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Income Tax - Case Laws
Showing 141 to 160 of 173207 Records
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2025 (4) TMI 1431
Accrual of income in India - fee for technical services u/s 9(1)(vii) of the Act read with Article 12 of Tax Treaty of India-Netherlands - Taxability of CHR Recruitment Fees, Taxability of External Information Services, Taxability of Real Estate Corporate Travel Services, Taxability of Health Ecotox Services and Taxability of IT Services - HELD THAT:- As in view of observations made we are of the considered view that in respect of the aforesaid services, the condition of “make available” is not satisfied and the Department has not brought anything on record to demonstrate that in the instant case, the technology was “made available” to the recipient of services, so as to fall within the ambit/definition of FTS under the India-Netherlands tax treaty. Accordingly, in our considered view, the aforesaid services do not qualify as FTS under the India Netherlands tax treaty.
Taxability of Health Ecotox services as FTS under the Act, read with taxability of IT Services - We are of the considered view that in respect of the aforesaid services, the condition of “make available” is not satisfied and the Department has not brought anything on record to demonstrate that in the instant case, the technology was “made available” to the recipient of services, so as to fall within the ambit/definition of FTS under the India-Netherlands tax treaty.
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2025 (4) TMI 1430
Reopening of assessment u/s 147 - Notice issued beyond four years - reopening of assessment can be sustained on the basis of audit objection - HELD THAT:- As to a specific query, specific reply was filed and proper disclosure was made in the financial accounts and also in the computation of income.
We have no hesitation in setting aside the impugned notice u/s 148 of the Act thereby quashing the resultant assessment order. Since we have quashed the assessment order, we do not find it necessary to delve into the merits of the case.
Whether audit objection by the revenue audit party constitutes information on tangible material that justifies reopening? - We are of the considered view that decision P.V.S. BEEDIES PVT. LIMITED [1997 (10) TMI 5 - SUPREME COURT] apply when an audit party points out facts not in the knowledge of the AO originally whereas the facts discussed elsewhere clearly show that the basis for the re-opening was examined by the AO during the original assessment proceedings and the facts relating to the impugned payment of commission claimed this year have been extensively disclosed in the audited financial statement of accounts and also in the computation of income. Therefore, the decision relied upon by the ld. D/R are not applicable on the facts of the case. Decided in favour of assessee.
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2025 (4) TMI 1429
Rejecting the application seeking registration u/s 12A(1)(ac)(iii) - nature of the activities carried out by the Trust are religious or charitable in nature - HELD THAT:- We find that the assessee in its application in Form No. 10AB specifically mentioned that its nature of activities are religious in nature. This is evident from Form No. 10AB. The assessee gave evidence to the fact of commencement of religious activities along with the reply.
Assessee also furnished the salary register together with the photos as evidence in support of religious activity carried out by it since the inception. Despite all these documents, CIT (Exemptions), Lucknow on perusal of the financial statements of the assessee made a remark that assessee had not incurred any expenditure on the charitable activities carried out by the assessee.
Hence it could be safely concluded that the CIT (E) had proceeded on the premise that the activities carried out by the assessee trust are charitable in nature whereas factually they are only religious in nature and even the assessee sought registration only as a religious trust and not as a charitable trust.
Hence the entire rejection order of the CIT (E), Lucknow had proceeded on incorrect assumption of facts and not understanding the predominant purpose for which the assessee trust was even formed. Hence we have no hesitation to cancel the said rejection order of the CIT(E) and direct CIT(E) to grant registration to the assessee trust - Assessee appeal allowed.
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2025 (4) TMI 1428
Classification of expenditure incurred - replacement of Hydraulic system with electrical control panel of the main machine - Revenue or capital expenditure - HELD THAT:- Assessee fairly accepted that the machine consists of 3 parts, out of which 2/3rd parts have been replaced. We note from the order of the ld. CIT(Appeals) that he has noted that SMG Feintool Germany Fine Blanking 630 Ton Press is second hand machine and imported alongwith its hydraulic system.
Since this second hand machine is imported, it cannot be denied that assessee was not knowing the fact that after the purchase of old machinery to put the main machinery to working condition, Hydraulic system with electrical control panel are required to be replaced.
After replacing Hydraulic system with electrical control panel to maintain the working capacity of the machine, the assessee has incurred expenditure. Therefore, it cannot be said that it is a revenue expenditure which gives enduring benefit to the assessee.
