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Income Tax - Case Laws
Showing 461 to 480 of 9304 Records
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2022 (12) TMI 675
Assessment u/s 153A - absence of any incriminating material, no addition can be made in the assessment proceedings u/s 153A r.w.s.143(3) - whether, in the absence of any incriminating material found during the course of the search operations, any addition can be made in an assessment u/s 143(3) read with Section 153A? - HELD THAT:- As in the case of CIT vs. Thana Electricity Supply Ltd. [1993 (4) TMI 37 - BOMBAY HIGH COURT] to the effect "The decision of one High Court is neither binding precedent for another High Court nor for the Courts or the Tribunals outside its own territorial jurisdiction. It is well-settled that the decision of a High Court will have the force of binding precedent only in the State or territories on which the Court has jurisdiction. In other States or outside the territorial jurisdiction of that High Court it may, at best, have only persuasive effect". Unlike the decisions of the Hon'ble jurisdictional High Court, which bind us in letter and in spirit on account of the binding force of law, the decisions of the Hon'ble non-jurisdictional High Court are followed by the lower authorities, only in the absence of benefit of guidance by the Hon’ble jurisdictional High Court on that issue, on account of the persuasive effect of these decisions and on account of the concept of judicial propriety-factors which are inherently subjective in nature.
Quite clearly, therefore, the applicability of the non-jurisdictional High Court is never absolute, without exceptions and as a matter of course, and that too is limited only on the issues on which there is no guidance of the Hon’ble jurisdictional High Court. In the present case, we have the benefit of guidance on the subject by the Hon’ble jurisdictional High Court. There is thus no occasion for us to consider the judgments of the Hon’ble non-jurisdictional High Courts.
In view of these discussions, the decisions of the Hon’ble non-jurisdictional High Court have no relevance in the present context. It is also 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.
As also bearing in mind the entirety of the case, we uphold the plea of the assessee, and respectfully following the coordinate bench in the case of LUXORA REALTORS PVT. LTD. [2022 (2) TMI 866 - ITAT MUMBAI] as also Hon’ble jurisdictional High Court”s judgments in the cases of Continental Warehousing and All Cargo Global Logistics [2015 (5) TMI 656 - BOMBAY HIGH COURT] hold that the impugned additions, in respect of share capital subscriptions from the two Mauritius based entities, namely Access Investment India and Aanya Properties (2) Limited must be deleted for this short reason alone. We, therefore, delete the impugned additions. The assessee gets the relief accordingly.
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2022 (12) TMI 674
Initiation of proceedings u/s 153C - existence of incriminating material - HELD THAT:- A statement cannot be considered to be incriminating merely on the basis of questions posed. The questions posed and the reply given are to be considered together to examine whether the statement contains any incriminating material. We have perused the statement of the Assessee recorded u/s132(4) including Questions No. 16, 17, 48, 49, 50, 51 and 53 along with the reply given by the Assessee.
We are of the considered view, that the aforesaid statement does not contain anything incriminating. We have also perused the assessment order and the same neither refers nor allude to any incriminating material. The assessment before us is concluded/un-abated assessment, and therefore, no additions could have been made in the absence of incriminating material.
Therefore, respectfully following the judgment of the Hon’ble Supreme Court in the case of Sinhgad Technical Education Society [2017 (8) TMI 1298 - SUPREME COURT] and the judgment Continental Warehousing Corporation (Nhava Sheva) Ltd.[2015 (5) TMI 656 - BOMBAY HIGH COURT] in absence of any incriminating material, we set aside the order passed by the CIT(A) and delete all the additions made by the Assessing Officer in the Assessment Order passed under Section 153C read with Section 143(3) of the Act for the Assessment Year 2010-11. Assessee appeal allowed.
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2022 (12) TMI 673
Assessment u/s 153A - unexplained opening capital and unexplained investment in shares - working of opening credit balance - AO did not consider the investment in shares in two companies in A.Ys. 1999-2000 and 2002- 03 - HELD THAT:- There is no dispute with regard to investment and share in two companies during A.Ys. 1999-2000 and 2002-03 which is evident from the submissions of assessee before the CIT(A).
