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Income Tax - Case Laws
Showing 361 to 380 of 8298 Records
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2023 (12) TMI 535
Revision u/s 263 - assessee was not a party to the original agreement to sale assessee - As per CIT AO passed his assessment order without examining the applicability of Section 56(2)(x) of the Act for non-examination of the said issue - assessee along with other persons purchased immovable property - assessee is having 7% share in the said sale deed out of ten co-owners - CIT revised the assessment order only by taking view that since the assessee was not the party to the original agreement and no payment / part payment at the time of execution of agreement was given therefore assessee is not eligible for the benefit of first and second proviso to Section 56(2)(x)(b) -
Whether if a person who was not a party to the agreement to sale and has not paid any consideration or part consideration by way of cheque other than cash at the time of execution of such agreement can still be eligible for the benefit of first and second proviso of Section 56(2)(x)(b) of the Act.? - HELD THAT:- We find that Co-ordinate Benches of Mumbai Tribunal in the case of Sulochana Saijan Modi [2023 (5) TMI 1099 - ITAT MUMBAI] while considering almost similar set of facts, wherein part payment of transaction was made by son of the assessee, who was joint holder of the property, the Tribunal accepted the submission for granting benefit of first and second proviso to Section 56(2)(x)(b) - We further find that in the present case, the part sale consideration was paid by Shri Umeshbhai P Patel, Sanjaybhai Tulshibhai Mangukiya and Karamshibhai Khimjibhai Mangukiya. We find that one of the assessee in these appeal that is Rajesh Bhai is the son of Parshottambhai C Patel. And Nayan Bhai is the cousin of Rajesh Bhai. Admittedly part consideration of the transaction was either paid by family members or by close relatives.
Therefore, we are also of the considered view that while accepting returned income considered by Assessing Officer has not committed any error. Therefore, the assessment order cannot be branded as erroneous. Thus, twine condition, for invoking Section 263 of the Act are not met out in the present case. This ground of assessee’s appeal is allowed.
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2023 (12) TMI 515
Unexplained cash deposit from undisclosed sources u/s 69A r.w.s. 115BBE - assessee has made cash deposit during demonetization period in her bank account - HELD THAT:- As perused the orders of the lower authorities, find that the assessing officer recorded that in the return of A.Y. 2015-16, the assessee shown gross receipt of Rs. 3,78,000/- and profit of Rs. 3,62,780/- and under the column of cash balance mentioned at Zero. Such finding of the assessing officer is not countered by ld AR for the assessee by showing any adverse evidence.
AO itself held that for A.Y. 2016-17 the assessee filed return of income on 24.12.2016 i.e. after demonetization the assessee has shown gross receipt under Section 44AD of the Act of Rs. 12,45,600/- and net income of Rs. 10,00,180/-. The assessee also claimed deduction under Chapter VIA of Rs. 1,75,560/- and paid tax of Rs. 96,130/-. Thus, out of total Rs. 10,00,180/-, the assessee incurred Rs. 2,71,690/- as per return of income and considering the household expenses of assessee at Rs. 1.00 lacs, the assessee was hardly having cash balance of Rs. 6.00 lacs.
From the aforesaid observation of assessing officer, find that the assessing officer has accepted the case balance of Rs. 6.00 lacs with assessee and disbelieved the remaining cash balance. Thus, the assessing officer accepted the availability of cash of RS. 6.00 lacs with the assessee. Since, the assessee was showing business income from several years, for the year under consideration the assessee has shown income of about Rs. 10.00 lacs (Approx) therefore, the assessee is also given benefit benefits of Rs.200 lacs, thereby the additions to the extent of Rs. 8.00 lacs are deleted and remaining addition of Rs. 2.90 lacs is upheld.
