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Income Tax - Case Laws
Showing 1 to 20 of 8298 Records
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2023 (12) TMI 1431
Unexplained income - cash deposits in his bank account and additional estimated income - CIT(A) noted assessee’s submissions that the said account was joint account with his brother and the deposits were made by the brother - HELD THAT:- As we find that a copy of the assessee’s brother affidavit is produced before us which stated that the said account was a joint account of his and younger brother and the first name was of assessee’s brother and the second name is the assessee. Further, the brother of the assessee has sworn on affidavit that all the money deposit was his and his younger brother has nothing to do with the deposits.
We find that in the interest of justice, this additional evidence needs to be verified at the level of AO. Hence, we restore the file to AO and AO shall verify all these submissions and decide as per law. Needless to add, assessee should be given adequate opportunity of being heard.
Assessee’s appeal is allowed for statistical purposes.
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2023 (12) TMI 1427
Validity of order passed u/s 148A(d) as petitioner was not granted a personal hearing before the impugned order was issued - HELD THAT:- Petitioner is correct in submitting that if only a personal hearing was granted, perhaps the impugned order under Section 148A(d) would not have been passed.
In the circumstances, without going into the merits of the matter and keeping open the rights and contentions of the parties, the impugned order issued u/s 148A(d) is hereby quashed and set aside. The matter is remanded for denovo consideration to the Faceless Assessing Officer (FAO).
FAO shall pass an order in accordance with law after giving personal hearing to petitioner, notice whereof shall be communicated to petitioner atleast 5 working days in advance.
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2023 (12) TMI 1426
Addition u/s 68 - cash sales during the demonetization period - CIT(A) deleted addition - HELD THAT:- As the cash sales is always more than Rs. 20 lakhs per day which went as high as Rs. 45.55 lakhs. The total sales from 28.08.2016 to 03.09.2016 is Rs. 1,30,42,002/- which means that cash sales of 8 days are more than cash sales from 01.011.2016 to 08.11.2016. Therefore, it can be safely concluded that there is nothing unusual in the cash sales during 01.11.2016 and 08.11.2016.
Nowhere in the assessment order the AO has mentioned that after inflating the alleged cash sales the assessee has frequently revised its VAT returns. It is not the case of the AO that the assessee has shown alleged cash sales without having sufficient stock in hand during that period. Not a single instance of defect is pointed out in the audited books of account. The entire assessment is based on assumptions/presumptions, surmises and conjectures de hors of the facts on record. Decided in favour of assessee.
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2023 (12) TMI 1425
Unexplained cash credit u/s 68 - Bogus share transactions - AO has doubted the purchase and sale of shares and observed that the price rise is not commensurate with the financials of the investee company - as submitted purchases and sale of shares are supported by evidences and are genuine and the assessee has substantiated with various details with the authorities - addition u/sec 69 in respect of estimated commission expenditure
HELD THAT:- The assessee has substantiated with all details and information and the AO has relied on the investigation report of income tax department and treated the long term capital gains on sale of shares as not genuine.
A.O. has not made any enquiry or independent investigation and relied on the statement of the parties and the assessee’s name is not included in the list of investigation report.
The fact remains that the assessee has submitted the requisite details in respect of purchase and sale of shares and were not disproved. The transaction of purchase and sale of shares is through banking channel. Hon’ble Tribunal in the case of Sangeeta Newal Agarwal [2022 (11) TMI 1545 - ITAT MUMBAI] dealt on the same scrip of share and for the same assessment and has granted relief to the assessee.
Accordingly, we direct the AO to delete the additions and allow the grounds of appeal in favour of the assessee.
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2023 (12) TMI 1424
Denial of benefit of exemption u/s 11 - Assessee society is set up for religious activities while claiming charitable status -
HELD THAT:- Appellant/revenue, fairly concedes that the question of law proposed in the instant appeal is covered by the order titled Director of Income Tax (Exemption) v. M/s Indian Evangelical Team [2015 (10) TMI 2865 - DELHI HIGH COURT] AND [2022 (7) TMI 1578 - DELHI HIGH COURT] as endorsed the opinion of the CIT(A) that the assessee was entitled to claim charitable status u/s 11 of the Act. In so holding it relied upon its preview views for AY 2009-10. No substantial question of law arises.