As relying on [2023 (8) TMI 373 - ITAT DELHI] we uphold that the expenditure incurred by the assessee is a capital expenditure and the assessee is eligible for depreciation as per law. Decided against assessee.
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2025 (4) TMI 1427
Denial of benefit of section 11 on no registration u/s 12AA/12AB - chargeability of tax on the income computed by AO at MMR instead of calculating tax as if it were an individual assessee - HELD THAT:- AO has levied tax on an income of Rs. 1,92,751/- whereas the appellant out of said income has claimed deduction u/s 11 of the Income tax Act, 1961 for 15% of the gross income calculated at Rs. 1,04,581/-. Considering the fact that the assessee trust was not registered u/s 12AA of the Income Tax Act,1961 we are of the opinion that correct assessable income is Rs. 1,92,751/- and hence we dismiss this ground of the appellant.
Chargeability of tax on the income computed by Assessing Officer at MMR - We agree to the same but here we are dealing with the issue of rate of tax chargeable in case of a trust which is not registered u/s 12AA/12AB whether it is to be charged at MMR or at normal rate as applicable to individual.
We find that in case of charitable trust wherein there is no provision of share of any surplus and there is no provision of distribution of assets, provisions of section 164(2) can only be applied and we, therefore, following the decision of Shri Digambar Jain Mandir Trust [2024 (4) TMI 661 - ITAT JODHPUR] allow ground of the appeal of the assessee and hold that the tax rate as applicable to section 164(2) will apply to the rate of the AOP/Individual and the initial exemption is also available to such assessee.
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2025 (4) TMI 1426
Rejection of its application seeking registration u/s. 80G(5) - copy of regular registration u/s 12A/12AA of the Act prior to 01-04-2021 has not been furnished - HELD THAT:- Assessee couldn’t submit the certificate so sought by the ld CIT(E) and had submitted other certificates inadvertently. However, given that these certificates have been issued earlier by the Revenue and are part of the records and a copy thereof has since been placed on record, we deem it appropriate that the matter is set aside to the file of the ld CIT(E) to examine the same. Further, the ld AR has pointed out the amendment which has been brought in by the Finance Act 2024 which apparently has not been taken into consideration by the ld CIT(E) while examining the application so filed by the assessee.
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2025 (4) TMI 1425
Rejection of Grant of registration u/s 12AB - Assessee contended that “Impugned Order” of Ld. CIT(E) is in violation of principles of natural justice and is therefore bad in law, illegal and not proper - HELD THAT:- AR fairly conceded that no doubt donation details were sought by Ld. CIT(E) at the material time but since the same were not available at the material time it could not be supplied however the same are available now and if this Tribunal is pleased to set aside the impugned order then in the proposed remand proceedings before CIT(E) they would submit the same without any demur.
Revenue did not strongly oppose the contention of the Ld. AR and finally left it to this Tribunal to take appropriate call on this issue in accordance with law. In rejoinder Ld. AR submitted that they indeed regret non compliance on part of the assessee but asserted that in Audit Report donation amount could be seen as having been received through normal banking channels. The assessee has now compiled the details and that they are ready to submit the same.
In the premises “impugned order” is set aside as and by way of remand on denova basis.
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2025 (4) TMI 1424
Eligibility of the assessee trust for registration u/s 12AB - application of the assessee was rejected on the pretext non maintaining separate set of books of account and alleging that the assessee is engaged in commercial activities - HELD THAT:- As is evident from the record that the trust runs Dharmshala since 1962 and that activities cannot be compared as commercial activities. Considering all the aspect of the matter the Bench feels that the assessee should represent the case and contested the written submission placed before the CIT(E).
Considering the fact that running of dharmshala cannot be termed as charitable activities and thereby the assessee cannot be denied registration merely on that count and since the assessee has prayed before us that they may given one more chance to contest the issue raised before the Ld. CIT(E) and its merit and therefore, considering that of aspect of the matter, the assessee should be given one more chance to contest the case before the ld. CIT(E) - Appeal of the assessee is allowed for statistical purposes.
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2025 (4) TMI 1423
Eligibility of Registration u/s 80G(5)/12A - HELD THAT:- The registration u/s 80G(5) is available to the Trust who are either registered under section 12A of the Act or 10(23C) of the Act. It is also noted that Assessee had filed necessary details along with provisional application for 12A registration.
