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2022 (12) TMI 405
Reopening of assessment u/s 147 - non-issue of a notice u/s 143(2) - assumption of jurisdiction by an officer commences with, and is triggered by, the issuance of a notice under Section 143(2) and failure to do so, would compromise the proceedings fatally - HELD THAT:- There is complete uniformity in the conclusion of Courts on the issue as to whether non-issue of notice under Section 143(2) would vitiate the assessment, answering the issue in the affirmative. CBDT Instruction No.3 of 2003 elucidates upon and explains the provisions relating to Transfer Pricing, as contained in Sections 92 and 92F of the Act that had come into force, with effect from assessment year 2002-03 onwards. The Circular reinforces the position that it is sine qua non for the Assessing Officer to assume jurisdiction prior to taking any steps in the matter of asses....... + More
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2022 (12) TMI 404
Validity of reopening of assessment - reopening as initiated beyond 4 years - Reasons to believe - HELD THAT:- It is settled that if notice under Section 148 of IT Act is to be issued after expiry of four years or before expiry of six years, the assessee should have failed to disclose the ‘material facts’. ITAT on consideration of the material on record has held that AO has not even stated or alleged that there was failure on the part of assessee to disclose fully and truly all the material facts necessary for the said assessment years. Nothing contrary to the findings of the ITAT is demonstrated or urged by the Revenue. In view of the settled position of law and the AO not stating that there was failure on the part of the assessee to disclose material facts, no exception can be taken to the order passed by the ITAT. Resultantly, these appeals must fail.
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2022 (12) TMI 403
Upfront premium amortization - land has been given on long lease/license for 30 years - Entitlement to amortize and offer 1/30th of the amount received as income every year - Whether consideration amount received in respect of an immovable property, either while conveying property or granting long license/lease shall be a capital receipt? - whether tribunal is justified in holding that the entire upfront premium constituted the income for the current year? - HELD THAT:- The issue involved in "Sindhurani Chaudharani" [1957 (4) TMI 3 - SUPREME COURT] is payment of 'Salami' and in this case it is upfront premium which non refundable. Therefore the matter requires reconsideration in the hands of the Assessing Officer referring to relevant facts and law. According to Shri.A.Shankar, if the accounting is as per AS-19 and even ....... + More
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2022 (12) TMI 402
Reopening of assessment u/s 147 or assessment u/s 153C - HELD THAT:- Undisputed facts of the case are, based on the agreement found during the search in the premises of M/s Davanam Jewellers Pvt. Ltd., the assessment was reopened for A.Y.2006-07. The assessment order does not indicate the procedure followed in re-opening the assessment. In addition protective assessment for A.Y.2007-08 has also been completed. As perused the agreement. Shri Chandrashekar is right in his submission that though the agreement is undated, the stamp paper bears the date of purchase as October 9th, 2009. The details of the payments are shown. In agreement, it is stated that the possession of the land shall be handed over after execution of the sale deed. In the facts of this case, in the absence of details in the assessment order with regard to the procedure fo....... + More
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2022 (12) TMI 401
Exemption u/s 10(22) denied - objects of the Trust include commercial activity - appellant's Trust was registered with the primary object to impart education - AO did not allow exemption on the ground that that the assessee-Trust was not solely for the educational purposes, but the trust was making profits - as per AO Trust Deed provided for payment of Honorarium to the Trustees prohibited u/s 13(2), Trust collects abnormally high fees, for acquiring luxury vehicles, using the Trust funds for activities other than education and unexplained cash credit - HELD THAT:- AO has not accepted the explanation on the ground that only upon the Department raising a query, the assessee had shifted the figures of Building and Development Fund to Income and Expenditure Account, as an after thought. The assessee was called upon to produce the details....... + More
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2022 (12) TMI 400
Stay of demand - AO directing the appellant to deposit 20% of the tax as determined in the order of assessment - HELD THAT:- Admittedly, the assessments are high pitched assessments and when such high pitched assessments are appealed against and an order of stay is sought for either before the assessing officer by filing an application under Section 220(6) of the Income Tax Act, orders are passed by the assessing officer either keeping the notice of recovery in abeyance and not treating the assessee as an assessee in default till the appeal is disposed of. There are yet another set of cases where the assessing officer for reasons to be recorded imposes certain conditions as a condition for grant of stay. The appellant’s case falls under the second category where the assessing officer has directed 20% of the demand to be paid by the ....... + More
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2022 (12) TMI 399