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2023 (12) TMI 1422
Bogus Long Term Capital Gain - sale of shares of Global Capital Markets Ltd., a penny stock - period of holding of shares - AO that the price movement of the company were not supporting by financial fundamentals of the company - ITAT deleted addition -
HELD THAT:- Assessee has sold shares after seven years and therefore, the proximity of time between the buy and sale of shares cannot be considered as an accommodation entry in penny stock company within a short period of about one year to book bogus of Long Terms Capital Gain or loss to defraud the Revenue.
AO and CIT(A) have ignored such facts which were considered by the Tribunal to arrive at a finding of fact that the assessee has to be treated as an investor and cannot be treated to have engaged in fraudulent activity or manipulation activity.
Tribunal, therefore, considering the period of holding of shares by the respondent assessee, arrived at a finding that the Long Term Capital Gain earned by the assessee is not a significant amount and therefore, held that the assessee cannot be said to have taken an accommodation entry by entering into transaction of shares in the penny stock company.
No error in the finding of facts and the conclusion arrived at by the Tribunal that the investment made by the assessee was longstanding and genuine and was not the penny stock company on the basis of which the Long Term Capital Gain was wrongly claimed. No substantial question of law.
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2023 (12) TMI 1421
Disallowance pertaining to the exaggerated profit of captive power generating unit by claiming higher rate than the cost price or the market price charged by it on the supply of power made by it to 3rd party i.e., State Electricity Board - HC [2008 (9) TMI 949 - PUNJAB AND HARYANA HIGH COURT] decided against the revenue.
Appellant(s) mentioned that in the judgment [2023 (12) TMI 417 - SUPREME COURT] ought to have been allowed, being filed by the assessee(s).
HELD THAT:- Accordingly, paragraph ‘56’ of the said judgment may be read as under:
“56. For the aforesaid reasons, all the Civil Appeals barring C.A. No.9920/2016 are hereby dismissed. Since C.A.No.9920/2016 is filed by the assessee(s), the same is allowed. However, there shall be no order as to cost.”
The Registry is directed to do the needful.
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2023 (12) TMI 1419
Reference to dispute resolution panel - Order u/s 144C bound to comply with the time frame stipulated u/s 144C(13) - whether the impugned order passed by the assessing authority was without jurisdiction? - HELD THAT:- Admittedly, Ext. P3 is dated 09.12.2013. Hence, the assessing officer was bound to pass the assessment order in conformity with the direction of the DRP before 31.01.2014. However, the assessing officer has passed Ext. P4 assessment order only on 27.03.2014, which was served on the petitioner on 31.03.2014. The respondents could not produce any document before this Court to prove receipt of Ext. P3 directions dated 09.12.2013 issued by the DRP. According to the petitioner, they received Ext. P3 on 27.12.2013. Ext. P4 assessment order was passed by the assessing authority on 27.03.2014, which is beyond the period stipulated in Section 144C(13) of the Act.
Whether the provisions in Section 144C are only procedural or not? - Section 144C is inserted in the Finance Act, 2009 with a view to provide a speedy disposal to create an alternative dispute resolution mechanism within the Income Tax Department. If the provisions of Section 144C as mandated by the statute are not strictly adhered to, the entire object of providing an alternative dispute resolution mechanism in the form of DRP would stand defeated.
The legislature had clear intention while the said provision was inserted in 2009 to facilitate an expeditious resolution of disputes on a fast track basis. If the assessing officer fails to pass any order in accordance with the statutory provisions, as mandated under Section 144C, it will defeat the entire exercise and render the same futile.
The directions in Ext. P3 given by the DRP are binding on the assessing officer, who has to finalize the assessment order even without affording the assessee an opportunity of being heard. There was nothing more to do by the assessing officer than to pass an assessment order on receipt of Ext. P3.
Once the statute has prescribed limitation period for passing a final order, the officers of the Department should act accordingly in order to provide the assessee an expeditious resolution of the disputes. The impugned orders were passed by the assessing authority beyond the time prescribed under Section 144C(13). Therefore, impugned order passed by the assessing officer cannot be sustained.