CIT(E) has rejected the registration of the assessee under section 12A of the Act, only on one ground that assessee failed to submit the details called-for. However, it is also a fact that primary details like, copy of trust deed, copy of financials were already available with the ld.CIT(E), and ld.CIT(E) has not commented on it.
Respectfully following the decision of Torna Rajgad Parisar Samajonnati Nyas [2025 (1) TMI 1473 - ITAT PUNE] we set-aside the order of ld.CIT(E) to ld.CIT(E) for denovo adjudication. Ld.CIT(E) shall provide opportunity to the assessee. Grounds of appeal raised by the assessee are allowed for statistical purpose.
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2025 (4) TMI 1422
Disallowance of Depreciation on the assets pursuant to the scheme of demerger - concept of grouping all assets having similar rate of depreciation in a single block - assessee continued to claim depreciation on the WDV of various block of assets, without excluding the assets so transferred under the scheme of demerger to the above said company - HELD THAT:- Identical issue was considered by the co-ordinate bench in AY 2003-04 [2024 (5) TMI 1563 - ITAT MUMBAI] noticed that it is a recurring issue every year. Further, it noticed that another co-ordinate bench has reached a compromise formula in AY 2008-09 [2022 (12) TMI 168 - ITAT MUMBAI] wherein the AO was directed to treat the opening WDV of assets transferred to the above said company as loss of assets. Hence, the co-ordinate bench held in AY 2003-04 that, in order to give effect to the above said direction given by the Tribunal in AY 2008-09, the depreciation claimed by the assessee in AY 2003-04 should be allowed. Accordingly, the co-ordinate bench deleted the disallowance of depreciation made by the AO in AY 2003-04. Accordingly, we also direct the AO to delete the disallowance of depreciation made on the assets transferred to M/s Ciba Specialty Chemicals (India) Ltd in this year also.
Addition made by enhancing the value of closing stock as on 31.3.2004 by the amount of estimated secondary freight cost - HELD THAT:- The co-ordinate bench, vide its order passed [2024 (3) TMI 1438 - ITAT MUMBAI] has deleted this addition as held that the consistently followed method of valuation of stock, which has been accepted by the departmental authorities earlier, should not be disturbed, since a stray departure in one year tends to upset the calculations. Following the above said decision, we set aside the order passed by Ld CIT(A) on this issue and direct the AO to delete this addition.
Disallowance of claim relating to Voluntary Retirement Scheme compensation - HELD THAT:- As the provisions of sec. 35DDA are related to lump sum compensation paid, since the question of amortization shall arise only in respect of lump sum payments. The purpose of spreading the deduction into five years is to avoid distortion of the profits in one year and also collection of income tax. Accordingly, we are of the view that the provisions of sec.35DDA shall not apply to the pension payments. In the instant case, the incremental liability is related to pension payments. Hence, we are of the view that the provisions of 35DDA shall not be applicable to pension payments, which are recurring in nature. Accordingly, we reject the view taken by the tax authorities on the applicability of sec. 35DDA to the case of the assessee.
Claim for deduction of incremental liability - We notice that the Ld CIT(A) has also taken different stand in the earlier years, i.e,, in some years, the Ld CIT(A) has confirmed the disallowance of provision for VRS compensation and in some other years, it has been deleted. A provision for expenses is created for a known liability under the accounting principles. Hence, the said claim made by the assessee is in principle allowable as deduction, since it is a provision created for a known liability. Hence the AO was not right in treating it as a contingent liability. Hence the Ld CIT(A) was right in allowing the same as deduction.
However, if the provision so made is not allowed as deduction in any of the years by the AO or the appellate authorities, then the actual payment made out of that provision is allowable as deduction. It is the submission of the assessee that Rs. 3,89,26,463/- represents actual payment made in this year. Hence, if the relevant provision amount had been disallowed in any of the prior years, then the actual payment should be allowed as deduction. However, the relevant details are not available on record. Hence the claim of the assessee requires verification at the end of the AO. Accordingly, we restore this alternative ground of the assessee in all the three years under consideration to the file of the assessing officer for examining the same in the light of discussions made supra.
Nature of expenditure - software expenses - revenue or capital expenditure - HELD THAT:- We set aside the order passed by Ld CIT(A) on this issue in all the three years and direct the AO to allow software expenses as revenue expenses.