Further, as noted that the assessee provided the details of such acquisition and which was examined by the Investigation Wing before the completion of proceedings u/s. 153A - also observed copy of share holding of both the companies is also enclosed for the consideration and examination of CIT(A).
CIT(A) neither disputed the said evidences filed on behalf of the assessee in support of its claim nor a reference made in the impugned order. The said details of investments filed before me and on perusal of the same at page 5 of the paper book, discloses that the assessee has share holding to an extent of Rs.2,15,500/- in Gupta Leasing & Finance Ltd. during A.Y. 1999-2000 and Rs.60,000/- in Gupta Coalfields and Washeries Ltd. for A.Y. 2002-03.
Therefore, the details investments of shares in two companies in A.Ys. 1999-2000 and 2002-03 were before the CIT(A) and the opening capital by way of a income for A.Ys. 2003-04 and 2004-05 were available to the assessee which were, in my opinion, properly explained and no addition is warranted.
There is no dispute with regard to credit opening balance to an extent of Rs.4,30,000/- which is supported through assessment order for A.Y. 2005-06 which is placed before me at page 7 of the paper book and also which is not disputed by the ld. DR. Since, the investments and availability of opening capital to the extent of Rs.3,41,577/- is properly explained vide evidences, thus, the addition is confirmed to an extent of Rs.88,423/- as admitted by the ld. AR on account of unexplained opening capital. Therefore, the order of CIT(A) is modified to that extent. Thus, the grounds raised by the assessee are partly allowed.
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2022 (12) TMI 672
TDS u/s 192 on the perquisite - underreporting of value of perquisite - FMV of shares to determine the value of perquisites in respect of exercising of option under ESOP granted to the employee of the company - M/s Reliance capital had sold shares of the assessee company at the rate of ₹ 850 per share and therefore fair market value of the specified security (equity share of assessee company) should have been computed taking the market value at the rate of ₹850 per share - AO computed the quantum of perquisite and liability in terms of section 201(1) and interest under section 201(1A) - whether the fair market value of equity shares of the assessee as on the date of exercising of the option by the employee for converting the warrant into shares, as determined by the merchant banker should be adopted or fair market of equity shares should be adopted on the basis of a real-time transactions of sale of equity shares of the company? - HELD THAT:- We find that for the purpose of computing fair market value of the equity shares allotted to the employee Sh. Rajeev Samant, the assessee has followed the procedure laid down in Rule 3(8) of the Rules. Under the rules, in case of shares of unlisted company the fair market value shall be the value determined by a merchant banker. The merchant banker has also been defined in the Rules. The said rule has been reproduced by the Ld. Assessing Officer in the impugned order.
It is evident that fair market value of the specified shares was to be taken as determined by the merchant banker. The assessee following above Rules, has adopted the fair market value of ₹194.15 as determined by the merchant banker. But the contention of the revenue in the grounds raised is that value as per the actual trade at the rate of ₹850 per share executed between the unrelated parties should have been adopted. No decision has been cited by DR, which could support the case of the Revenue and therefore we do not find any basis for adopting the fair market value as suggested by the DR based on an independent transaction of sale of shares of the assessee company between unrelated party.
In the grounds raised before us, the Revenue has nowhere challenged correctness of fair market value determined by the merchant banker. Further, during the course of hearing, the Ld. counsel of the assessee filed a copy of the assessment order in the case of Sh. Rajeev Samant i.e. the employee director who received the said equity shares of the assessee company and submitted that no addition has been made on the issue of underreporting of value of perquisite in his hands, and thus department has accepted the quantum of perquisite in his hands. DR could not controvert this factual aspect pointed out by the Ld. counsel of the assessee, though in our opinion, any omission on the part of the Assessing Officer in the case of the recipient cannot give right to the assessee to take benefit of the said omission. - Decided against revenue.
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2022 (12) TMI 671
Delay in making the payment towards the employees’ contribution for the provident fund, under section 36(1)(va) r.w.s. 2(24)(x) - intimation u/s 143(1) - HELD THAT:- As decided in KALPESH SYNTHETICS PVT LTD. VERSUS DEPUTY COMMISSIONER OF INCOME TAX, CPC BENGALURU. [2022 (5) TMI 461 - ITAT MUMBAI] when the due date under Explanation to Section 36(1)(va) is judicially held to be not decisive for determining the disallowance in the computation of total income, there is no good reason to proceed on the basis that the payments having been made after this due date is “indicative” of the disallowance of expenditure in question.Tax audit report can not be reason enough to make the impugned disallowance.