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2023 (12) TMI 1418
Revision u/s 263 - allowance/deduction u/s 80P(2)(a) or 80P(2)(d) with regard to interest received from Surat District Cooperative Bank - HELD THAT:- We find that the Surat District Cooperative Bank is a cooperative society registered under Gujarat State Cooperative Societies Act. Tribunals held that the cooperative banks are primarily cooperative societies and interest earned on deposits with such cooperative bank is exempt u/s 80P(2)(d) of the Act.
The Hon'ble Jurisdictional High Court in the case of Surat Vankar Sahakari Sangh Ltd. [2016 (7) TMI 1217 - GUJARAT HIGH COURT] also held that the assessee cooperative society was eligible for deduction u/s 80P(2)(d) in respect of gross interest received from cooperative bank without adjusting interest paid to said bank.
No doubt that in the assessment order, there is no discussions of the issue of deduction of interest income earned by assessee on fixed deposits from Surat District Cooperative bank, still we found that the assessment is not erroneous on the deduction u/s 80P(2)(d), as the same is consonance with the decision of Surat Vankar Sahakari Sangh Ltd. [2016 (7) TMI 1217 - GUJARAT HIGH COURT] and the various other decisions of this Tribunal. Thus, the twin condition for invoking section 263 is not satisfied. Decided in favour of assessee.
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2023 (12) TMI 1415
Addition u/s 69 - Treating cash balance shown in the books of account as cash introduced from alleged undisclosed income - HELD THAT:- It incomprehensible that in case the cash-in-hand as claimed by the assessee firm was sourced from its books of account, then why such books of accounts were held back and not produced before the A.O.
Rather, the production of only the extract of the cash book as of 31.03.2016 wherein the cash-in-hand was disclosed at Rs.29.64 lacs (supra) in view would be nothing better than a mere eye wash which could not have been acted upon by the A.O. Accordingly, finding no infirmity in the view taken by the CIT(Appeals) who had rightly approved the addition made by the A.O, thus, uphold the same.
Scope of limited scrutiny - Addition made with respect to the difference in the interest income disclosed by the assessee firm in its return of income as against that shown in its Form 26AS - HELD THAT:- Case of the assessee firm was selected for limited scrutiny, the A.O. could not have ventured to an issue that did not form the basis for taking up the case for scrutiny assessment - ITAT, Mumbai in the case of Su-Raj Diamond Dealers (P) Ltd. [2019 (12) TMI 26 - ITAT MUMBAI] had observed that since the assessee’s case was selected for “limited scrutiny” under CASS with respect to certain specific issues, the jurisdiction of the A.O in the absence of getting the said case converted into complete scrutiny as per the CBDT Instruction No.20 of 2015 dated 29.12.2015, was confined only to the specific reason/issue based on which the case of the assessee was picked up for scrutiny. Accordingly, addition made by the A.O is liable to be quashed for want of valid assumption of jurisdiction by the A.O while framing the “limited scrutiny” assessment vide his order u/s. 143(3) of the Act dated 13.12.2018.
Assessee appeal partly allowed.
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2023 (12) TMI 1414
Issuance of notice u/s 143(2) by non jurisdictional officer - Notice issued by ACIT/ DCIT v/s ITO - HELD THAT:- As per the CBDT Instruction 1/2011 dated 31.01.2011, the moment the return of income has been filed by the assessee disclosing taxable income more than 15 lakhs or 20 lakhs for Mofussil and metro areas respectively, as the case may be, the scrutiny notice u/s 143(2) of the Act could be issued only by the authority in the rank of ACIT/ DCIT and not by ITO.
It is bounden duty on the part of the ld. DCIT to have issued notice u/s 143(2) of the Act within the prescribed time provided in the statute after having assumed jurisdiction over the assessee, which is admittedly not done in the instant case by the ld. DCIT. Hence, it could be safely concluded that the entire scrutiny assessment framed u/s 143(3)144 by DCIT, Circle Haridwar without issuing a valid and legal notice u/s 143(2) of the Act become void abinitio and deserves to be quashed.
Whether department would be rescued by the provisions of section 292BB? - We are unable to comprehend ourselves to agree to this argument of the revenue in as much as in our considered understanding, the provisions of section 292BB applies only in case of improper service/ wrong service of notice and not to objection not taken by the assessee during assessment proceedings.