Unexplained money - Assessee had deposited the amount in his bank after receiving the same from his father-in-law - lower authorities were in error in confirming the assessment on the ground that the WILL was not properly notarized or registered and on the further ground that creditworthiness of the father-in-law is not established in view of undisputed fact that there was no cash credits - HELD THAT:- It is settled that tax authorities cannot record any findings with regard to validity of the Will. They may look into any Will for satisfying themselves with regard any transaction. In view of the authority in Daulat ram Rawatmull and the fact that another sum of Rs.25 Lakhs has been paid to assessee's co-brother under the very same Will and there has been no enquiry in that regard, we are of the view that the findings recorded by the C....... + More
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2022 (12) TMI 358
Foreign exchange fluctuations loss on unmatured, matured and cancelled forward contracts - loss on Forward Cover Purchase Contracts for foreign exchange (hereafter ‘Forward Contracts’) - allowable as a deduction from the income chargeable to tax for the relevant assessment year notwithstanding that the Forward Contracts have not closed - Whether the losses on account of foreign exchange fluctuations on forward contracts are allowable undersection 37(1) of the Income Tax Act and covered as hedging transactions u/s 43(5)(a) of the Act or should be disallowed as speculation losses under Section 43(5) of the Act in view of the CBDT Instruction No. 3/2010 dated 23.03.2010? - HELD THAT:- Undisputedly, the Forward Contracts, in the present case, are hedging transactions. Assessee has reinstated its debits and credits from the underly....... + More
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2022 (12) TMI 305
Reopening of assessment u/s 147 - Reasons to believe - alleged failure to disclose fully and truly all material facts in so many words - accrual of income - Reopening beyond period of four years - transaction of E-auction by the Monitoring Committee, the sale of ore, and the sale of 209,961 tons of ore by the Monitoring Committee - whether the amount had indeed accrued to the Petitioner during the AY 2012-13? - HELD THAT:- AO could have taken the view that even the amount of ₹64.92 crores warrants tax payment because the same was accrued to the Petitioner during the AY 2012-13. Further, perhaps the Revenue could have explored the possibility of reopening the assessment within four years from the end of the relevant AY. However, for any attempt to reopen the assessment after four years from the end of the relevant AY, the Revenue had....... + More
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2022 (12) TMI 294
Reopening of assessment u/s 147 - objections to the reasons recorded - Notice beyond four years - treatment of share of profit in capacity of partner - HELD THAT:- AO had considered the very issue in respect of which subsequently he issued notice under section 148 seeking to reopen the assessment. The assessment order passed by assessing authority also reflected consideration of the same. Therefore, there was no basis for re-opening of the reassessment. It is trite principle that change of opinion could not be a ground to resort to reopening of process. AO in the present case could be said to have any new facts discovered to justify the re-opening. If it was a mere change of opinion on the part of the AO in issuing the order such course was not permissible in law. The entire assumption of jurisdiction to reopen the assessment was without ....... + More
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2022 (12) TMI 225
Reopening of assessment u/s 147 - Provision for cases where assessment is in pursuance of an order on appeal, etc. u/s 150 - AO proposed to assess/re-assess the loss/depreciation allowance - HELD THAT:- The provisions of sub- section (1) shall not apply in any case where any such assessment, reassessment or recomputation as is referred to in that sub-section relates to an assessment year in respect of which an assessment, reassessment or recomputation could not have been made at the time the order which was the subject-matter of the appeal, reference or revision, as the case may be, was made by reason of any other provision limiting the time within which any action for assessment, reassessment or recomputation may be taken. From a perusal of sub-section (1) of Section 150 of the Act, we find that the said provision is basically to be empl....... + More
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2022 (12) TMI 224
Intimation u/s 143(1)(a) - Adjustment of interest on deposits by the respondent/assessee at the stage of issuance of intimation u/s 143(1)(a) - HELD THAT:- CIT(A) held that in the guise of prima facie adjustment, assessing officer cannot adjudicate upon debatable issues. CIT(A) noted that the decision of this Court in Godavari Fertilizers and Chemicals Limited [1991 (6) TMI 13 - ANDHRA PRADESH HIGH COURT] on which heavy reliance is placed by the revenue was appealed against before the Supreme Court and the appeal was pending. CIT(A) held that the issue was highly debatable on which two opinions were clearly possible and on such a highly debatable issue, prima facie adjustment ought not to have been carried out by the assessing officer. Taking the view that interest payments sought to be set off against interest receipts having the same or....... + More
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2022 (12) TMI 190
Nature of expenditure - expenditure in connection with the development of new products / software - revenue or capital expenditure - question of larger context of business necessity or expediency - HELD THAT:- The issue as to whether a particular expenditure incurred was of capital or revenue in nature has been the subject matter of legal debate before various Courts in the Country. As held by the Apex Court in the case of Empire Jute Co. Ltd. [1980 (5) TMI 1 - SUPREME COURT] since there does not exist an all-embracing formula which can provide a ready solution to the problem; no touchstone has been devised and that every case has to be decided on its own facts keeping in mind the broad picture of the whole operation in respect of which the expenditure has been incurred. The appellant is admittedly in the business of development of softwa....... + More
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2022 (12) TMI 189