While preparing the tax audit report, the auditor is expected to report the information as per the provisions of the Act, and the tax auditor has done that, but that information ceases to be relevant because, in terms of the law laid down by Hon’ble Courts, which binds all of us as much as the enacted legislation does, the said disallowance does not come into play when the payment is made well before the due date of filing the income tax return under section 139(1). Viewed thus also, the impugned adjustment is vitiated in law, and we must delete the same for this short reason as well.
In view of the detailed discussions above, we are of the considered view that the impugned adjustment in the course of processing of return under section 143(1) is vitiated in law, and we delete the same. Assessee appeal allowed.
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2022 (12) TMI 670
TP Adjustment - benchmarking of transaction - whether the transactions being import of finished goods from associated enterprises benchmarked by the assessee adopting the resale price method where the profit level indicator is determined of gross profit ratio and the gross profit ratio of assessee was found to be at 15.35% whereas of the other comparable companies was 14.64% which is stated to be at arm’s-length by the assessee, is proper or not? - HELD THAT:- When it is claimed undisputedly by the assessee that with respect to the trading of goods, assessee does not undertake any value addition, we failed to understand the reasoning given by the learned dispute resolution panel in rejecting the resale price method as most appropriate method and upholding transactional net margin method. According to rule 10 B (1) (b) resale price methods is the method where the normal gross profit margin earned by a tested party is required to be compared with comparable uncontrolled transactions.
When undeniably assessee is selling the goods imported from associated enterprises to the third parties, the resale price method is the most appropriate method, where the segmental results to the gross profit level are available. Direction of the learned dispute resolution panel in rejecting reliance on the decision of L’Oreal India private limited [2015 (2) TMI 407 - BOMBAY HIGH COURT] is also not proper.
The finding of the learned dispute resolution panel that in that case that assessee was engaged only in trading activities is clearly an incorrect fact recorded by the learned dispute resolution panel, which can be gathered from the coordinate bench decision reported [2012 (4) TMI 752 - ITAT MUMBAI] which was challenged by the revenue before the honourable Bombay High Court. Thus, in that case honourable Bombay High Court [2015 (2) TMI 407 - BOMBAY HIGH COURT] in case of an assessee who was engaged in the business of manufacturing and trading in cosmetics held that for the trading activities in cosmetic segment, adoption of the resale price method by the assessee was upheld. In view of this, we do not have any hesitation in accepting submission of the assessee that for benchmarking of the international transaction of trading activities where assessee imports finished goods and sold it to third party without undertaking any value addition, resale price method should be adopted as most appropriate method.
The submission of the assessee is also supported by the order of the honourable jurisdictional High Court. As we already noted that the margin shown by the assessee of gross profit is 15.35% compared to the comparable companies of 14.60% we direct the learned transfer pricing officer/AO to delete the consequent adjustment - Accordingly we reverse the order of the learned lower authorities and allow ground number 2 of the appeal.
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2022 (12) TMI 656
Deduction u/s 54 - At residential plots that no construction was carried out till date and the plots were vacant - CIT(A) observed that the fact remains that the appellant could not complete the construction of residential houses upon the said plots within specified period of three years as the investment was made by the appellant in the plots which were not having approvals from the concerned government departments for the construction ab initio - HELD THAT:- Objective of Section 54 is that the capital gains to be reinvested in another residential house. The provision emphasizes the investment of amount in new property within the timelines as per Section 54, but not completion of the property so as to be occupied or become habitable even. There may be many intervening factors which make it unreasonable and against the rules of prudence to expect the investor to also have completed the construction in three years. But then the law requires the gain to be statutorily invested.
Here in the case in hand total capital gain exemption was 1,62,76,703/- and which now has been restricted to the claim to the extent of investment of sum of Rs. 78,60,000/- in first property and the investments in two other properties have not been pressed for exemptions.