Section 292BB of the Act does not save the defect of non-issue of valid notice u/s 143(2) of the Act by the jurisdictional officer. Hence, in the absence of valid and legal notice issued by the jurisdictional officer, the assessment framed on the assessee requires to be quashed. Decided in favour of assessee.
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2023 (12) TMI 1409
Penalty u/s 271D - Accepted the sale consideration in cash in contravention to the provision of section 269SS - Mandation to record satisfaction - whether without satisfaction being recorded in the assessment order, penalty can be levied u/s 271D of the Act? - HELD THAT:- In the case of Umakant Sharma [2023 (8) TMI 1094 - ITAT INDORE] observed that, it is pre-requisite condition that the initiation of penalty under section 271D/271E of the Act, there must be assessment proceedings or proceeding arising from assessment order are pending in the case of the assessee, and, therefore, following the case of Vijayaben G. Zalavadia [2022 (5) TMI 1572 - ITAT AHMEDABAD] deleted the penalty levied under section 271D of the Act by holding that without any assessment proceedings in the case of the assessee such penalty is not valid and liable to be quashed.
Provisions u/s 271E and 271D of the Act are in pari materia and since in terms of the decision in Jai Laxmi Rice Mills [2015 (11) TMI 1453 - SUPREME COURT] satisfaction must be recorded in the original assessment order for the purpose of initiation of penalty proceedings under section 271E of the Act, the same is equally applicable for initiation of penalty proceedings under section 271D - Decided in favour of assessee.
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2023 (12) TMI 1408
Revision u/s 263 - assessee has surrendered income on discrepancies found during the course of survey action - AO treated the surrender amount as the business income of the assessee - AR submitted that the case of the assessee was selected for compulsory scrutiny only on the issue of the amount surrendered during the course of survey action - HELD THAT:- During the course of assessment proceedings, the AO in the notice issued u/s 142(1) has asked the assessee to show-cause why the surrendered income in terms of excess stock of Rs 40 lacs and excess cash of Rs 10 lacs found during the course of survey may not be brought to tax under the deeming provisions r.w.s. 115BBE. In response to the notice so issued, the assessee has filed his submission stating that he has surrendered the excess stock and cash which is related to his business and offer of surrender was accepted by the department team at the time of survey and pursuant thereto, the assessee has not back tracked from his offer and has paid taxes as per law prevailing on the date of survey and this income was duly shown in income tax return and duly reported for tax purposes.
AO taking cognizance of the findings of the survey team, the documents found during the course of survey, the statement of the assessee, and the return of income and after examination thereof and due application of mind, has accepted the explanation so offered by the assessee and the returned income was accepted wherein the surrendered income has been offered under the head business income. We therefore find that the assessee has been asked specific questions during the course of assessment proceedngs, after due examination and being satisfied with the explanation of the assessee, the same has been accepted and thus, it is not a case of lack of enquiry on part of the AO or for that matter, accepting the explanation of the assessee on face value. The AO has duly enquired in the matter and thereafter, has taken a view in the matter.
No doubt, these transactions were not recorded at the time of survey thus qualify as unrecorded transactions satisfying one of the essential conditions, at the same time, the assessee has provided the necessary explanation about the nature and source of such unrecorded transactions and the necessary nexus with assessee’s business has been established, thus, it cannot be said that these are unexplained transactions thus, doesn’t satisfy the second condition for invoking the deeming provisions of the Act. Thus, the view taken by the AO is clearly a plausible view considering the facts and circumstances of the present case and nothing has been pointed out as to how the view so taken is unsustainable in the eyes of law.
The order so passed by the AO cannot be held as erroneous due to lack of inquiry or for that matter requisite inquiry on the part of the AO.
As we have held above, there is no findings recorded by the Ld. Pr. CIT as to how the deeming provisions are applicable in the instant case and the order so passed by the AO is erroneous. We therefore find that merely stating that there was survey operation at the business premises of the assessee and provisions of Section 115BBE of the Act are attracted, the same can be a basis for exercise of jurisdiction u/s 263 of the Act. In view of the same, order so passed by the Ld. Pr. CIT under section 263 is set aside and that of the AO is restored. Assessee appeal allowed.