Taxing of the addition under amended provisions of section 115BBE we find that division bench of this Tribunal in Samir Shantilal Mehta [2023 (5) TMI 1279 - ITAT SURAT], Arjunsinh Harisinh Thakor Vs [2023 (6) TMI 770 - ITAT SURAT] and in JItendra Nemichand Gupta (supra)[2023 (6) TMI 1338 - ITAT SURAT] and Indore Bench in DCIT Vs Punjab Retain Pvt Ltd [2021 (11) TMI 405 - ITAT INDORE] and Sandesh Kumar Jain [2022 (11) TMI 126 - ITAT JABALPUR] held that applicability of amended provision of section 115BBE in not retrospective. Thus, the assessing officer is directed to tax the remaining addition @ 30% and applicable surcharges if any. In the result, the ground of appeal raised by the assessee is partly allowed.
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2023 (12) TMI 506
Refund due adjustment against the demand raised - recourse to a statutory remedy for payment of interest and the balance refund claimed - HELD THAT:- As revenue, has returned with instructions, which indicate that the respondents/revenue have computed the amount refundable to the petitioner/assessee.
As pointed out by Respondents that Rs. 44.60 lakhs has been computed as the amount which is refundable to the petitioner/assessee. Petitioner/assessee says that the amount claimed by way of refund is Rs.46 lakhs, as indicated in the prayers made in the writ petition. Petitioner also says that the petitioner/assessee should also be granted interest.
To be noted, in the application interest at the rate of 18% per annum has been claimed, which is way beyond the statutory rate of interest. As a matter of fact, at the time when the writ petition was filed, interest at the applicable rate was claimed.
As would be evident upon perusal of the extract of the order date 27.09.2023, in the instant writ action, counsel for the petitioner had clearly indicated that he would not be claiming interest if the amount is paid forthwith.
Writ petition is disposed of with the following directions-
(i) The respondents/revenue will remit to the petitioner/assessee the amount of refund already crystallized [i.e., Rs.44.60 lakhs] within the next two (2) weeks.
(ii) The petitioner will be at liberty to take recourse to a statutory remedy for payment of interest and the balance refund claimed by him. The order passed today or those passed on previous dates will not come in the way if such a remedy is taken recourse to.
(iii) The concerned authority will decide the matter concerning interest and the balance principal amount by the petitioned/assessee in accordance with the law.
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2023 (12) TMI 505
B/F losses not allowed to be carry forward - Tribunal allowed the appeal and directed the AO to expunge the concluding remark “brought forward loss is not allowed to be carry forward - Tribunal for expunging the remark was that the AO was only required to notify the assessee about the amount of loss, as computed by him for the relevant AY and held that the question of whether the loss, incurred in any year, could be carried forward to the following year, and set off against the profits had to be decided by the AO who would deal with the assessment concerning the subsequent year.
HELD THAT:- Section 79 of the Act prohibits carry forward and set off of losses that occurred in a period before the previous year, when in a previous year, there has been a change of shareholding unless the case fits in any of the provisos referred to therein.
Tribunal, in sum, concluded that it was not within the remit of the AO, dealing with the AY in issue, to make an observation concerning an aspect that would fall within the jurisdiction of the AO, when the aspect concerning carry forward and set off losses would come to the fore
A textual reading of Section 79 makes it evident that it does not empower an AO, who exercises jurisdiction qua a particular AY, to place limitations on the adjudicatory powers of the AO who would be called upon to deal with the matter in subsequent years.
A perusal of Section 79 of the Act would show that unabsorbed depreciation and capital losses do not fall within its scope and ambit.
There is, in our opinion, no practical efficacy in the assessee carrying forward business losses, unabsorbed depreciation, and capital losses unless there is a possibility of setting off those losses in the future, albeit subject to the provisions of the Act. These are the aspects, in our opinion, that the concerned AO would examine in the relevant AY in which such set off is claimed.
Mere fact that the Tribunal has expunged the impugned observations, in our view, cannot impact the stand of the appellant/revenue.
