilized for acquisition of new house, the assessee be permitted to avail the benefit allowable u/s 54 of the Act.
Appeal of the assessee is allowed.
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2022 (12) TMI 795
Disallowance of power & fuel expenses - Addition @ 5% of the total claim of expenses - CIT(A) after going through the details filed by the assessee held that expenses on power and fuel are proportionately high in certain months are not justified and specially in the month of March which was without any justification - HELD THAT:- On perusal of the details filed by the assessee notice that during AY 2013-14 fuel expenses are 14.45% of the total turnover Ct the assessee has purchased its own vehicle.
Major Increase in the expenditure of power expenses - As assessee has been able to satisfy the considerable change. However, considering the fact that most of the expenses of power & fuel have been booked at the fag end and there considerable increase in the percentage of this expenditure for the AY 2010-11 onwards, we deem it proper to sustain the addition/disallowance @ 1% of the total claim of expenditure at Rs.2,15,63,895/-. Therefore, against the disallowance of Rs.10,78,194/-, a sum of Rs. 2,15,638/- is sustained and remaining disallowance of Rs.8,62,556/- is deleted. Ground no.1 raised by the assessee is partly allowed.
Disallowance of repair & maintenance expenses - HELD THAT:- Assessee has filed complete ledger accounts of the expenditure incurred. Except an amount as incurred in cash remaining/balance amount has been paid through banking channel. We also note that percentage of repair and maintenance expenditure has scaled down as comparable to the preceding year. Disallowance of repair and maintenance expenses needs to be sustained only to the extent which the assessee failed to explain. Thus, remaining addition of is deleted. The assessee gets part relief. Ground no. 2 is partly allowed.
Disallowance of unloading & chipping expenses computed @ 5% - HELD THAT:- As most of the expenditure though has been incurred in cash but subjected to deduction of TDS, which has been duly deposited. Both the lower authorities have given general remarks and have not specifically pointed out any such payment, which has been made in cash and TDS not deducted and not supported by relevant documents. Considering the fact that loading and chipping expenses constitutes major parts of the expenditure of the assessee company i.e 32.14% and also considering the fact that turnover of the assessee has increased from 1.26 cr during AY 2010-11 to Rs. 14.92 cr during AY 2013-14 and also net profit which was declared at Rs. 9,04,071/- during AY 2010-11 has risen to Rs.99,15,955/- in AY 2013-14, the books of account regularly audited and complete details have been filed before us in the shape of paper book, we being fair to both the parties are inclined to sustain the disallowance @ 1% i.e at Rs. 4,79,618/- as against Rs.23,98090/- confirmed by the ld. CIT(A). Thus, assessee gets relief at Rs. 19,18,472/-. Ground no.3 is partly allowed.
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2022 (12) TMI 794
Penalty u/s 271(1)(c) - Defective notice u/ 274 - non-strike off of the irrelevant part - HELD THAT:- As could be seen from the above the Hon'ble Bombay High Court (Full Bench at Goa) in the case of Mr. Mohd. Farhan A. Shaikh [2021 (3) TMI 608 - BOMBAY HIGH COURT] while dealing with the issue of non-strike off of the irrelevant part in the notice issued u/s. 271(1)(c) held that assessee must be informed of the grounds of the penalty proceedings only through statutory notice and an omnibus notice suffers from the vice of vagueness.
Ratio of this full bench decision of the Hon'ble Bombay High Court (Goa) squarely applies to the facts of the assessee's case as the notice u/s. 274 r.w.s. 271(1)(c) of the Act were issued without striking off the irrelevant portion of the limb and failed to intimate the assessee the relevant limb and charge for which the notices were issued.
A.O passed the assessment order without mentioning the exact limb of the penalty proceedings to be initiated against the assessee and consequent to the same issuance of the notice u/s 274 which the A.O. has fail to specify the limb under which the penalty proceedings having initiated and proceeded with, apparently goes to prove that above notices have been issued in a mechanical manner without applying the mind. Being so, the said notice issued u/s 271(1)(c) of the Act is bad in law consequently the penalty levied there under cannot be sustained.Appeal filed by the assessee is allowed.
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2022 (12) TMI 793
Deduction u/s 80P(2)(a)(i) - interest from Cooperative Banks in respect of availing facility to take cash from the said banks - HELD THAT:- From the perusal of Profit & Loss account the said receipts of dividend are shown to the extent of Rs. 12,660/- of bank share and thus the total receipt from Cooperative Banks come to Rs. 19,14,547/-.