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2023 (12) TMI 1393
Addition made 56(2)(viib) on account of share premium received of allotment of shares - valuation of the Shares made by Technical Expert as required under Rule 11DA of the Income Tax Rules - HELD THAT:- The assessee has taken the DCF method for valuation of share which is followed by the Rule 11UA the Rule. However, there is no dispute between the parties that Rule 11UA(1) is not applicable on the facts and circumstances of the present case which is a provision of general nature whereas Rule 11UA(2) is a specific provision providing for the valuation of the unquoted equity shares.
After going through the relevant Section and the Rules, in our opinion, the matter of valuation of unquoted equity shares, has been completely left to the discretion of the assessee. It is his option whether to choose NAV Method (Book Value) under clause (a) or to choose DCF Method under clause (b) and the AO cannot adopt a method of his own choice.
We relied on the order of Crown Chemicals [2022 (12) TMI 1552 - ITAT MUMBAI], Hometrail Buildtech (P.) Ltd [2023 (9) TMI 797 - ITAT DELHI] and Nabh Multitrade Pvt. Ltd., [2020 (10) TMI 928 - ITAT JAIPUR] We find that the assessee valued the share amount to Rs. 158/- per share and allotted share is Rs.100 which is much less than the NAV which is not contravening of section 56(2) of the Act. Further, all the investment in equity shares are accumulated from the directors and son of director. So, the addition in related to contravening of section 56(2) is not justified. Accordingly, we set aside the appeal order.
Addition u/s 68 - non-furnishing of the identity and PAN of the creditors - HELD THAT:- The assessee was unable to substantiate its claim before the revenue authorities. Accordingly, we remit back the matter to the file of the CIT(A) for adjudication afresh.
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2023 (12) TMI 1392
Unexplained income u/s 68 r.w. section 115BBE - cash deposit post demonetization - Onus to prove - AO referred to the cash deposits made by the assessee in the month of October and November and compared to the last two years and held it to unreasonably high - HELD THAT:- Source of such cash deposits has been explained by the assessee as out of its cash sales so undertaken from time to time and it has also been explained that such cash sales are subject to VAT where VAT has been collected and deposited with the government treasury.
Assessee has furnished the cash book containing the entries towards the cash sales, cash deposits with bank, complete sale and purchase ledgers, sundry creditors, VAT returns, copy of trading and profit/loss account and balance sheet which are duly audited. No defect has been pointed out by the AO in terms of availability of stock or in any of the documentation so submitted by the assessee or in the books of accounts.
Merely the fact that certain cash deposits have been made by the assessee during the period of demonization and such deposits are on a higher side considering the past year figures cannot be basis to hold the explanation so made by the assessee as unsustainable and treat the cash sales as bogus and bringing the cash deposits to tax u/s 68 of the Act.
The comparative figures for past years can no doubt provides a starting point for further examination and verification but basis such comparative analysis alone and without any further examination which points out any defect or manipulation in the documentation so submitted or in terms of availability of requisite stock in the books of accounts, the sales so undertaken by the assessee which is duly recorded in the books of accounts cannot be rejected and treated as bogus. Decided in favour of assessee.
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2023 (12) TMI 1384
Validity of final assessment order passed u/s 143(3) r.w.s. 144C(3) and 144B - Petitioner had filed its objections u/s 144C(2) with DRP, however, did not upload the objections in the portal due to a technical impediment in the portal - HELD THAT:- As Faceless Assessing Officer unaware of the fact that the Petitioner has filed its objections, proceeded to pass the assessment order without waiting for the directions of DRP under Sub-section 5 of Section 144C of the Act.
Therefore, without going into merits of the matter and in view of the view expressed by us in Sulzer Pumps India Private Limited [2021 (12) TMI 891 - BOMBAY HIGH COURT] and Pepsico India Holdings Private Limited [2023 (12) TMI 226 - DELHI HIGH COURT] we hereby quash and set aside the assessment order.
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2023 (12) TMI 1383
Revision u/s 263 - eligibility of exemption u/s 10(21) - HELD THAT:- We notice that entitlement of the assessee for exemption u/s 10(21) has been the core issue in entire proceedings for the year under consideration. In the original return the assessee had claimed deduction u/s 11 and it was only during the reassessment proceedings u/s 147 of the Act, the alternate claim of exemption u/s 10(21) is made by the assessee.