Disallowance of travel expenses on visit of foreigners - HELD THAT:- We notice that disallowance of identical expenses has been made in the earlier years also. The Tribunal has deleted the identical disallowance made in AY 2002-03 [2024 (3) TMI 1438 - ITAT MUMBAI] wherein it has followed the decision rendered by the co-ordinate bench in the assessee’s own case in AY 1997-98 [2016 (1) TMI 1491 - ITAT MUMBAI]. In all these years, the Tribunal noticed that the foreigners are the executives specializing in the business carried on by the assessee and they visit India for business purposes only. Accordingly, the Tribunal has deleted the identical disallowance made in the earlier years. Thus direct the AO to delete the disallowance made in both the years mentioned above.
Disallowance u/s 14A - CIT(A) has confirmed disallowance to the extent of 2% of dividend income in AY 2004-05 - HELD THAT:- We set aside the order passed by Ld CIT(A) on this issue in AY 2007-08 and direct the AO to restrict the disallowance u/s 14A to 2% of the dividend income.
Addition made by loading unutilized Modvat credit amount to the value of closing stock - as submitted that the AO should be directed to adopt the same method for the opening stock as on 1.4.2004 and that the method of determining the value of stock should be identical both for closing stock and opening stock of any year - HELD THAT:- Accordingly, we direct the AO to adopt the value of closing of one year as the opening stock of the succeeding year.
Disallowance of advances written off - HELD THAT:- We notice that the amount so written off is allowable as deduction u/s 28 or u/s 37(1), if the said advances had been given for revenue purposes. In our view, the question of examining the amount so written off u/s 36(1)(vii) shall not arise in this case. A.R submitted that the assessee is having relevant details relating to the advances so written off.
This issue requires fresh examination at the end of the AO in both AY 2004-05 and 2006-07. Accordingly, we set aside the order passed by CIT(A) on this issue in both the years under consideration and restore the same to the file of the AO for examining afresh. The assessee is also directed to furnish the details of advances and show that those advances were given for revenue purposes.
Determination of “Profits of business” for the purposes of deduction u/s 80HHC - HELD THAT:- In the instant case, in our view, the royalty receipts are independent source of income. Accordingly, we are of the view that the Ld CIT(A) was justified in confirming the action of the AO in excluding 90% of royalty income from profits for the purpose of computing profits of business as per Explanation (baa) to sec.80HHC of the Act. With regard to other receipts, the Ld A.R submitted that they are covered by the decisions rendered by the Tribunal in earlier years. Accordingly, we direct the AO to follow the decisions rendered by the Tribunal in respect of other receipts. The order passed by Ld CIT(A) is modified accordingly. The matter is restored to the file of the AO for computing deduction u/s 80HHC.
Assessment of notional value of rent for the property used by the demerged company - HELD THAT:- We notice that the AO has adopted adhoc rate for determining the Annual letting value. We notice that the said methodology is not in accordance with law laid down by Hon’ble Bombay High Court in some of the cases. We also notice that the assessee has also raised similar contentions before the tax authorities. Accordingly, we are of the view that the determination of Annual Letting value (ALV) requires fresh examination. Accordingly, we restore this issue to the file of AO in AY 2004-05 and 2006-07 for determining ALV in accordance with the decisions rendered by Hon’ble Bombay High Court.
LTCG - determination of fair market value as on 1.4.1981 for the land sold by the assessee - HELD THAT:- We notice that an identical issue has been considered by the co-ordinate bench in AY 2002-03 and 2003-04. When the appeal of AY 2002-03 was pending, the DVO report was brought to the notice of the Tribunal. The DVO had determined the fair market value as on 1.4.1981 at Rs. 71.12 per sq ft. Accordingly, the Tribunal directed the AO to compute the long term capital gains on sale of land by adopting the fair market value as on 1.4.1981 as per the rate determined by the DVO.
There should not be any dispute that the long term capital gains has to be computed for the area of land, which is actually sold by the assessee. Accordingly, we direct the AO to compute the long term capital gains on the actual area sold by the assessee and for that purpose, the AO should adopt the fair market value of rate per square feet as on 1.4.1981 as determined by the DVO.
