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Income Tax - Case Laws
Showing 81 to 100 of 173171 Records
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2025 (4) TMI 1455
Validity of notice issued u/s 153C as barred by limitation - Reckoning of limitation period of 6 years - HELD THAT:- In the cases on hand, the search was conducted on 10.11.2020. Thereafter, on 30.06.2022, the documents/materials were collected from the petitioner, who is the other person. In terms of 1st proviso to Section 153C(1), the limitation would start from the date on which the materials were collected from the other person, viz., petitioner.
In this case, the search was conducted on 10.11.2020. Thereafter, the documents or assets were seized or requisitioned by the Assessing Officer on 30.06.2022 and the show cause notice dated 30.12.2024 was issued.
The claim of the petitioner is that the date of issuance of show cause notice should be considered as the date of initiation of proceedings as far as other person is concerned, and hence, the limitation period of 6 year has to be calculated from the said date, in which case, the present proceedings are barred by limitation.
In this case, on 10.11.2020, the search was not conducted in the petitioner's premises. The petitioner is the other person, from whom the documents or assets were seized or requisitioned on 30.06.2022 and thus, the said date, i.e., 30.06.2022, only has to be considered for calculating the limitation period of 6 years. With regard to all other aspects, i.e., for initiation or completion of proceedings, it is left open for the petitioner to give suitable reply to the show cause notice dated 30.12.2024 and contest the same in accordance with law, if so advised.
As far as the settlement arrived at IBS is concerned, even though the case was settled before the IBS, the liberty is granted to the Department to proceed further, in future, if any new material is found. When such being the case, this Court finds no substance in the submissions made by the petitioner on this aspect.
This Court does not find any merits in the submissions made by the petitioner on the aspect of limitation and thus, this Court is not inclined to interfere with either the impugned notices. Writ petitions are liable to be dismissed.
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2025 (4) TMI 1454
Claim of weighted deduction u/s. 35(2AA) - donations made to a scientific research institution - CIT(A) allowed deduction - HELD THAT:- The arguments of the CIT-DR is devoid of merits for the simple reason that, when donation was given for specific purpose i.e., for construction of state-of- the-art Auditorium which is also eligible for deduction u/sec.35(1)(ii) of the Act as per the letter issued by the IISc, Bangalore, in our considered view, the AO cannot deny deduction for the said donation only on the ground that it is capital in nature and used for construction of state-of-the-art Auditorium in the name of father of the Director of appellant-company.
Moreover, even if the amount is spent for construction of state-of-the-art Auditorium,, in our considered view, the Auditorium may be used for the purpose of scientific research of conducting seminars, workshops and other activities which means the said purpose is for the prosecution or the provision of facilities for the prosecution of scientific research and, therefore, the appellant-company is entitled for deduction u/sec.35(1)(ii).
CIT(A) after considering the relevant facts has rightly allowed the donation given by the appellant-company to the IISc, Bangalore u/sec.35(1)(ii) of the Act. Thus, we are inclined to uphold the order of the learned CIT(A) and dismiss the appeal filed by the Revenue.
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2025 (4) TMI 1453
Disallowance of interest expenses u/s 36(1)(iii) - CIT(A) observed that it is not the business of assessee company to give share application money to sister concern from borrowed funds and further, the assessee-company do not have any surplus to invest in shares of sister concern and entire investment has been funded through interest bearing borrowings - HELD THAT:- From the details filed by the assessee, it is undisputedly proved that, the impugned sum considered by the AO as loan for the purpose of sec.36(1)(iii) of the Act is in fact, an investment in another group company, but, not a loan.
Therefore, AO is erred in invoking the provisions of sec.36(1)(iii) of the Act for the amount invested in M/s. Kamineni Health Care Pvt. Ltd.
Assuming for a moment it is a loan and advance for the purpose of sec.36(1)(iii) but, the fact remains that the assessee has given said loan and advance out of it’s own interest free funds available in the form of fresh investment received from two of it’s Directors.
No interest bearing funds have been used for the purpose of giving amount to M/s. Kamineni Health Care Pvt. Ltd. and, therefore, on this count also, the addition made by the AO towards disallowance of interest u/sec.36(1)(iii) cannot be sustained. We, therefore, delete the addition made by the AO towards interest on amount given to M/s. Kamineni Health Care Pvt. Ltd.