Validity of faceless assessment u/s 144B - denial of the principles of natural justice to the Petitioner by not affording her a hearing through video conferencing - HELD THAT:- We are of the opinion that the Respondent has not afforded to the Petitioner a fair hearing in the matter. Respondents ought to have either responded to the Petitioner’s request for extension of time till 25.02.2022 for filing her reply, by rejecting her request or at least responded to the Petitioner’s request on 19.02.2022 for an online hearing of her case by video conferencing. Having not given to the Petitioner an opportunity of personal hearing as was required to be done under the provisions of Section 144B of the Act as specified in the show-cause notice dated 03.02.2022 itself, we find that the Respondents have acted in arbitrary manner. Conseque....... + More
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2022 (12) TMI 188
Reopening of assessment u/s 147 - notice issued to the Petitioner-Assessees u/s 148-A(1)(b) - ‘personal hearing’ was not given to the Assessee prior to the passing of the said order - HELD THAT:- Having carefully examined the said decisions in light of the order passed by the Supreme Court in Anshul Jain v. Principal Commissioner of Income Tax [2022 (10) TMI 3 - SC ORDER] this Court is of the considered view that the above order cannot be considered to be one which does not decide any issue or which has been passed without considering the issue involved in the case. This Court is unable to agree with the submission that the aforementioned order of the Supreme Court is not a binding precedent as far as this Court is concerned. Petitioners have also assailed both the notice u/s 148-A(1)(b) as well as the consequential order u/s ....... + More
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2022 (12) TMI 187
Reopening of assessment u/s 147 - Capital gain on sale of property - year of assessment - crux of the objections of the assessee to the proposed reopening was that firstly the transaction was not of the sale, but was an agreement for development. Secondly, the transfer did not take place in the previous year corresponding to the assessment year 2015-16, but the transfer took place during previous year 2015-16, that is, relevant to assessment year 2016-17 and it was the case that the gain arising out of the transaction was offered to tax for the assessment year 2016-17 and that no tax had thus escaped assessment - HELD THAT:- When the amount received by the petitioner assessee by way of cash was pursuant to development agreement and the transfer had not taken place in the year of receipt, when the sale deed was executed in the subsequent y....... + More
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2022 (12) TMI 186
Reopening of assessment u/s 147 - Scope of new provision section 148A - conducting of enquiries or issuance of show-cause notice or passing of order u/s 148A - Scope of amendment by the Finance Act, 2021 which has amended Income Tax Act by introducing new provisions i.e. sections 147 to 151 w.e.f. 1st April, 2021 - violation of the judgment passed by Hon’ble Supreme Court in the case of Union of India and others vs. Ashish Agarwal [2022 (5) TMI 240 - SUPREME COURT] - HELD THAT:- The Section 246 of the Income Tax Act, 1961 provides an appeal. Therefore, the petitioner is having a remedy to challenge the order/notice by way of filing an appeal and the ground raised by him with respect to jurisdiction of the authorities can always be considered by the authorities. Even otherwise, a writ petition against a show cause notice is not maint....... + More
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2022 (12) TMI 185
Stay of demand - petitioner submitted that this Court may direct the first respondent to pass the final order in the aforesaid appeal without any further delay and serve the copy of the order on the petitioner - HELD THAT:- Considering the facts and circumstances of the case and the final order passed nothing survives in this writ petition for further adjudication. Hence, this writ petition stands dismissed with a liberty to the petitioner to work out the remedy in the manner known to law.
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2022 (12) TMI 184
Reopening of assessment u/s 147 - notice against dead assessee - no notice issued to legal representative - asseessee had expired about 6 years back. - HELD THAT:- he assessment order was passed taking into account the fact that the assessee had expired. - The plea of the respondent authorities that they were not intimated regarding the death of the assessee Smt. Shobha Mehta, is factually incorrect. It is not in dispute that the notice of re-assessment u/s 148 was issued to the assessee Smt. Shobha Mehta who had expired about 6 years back. No notice whatsoever was issued to the legal representative/s of the assessee before undertaking the reassessment proceedings. Thus, the impugned re-assessment and the assessment order having been passed against the dead assessee, is invalid and the same cannot be sustained in the eyes of law. WP allowed.
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2022 (12) TMI 183
Validity of reopening of assessment u/s 147 - violating principles of natural justice - sufficient opportunity was not granted to object to the proposed assessment - HELD THAT:- This Court has been noticing a disturbing pattern on the part of the Income Tax department by granting minimal time to assessees to explain or answer showcause notices. The principles of natural justice mandate reasonable time to be given to the assessees to reply to showcause or other notices issued under the statute. The purpose of a showcause notice is to provide an opportunity to explain the allegations in the notice. Several steps precede the reply noticecollection of materials, verification of documents, appreciation of the allegations raised in the showcause notice, consultation with professionals etc. The aforesaid attributes that precede the preparation o....... + More