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2023 (12) TMI 504
Validity of order passed Direct Tax Vivaad Se Vishwas, Act - penalty imposed u/s 271 AAB - amicable settlement in terms of the Act seeked - settlement over litigation - appeal was filed carrying a delay of 1261 days - designated authority rejecting that application/ declaration for reason of second appeal not filed before the cut off date 01.04.1919 to 31.01.2020 - revenue would submit not only the petitioner did not file any appeal within limitation, he also did not file such appeal with delay within the cut off time. Had such delay condonation application being filed, the revenue authorities would have remained enabled to consider the application/ declaration on merits
HELD THAT:- We find no good ground to offer any interference. In the first place, settlement of disputes outside courts/ judicial process is not a fundamental or inherent right of any litigant. That right was created by the statute i.e. the Act. Being a statutory right, the same may have been availed strictly in accordance with the statutory conditions and it was a stipulation that the application/ declaration may be maintainable only if there was pending a litigation between the parties before the cut off date, it remained from the petitioner to satisfy that condition. Not only the petitioner did not file the appeal before the Tribunal, within time it also remained from him to file any defective proceeding seeking condonation of delay in filing such appeal before the cut off date. Therefore, no right vested or accrued to the petitioner to seek a settlement in terms of the conditions prescribed by the Act. For that reason, we find no error in the order passed by the designated authority.
Further submission of petitioner is concerned based on the objects and reasons of the Act, while objects and reasons may never defeat specific provisions of enactment, here we also note that the petitioner is not at loss inasmuch as his right of appeal before the Tribunal, against the order passed by the first appellate authority has been preserved upon condonation of delay of 1261 days in filing the second appeal.
Writ petition lacks merits and is dismissed.
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2023 (12) TMI 503
Validity of faceless assessment proceedings - as argued petitioner did not receive the draft assessment order and notice - violation of principles of natural justice - HELD THAT:- It is not in dispute that all other notices issued to the petitioner during the faceless assessment proceedings were served on him and he filed responses to the said notices. It would be hard to believe that the petitioner did not receive the draft assessment order and notice.
Violation of principles of natural justice - As argued Sufficient time to the petitioner for filing reply/objection to the draft assessment order not provided assessee was afforded only three days time to file objection to the draft assessment order - Submission of the petitioner is also unsustainable, because violation of principles of natural justice would come only if the petitioner asked for extension of time to file reply/objection to the draft assessment order dated 24.9.2021, Ext.P11(b), or the notice dated 23.9.2021 and the authority denied such request for further time for filing reply/objection. In the present case, the petitioner did not choose to file reply to the notice dated 23.9.2021, nor objection to the draft assessment order. Therefore, the alleged violation of principles of natural justice does not exist.
Thus it would be hard to believe that the petitioner did not receive draft assessment order and therefore, the decision in the case of Ellathkandi Khaleel Ahammad [2022 (8) TMI 139 - KERALA HIGH COURT] is of no use to the petitioner in the present case.
No substance in the submission of the learned counsel for the petitioner that notice and draft assessment order were not served on the petitioner. Accordingly, the present writ petition is hereby dismissed.
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2023 (12) TMI 502
Bogus short-term capital loss on sale of shares - assessee, an individual, claimed to be engaged in the activity of trading of shares & securities -principle of surrounding circumstantial evidence relied upon - lower authority treated the transaction carried out by the assessee as sham transaction based on certain general facts like the company company was not finically viable in which general public should show interest. The price of the scrip was unusually skyrocketed without any financial or economic basis and unusually decreased and script in that period were traded in bulk and most people who indulged in bulk trading were from Ahmedabad city only
HELD THAT:- AO in its order has stated nowhere that any enquiry or investigation was carried out with any concerned authority or income tax department regarding rigging up of the price of M/s Looks Health Services Ltd or by the assessee’s broker. AO predominantly proceeded to hold the price of the shares was rigged up merely on analysis of trade data of impugned script and financial strength of the company. Thus, the AO based on sweeping observation held that the assessee entered a prearranged transaction to set off the long-term capital gain earned by him during the year. As such, there is no information or finding based on corroborative material available with the AO that the price of impugned script was rigged up or the assessee along with his broker have rigged up the price or prearranged the transaction.
The principle of surrounding circumstantial evidence is also not as strong to draw adverse inference against the assessee especially considering the fact that the transaction of purchases and sales were made on the BSE platform where seller and buyer do not know each other, and transaction entered on the basis of current market scenario.