Coming back to loan and advances given. There is no dispute with regard to the fact that the appellant-company had given loan to above company on 31.03.2016. AO has computed interest for the whole year. Although, CIT(A) has restricted the disallowance of interest for the actual period of loan i.e., for one day, but, uphold the reasons given by the AO to treat the said transaction as loans and advances for the purpose of sec.36(1)(iii) of the Act.
Before us Assessee claims that it is not a loan or advance, but, a current account between the two group companies in the ordinary course of business. We find that, although, Assessee brings in the theory of business exigency or commercial exigency, but, failed to prove the theory of commercial exigency by bringing on record any evidence to prove that there is a business connection between the two companies.
Although, the appellant-company claims that it is a holding company of appellant-company, but, in our considered view, except making a oral statement, no evidence has been placed on record to prove the claim that the transaction is between the holding company and subsidiary company in the ordinary course of business and such transactions are carried-out under commercial expediency.
Since the appellant-company fails to prove commercial/business exigency in advances given to the other company, in our considered view, there is no error in the reasons given by the learned CIT(A) to treat the said advances as loans and advances within the meaning of sec.36(1)(iii). We, therefore, direct the AO to levy interest for the actual period of loan. Thus, we uphold the reasons given by the learned CIT(A) on this issue.
We direct the AO to delete addition made towards disallowance of interest on investment with M/s. Kamineni Health Care Pvt. Ltd. and sustain the addition made toward interest on loan given to M/s. United Steel Allied Ind Private Limited, but, restrict the interest disallowance as per the directions of the learned CIT(A). Appeal of the Assessee is partly allowed.
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2025 (4) TMI 1452
Deduction u/s 80IB(10) - due to a typographical error, the claim of deduction was not mentioned in the I.T. Return - HELD THAT:- A perusal of the Audit Report in Form No.10CCB shows the date of approval by the local authority as 30.03.2007 and the date of completion of the housing project as 31.03.2012. The deduction u/s 80IB(10) of the Act is also determined at Rs. 6,12,05,192/-.
Although the assessee can claim a deduction which was not claimed in the original return filed or through a revised return and the Ld. CIT(A) can entertain such a new claim, in view of the various judicial precedents relied on by CIT(A), however, he has to adjudicate the issue as to whether the assessee is entitled to the claim of certain deductions / exemptions without claiming the same in the return of income as per the provisions of section 80A(5). However, he has not done the same.
We deem it proper to restore the issue to the file of the Ld. CIT(A) with a direction to adjudicate the issue of allowability of the claim in absence of claiming the same in the return of income as per provisions of section 80A(5) of the Act and pass a speaking order on this issue. The grounds raised by the Revenue are accordingly allowed for statistical purposes.
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2025 (4) TMI 1451
Penalty levied u/s 270A - disallowance of the deduction Claimed towards Health and Education Cess - HELD THAT:- The claim for deduction was made based on existing legal interpretation available at the time of filing return. Judicial pronouncements clearly supported such a view. There is no allegation of concealment, falsification, or suppression of facts.
Assessee voluntarily surrendered the claim immediately upon being made aware of the retrospective amendment. The facts were fully disclosed by the assessee during the course of assessment proceedings.
It is relevant to note that both the Assessing Officer and the CIT(A) accepted that the case does not involve “misreporting” under section 270A(9) of the Act. Accordingly, penalty was restricted to 50% of tax on underreported income. However, once it is found that the claim was bona fide and all facts were disclosed, even such penalty under section 270A(1) read with section 270A(2)(a) of the Act becomes unsustainable in law.
Mere making of a claim based on a bona fide interpretation of law, subsequently found unsustainable by retrospective amendment, does not attract penalty under the Act.
This position is fortified by case of Yahoo India (P.) Ltd. [2013 (3) TMI 704 - BOMBAY HIGH COURT] wherein it was reiterated that where a claim is made transparently and based on legal interpretation, even if not accepted, it does not amount to furnishing inaccurate particulars or under-reporting. Thus, relying on the principles laid down therein, we hold that the assessee’s claim towards deduction of cess, made prior to the retrospective amendment and disclosed in full, cannot trigger penalty under section 270A of the Act. Appeal of the assessee is allowed.