Disallowance of adjustment by way of excess/short amount in respect of the year end provision made for expenses - HELD THAT:- There is no dispute that the provision for expenses were made on the basis of estimates made with reliable data. Whatever may be the degree of estimation, there bound to be some difference when the actual bill is received and hence the same would require adjustment on account of excess/short provision. Such adjustment would be a recurring feature and they are considered as current year’s expenses as per the accounting principles. Hence, there is no reason to disallow the same. Accordingly, following the order passed by the co-ordinate bench in the hands of the assessee in AY 2008-09 [2022 (12) TMI 168 - ITAT MUMBAI] we set aside the order passed by Ld CIT(A) on this issue in all the three years, viz., AY 2004-05, 2006-07 and 2007-08 and direct the AO to delete this disallowance made.
Interest u/s 234C is required to be computed on the returned income. Accordingly, we restore this issue to the file of the AO for computing interest u/s 234C as per the provisions of the Act.
Charging of Dividend Distribution Tax - contention of the assessee that the rate prescribed under relevant DTAA shall be applicable to Dividend distribution tax also - HELD THAT:- We notice that the above said claim of the assessee is against the decision rendered in the case of DCIT vs. Total Oil India (P) Ltd [2023 (4) TMI 988 - ITAT MUMBAI (SB)] Accordingly, we reject this ground of the assessee.
Addition made u/s 50C - HELD THAT:- As all the relevant factual aspects, which are necessary for the purposes of sec.50C, have not been furnished by the assessee to the tax authorities. Hence, we are of the view that this issue requires fresh examination at the end of the AO. If the assessee is able to show that it has received part consideration on the date of the entering of agreement for sale in the manner provided in the proviso to sec.50C of the Act, then the assessee would get the benefit of the proviso. In that case, the stamp duty value as on the date of agreement should be compared with the actual consideration.
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2025 (4) TMI 1421
TDS u/s 194H - discounts allowed to its distributors on sale of starter kits and recharge vouchers (RCVs) - HELD THAT:- As relying on Tata Teleservices Limited [2018 (5) TMI 703 - ITAT DELHI] and Bharti Cellular Ltd. [2024 (3) TMI 41 - SUPREME COURT] we hold that no TDS u/s 194H is deductible in case of discounts allowed to the distributors on sale of starter Kits and recharge vouchers.
Assessee in default u/s 201 - non-deduction of tax at source under the provisions of section 194J on inter connect usage charges paid by the assessee to the other telecom operators - HELD THAT:- As relying on M/S TATA Teleservices Ltd. [2018 (5) TMI 703 - ITAT DELHI] we hold that no TDS u/s 194J is deductible in case of roaming charges paid.
Grounds raised by the assessee are allowed.
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2025 (4) TMI 1420
Disallowing the claim of amortization of surface rights - as submitted what the assessee acquired by incurring the expenditure was an enduring business right in respect of mining the lignite and not acquisition of any fixed asset - HELD THAT:- In the set aside proceedings the assessee brought on record the fact that M/s. RSMML has not claimed any expenditure in relation to acquisition of surface rights of Kapurdi mines on behalf of the assessee for which attention was drawn to Note No.11.6 of Notes to Accounts of M/s. RSMML in its annual report for F.Y. 12-13 where it disclosed that it has not treated the amount received from the assessee for acquiring the mining right for the assessee as its asset or liability in the financial statements but since the title of land at Kapurdi is mutated to M/s. RSMML Ltd., the same is shown at a nominal value of Rs. 1 in its balance sheet.
This fact is also confirmed by M/s. RSMML vide letter dt.10.07.2018 (PB 65-68). The AO at para 3.3 of its order for A.Y. 2012-13 has accepted that no benefit has accrued to M/s. RSMML in respect of the said land.
Thus, when this fact is on record and not disputed by the AO read with the direction of the coordinate bench, the claim of amortization of surface rights are allowable. Hence by not following the direction of coordinate bench, addition confirmed by both the lower authorities is illegal & bad in law and therefore, the same be directed to be allowed.
Allowability on account of depreciation on intangible asset in the nature of business right acquired on account of issue of equity shares free of cost - Whether mining lease transfer deed does not involve payment of any consideration? - HELD THAT:- The assessee is failed to demonstrate any visible benefit accrued to it by virtue of this free allocation of shares to M/s. RSSML. There is no documentary evidence furnished before us which confirms any sort of technical or other support being drawn by the assessee out of this transaction. As an appropriate amortization charge where the benefit to the assessee was visible in the form mining lease charges paid are duly allowed, but on this issue we are not convinced with the claim of the assessee that any intangible asset came into existence which benefited the assessee in terms of its business operation. Assessee is not entitled to claim the depreciation on this show called intangible asset. Hence the orders of authorities below are sustained and ground raised by the assessee is dismissed.