From the perusal of records all the details pertaining to the alternate claim of the assessee have been submitted and are part of the records. Therefore there is merit in the claim of the ld AR that the order under section 144 r.w.s. 263, though the assessee did not make any fresh submissions, all the details pertaining to eligibility of the assessee for exemption u/s 10(21) have been examined by the AO and he has taken a possible view that the impugned incomes are correctly included for the purpose of exemption.
It is relevant to notice that in the celebrated decision of Malabar Industrial Co. Ltd. [2000 (2) TMI 10 - SUPREME COURT] in the context of revision proceedings u/s 263 it is held that "Every loss of revenue as a consequence of an order of AO cannot be treated as prejudicial to the interests of the revenue, for example, when an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the revenue unless the view taken by the Income- tax Officer is unsustainable in law"
The claim of the assessee is that the income derived from Auditorium Hire charges, hoarding site & service charges and rent are incidental to the attainment of the objectives of the assessee trust and the reason for excise of revisionary power under section 263 is that the said income is not incidental to the objectives.
AR relied on the decision of Association of Surgeons of India [2016 (7) TMI 521 - ITAT CHENNAI] wherein it was held that the income earned from letting out of Auditorium was eligible for exemption under section 11 when the income was applied to the objects of the Trust. Therefore there is merit in the contention that whether the impugned income is incidental to the objects of the assessee trust is a debatable issue and that the AO while allowing the exemption in the order passed under section 144 r.w.s. 263 has taken a possible view upon verifying the details available on record.
Thus, we hold that the conclusion of the second CIT (Exemptions) that the order passed by the AO is erroneous is not tenable and liable to be quashed. Appeal of assessee is allowed.
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2023 (12) TMI 1382
Income deemed to accrue or arise in India - Taxability of amount received - PE in India - Indo-China DTAA - whether payments made by the assessee’s customers to it constituted royalty, in respect of software supplied? - as confirmed by SC [2021 (7) TMI 1336 - SC ORDER] supplies made (of the software) enabled the use of the hardware sold. It was not disputed that without the software, hardware use was not possible. The mere fact that separate invoicing was done for purchase and other transactions did not imply that it was royalty payment. In such cases, the nomenclature (of license or some other fee) is indeterminate of the true nature.
HELD THAT:- We find no ground to interfere with the impugned order(s) passed by the High Court. The Special Leave Petitions are, accordingly, dismissed.
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2023 (12) TMI 1381
Reopening of assessment u/s 147 - AO based on the bank statements obtained from Karur Vysya Bank Ltd. had noticed certain credits into the bank account of the assessee and had called for furnishing details in this regard - HELD THAT:- We also notice that the assessee did not appear before the CIT(A) who has concluded the appellate proceedings ex-parte based on the materials available on records.
Given this in the interest of natural justice and fair play we are of the considered view that the assessee be given one final opportunity to present the case on merits. Accordingly we remit the issue back to the AO for de novo verification calling for necessary details as may be required. Assessee is directed to furnish the required information as may be called for without seeking any adjournments and cooperate with the proceedings. Appeal of the assessee is allowed for statistical purposes.
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2023 (12) TMI 1380
Validity of assessment proceedings are time-barred - release the refunds along with interest in accordance with Section 244A as returned assessment should be accepted - petitioner states that as the limitation period to pass such orders, as per the statutory timelines prescribed u/s 153(3) read with Section 153(4) and Section 153(5) of the Act have expired, the assessment proceedings have become time-barred
HELD THAT:- In the event, the AO has not passed the assessment orders in accordance with the orders of remand passed by the ITAT within the time stipulated under Section 153(3) read with Section 153(4) and Section 153(5) of the Act, the returned assessments are directed to be accepted on the said issues. AO shall also release the refunds, if any, along with applicable interest in accordance with Section 244A of the Act within a further period of eight weeks. This Court clarifies that it has passed this order, as it is settled law that assessment is complete only when the AO passes an assessment order determining the total income and the demand notice determining the tax payable by the assessee is issued. [See: Kalyan kumar Ray v. CIT [1991 (8) TMI 291 - SUPREME COURT].
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