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2025 (4) TMI 1450
Addition u/s 40(a)(ia) - form 26A was not filed by the assessee in respect of amount of interest paid on which no TDS was deduction at source - HELD THAT:- We observe this fact from the appellate order passed in the first round passed by the ld CIT(A) that the payee of the interest has offered the sum to tax by incorporating the same in his return of income and therefore, case is clearly covered by the decision of Hindustan Coc Cola Beverages (P) Ltd. [2007 (8) TMI 12 - SUPREME COURT] wherein it is held that no disallowance has to be made u/s 40(a)(ia) of the Act if the receiver/ payee of income has offered same to tax in the return of income.
Therefore, there cannot be any disallowance on this account. Moreover, the finding of the CIT (A) that assessee has not filed the form no.26A read with 31ACB a certificate from Chartered Accountant, certifying the payee had fulfilled all the conditions mentioned in the First Proviso to Sub Section 1 to Section 201 but after perusing the said section along with Rule 31ACB of the Income Tax Rules, 1962, we note that the form 26A was not applicable during the impugned assessment year as the same was brought by IT(11th Amendment) Rules, 2012 with effect from 12.09.2012, which provides that under Rule 31ACB, the assessee is required to obtain a certificate from Accountant under First Proviso to Section 201 (1) and that certificate should be in form no.26A. Accordingly, we set aside the order of ld. CIT (A) and direct the AO to delete the addition.
Deduction u/s 80IB - AO noted that the assessee has not made his claim in the return filed u/s 139(1) - AO observed that the assessee has also not made its claim by filing a revised return of income and therefore, the same is not allowable to the assessee - HELD THAT:- We note that the assessee has filed the return of income within time on 26.09.2008, originally declaring total income without claiming the deduction u/s 80IA of the Act in respect of rail and infrastructure system. In our opinion, if the assessee is not made any claim in the return filed u/s 139(1) of the Act, then the same could be made before the appellate authority for the first time.
CIT (A) in the first round has rightly given the finding while allowing the appeal of the assessee by admitting the additional ground which has been extracted above, whereas in the impugned appellate order, the CIT (A) has given a perverse finding by misconstruing the facts. In our opinion, the assessee is entitled to claim u/s 80IA. Accordingly, we set aside the order of ld. CIT (A) and direct the AO to allow the deduction u/s 80IA. The ground raised by the assessee is allowed.
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2025 (4) TMI 1449
Rejection of application for registration u/s 12A - even there is a clause in the Trust deed for paying Honorarium or salary to the trustee against his/her services or involvement in any of the project or programs run by the trust, which is in violation of section 13(3) of the Act regardless of the fact that whether any payment in honorarium or salary is made to specified persons, the applicant is ineligible for registration u/s 12A
HELD THAT:- If the functionary is a salaried employee under an employment contract and therefore, is being paid salary which is a contractual obligation on the part of the Trust then such remuneration is permissible. There has to be a reason or cause of action to infer and conclude that any benefit was provided to the functionary.
A benefit implies payment of anything which is not legally due to a person, therefore, the salaries paid cannot be treated as a benefit. It may also be noted that payment of salary per se is not a benefit. To establish that some benefit was passed u/s 13(1)(c) of the Act, it will be incumbent on the AO to have reasons to believe that the remuneration were legally not due to the employees/functionaries. Once the legal eligibility of the trustees/board members to receive salary as full time employee is not disputed, then the only option available is to see the reasonableness of the salaries under section 13(2)(c) of the Act.
Therefore, we agree with the contention of assessee that the provision of section 13(3) of the Act cannot be pressed into play to decide the eligibility of registration of the Trust. In view of the above discussion, we set aside the order of the rejection passed by the ld. CIT(E), Kochi and direct to grant the registration to the assessee as sought vide application in form 10AB dated 30/09/2023.
Appeal filed by the assessee is allowed.
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2025 (4) TMI 1448
Income tax demand against company dissolved - HELD THAT:- In the case of Rishi Ganga Power Corporation Ltd. [2023 (11) TMI 201 - DELHI HIGH COURT] held that where National Company Law Tribunal admitted insolvency petition against assessee but revenue in terms of Insolvency and Bankruptcy Code, 2016 had not lodged its claim with RP, revenue could not enforce assessment order and demand notice.
In the instant facts, we observe that the assessment was completed and demand was raised on the assessee on 01.12.2017, whereas the order of NCLT u/s 30(6) r.w.s. 31 of IBC was passed on 06.12.2023. In the Resolution Plan, the Department had not filed any claim for recovery of tax demand with respect to outstanding demand against the assessee. Therefore, assessee’s case and the judicial precedents cited above, the Department cannot now claim and recover from the assessee an amount of arrears that accrued prior to approval of Resolution Plan u/s 31 of IBC.