Assessee during the year under consideration has earned LTCG of Rs. 2,46,90,000/- whereas claimed setoff of STCL of Rs. 1,78,23,848/- only, had the assessee prearranged the transaction to set off the gain then he might have setoff entire capital gain. It is also pertinent to mention that the assessee during the year entered into share trading on short term basis in 48 different scripts and he incurred losses as well as earned profit which were not doubted.
We find it necessary to refer to the judgment of the Krishna Devi [2021 (1) TMI 1008 - DELHI HIGH COURT] wherein High court decided the issue in favour of the assessee as held that reliance placed on the report, without further corroboration on the basis of cogent material, does not justify his conclusion that the transaction is bogus, sham and nothing other than a racket of accommodation entries. We do notice that the AO made an attempt to delve into the question of infusion of Respondent's unaccounted money, but he did not dig deeper. AO simply proceeded on the basis of the financials of the company to come to the conclusion that the transactions were accommodation entries, and thus, fictitious. The conclusion drawn by the AO, that there was an agreement to convert unaccounted money by taking fictitious LTCG in a pre-planned manner, is therefore entirely unsupported by any material on record. This finding is thus purely an assumption based on conjecture made by the AO.
Thus following same we direct the AO to delete the addition made by him. Hence, the ground of appeal of the assessee is hereby allowed.
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2023 (12) TMI 501
Revision u/s 263 - Reopening of assessment u/s 147 - sale of the immovable property and the resultant capital gain arising from such sale - claim of deduction u/s 54 - HELD THAT:- AO has clearly stated that assessee’s counsel has furnished written reply, sale deed, copy of purchase of property and computation of capital gain. In the said order sheet, AO has also called upon the assessee to furnish the details of exemption claimed under section 54 with supporting evidences. Thus, as could be seen from the order-sheet entries in the assessment record, the Assessing Officer has duly examined the issue relating to capital gain from sale of property as well as assessee’s claim of deduction under section 54 of the Act.
A perusal of the showcause notice issued u/s 263 of the Act as well as the order passed under the said provision clearly reveal that the revisionary authority has not expressed any doubt regarding the quantum of capital gain arising at the hands of the assessee and also the fact that such capital gain was invested in purchase/construction of residential house within the time limit prescribed u/s 54(1) of the Act.
Only because the capital gain was not deposited in the capital gain account scheme, the revisionary authority has treated the assessment order to be erroneous and prejudicial to the interest of Revenue. In our view, learned PCIT has adopted a hyper-technical approach while dealing with the issue. When the basic conditions of section 54(1) has been satisfied, in our view, the assessee remains entitled to claim the deduction under section 54 of the Act. In any case of the matter, there is no prejudice caused to the Revenue as the assessee in terms of section 54(1) of the Act is entitled to deduction.
We hold that exercise of power under section 263 of the Act to revise the assessment order in the instant case is invalid. Accordingly, we quash the order passed under section 263 of the Act and restore the assessment order.
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2023 (12) TMI 500
Reopening of assessment - Addition u/s 68 - introduction of the assessee’s unaccounted funds in the guise of share capital/premium and such a transaction was to launder its own unaccounted fund - HELD THAT:- As in Aroni Commercials Ltd. [2014 (2) TMI 659 - BOMBAY HIGH COURT] as observed that once a query is raised during the assessment proceedings and the assessee has replied to it, it follows that the query raised was a subject of consideration of the assessing officer while completing the assessment. It is not necessary that an assessment order should contain reference and/or discussion to disclose its satisfaction in respect of the query raised. And further their Lordship observed that if an assessing officer has to record the consideration bestowed by him on all issues raised by him during the assessment proceedings even where he is satisfied, it would be impossible for the assessing officer to complete all the assessments which are required to be scrutinized u/s 143(3) of the Act.