Admitted case of assessee that income had accrued in FY 2014-15 and after the developer got approved zonal plan, the assessee obtained physical possession of the plot vide letter dated 18.08.2022 and though before that the assessee got approved the construction plan by making application with competent authority. However, construction has not begun.
There is no evidence of any construction activity or of the fact that assessee has invested the proceeds in statutory deposits and then spent any proceeds of the sales consideration of two properties he had sold, into the construction over this plot. Thus the property in which part investments of capital gains was done continued to be plot for all purposes and intent, for the assessee in the period when construction was to atleast to be started, if not completed. That being so, there is no error in the determination of issue against the assessee by Ld. tax Authorities below and no merits in the grounds as raised here. The appeal is dismissed.
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2022 (12) TMI 651
Disallowance u/s 14A - respondent/assessee had not earned income which was exempt from imposition of tax - Scope of amendment which was brought about in Section 14A - HELD THAT:- Revenue as fairly placed before us a judgment M/s Era Infrastructure (India) Ltd [2022 (7) TMI 1093 - DELHI HIGH COURT] which has ruled on the amendment which was brought about in Section 14A of the Act via Finance Act 2022.
The coordinate bench has ruled that the amendment will not operate retrospectively.
It appears that the coordinate bench in judgment has referred to judgments passed by other coordinate benches rendered in PCIT v. IL & FS Energy Development Company Ltd. [2017 (8) TMI 732 - DELHI HIGH COURT] and Cheminvest Limited [2015 (9) TMI 238 - DELHI HIGH COURT]
As informed that the decision rendered by the Division Bench of this court in PCIT v. IL & FS Energy Development Company Ltd. has been assailed by the appellant/revenue by instituting a special leave petition (SLP), which is pending adjudication.
Given these circumstances, since no substantial question of law arises in the present case, at this juncture, the appeal is, accordingly, disposed of.
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2022 (12) TMI 650
Attachment of the HSBC Bank and DBS Bank accounts of the petitioner u/s 132(9B) - bank account of DBS Bank was released and the balance fund as on 18.11.2021 remained under attachment u/s 281(B) until further order - whether in absence of any material and any reasons recorded in writing that such a harsh step of attachment of the property of the petitioner had been taken and that shall need to be straightway answered in negation? - HELD THAT:- As held that permitting the department to provisionally attaching the petitioner’s refund for the current year on the ground that in the final assessment, the demands are likely to be confirmed, would amount to ignoring the hard fact that for the earlier assessment years, Tribunal has suspended the recoveries arising out of the demands made by the assessing officer on similar issues. As held that looking it from any angle, the occasion for the competent authority to exercise the drastic power u/s 281(B) has not arisen, therefore, there was no justification to exercise such powers.
Going by the decision of Vodafone Idea Limited [2019 (9) TMI 447 - BOMBAY HIGH COURT]. we can surely say that the assessing officer, for the purpose of protecting interest of the Revenue, in the instant case, with the prior approval of the higher authority has passed an order in writing recording the reasons and provisionally attaching the property belonging to the assessee. These are though drastic powers in a given circumstances, we are satisfied that for the petitioner assessee to continue its business, the continuation of provisional attachment is not necessary and even otherwise, the interest of the Revenue can be safeguarded by directing a particular amount to be furnished by way of a bank guarantee to the authority concerned, that would sub-serve the purpose.
We are conscious of the fact that the order has came to be passed in relation to the two of the companies which is said to be the shell companies adding the commission and the main company of Taiwan is said to be benefiting. It is also alleged that the modus is adopted to shift the profit to the Chinese Company.
We also have taken note of some of the details which have been culled out from the file which, for the purpose of secrecy pleaded by the respondent, we choose not to reveal the same as that may prove to be deleterious for the on-going assessment proceedings. However, if the past case of the respondent is taken into consideration along with its on-going proceedings, in our opinion, the fixed deposit which has been made by the respondent of the DBS Bank would suffice to protect the interest of the Revenue for now.
We also would like to make a mention of the fact that except one Director, the rest are from Taiwan and therefore, the Indian Director along with the Taiwan Directors are also required to give the undertaking that in the eventuality if the assessment is more than the amount which is permitted to be provisionally attached, they shall fulfill the obligations even from their own personal funds.