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2025 (4) TMI 1384
Belated filling of appeal before CIT(Appeals) - petitioner had filed an appeal in Form No.35 manually - HELD THAT:- As petitioner had filed the appeal within the extended time on 15.06.2016 as per Circular No. 20/2016 dated 26.05.2016, the appeal could not have been dismissed on the ground of delay.
The impugned order passed by CIT(Appeals) is hereby quashed and set aside. The matter is remanded to CIT(Appeals) to decide the same on merits in accordance with law after giving an opportunity of hearing to the petitioner.
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2025 (4) TMI 1368
Loss on derivative on the issue of loss in shares and securities and the issue of Coordination charge - As petitioner submitted that the controversy between the petitioner and the Department no longer survives in view of the settlement of dues under the Direct Tax Vivad Se Vishwas Scheme, 2024. Hence, appropriate orders may be made in this petition.
HELD THAT:- The submission of learned counsel for the petitioner is placed on record.
Owing to the aforesaid reason, the Special Leave Petition has been rendered infructuous.
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2025 (4) TMI 1367
Reopening of assessment u/s 147 - notice issued to the Petitioner-Assessees u/s 148-A(1)(b) - scope of extended time limit by TOLA, 2021 - Revenue relied upon Rajeev Bansal [2024 (10) TMI 264 - SUPREME COURT (LB)] wherein Revenue concedes that for the assessment year 2015-2016, all notices issued on or after April 1, 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 - HELD THAT:- As the revenue made a concession in the aforesaid decision that is for the assessment year 2015-2016, all notices issued on or after 1st April, 2021 will have to be dropped as they would not fall for completion during the period prescribed under the taxation and other laws (Relaxation and Amendment of certain Provisions Act, 2020). Nothing further is required to be adjudicated in this matter as the notices so far as the present litigation is concerned is dated 25.6.2021.
In such circumstances referred to above the original writ petition [2023 (2) TMI 1400 - ORISSA HIGH COURT] respectively filed before the High Court of Orissa at Cuttack stands allowed.
The impugned notice therein stands quashed and set aside. The relief in terms of prayer (a) is granted. The appeals stand disposed of in the above terms.
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2025 (4) TMI 1366
Accrual of income - Duty drawback had not accrued and become payable to the assessee and cannot be included in the taxable income of the Assessee - HELD THAT:- Whether the said claim is accepted or not is something which is in the knowledge of the respondent. Therefore, while passing an order of remand, the ITAT directed the respondent to place all the relevant material before the Assessing Officer. Thus, the scope of remand is very narrow for the limited purposes of ascertaining whether the claim made by assessee was accepted in the year under consideration.
While passing order of remand as noted above, the ITAT observed that if the claim of assessee was not accepted in the year under consideration, then no addition shall be made. However, if it is found that the claim of assessee was accepted in the year under consideration to that extent, addition would be retained. There was no reason for the High Court to interfere with the order of remand as it was passed only for the purposes of limited factual verification by the AO.
Accordingly, the appeal is partly allowed. The impugned judgment and order of the High Court is interfered with only as regards the finding recorded by the High Court [2017 (12) TMI 536 - DELHI HIGH COURT] on question no.(iv) in paragraph nos.7 and 8.
Consequently, the order of remand passed by ITAT under order [2004 (10) TMI 278 - ITAT DELHI-A] stands restored. The appeal is accordingly partly allowed.
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2025 (4) TMI 1365
Rejection of application for condonation of delay in filing Form-10B - HELD THAT:- Suppose the Petitioner wishes to file a supplementary affidavit in support of the application for condonation of delay. In that case, the same should be filed within 15 days from today and forwarded to the CBDT. CBDT must consider this additional affidavit if filed within 15 days from today and dispose of the Petitioner’s application for condonation of delay on its own merits and in accordance with law.
We clarify that we have not examined whether the Petitioner has made out any sufficient cause. CBDT will have to examine these matters in the first instance. Accordingly, all parties' contentions are left open.
We are sure that the CBDT will afford an opportunity of hearing to the Petitioner and the Department before disposing of the Petitioner’s application for condonation of delay. A reasoned order must be communicated to the Petitioner within four months of producing an authenticated copy of this order.
Rule is made absolute in the above terms without any cost order. The proceedings for the restoration of this petition do not survive, as it is pointed out that this petition was already restored.