In the light of the inquiry made by AO regarding the share capital/premium allotted/received by assessee during the original/abated/scrutiny assessment, the impugned action of AO again to examine the same alleging escapement of income tantamount to review of his own action which is not permissible; and therefore, the action of the AO to reopen the assessment by issuance of notice u/s 148 merely on the basis of “change of opinion”, cannot satisfy requirement of law u/s 147 of the Act to validily reopen the assessment. We find that AO in the reasons recorded had no tangible material in his possession to reopen the assessment, and he has resorted to reopening only after perusal of balance-sheet of the assessee regarding shares allotted on premium, which action itself vitiates the impugned reopening of assessment.
Thus we find that the issue regarding share capital/premium allotted to M/s. Balaji Universal Tradelink Pvt. Ltd from whom assessee collected in the year under consideration was subjected to inquiry by AO during the original assessment and thereafter, he framed the assessment order on 30.12.2011 after consideration assessee’s reply and the AO’s action of not making any adverse finding on this issue, implies that AO has accepted the explanation of assessee on this issue. Right or Wrong the action of AO could not have been reviewed by AO himself after reopening the assessment u/s 147 of the Act.
May be the Ld. PCIT could have initiated revisional proceeding u/s 263 of the Act. And moreover, we note that year under consideration is AY 2009-10 and share /premium could not have been brought to tax because share premium was brought to tax only w.e.f. 01.04.2013 as held in the case of Gagandeep Infrastructure Pvt. Ltd [2017 (3) TMI 1263 - BOMBAY HIGH COURT] wherein held that share premium can be brought to tax only w.e.f. 1st April, 2013. Therefore, the action of AO to reopen the assessment of assessee cannot be sustained. Decided in favour of assessee.
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2023 (12) TMI 499
TP Adjustment - valuation of Arms Length Price (ALP) of the various Specified Domestic Transactions (SDTs) between the assessee and its Associated Enterprises (AEs) - AO had made a reference to Transfer Pricing Officer u/s. 92CA of the Act to determine ALP with respect to SDT u/s. 92BA(1) - HELD THAT:- We are of the view that Coordinate Benches have taken a view that since clause (i) of section 92BA stands omitted from the provision and omission of such is to be construed as if it never existed in the Statute Book and if it never existed in the Statute Book, then, no Arm's Length Price is required to be determined for a transaction with specified persons in section 40A(2)(b) of a domestic transaction. If no Arm's Length Price is required to be determined, then, no reference was required to be made.
As relying on Texport Overseas Pvt. Ltd [2019 (12) TMI 1312 - KARNATAKA HIGH COURT] we allow the Cross Objection of the assessee resulting into deletion of the adjustments made in respect of the SDTs by the Ld. AO.
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2023 (12) TMI 498
Addition u/s 40(a) - withholding of TDS - assessee submits that the ground of the Department for disallowance of the gross fee paid to FOWC already stands decided against the Department by the Tribunal in assessee’s own case - as regards the disallowance of fee paid to FOM it is rightly deleted by the Ld.CIT(A) for both the reasons: (i) there was no chargeable sum in the gross fee and (ii) FOM had filed their returns and had paid their tax dues.
HELD THAT:- In so far as the fee paid to Formula One World Championship Ltd. to UK (FOWC), we find that the issue stands covered in favour of the assessee by the order of the Tribunal [2023 (3) TMI 609 - ITAT DELHI] for the assessment years 2012-13 to 2014-15 as held no part of the RPC fee paid by the assessee is liable to be disallowed under clause(i) of s.40(a) because the second proviso clause (i) of Section 40(a) has been inserted w.e.f. 1.4.2020. The said proviso essentially provides that where the relevant income has been declared by the payee and tax thereon has been paid by him then no disallowance shall be made in the hands of the payer. This proviso is similar to the second proviso to clause(ia) of s.40(a) which was inserted w.e.f. 1.4.2013. Both these provisos were inserted to remove an anomaly and were therefore curative and declaratory in nature. Hence they had to be given retrospective effect.
Fee paid to Formula One Management Ltd. of UK (FOM) - On careful observation of Ld.CIT(A), we noticed that the disallowance was deleted on the ground that the assessment made in FOM it was found that the chargeable sum resulted in loss therefore no withholding was required by the assessee the disallowance was rightly deleted. Grounds of Revenue on this issue are rejected.