The said undertaking shall be filed before this Court within a period of one week from the date of receipt of copy of this judgment. They shall also furnish the disclosure of the immovable assets of the company. At this stage, Standing Counsel upon instruction has informed that the matter has been already referred to the Transfer Pricing Officer and therefore, the Court shall need to regard the interest of the Revenue Authority.
On furnishing the above aspect, once having verified the details in a week’s time thereafter, the attachment of the HSBC bank account bearing account no. 101040608001 shall be then released. The original file is returned to the respondent.
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2022 (12) TMI 649
Disallowance of lower deduction of tax at source u/s 40(ia) - Default u/s 201(1) - HELD THAT:- We do not find any infirmity or error in the above findings and conclusion of the CIT (A). Moreover, the assessee has failed to give any reason for not fulfilling the conditions envisaged by Section 201(1) - The assessee has failed to deduct the TDS and also fail to fulfill the conditions as per Section 201 on the payment made to three entities.
We are fully agree with the observation of the Ld.CIT (A) that the said expenses on account of payment made to three entities are not allowable as per provisions of Section 40(a) (ia) - Thus, we do not find any error in the action of the CIT(A) in upholding the disallowance made by the A.O. Accordingly, the grounds of appeal of the assessee are dismissed.
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2022 (12) TMI 648
Rectification of mistake u/s 154 - difference in exempt income claimed by the assessee and the document furnished during the assessment proceedings - HELD THAT:- As admitted by the assessee himself vide written statement filed before the A.O., that the above addition was made due to the clerical error done on the part of the assessee while filing the return and accordingly, the Ld. AR has made a submission before the CIT(A) to allow the assessee to rectify his mistake u/s 154 - Considering the admitted error of the assessee, CIT (A) has rightly provided liberty to the assessee to move rectification application u/s 154 of the Act before the A.O.
If there is any typographical error the assessee has to invoke the Section 154 of the Act and not the Appellate Jurisdiction to rectify the mistakes committed during the assessment proceedings.
The order of the Ld.CIT(A) neither erroneous nor has any legal infirmity in providing the liberty to more rectification application u/s 154 of the Act before A.O., thus, we do not find merit in the grounds of appeal of the assessee.
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2022 (12) TMI 647
Penalty u/s 271(1)(c) - Defective notice - non-strike off of the irrelevant part in the notice issued u/s.271(l)(c) - Addition u/s 68 - HELD THAT:- As penalty provisions of Section 271(1)(c) of the Act are attracted, where the assessee concealed the particulars of income or furnished inaccurate particulars of income. It is well settled law that the aforesaid two limbs of Section 271(1)(c) carrying different meanings.
A.O. to specify the relevant and exact limb so as to make the assessee aware as to what is the charge made against him so that he can respond adequately which has been violated by the A.O in the Assessment order. A.O. has failed to specify the exact limb under which the penalty proceedings to be initiated.
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(l)(c) of the Act, 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 A.O. has failed to specify the irrelevant portion of the limb and failed to intimate the assessee the relevant limb and charge for which the notices to be issued. - Decided in favour of assessee.
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2022 (12) TMI 646
Rejection of books of accounts u/s 145(3) - Estimating its income at 1% of total turnover - HELD THAT:-No stock register has been maintained by the assessee. Even as regards the payment of excise duty, the auditor has mentioned that the assessee is doing the trading activity, however, as per the profit and loss account assessee has adjusted the excise duty from the sales receipts.
Assessee has not valued the stock in trade as required under section 145A of the Act. During the hearing, reliance has been placed upon the statement pertaining to the net profit earned by companies in similar line of business - However, apart from the statement, no other data has been brought on record to show that these companies are having business similar in nature to the assessee and merely computation of profit for the year under consideration was furnished.
Therefore, the submission of the assessee to adopt the profit percentage of other companies also does not merit acceptance. In addition, there is no data available on record regarding the past performance of the assessee. Thus, no infirmity in the impugned order passed by the learned CIT(A) in estimating the income at 1% of the turnover. As a result, the grounds raised by the assessee are dismissed.