Appeal of the Department is dismissed and the appeal of the assessee is allowed.
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2025 (4) TMI 1447
Penalty u/s. 271(1)(c) - Addition u/s 68 - HELD THAT:- As evident that the addition has been made on a debatable issue. The decisions relied upon by the assessee heavily support its contention that where the High Court has admitted substantial question of law on issue of quantum proceedings, on the basis of which penalty was levied, it shows that the concealment is not final and the issue is debatable.
Therefore, there is no case for levy of penalty. We hold that the penalty levied in the present case being on a debatable issue, is not sustainable and we direct the deletion of the same. Appeal of assessee allowed.
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2025 (4) TMI 1446
Reopening of assessment u/s 147 - validity of consolidation approval by JCIT for various years and cases - Addition u/s 68 - HELD THAT:- It is evident that the approval is in respect of 111 cases of reassessment. It is a general order of approval for all the cases. The ACIT in its approval has failed to mention the assessment year wise income returned and assessed by the AO. It is established from the record that the approval was granted mechanical manner without applying the mind and verifying the record.
The requirement of approval cannot be treated as mere formality and the mandate of the Act that the Approving authority has to act in a judicious manner by due application of mind in a manner of a quasi- judicial authority.
Thus we hold that the approval granted by the Joint Commissioner of Income Central Range 61 New Delhi is not valid. Accordingly, we quashed the assessment order. Assessee appeal allowed.
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2025 (4) TMI 1445
Addition on account of cash deposit in to bank u/s 69A - HELD THAT:- Assessee has source for cash deposits made during the pre-demonetization and also subsequently. AO proceeded to make the addition merely on the basis of sales recorded by the assessee comparatively less during previous assessment year and he has completely overlooked the fact that assessee has sales of cash of selling the fabric during festival season mainly in October and November.
They do not deny the fact that the assessee has recorded huge cash sales and credit sales during the festival season and the sales recorded during the current assessment year cannot be compared with previous assessment year due to increase of business recorded only during the current assessment year. The details of two incomparable years cannot be compared.
Therefore, assessee has a source of cash deposits. Hence, the addition made by the AO is not justified and for the sake of overall justice, we are inclined to direct the assessee to submit a quantity-wise details of opening purchases and sales recorded of credit as well as cash sales during the year matching with the closing stock declared in the financial statement.
AO is directed to verify the same and if the quantity details are properly recorded in the financials statement, the additions proposed by him should be deleted. We are inclined to delete the addition after due verification of the quantity details by the AO. Assessee appeal allowed. Appeal of the assessee is allowed.
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2025 (4) TMI 1444
Validity of the assessment framed u/s 147 - Disallowance of assessee’s claim of deduction of its income u/s 80P - HELD THAT:- AO while framing order under Section 147 of the Act in the present case did not make any addition on the income which he believed had escaped assessment, which in the present case was the cash withdrawals of Rs. 1.13 crores from its bank account the source of which was found to be unexplained, the AO hold, could not have made addition or disallowance on any other account, in the present case being disallowance of deduction claimed u/s 80P of the Act, since Courts have time and again reiterated that the moment the AO finds no escapement of income of the assessee on the basis of which he had assumed jurisdiction u/s 147 of the Act he loses jurisdiction to proceed further and make any other addition or disallowance to the income of the assessee.
Disallowance of deduction u/s 80P of the Act made in the present case by the AO is not sustainable being not in accordance with law, beyond the jurisdiction of the AO and accordingly, direct deletion of the same. Appeal of the assessee is allowed
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2025 (4) TMI 1443
Assessment u/s 153A - absence of any incriminating material belonging to the assessee being found during the course of the search - HELD THAT:- From the perusal of the impugned order of AO, we find that the AO referred one pen drive seized from the premises of the proprietorship firm of the assessee containing Trial balance of the assessee. In the said trial balance, an entry of unsecured loan of Rs. 30.00 lacs taken from M/s Destiny Gems & Jewellers Pvt. Ltd. is appearing.
The trail balance is prepared from the regular books of accounts and in the Balance Sheet, this loan of Rs. 30,00 lacs taken from M/s Destiny Gems & Jewellers Pvt. Ltd. is duly appearing. Therefore, this document could not be hold as incriminating material.