TDS u/s 194H - Disallowance of bank guarantee Commission - As decided in own case [2017 (9) TMI 241 - ITAT DELHI] no tax is required to be deducted on bank guarantee Commission u/s 194H of the Act was accepted. Respectfully following the decision of the Tribunal, we reject the grounds raised by the Revenue on this issue.
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2023 (12) TMI 497
Reopening of assessment - Addition made u/s.69A - difference between agreement value and market value - HELD THAT:- Assessee has purchased the premises in question by virtue of the sale agreement from M/s. Trincas Agencies & Commerce Pvt. Ltd. reopening in case of the assessee for A.Y. 2011-12 is not sustainable in the eyes of law.
Even on merits the assessee has proved on record the ledger account of M/s. Trincas Agencies & Commerce Pvt. Ltd. showing payment through banking channel. The assessee has also brought on record his bank statement available wherein payment of the sale consideration is shown to have been made through Union Bank of India from his bank account.
When we examine sale agreement between M/s. Trincas Agencies & Commerce Pvt. Ltd. and the assessee for a consideration of Rs. 9,92,00,000/-. From the document available it is proved that the assessee has purchased the property in question more than the fair market value - Assessee has nothing to do with M/s. Sunshine Housing & Infrastructure Pvt. Ltd. rather purchased the property in question in A.Y. 2013-14 in second sale from M/s. Trincas Agencies & Commerce Pvt. Ltd. at the rate more than the fair market value.
Reopening made on the basis of search conducted at the M/s. Sunshine Housing & Infrastructure Pvt. Ltd. and the statement of Shri N.K. Vora recorded under section 132(4) of the Act reopening of the assessment in A.Y. 2011-12 is invalid and not sustainable in the eyes of law. Even on merits the addition made in the hands of the assessee in A.Y. 2011-12 in which no such property was purchased by the assessee is sustainable in the eyes of law, hence ordered to be deleted.
Appeal filed by the assessee is allowed.
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2023 (12) TMI 496
Excess claim of deduction u/s 35(2AB) - partial disallowance by the ld. AO in the re-assessment - As submitted although in the said approval letter, the R&D facility was approved for the purpose of section 35(2AB) from 20.11.2012 to 31.3.2015, yet it did not assign any reason for curtailing the period from 1.4.2012 to 19.11.2012 - no reply was received from DSIR when seeked reason for curtailing approval - as submitted that once a R&D facility is approved by DSIR, then the expenditure incurred thereon would be eligible for weighted deduction u/s 35(2AB) of the Act for the whole year irrespective of the fact that the approval was granted only from the period commencing from 20.11.2012 onwards - HELD THAT:- As decided in SANDAN VIKAS (INDIA) LTD. [2011 (2) TMI 66 - DELHI HIGH COURT] The provisions nowhere suggest or imply that research and development facility is to be approved from a particular date and, in other words, it is nowhere suggested that date of approval only will be cut-off date for eligibility of weighted deduction on the expenses incurred from that date onwards. A plain reading clearly manifests that the assessee has to develop facility, which presupposes incurring expenditure in this behalf, application to the prescribed authority, who after following proper procedure will approve the facility or otherwise and the assessee will be entitled to weighted deduction of any and all expenditure so incurred.
Tribunal has, therefore, come to the conclusion that on plain reading of section itself, the assessee is entitled to weighted deduction on expenditure so incurred by the assessee for development of facility.Tribunal has also considered Rule 6(5A) and Form No. 3CM and come to the conclusion that a plain and harmonious reading of Rule and Form clearly suggests that once facility is approved, the entire expenditure so incurred on development of R&D facility has to be allowed for weighted deduction as provided by Section 35(2AB).
No scope for any other interpretation and since the approval is granted during the previous year relevant to the assessment year in question, we are of the view that the assessee is entitled to claim weighted deduction in respect of the entire expenditure incurred under Section 35(2AB) of the Act by the assessee.