The reliance of the Hon’ble Supreme Court’s decision that of Totgars Cooperative Sale Society Ltd. [2010 (2) TMI 3 - SUPREME COURT] is not justifiable in the present case as the interest income had on the surplus of its funds not immediately required for its business was declared as not income from business by the Hon’ble Supreme Court in the said case.
But in the present case the assessee claim deduction on interest from Cooperative Banks in respect of availing facility to take cash from the said banks which is directly related to the business of the assessee society. Thus, the CIT(A) as well as the AO was not right in disallowing the interest component claimed by the assessee under Section 80P(2)(a)(i) of the Act. Appeal of the assessee is allowed.
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2022 (12) TMI 792
Penalty u/s 271(1)(c) - deduction u/s 80G and 80HHC denied on the ground that the entire gross total income of the assessee comprised purely of Long Term Capital Gains and not business income - debatable issue - HELD THAT:- The contention of the assessee, therefore, that the issue was debatable is correct. The Ld.CIT(A) has not dealt with this contention of the assessee at all, brushing it aside simply by stating that the claim is inadmissible as per law in view of section 112(2) of the Act.
In view of the decision of ARVIND MILLS LTD. [2001 (9) TMI 53 - GUJARAT HIGH COURT] laying down proposition in favour of the assessee it cannot be said that the claim was clearly inadmissible as per law. In these facts and circumstances of the case, the assessee cannot be charged with having furnished any inaccurate particulars of income so as to be exigible to levy of penalty u/s 271(1)(c)of the Act. The penalty so levied amounting is directed to be deleted. Appeal of the assessee is allowed.
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2022 (12) TMI 791
Levying the late filing fee u/s. 234E - delay in filing the TDS statement - genuine hardship to the assessee - reasonable cause on the part of the appellant Educational Society which resulted in delay in filing the TDS statement - HELD THAT:- Assessee had deducted tax at source u/s. 195 of the Act but belatedly filed the returns on 27/11/2015 under the bonafide intention that the amended provisions will not attract for levy of late fee u/s. 234E of the Act since the due date for filing the returns for Q1 of FY 2014-15 is 30/06/2014.
AYs’ 2016-17 & 2017-18 - AO vide order passed U/s. 200A, imposed late fees U/s. 234E of the Act. In these cases since the assessee has filed its TDS returns on 12/02/2018 which is after the date of insertion of specific provision for levy of late fee U/s. 234E ie., 01/06/2015. Therefore, the action taken by the Ld. AO in levying the late fee for default in furnishing the TDS statement beyond the stipulated time is in accordance with law. Therefore, we have no hesitation to come to a conclusion that the orders of the Ld. Revenue Authorities invoking the provisions of section 234E in order to levy late fee for default in furnishing the TDS statement beyond the stipulated time is in accordance with law and accordingly the grounds raised by the assessee are hereby dismissed.
Since the period under consideration is the 1st Quarter of FY 2014-15 ie., prior to the amendment to section 200A(1) of the Act wherein clause (c) was inserted w.e.f 01/06/2015 and the assessee had already deposited the tax at source prior to the amendment to section 200A(1), the levy of late fee u/s. 234E for default in furnishing the statement beyond the stipulated time is not sustainable in law.
Respectfully following the ratio laid down in the judgment in the case of Fatheraj Singhvi [2016 (9) TMI 964 - KARNATAKA HIGH COURT], in the case of United Metals [2021 (12) TMI 1349 - KERALA HIGH COURT] and the levying of late fee u/s 234E for the period prior to 1/6/2015 is not sustainable in law.
Thus, in the instant case since the period of default was before the said date ie., 01/06/2015, there is no merit in charging late filing fee u/s. 234E of the Act. Accordingly the Ld. AO is directed to delete the fee levied U/s. 234E of the Act in the order passed U/s. 154 r.w.s 200A of the Act Thus, the grounds raised by the assessee are allowed.
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2022 (12) TMI 790
ESOP expenditure - nature of expenditure - whether CIT(A) erred in holding that the ESOP expenditure was only notional and capital in nature, thus attracting disallowance? - HELD THAT:- As decided in assessee’s own case in [2021 (11) TMI 1119 - ITAT DELHI] expenditure incurred in connection with the ESOP is treated as revenue expenditure, we hereby allow the ground of appeal on this issue.