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2025 (4) TMI 1364
Reopening of assessment u/s 147 - second re-assessment notice issued after a period of four years - Petitioner has received cash for sales - HELD THAT:- In this case, the return of income was filed on 16 September 2008. The said return of income was reopened by issuing notice u/s 148 on 29 December 2011 and an assessment order u/s 143(3) r.w.s. 147 was passed on 18 December 2012.
The second re-assessment notice u/s 148 which is impugned in the present Petition, was issued on 27 March 2015, which is after a period of four years from the end of the relevant assessment year.
In the reasons recorded, it is alleged that the Petitioner has received cash for sales relevant to assessment year 2008- 09 as per the assessment order 2011-12, which have not been shown by the assessee in return of income for assessment year 2008-09 and therefore, the case is reopened.
On a perusal of the assessment order for AY 2011-12, an addition is made on the ground of alleged cash received on sale of flat. The breakup of said amount can be found in the assessment order at internal page 9 to 12 and Writ Petition.
On a comparison of the breakup it is noticed that the amount proposed to be reassessed in the reasons recorded for assessment year 2008-09 has already been added in the assessment order for assessment year 2011-12.
The reasons for reopening the case for assessment year 2008-09 are recorded on or before 27 March 2015 whereas, the assessment order for assessment year 2011-12 is dated 27 March 2014. On the date of recording the reasons, the assessing officer had already added on substantive basis in assessment year 2011-12 and further the reasons recorded for assessment year 2008-09 does not say that the said amount is supposed to added on protective basis.
In our view, if sum was already added in the assessment order for assessment year 2011-12 on substantive basis much prior to the issue of the impugned notice dated 27 March 2015, then we failed to understand how there could be reasons to believe that income for assessment year 2008-09 has escaped assessment, since the same figure has already been added on substantive basis in assessment year 2011-12 and the present impugned proceedings are not on protective basis.
On this short point itself since there could not have been any reasons to believe that the income has escaped assessment for assessment year 2008-09 after having the said amount added in assessment year 2011-12 prior to the impugned proceedings, the present impugned notice under Section 148 dated 27 March 2015 is hereby quashed and set aside.
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2025 (4) TMI 1363
Reopening of assessment u/s 147 as barred by time - Time limit for notice u/s 149 - escaped income from multiple assessment years to meet the threshold limit of Rs. 50 lakhs - HELD THAT:- In the present case, it is apparent that there is no singular occasion or event which has resulted in the income of more than one previous year exceeding the sum of Rs. 50 lakhs. The allegations against the Assessee are that it has undercharged its AE for the R&D Services rendered by it, and therefore, the income is required to be adjusted to the extent of Rs. 27 lakhs. Additionally, it is alleged that the Assessee has overpaid for certain managerial and group related services to the extent of Rs. 21 lakhs. None of these two adjustments can be stated to have been a part of a singular event or occasion spanning more than one previous year.
AO has erred in proceeding on the basis that it was open for the AO to issue a notice u/s 148 of the Act bearing in mind the cumulative income that has escaped assessment in respect of FYs 2016-17, 2017-18 and 2018-19. It is impermissible for the AO to add income which is alleged to have escaped assessment for different previous years for determining the threshold figure of Rs. 50 lakhs as specified under Section 149 (1) (b) of the Act.
We find merit in the contention that the impugned notices have been issued beyond the period of limitation as prescribed u/s 149 (1). Accordingly, the impugned notices and all proceedings commenced pursuant thereto, are set aside.
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2025 (4) TMI 1362
Disallowance of benefit u/s 54 - Assessee could not establish the value of the cost of construction by production of any bills or other documents.
It is the Assessee’s case that he had inherited the property from his mother and did not have any bills or documents to substantiate the cost of construction. Accordingly, the Assessee had furnished an independent valuer’s report estimating the value of construction at the material time. Assessee is aggrieved as the said valuation report had been disregarded.
HELD THAT:- AO has not undertaken any exercise to estimate the costs of construction and has proceeded to assume them to be NIL. Prima facie, the cost of building cannot be disregarded in entirety.
We also note that the Assessee has a remedy of statutory appeal before the CIT(Appeals). We, accordingly, refrain from entertaining the present petition leaving it open for the Assessee to avail his statutory remedy. However, in the peculiar facts and circumstances of the case, we direct that in the event the Assessee prefers an appeal within a period of four weeks from date, the same would be considered by the Appellate Authority on merits
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