Thus we hold that the assessee would be entitled for deduction u/s 35(2AB) of the Act for the expenditure incurred from 1.4.2012 to 31.3.2013. Assessee appeal allowed.
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2023 (12) TMI 495
On-money received towards sale of property and offered during the course of survey - AO based on the impounded MOU and sworn statement of the assessee completed the assessment by adding Rs. 1 Crore to the total income of the assessee - HELD THAT:- We find from the financial statements filed by the assessee for the A.Y 2011-12 that additional income offered during the course of survey towards on-money received from sale of property amounting to Rs. 1,00,00,000/- has been offered to tax and credited to profit and loss account under the head “other income business”. Further, the appellant has filed an affidavit and confirmed income offered during the survey is subjected to tax.
From the details filed by the assessee, we find that the appellant has declared amount of Rs. 1,00,00,000/- offered as additional income during the course of survey and paid necessary taxes. In fact, the A.O and Ld. CIT(A) are also not disputed the fact that the assessee has offered Rs. 1,00,00,000/- for tax which is evident from the findings of the Ld. CIT(A) in their order dated 23.03.2016.
Since, the appellant has already offered and paid taxes additional income of Rs. 1,00,00,000/- declared during the course of survey, further addition on very same amount by the A.O amount should double additional which is not permissible under the law. Therefore, we are of the considered view that the A.O is erred in making separate addition of Rs. 1,00,00,000/-, even though the appellant has already credited said additional income in the profit and loss account and paid taxes.
CIT(A) without appreciating the facts simply sustained the additions made by the A.O. Thus, we set aside the order of the CIT(A) and direct the A.O to delete additions of Rs. 1,00,00,000/- made towards on-money received towards sale of property and offered during the course of survey. Appeal of the assessee is allowed.
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2023 (12) TMI 494
Addition on the basis of entries found in form No. 26AS - addition under the head “income from other sources” - CPC compared the interest income reflected in Form No. 26AS and net interest income shown in the computation of income and added the difference - HELD THAT:- On examination of computation of income which, is made a part of order by ld. CIT(A), we find that the assessee has shown bank interest under the head income from other sources and net difference of interest income earned and interest income incurred is reduced from business income. Thus, find merit in the written submission that the CPC has not considered or unable to consider the allowability of interest income earned and interest incurred due to mechanical working.
As also find merit in the written submission that no addition on 26AS alone can be a basis for making addition without verification of fact as has been held by various Benches of the Tribunals, therefore, the addition/adjustment made by AO and confirmed by ld. CIT(A) is deleted. In the result grounds of appeal raised by the assessee are allowed.
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2023 (12) TMI 465
Validity of reopening of assessment - assumption of jurisdiction for reassessment - Period of limitation - Scope of extended period of six years - reassessment even after the expiry of four years from the end of the relevant assessment year, but, within six years from the relevant assessment year - delay of 340 days in filing the special leave petition - As decided by HC [2022 (8) TMI 1340 - MADRAS HIGH COURT] failure on the part of the assessee to fully and truly disclose all material particulars in our view would constitute the "jurisdictional fact" for invoking extended period of limitation and failure to record the existence of the above jurisditional fact while invoking the extended period under the proviso to Section 147 of the Act, would vitiate the entire proceedings - failure to render a finding as to the existence of the above circumstance warranting invocation of the extended period in terms of the proviso to Section 147 of the Act would vitiate the entire proceedings. Thus the initiation of reassessment proceedings is in excess of jurisdiction
HELD THAT:- SLP dismissed both on the ground of delay as well as on merits.
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2023 (12) TMI 464
Assessment u/s 153C and 153A - mandate of satisfaction recorded by the assessing officer of the searched person (153A) - date with reference to which the proceedings for assessment or reassessment of any assessment year - as decided by HC [2023 (4) TMI 1055 - KARNATAKA HIGH COURT] no satisfaction was recorded by the AO of the searched person because it is seen that the so-called satisfaction note prepared by the Assessing Officer in his capacity as Assessing Officer of the searched person, it could not be shown by the Revenue that any satisfaction note was prepared by him as the AO of the searched person.