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2022 (12) TMI 645
Revision u/s 263 - Interest disallowance u/s.36(1)(iii) - HELD THAT:- As assessee’s arguments fail to evoke our acceptance since we do not find even a single question or enquiry from the AO’s side alleging diversion of interest bearing funds for non-business purposes, attracting section 36(1)(iii) interest disallowance. We conclude that the PCIT herein has rightly termed the AO’s assessment completed without making the adequate enquiries in light of section 263 Explanation (2) inserted in the Act by Finance Act, 2015 w.e.f. 01.06.2011 as well as Malabar Industrial Company Ltd., [2000 (2) TMI 10 - SUPREME COURT].
Applicability of section 14A r.w.r. 8D - From perusal of the PCIT's revision directions that he has already directed the AO to examine the issue of applicability of section 14A r.w. Rule 8D in his findings of the revision order. Revenue could hardly dispute that the AO had duly disallowed an amount in his assessment and, therefore, the same could not be termed an instance of lack of enquiry as it is alleged at the PCIT’s behest. PCIT’s revision directions to the limited extent of applicability of section 14A r.w.r. 8D disallowance therefore.
Deemed rent computation issue raised in the learned PCIT’s revision directions - We note from a perusal of the relevant discussion in page-9 para-3 that neither the assessee could clarify before us about the number of house properties owned in the relevant previous year nor could he rebut his computation in the subsequent assessment year 2015-16 qua the same. Faced with the situation, we upheld the PCIT’s revision directions that the AO had neither enquired nor examined the issue of assessee’s rental income from house property u/s. 23 of the Act. The assessee’s arguments to this effect are rejected accordingly.
Section 56(2)(vii) made applicable in assessee’s case on account of alleged difference between stamp valuation and actual purchase consideration qua the sale deed executed in the relevant previous year - A perusal of the said sale deed dated 31.12.2013, and more particularly, the schedule of payment therein at page-16 indicates that the assessee had already paid an amount of Rs.50,000/- on 20.09.2016 by way of bank cheque which followed the agreement itself dated 05.10.2006. Faced with the situation, we quote 1st and 2nd proviso to sec.56(2)(viib) that the consideration amount in such a transfer of immovable property at the time of agreement could also be accepted in case whole or part thereof had been paid in any mode other than cash on or before the date of the agreement, for the transfer of such immovable property.
CIT-DR could hardly dispute that the legislature had introduced similar provision(s) in sec.50C(1) vide Finance Act 2016 w.e.f. 01.04.2017 which have already been held as carrying retrospective effect being curative in nature in Dharmashibhai Sonani [2016 (9) TMI 1259 - ITAT AHMEDABAD] We, therefore, are of the opinion that the only difference in sec.50C vis-à-vis sec.56(2)(vii) is that the former applies in case of transfer of a capital asset in the hands of the vendor whereas the latter one gets attracted in the purchaser/vendee’s case, respectively. We thus conclude that the PCIT has erred in law and on facts in directing the Assessing Officer to frame his assessment afresh in light of section 56(2)(vii) in very terms. His directions to this limited extent are reversed accordingly. The assessee’s instant former substantive ground succeeds in part therefore.
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2022 (12) TMI 644
Deduction on interest earned from Co-Operative Banks u/s 80P(2)(d) - Dividend Income AND Interest Income earned from another Co-Op Society - HELD THAT:- In our considered view, Ld. CIT(A) has erred in law in holding that the observations in the case of State Bank of India [2016 (7) TMI 516 - GUJARAT HIGH COURT] to the effect that the interest income earned by a co-operative society on its investments held with a co-operative bank would be eligible for claim of deduction under Sec.80P(2)(d) of the Act have no binding effect on the jurisdictional Revenue Authorities.
The Kolktata ITAT in the case of SubhlakshmiVanijya (P.) Ltd. [2015 (8) TMI 174 - ITAT KOLKATA] has held that even the obiter of the jurisdictional High Court has a binding force on the lower authorities.
Therefore, in our view, the Ld. CIT(A) has erred in law and in facts in holding that the above order of the jurisdictional Gujarat High Court in the case of State Bank of India [Supra] has no binding effect on the jurisdictional Revenue authorities.
In the case of Surat Vankar Sahakari Sangh Ltd. [2016 (7) TMI 1217 - GUJARAT HIGH COURT] held assessee-cooperative society was eligible for deduction under section 80P(2)(d) in respect of gross interest received from co-operative bank without adjusting interest paid to said bank.