Addition on account or interest paid on money borrowed as unsecured loan - HELD THAT:- We note that the AO has prepared a chart in which interest paid to Smt. Vasntha Surya was Rs.8,36,424/- and the rate of interest varied between 13% to 24%. Assessee’s claim was that it was in need of funds and banks did not provide necessary assistance, has been rejected by the authorities below on the ground that no such evidence is available. Comparing the interest rate with bank rates in the facts of this case is quite anomalous considering the fact that assessee has claimed that assessee has got the loan without any collateral security and rate varied from 13% to 24%. So blanket disallowance by the AO and confirmed by the ld. CIT (A) is without any basis. It is not the case that the expenditure is bogus. In these circumstances, we set aside the orders of the authorities below and decide the issue in favour of the assessee.
Disallowing the expenditure incurred by the Appellant towards gift provided to foreign delegate as a part of business promotion - HELD THAT:- We find that assessee has not adduced any evidence before us also to take a contrary view than the one taken by ld. CIT (A) on above issues. As regards gold chain, we may also observed that if it was a souvenir on behalf of the assessee company, there is no reason why the bill is in the name of the Director in person. Hence, we confirm the disallowances as sustained by ld. CIT (A).
Disallowing the claim for weighted deduction in respect of expenditure on scientific research u/s 35(2AB) - HELD THAT:- Upon careful consideration, we find ourselves in agreement with the submission of ld. Counsel of the assessee as above. Assessee has duly fulfilled the obligation cast upon it. It has duly obtained the required certificate from DSIR. The delay in respect of Form 3CL is not attributable to any act or omission of the assessee. Moreover the case laws referred above duly cover the issue in favour of assessee. No contrary decision has been brought to our notice. Hence, following the aforesaid precedents, we set aside the order of authorities below and decide the issue in favour of assessee.
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2022 (12) TMI 789
Addition u/s 68 - unexplained cash credit of share capital and security premium received during the year - assessee failed to appear before the AO and assessee did not produce the alleged share holder before the AO for identity, creditworthiness and genuineness of the transaction - HELD THAT:- The assessee company has miserably failed to source of alleged cash credit if the assessee had sufficient details to explain the alleged sum. Consistently escaping from appearing before the ld. AO and the appellate authority, CIT(A) indicates that the assessee has no plausible explanation to explain the source of alleged sum of share capital and security premium.
In the case of assessee completely failed to explain the alleged cash credit and consistently escaped the provisions of section 68 are attracted. Thus it is held that the assessee has routed its unaccounted income in the books of account in the form of share capital and security premium by arranging the bogus share capital and share premium through accommodation entry provider. Therefore, we find no infirmity in the findings of the CIT(A) confirming the addition made u/s 68 of the Act and same is confirmed. Thus the ground of appeal raised by the assessee is dismissed.
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2022 (12) TMI 788
Addition u/s 68 - unexplained cash credit (security premium) - HELD THAT:- AO asked the assessee to explain the said credit on multiple occasions which the assessee was duty bound to explain so as to avoid the invocation of the provisions of Section 68 which relates to unexplained cash credit. It is not in dispute that the assessee received the alleged sum during the year towards security premium.
AO was justified in asking the assessee to prove the identity and creditworthiness of the shareholders/share applicants and the genuineness of the transaction.
All the efforts of ld. AO went in vain as the assessee did not comply to any of the notices and even before the ld. CIT(A) the assessee did not appear on any occasion and similar lethargic approach of the assessee stands continued before this Tribunal. Also, the assessee has not filed any application stating any reasonable cause for not appearing on the given dates of hearing.
Except filing the appeal, there is no other effort from the side of the assessee to pursue its appeal. Unless and until the documents and the other materials are filed to explain the alleged cash credit it is not possible to accept the grounds raised by the assessee and thus, it is presumed that the assessee is unable to explain the source of alleged security premium.
No infirmity in the detailed finding of ld. AO as well as CIT(A) duly supported by judicial pronouncements and therefore, the addition for unexplained security premium u/s 68 of the Act is confirmed. Thus, all the grounds raised by the assessee are dismissed.
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2022 (12) TMI 787
Reopening of assessment u/s 147 - issue not been agitated before the CIT(A) - HELD THAT:- Copy of Form No. 35 available on record has been seen. Hence, no finding of the First Appellate Authority is available on the issue. We find from the record that before us despite providing more than adequate opportunities to the assessee, no attempt has been made to show how the ground is maintainable and allowable. Nothing has been placed before us to show that the assessment was bad in law. Accordingly, ground No. 2 considering the record available is dismissed.
Unexplained addition u/s 68 - HELD THAT:- Since nothing has been placed before us to rebut the finding on fact or address the issue on facts for want of submission and supporting evidences, the additions sustained by the CIT(A) are upheld. - Decided against assessee.