HELD THAT:- As petitioner(s) submitted that the issues which arise in this special leave petition are covered by the judgment of this Court in the case of Commissioner of Income Tax 14 v/s. Jasjit Singh [2023 (10) TMI 572 - SUPREME COURT]
Following the aforesaid judgment, the Special Leave Petition is dismissed.
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2023 (12) TMI 463
Income taxable in India - granting rights to the customers under EULA to use the software - taxable Royalty receipts both u/s 9(1)(vi) of the Act and under Article 12 of India-USA DTAA - sale of the End User Licence and Annual Maintenance Charges (AMC) - Whether amount received towards annual maintenance charges of the software are not ancillary or subsidiary to enjoyment of right to use software and thus not taxable as FTS/FIS? - HELD THAT:- Tribunal has returned a finding of fact that End User Licences issued by the respondent/assessee to its customers were non-exclusive and non-transferable and that the users were not given access to the source code.
As regards the amount which the AO treated as FTS is concerned, the Tribunal concluded that Fee for Included Services (FIS) under the said Article would only mean payment made in consideration for rendering technical or consultancy services, if such services were ancillary and subsidiary to the enjoyment of right in the property.
It was the Tribunal’s view that since it had concluded that no right in the property had been transferred, Article 12(4)(a) of the DTAA had no applicability. Tribunal had also examined the applicability of Article 12(4)(b) of the DTAA.
Tribunal concluded that the respondent/assessee had not “made available” any technical knowledge, experience, skill, know-how etc, to the recipients of such services. A finding of fact was returned in that behalf.
We find that the first issue is covered by the judgment of the Supreme Court rendered in Engineering Analysis Centre of Excellence Pvt. Ltd. [2021 (3) TMI 138 - SUPREME COURT] and the second issue, in any case, is connected, as rightly held by the Tribunal, with the first issue.
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2023 (12) TMI 462
Denial of benefit of lower rate of tax @ of 22% u/s 115BAA - failure to file Form 10-IC - Petitioner placed before the court Circular No.19/2023 dated 23.10.2023 issued by the Central Board of Direct Taxes (CBDT) which, in effect, condones the delay in filing Form 10-IC - HELD THAT:- We are informed by petitioner that in terms of the said circular, a fresh Form 10-IC has been filed, albeit, electronically. Accordingly, petiotioner says that the petitioner fulfills the conditions referred to in paragraph 3 of the said circular.
In these circumstances, the writ petition is disposed of, with a direction to the CBDT to process the petitioner’s request contained in Form 10-IC. CBDT will process the aforementioned prescribed form within eight (8) weeks from the date of receipt of the order passed today.
The interim order which was made absolute on 19.05.2023, shall continue to operate pending the aforementioned exercise, and for further three (3) weeks, in case the result is adverse to the interest of the petitioner.
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2023 (12) TMI 461
Addition as per Draft Assessment order u/s 144C - not allowing indexed cost of improvement to the property while computing the capital gains - assessee furnished reply which was rejected by the AO on the ground that assessee has failed to provide details of name, address and PAN of party to whom payment was made, did not furnish invoices, bank statements, reflecting the entries for the payment - whether cash withdrawal amounts were precisely used for the renovation work? - HELD THAT:- The submissions of the assessee that being an NRI he has issued cheques to Alok Lal for withdrawal of cash from his bank account for the purpose of utilizing the same for renovation of kitchen, cupboards, etc. cannot be ruled out. The explanation of the assessee is a plausible explanation. The observation of the AO that there is no written agreement to establish the relation between the assessee and the Fourth Dimension and its proprietor Alok Lal cannot be a ground for disbelieving the payments for utilizing the renovation work. In any case, there is no dispute about carrying out of the renovation work and the amount spent was only of Rs. 9,50,000/- for kitchen cup boards, etc.. Therefore, taking the totality of facts and circumstances into consideration, we accept the submissions of the assessee and the explanation as genuine and, therefore, direct the AO to allow the assessee the cost of improvement with indexation and re-compute the capital gains. Appeal of the assessee is allowed.
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