As seen that besides pen drive, the AO has relied upon the statements of various directors of the loaner company wherein they accepted that the said company is paper/ shell company and concluded that the loan taken from the said company is bogus. It is admitted position that search was simultaneously carried out in the case of assessee as well as in the case of SRS group of cases, however, both the entities are independent and separate entities.
AO cannot allowed to assume jurisdiction to assess the assessee u/s 153A on the statements of third parties in whose cases, search was also carried out and such persons were not related to the assessee.
AO should have proceeded to assess the income of the assessee for such statements u/s 153C after following the procedure of recording of satisfaction to this effect in the case of CIT vs. Culcutta Knitwears [2014 (4) TMI 33 - SUPREME COURT]
Any material/ statements pertaining / relating to a person other than the person searched, was first to be handed over by the AO of the searched person after recording his satisfaction, to the AO of other person to whom such material/ statements belonged, who after recording his satisfaction, has to proceed against such other person by issuing a notice u/s 153C and then to assess / re- assess income of such other person for such material/ statements.
As by respectfully following the decisions of Anand Jain, HUF [2021 (3) TMI 8 - DELHI HIGH COURT] and coordinate benches of the Tribunal in various cases, we hold that no addition could be made in the assessment completed u/s 153A on the basis of statements of third party recorded during the search in their own case. Therefore, the addition made in the hands of the assessee on account of unsecured loan taken from M/s Destiny Gems & Jewellers Pvt. Ltd. solely on the basis of statements of third party is hereby deleted. Assessee appeal allowed.
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2025 (4) TMI 1442
TP Adjustment - challenge to inclusion of commission paid to local distributors in AMP expenses for working out the adjustment on account of AMP adjustments and not followed the settled history of the assessee of preceding assessment years - HELD THAT:- Commission paid was not AMP expenses and further looking to the past history of the assessee and by following the principle of the consistency and by respectfully following the aforesaid judgements of various Courts on this principle, we hold that AMP expenses including the amount of commission paid to distributors are not international transaction. Accordingly, we set aside the order of TPO/AO/DRP and delete the addition made made by TPO/AO toward AMP adjustment. The Ground of appeal No.1 of the assessee is allowed.
Deduction u/s 80G when the said sum was not allowed being part of CSR expenses - whether the same can be allowed as deduction u/s 80G when it is part of CSR expenses? - HELD THAT:- Explanation 2 inserted in Section 37 to deny the deduction for CSR expenses incurred by companies as normal business expenditure and the same applies only to the extent of computing business income under Chapter IV-D. The said Explanation cannot be extended or imported to CSR contributions which are otherwise eligible for deduction under any other provision or Chapter, to say donations made by a charitable trust registered u/s 80G and if the same denied merely because such payment forms part of CSR, it would lead to double disallowance, which is not the intention of Legislature. Accordingly, we allow the deduction as claimed by the assessee u/s 80G of the Act. This ground of appeal of the assessee is allowed.
Disallowance of deduction claimed u/s 80G - AO has disallowed the claim of the assessee for the sole reason that assessee has field to produce the receipts of the donation - AR requested that the matter may be sent back to the AO for submission of the receipts which was misplaced earlier and now is available - HELD THAT:- We are remitting this issue back to the file of AO for making verification of the fact whether the conditions necessary to claim deduction under section 80G of the Act are fulfilled or not after obtaining the receipt of donation from the assessee. Assessee is directed to file all requisite details in order to substantiate its claim before AO who is directed to grant deduction to the extent of eligibility.
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2025 (4) TMI 1441
Addition made on account of bogus purchase and profit estimation on sales -AO made addition @8% on these 3 sales treating that actual sales had been made in the grey market and accordingly would have earned grey market premium on sales - HELD THAT:- Merely because there was some cash deposit in its bank account prior to the issuance of cheques to the assessee towards payment of purchase consideration, it cannot be concluded that the source of said cash deposit represent the unaccounted income of the assessee. Similarly, with regard to sales made by the assessee to M/s. Bhagya Laxmi Gems and Jewellers Pvt. Ltd, the said company is a Pvt ltd company registered under Companies Act at Secunderabad, Telengana and assessed to income tax. The said party had filed its confirmation that it had made purchase from the assessee and had directly responded to the notice issued u/s 133(6) of the Act before the AO, which fact is also mentioned by the AO in the assessment order.