In the case of Surendranagar District Co-op. Milk Producers Union Ltd. [2019 (9) TMI 978 - ITAT RAJKOT] held that assessee-co-operative society could not claim benefit of section 80P(2)(d) in respect of interest earned by it from deposits made with nationalised/private banks, however, said benefit was available in respect of interest earned on deposits made with co-operative bank.
In the case Totagars Cooperative Sale Society [2017 (1) TMI 1100 - KARNATAKA HIGH COURT] held that the interest income earned by a co- operative society on its investments held with a co-operative bank would be eligible for claim of deduction under Sec.80P(2)(d) of the Act.
Thus in our view, dividend income and interest earned by the assessee on surplus held with cooperative bank would be eligible for deduction under Sec.80P(2)(d) of the Act. Appeal of the assessee is allowed.
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2022 (12) TMI 643
Short payment of TDS u/s 195 - error in depositing TDS under the wrong challan - assessee has declared dividends to its shareholder who is a non-resident as per the provisions of the Act - demand raised vide intimation issued u/s 200A/206CB - HELD THAT:- Wrong challan filed by the assessee while depositing the tax deducted at source u/s 195 in respect of payment of dividend to the non-resident shareholder. From the applications filed by the assessee, a copy of which has been brought on record, we find that the assessee has pursued this matter with the concerned authorities and not only requested to consider the deposit of taxes on dividends by the company but has also prayed for correction of the challan from challan No. 280 to challan No. 281.
From the copy of the email dated 06/12/2022, filed by the learned DR, we find that the office of DCIT (OSD) TDS has escalated the issue to CPC – TDS for either necessitating the required changes in the challan from the backend or enabling the system to allow the TDS–AO to do the same from his login at TRACES AO – Portal. Therefore, we deem it appropriate to direct the concerned authority to make every possible endeavour of carrying out the necessary correction in the challan within a period of 2 months from the date of receipt of this order and grant the relief to the assessee as per law. As a result, grounds raised by the assessee are allowed for statistical purposes.
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2022 (12) TMI 642
Long term capital gain computation - date of transfer of ownership agreement - indexation benefit from the fast installment paid towards purchase of flat in pursuance to allotment letter issued by the builder -Whether date of acquisition for capital gain purposes will be the date of the agreement of transfer of ownership between the builder and the buyer and not the date of issue of the allotment letter? - HELD THAT:- The agreement between the assessee and the builder for transfer of ownership rights was excluded on 19.07.2010 whereas, the assessee has claimed the indexation benefit from 2007. The departmental authorities have allowed indexation benefit from the date of transfer of ownership agreement by relying upon a decision of Gulshan Malik [2014 (3) TMI 474 - DELHI HIGH COURT]. The assessee has failed to bring on record any material or legal proposition to controvert the finding of the departmental authorities or to demonstrate inapplicability of the ratio laid down in case of Gulshan Malik vs. CIT (supra). Thus, in absence of any rebuttal by the assessee, we do not find any reason to interfere with the decision of the Ld. Commissioner (Appeals) on the issue. Grounds raised are dismissed.
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2022 (12) TMI 641
Rectification of mistake u/s 154 - whether rectification application was beyond time? - exemption u/s.5(1)(c) r.w s 6 of the Act treating the status of the appellant as non-resident was not claimed by mistake - whether the assessee was NRI during the relevant point of time and whether he is entitled to the benefit of exemption u/s.5(1)(c) r.w.s 6 - HELD THAT:- Admittedly, the assessee individual is a non-resident Indian and the facts clearly show that the return has been filed with mistakes. These mistakes can admittedly be rectified by filing a rectification application. The rectification application admittedly is not being considered on account of the limitation provided u/s.154(7) of the Act. However, in view of the submissions made by both the sides and considering the Circular No.4 of 2012 dated 20.6.2012 issued by the CBDT, the issues in its appeal are restored to the file of the AO for readjudication of the rectification application on merits. The Assessing Officer is at liberty to examine whether the assessee was NRI during the relevant point of time and whether he is entitled to the benefit of exemption u/s.5(1)(c) r.w.s 6 of the Act. If it is found that the claim of the assessee is correct, then, the AO is to proceed to decide the rectification application on merits in accordance with the provisions of section 5(1)(c) r.w.s 6 of the Act. appeal of the assessee is partly allowed for statistical purposes.