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2022 (12) TMI 786
Revision u/s 263 - disallowances u/s 14A - interest bearing borrowed funds have been utilized during the year to fund the non-current investments as evident from the steep increase in the finance cost during the year which doesn't stand justified with reference to revenue from operations and it is accordingly held that the finance cost is incurred during the year to sustain its non-current investments which call for disallowance u/s. 14A of the Act and which the AO has failed to enquire during the course of assessment proceedings - HELD THAT:- As submitted that basis the said submission that there are no fresh investments made during the year and consequentially, no interest bearing funds were utilized for making any such investment, no disallowance was made by the AO towards the interest expenditure incurred during the year.
We find force in the arguments of the AR and are of the considered view that the matter has been adequately examined by the AO regarding fresh investments made during the year and after taking into consideration the factual position and submissions of the assessee including the comparative position of investments at the beginning and at the end of year which shows that there are no fresh investments made during the year, the AO has not made any disallowance towards interest expenditure u/s. 14A - we find that it is not the case of the ld. PCIT that the investments made in the earlier years were made out of interest bearing funds and interest cost thereof continue to be claimed during the year and which has escaped attention of the AO. Nothing has been brought on record to this effect either in the impugned order or during the course of hearing before us including any disallowances made u/s 14A in the earlier years.
We find that there are justifiable basis to invoke the provisions of section 263 as the order passed by the AO cannot be held to be erroneous in so far as prejudicial to the interest of the Revenue and the order so passed by the ld. PCIT is hereby set-aside and that of the AO is sustained.
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2022 (12) TMI 785
Revision u/s 263 by CIT - assessment of trust - vehicle in question i.e. Innova car is the sole passenger vehicle and purchase of the car was for the benefit and use of the school - actual ownership of a vehicle - whether disallowance should be made for vehicle purchased in the name of the Chairman if the vehicle is being used for the purpose of the trust? - HELD THAT:- These are undisputed facts clearly emerging from the records as so stated by the CIT(E) and we fail to understand what is the ambiguity involved and what further verification is required as so stated by the CIT(E) in the impugned order as we find that these facts adequately demonstrate that the ownership of the vehicle is with the assessee society. Therefore, on this account itself, the impugned order deserves to be set-aside.
As far as usage of the vehicle is concerned, we find that the vehicle has been purchased towards the fag end of the financial year on 28/03/2017 and it has been submitted by the assessee that the Chairman who is aged 88 years has his own two vehicles in personal capacity and doesn't require any school vehicle for his personal usage and the said vehicle was not used by him rather the vehicle was used by the Principal and other staff members.
CIT(E) has acknowledged the said explanation of the assessee where he held that there appears to be no evidence regarding any wrong use of the vehicle and the AO must remain cognizant that Shri. Rajinder Nath Chairman already has other vehicles in his personal name, and appears otherwise financially well-endowed and well settled. Therefore, on this account as well, the impugned order deserves to be set-aside.
We are of the considered opinion that there is no justifiable basis to invoke the provisions of section 263 as the order passed by the AO cannot be held to be erroneous in so far as prejudicial to the interest of the Revenue and the order so passed by the ld. CIT(E) is hereby set-aside and that of the AO is sustained. - Decided in favour of assessee.
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2022 (12) TMI 784
Revenue recognition - Addition on account of operation and maintenance service charges of transmission lines - Charges neither supported by agreement nor even paid by the other party to whom the services were rendered - bill was raised but not accounted for in the books of accounts by the assessee company - why the said amount should not be treated as income of the assessee for the year under consideration particularly when the assessee company is following the mercantile system of accounting drawing drawn reference to the Audit Report submitted by the Statutory Auditor? - HELD THAT:- We therefore find that the assessee has suitably demonstrated that there were uncertainties regarding the determination of the amount in absence of any agreement with UT Electricity Department as well as its ultimate collection and once, there was resolution and acceptance thereof at the revised figure after indulgence by Central Electricity Authority, the revenue has been duly recognized in the books of accounts in the subsequent financial year. We find that the assessee has been consistent in following the said policy as can be seen from the audit report where bills raised for F.Y. 2010-11 have been accounted for in the year under consideration and which has infact, formed the basis for the action on part of the AO.
AO cannot follow dual approach in taxing the revenues pertaining to earlier financial year and at the same time, disputing the deferment of revenues for the year under consideration on account of similar uncertainties involved. We see no justifiable basis to allow the disturbance of well-accepted accounting policy consistently followed by the assessee where the recognition of revenue is deferred where there are visible uncertainties involved in quantifying and realization of revenues. In the result, the addition on account of operation and maintenance service charges of transmission lines is hereby set-aside and the ground of appeal is allowed.
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9911796707