For all the sales made to these 3 parties, i.e. Bombay Gold Lab, Dharneesh Gold Pvt. Ltd and Bhagya Laxmi Gems and Jewellers Pvt. Ltd, the assessee had already declared the same in its profit and loss account and in the income tax returns. There is absolutely no evidence brought on record that assessee had made cash sales in grey market at a huge premium. Hence, there is absolutely no question of bringing to tax any amount on account of profit of premium at grey market.
Hence, the addition made again @8% by the ld AO which was reduced to 2% by the CIT(A) does not deserve to survive at all. Accordingly, the grounds raised by the assessee in this regard are allowed and grounds raised by the revenue in this regard are dismissed.
Addition made on account of purchase made from Bombay Gold Lab - The said party Bombay Gold Lab had duly responded to the notice issued u/s 133(6) of the Act by furnishing the requisite details directly before the ld AO. The assessee had even given the PAN details and GST details of the said party before the lower authorities. Hence, purchase transaction made from the said party cannot be treated as bogus. Once corresponding sales made out of disputed purchase stands accepted, the purchase cannot be doubted.
The books of account of the assessee have not been rejected by the ld AO or by the ld CIT(A). With regard to the Inspector report that Bombay Gold Lab does not exist at the address given, the assessee had already pleaded that said Inspector’s Report was never furnished to the assessee for its rebuttal over the purchase made by the assessee which includes the disputed purchase, the closing stock, sales which are reflected in the books of account already cannot be doubted as they are not rejected by the ld AO. CIT(A) duly appreciated all these facts and erroneously proceeded to make an ad hoc addition @1% of the value of purchase treating it as an accommodation entry on account of claim of expenditure. Once, the transaction from Bombay Gold Lab is held to be genuine, there is no question of treating the same as accommodation entry. Accordingly, the addition made on account of commission expenditure stands deleted as it was not incurred at all and it was not required to be incurred by the assessee.
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2025 (4) TMI 1440
Deduction u/s 80P - addition of interest received by the assessee from fixed deposits - HELD THAT:- We find that the present issue is squarely covered by the various judicial precedents. In the decision of Gunja Samabay Krishi Unnayan Samity Ltd. [2023 (1) TMI 783 - CALCUTTA HIGH COURT] held that interest earned by the cooperative society on surplus funds deposited in bank and Govt. securities is qualified for deduction u/s 80P(2)(a)(i) of the Act.
Similarly in the case of Yendagandhi Large Sized Co-operative Society Ltd. [2023 (12) TMI 61 - ITAT VISAKHAPATNAM] allowed the deduction for interest income from deposits with the cooperative society and nationalised banks. Thus, we direct the AO to delete the disallowance u/s 80P of the Act and therefore, the deduction u/s 80P claimed is allowed.
Addition on account of overdue interest provisions made by the assessee - HELD THAT:- The provisions for overdue interest was not an issue raised in the limited scrutiny assessment. Therefore, the ld. CIT(A) erred in confirming this addition without proper justification and the addition is hereby deleted since the limited scrutiny had done in the case of the assessee was only related to the specific issues and the AO cannot go beyond the scope of limited scrutiny on an issue which was never for limited scrutiny assessment. Moreover, provision was made relating to overdue interest as amount in question had not been recovered for a continuous period of six years.
Additions on miscellaneous income and rental income - HELD THAT:- CIT(A) cannot make an addition on an issue which is not raised in the original assessment order without giving the assessee an opportunity to respond. In the present issue, without giving notice to the assessee, the alleged addition was made by the ld. CIT(A) suo moto which is not in accordance with law. Consequently, the additions on miscellaneous income and rental income are hereby deleted.
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2025 (4) TMI 1439
Addition on issue other than the issue mentioned in the notice u/s 143(2) where the case of the assessee has been selected for limited scrutiny - HELD THAT:- During the hearing, the Bench had requested the DR to submit the copy of the reasons for selection of the case for scrutiny under CASS. DR has submitted a copy of “CASS Selection Reason and Issue” from which it is seen that the case was selected for scrutiny with Reason Code EI02.02 and DM01.15A on issue of “Agricultural income” and “Cash deposit during demonetization period”. It is clear from the above that the AO has passed the order as per the mandate given to him by the CBDT for limited scrutiny under CASS. He has not exceeded the jurisdiction as contended by the ld. AR. Accordingly, the ground No.1 is dismissed.