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2022 (12) TMI 640
Disallowance of Corporate Social Responsibility (CSR ) expenses - allowable expenses u/s 37(1) - Expenses incurred under the directions of DPE Govt. of India requiring Companies to spend a prescribed percentage of its profits on CSR-and also made mandatory under the Companies Act 2013 - HELD THAT:- Respectfully following the order of coordinate bench of ITAT Delhi for A.Y. 2013-14 - We hold that the Explanation 2 to section 37(1) of the Act is applicable from A.Y. 2015-16 and onwards and not prior to the amendment including A.Y. 2014-15, therefore ground no. 1.1 & 1.2 are allowed.
Charging of interest u/s. 234 A - Assumption of date of filing of return - HELD THAT:- On carefully consideration of submissions of the assessee undisputedly assessee company is a joint venture company owned equally 50% each by Steel Authority of India Ltd (SAIL) and Damodar Valley Corporation Ltd (DVC) which are Central Public Sector undertakings. Therefore due date for filing of return as per Explanation 2 to section 139(1) of the Act for A.Y. 2015-16 was 30.09.2015. This fact has been controverted by the Ld. Senior D.R. that the company has electronically uploaded its return of income and from 3CEB on 30.09.2015, as also has been mentioned in assessment order para 1. Therefore interest u/s. 234A of the Act is not liable of the assessee hence ground no 2 is allowed.
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2022 (12) TMI 639
Assessment u/s. 153A r.w.s. 153C - Incriminating material available on records found or not ? - HELD THAT:- We hold that there is no incriminating material available on records which were found during the course of search which could have been used by the assessee for disturbing the returned income of the Assessee for AY 2010-11. Accordingly, we allow Ground no 1 of the Appeal. Resultantly, all additions made in the order do not survive.
Non issue of notice u/s 143 (2) in case of assessment u/s 153C - HELD THAT:- As we note that these discussions by the CIT(A) are beside the point inasmuch as in the submissions before us, the assesse has submitted that assessee has received notice u/s. 143(2) issued by AACIT, Circle 42, Mumbai to the assessee. Hence, this argument by the assessee before the CIT(A) that notice u/s. 143(2) has not been issued is not factually correct. Hence, the said issue by the assessee is dismissed.
Correct head of income - sale of land and development rights - capital gain shown by assessee on sale of land and development rights, treated by it its computation of income as income chargeable to tax under the Head “capital gains" but learned AO considered it as “income from Business and Profession” - HELD THAT:- Neither the AO, nor the ld. CIT (A) and ld. DR before us could not show above any incriminating material found during the course of search. In absence of incriminating material, we hold that orders of the ld. Lower Authorities are non-sustainable in view of the decision of honorable supreme court in case of Sinhgad Technical education society [2015 (4) TMI 190 - BOMBAY HIGH COURT] . Hence we allow ground no 4 and 5 of the Appeal.
Addition of on money income on account of sale of car parking - taxation of on money on sale of flats - HELD THAT:- We find that both this issues were discussed by the coordinate bench in the case of the assessee for AY 2011 -12 [2022 (2) TMI 808 - ITAT MUMBAI] and held that there is no incriminating material available for making such addition in the hands of the assessee in case of a concluded assessment. Before us also same document andstatements are relied up on by the lower authorities as well as the ld. DR. Judicial Discipline demands that unless, there is manifest error, same needs to be followed. No infirmities werepointed before us by the ld. DR in the order of coordinate bench, therefore, there is no reason to deviate from the same. On careful analysis, we find that in the order of CIT (A) in appeal before us is identical to Para no 13 of the decision of the coordinate bench where the addition of unaccounted on money on sale of flats was confirmed by him [ the Ld. CIT (A) for AY 2011-12] . When the findings of ld. CIT (A) are ad verbatim for this appeal compared to AY 2011-12, where the coordinate bench has deleted the addition, we have no reason to differ from the same. Accordingly,ground no 6 & 7 of the appeal are allowed
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