Unexplained cash credit being cash deposits in bank account - HELD THAT:- The amounts of withdrawal are substantial. The appellant has not filed confirmation or affidavit from Shri Vijay J. Ramani that he withdrew the impugned amounts in cash and gave it to the appellant. He has not confirmed that the amount was not utilized by him for personal purposes or investment. Copy of the bank account of Shri Vijay J. Ramani has not been submitted to prove that the above withdrawals were not credited to his account. The copies of PAN, Aadhar and Passport of Shri Vijay J. Ramani mentioned the name of his father as Jashubhai Manjibhai Ramani and not Jashubhai Manjibhai Patel, the appellant herein. The name of the assessee in the PAN is Jashubhai Manjibhai Patel, and not Jashubhai Manjibhai Ramani. Since no supporting and corroborative evidence has been filed by the appellant to support the claim that the cash withdrawal by Shri Vijay J. Ramani, was part of cash available with the appellant, we do not find any infirmity in the order of AO. The order of AO has been rightly upheld by the CIT(A). Accordingly, the ground No.2 is dismissed.
Taxing the addition by taking the rate @77.25% by attracting Sec 115BBE instead of taxing as per normal tax slab - HELD THAT:- The provisions of section 115BBE of the Act was enacted on 15.12.2016 and hence cannot be applied for the year under consideration.
As relying on Punjab Retail 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 of the Act is not retrospective. There is no reason not to follow above decisions. Thus, the AO is directed to tax the addition at normal rate of tax and applicable surcharges and cess, if any. The assessee is, accordingly, allowed relief against taxing the addition at higher rate u/s 115BE of the Act.
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2025 (4) TMI 1438
Disallowance of labour expenses made u/s 36(1)(va) on account of employee’s contribution to the Labour Welfare Fund - HELD THAT:- The assessee in the statement of facts filed before CIT(A) had also stated that due date was further extended to 30.06.2020 by the Welfare Commissioner, Haryana Labour Welfare Board vide letter dated 02.06.2020. Assessee had duly remitted the Labour Welfare Fund dues within the due date prescribed thereon.
The said due dates were beyond the due date of filing of income tax return u/s 139(1) of the Act. Hence, the ld CPC, Bengaluru while processing the return had erroneously construed this employees’ contribution to have not been remitted within the due date prescribed under the respective Labour Act and made addition u/s 36(1)(va) of the Act in the sum which was also confirmed by the assessee CIT(A).
We find that in view of section 9 of Haryana Labour Welfare Board Act, the labour welfare fund dues in the instant case had been duly remitted within the respective dates prescribed under the Labour Laws. Hence, the decision in the case of Checkmate Services [2022 (10) TMI 617 - SUPREME COURT] relied by the NFAC is not applicable to the facts of the instant case. Hence, we direct the ld AO to delete the addition in the sum u/s 36(1)(va). Accordingly, Ground No. 2 raised by the assessee is allowed.
Disallowing the Employee State Insurance Corporation fund u/s 43B by making double addition - HELD THAT:- Assessee had made suo moto disallowance being the employees’ contribution to ESI in the return of income which is evident from the tax audit report enclosed at page 19 of the paper vide Sl. No. 7 thereon. This fact was ignored by the ld ld CPC while processing the return and addition was made by the CPC. The assessee had brought this point to the knowledge of the CIT(A)/ NFAC. The fact was ignored by the ld NFAC thereby resulting in double addition. We are convinced with this fact that there was indeed double addition.
Upward adjustment - inconsistency between amount reported in the tax audit report and the deduction claimed in the income tax return towards gratuity component and other comprehensive income - HELD THAT:- The entire addition has been made by the lower authorities without understanding the requirement of IND-AS which has been duly explained by the assessee before the lower authorities. Further, the ld AR also submitted that in AY 2017-18, CIT(A) granted relief on this issue and revenue did not challenge the same before the Tribunal which goes to prove that the revenue had accepted the same in AY 2017-18. The copy of the said CIT(A) order for AY 2017-18. The relevant observation of the CIT(A) in order where these issues were deleted by the CIT(A. It is pertinent to note that the ld CIT(A) while addressing this issue for the year under consideration had erroneously looked at clause 26(i)(A)(a) in Form 3CD instead of clause 26(i)(B)(a) which had lead the ld NFAC to arrive at the conclusion. Accordingly, ground No. 4 raised by the assessee is allowed.
Chargeability of interest u/s 234C - The law is very well settled that the interest u/s 234C of the Act could be charged only on the returned income and not on the assessed income.
Credit of advance relating to company which got merged with the assessee with an appointed date of 01.04.2021 - HELD THAT:- Amalgamating entities paid an advance tax of Rs. 1.50 crores. Later the two amalgamating entities got amalgamated with the assessee. The appointed date is 01.04.2021. The fact of advance tax payment made by the amalgamating entity in the sum of Rs. 1.35 crores and Rs. 0.15 crores are reflected in Form 26AS. Since the entire transactions of the amalgamating entities are reflected in the hands of the assessee, credit for advance tax paid by the amalgamating entity should be given to the assessee. We direct the ld AO accordingly and allow Ground No. 4 raised by the assessee.
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2025 (4) TMI 1437
Deduction u/s 80IC - assessee has failed to file the Audit Report in Form 10CCB within stipulated time period provided under the Act - extension of the period of limitation falling under Covid-19 period - HELD THAT:- In the instant case, the due date of filing of return of income was extended upto 15.02.2021. However, the Audit Report was filed only on 15.02.2021, simultaneously alongnwtih return of income filed on the same day. Thus, the assessee has failed to comply with the provisions of Rule 18BBB of the Rules.
However, in view of the judgement of Hon’ble Supreme Court in the case of Suo Moto Writ Petition [2022 (1) TMI 385 - SC ORDER] the period of limitation was extended by the Hon’ble Supreme Court upto 31.05.2022. Therefore, there was no delay in filing the Audit Report by the assessee in Form 10CCB. Co-ordinate Bench of the Tribunal in the case of Sanjay Kukreja [2024 (2) TMI 41 - ITAT DELHI] has also expressed the view that filing of Audit Report alongwith return of income is not mandatory but directory and if the Audit Report is filed at any time before framing the assessment, it would be sufficient to hold that the assessee has complied with the provision of filing of Audit Report.
We are of the view that there is no delay in filing the Audit Report in Form 10CCB in the instant case. Therefore, we allowed the said Audit Report to be considered for deduction u/s 80IC however, we are not aware whether the other conditions for claiming deduction u/s 80IC have been coupled with or not. Therefore, the AO is directed to verify all such conditions and if it is found that the assessee has duly complied with all conditions, the deduction claimed u/s 80IC be allowed. Appeal of the assessee is allowed.
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2025 (4) TMI 1436
TP Adjustment - payment of royalty/consideration for use of trademark and knowhow - HELD THAT:- We find that the Tribunal for the immediately preceding AY i.e. 2017-18 [2024 (8) TMI 277 - ITAT DELHI] in so far as royalty addition is concerned decided the issue in favour of the assessee wherein the payment of royalty was held to be at arm’s-length by coordinate benches of this Tribunal.
Addition on account of consultancy services, reimbursement of advertisement expenses and IT cost allocation - HELD THAT:- On perusal of the Tribunal’s order for the AY 2017-18 [2024 (8) TMI 277 - ITAT DELHI] assessee has availed consultancy services from an employee based out of Hong Kong and has reimbursed the salary and related expenses of this employee to its AE. Since this is similar to the issue of expatriate cost in previous years, we find no reason to take a different view for this assessment year. While respectfully following the consistent view taken by the Tribunal in Assessee’s own case for the AY 2007-08, 2008-09 and 2009-10, we hold that the impugned addition cannot be sustained. We, therefore, direct the TPO/AO to delete the adjustment made on this issue. Thus, Ground and sub-grounds are partly allowed in favour of the assessee.
Not allowing deduction on account of reversal of provision for contingent Income tax liability credited to profit and loss account and disallowed earlier in the year of creation that the time it was debited to profit and loss account - HELD THAT:- As Counsel submits that thus the provision which was created in AY 2016-17 was never claimed as deduction since it was added back in the computation of income. Since in the assessment year under consideration the provision was reversed in the books consequent adjustment was made in the tax computation otherwise it would have resulted in a double addition.
We find considerable merit in the submissions of the Ld. Counsel for the assessee. Therefore, the issues in ground nos. 5 & 6 are in principle allowed subject to verification by the Assessing Officer. The Assessing Officer while passing the consequential order may verify the contentions of the assessee before allowing claims of the Assessee.
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