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Showing 341 to 360 of 1346 Records
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2021 (1) TMI 1008
Additions made u/s 68 read with Section 115BBE - LTCG in penny stocks - HELD THAT:- It is recorded that “There is no dispute that the shares of the two companies were purchased online, the payments have been made through banking channel, and the shares were dematerialized and the sales have been routed from de-mat account and the consideration has been received through banking channels.” The above noted factors, including the deficient enquiry conducted by the AO and the lack of any independent source or evidence to show that there was an agreement between the Respondent and any other party, prevailed upon the ITAT to take a different view.
Before us, Mr. Hossain has not been able to point out any evidence whatsoever to allege that money changed hands between the Respondent and the broker or any other person, or further that some person provided the entry to convert unaccounted money for getting benefit of LTCG, as alleged. In the absence of any such material that could support the case put forth by the Appellant, the additions cannot be sustained.
Lower tax authorities are not able to sustain the addition without any cogent material on record. We thus find no perversity in the Impugned Order.
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2021 (1) TMI 1007
Revision u/s 263 - assessee is not eligible to claim deduction under Section 10A for Assessment Year 2008-09 as the period of 10 years in the case of assessee expired with Assessment Year 2007-08 and the Assessment Year in case of assessee has to be reckoned from Assessment Year 1998-99 - HELD THAT:- In the instant case, the period of 10 consecutive years would start from Assessment Year 1995-96 and would end with Assessment Year 2008-09. It is pertinent to mention here that the period of 10 year commences from 1995-96 irrespective of the fact that whether or not the assessee has claimed benefit in between the Assessment Years and the period of 10 consecutive years therefore, in view of the plain language of the enactment cannot be extended. The Assessing Officer without examining the aforesaid aspect of the matter granted the benefit of deduction Section 10A of the Act to the assessee. The view taken by the Assessing Officer cannot but be said to be erroneous and prejudicial to the interest of the revenue.
The view taken by the AO cannot be said to be a plausible view. It is also pertinent to mention here that no reasons have been assigned by the Assessing Officer for holding the assessee eligible for benefit of deduction under Section 10A - Since, the issue with regard to eligibility of the assessee for deduction under Section 10A of the Act for Assessment Year 2008-09 beyond a period of 10 consecutive years was not subject matter of order of assessment itself.
Therefore, the same could not have been the subject matter of the appeal before the Commissioner of Income Tax (Appeals) and thus, in the fact situation of the case there was no bar in invoking the powers under Section 263 - The income of the assessee from staffing, which was not an income from export of computer software was also allowed by the Assessing Officer without any application of mind and without any enquiry. Therefore, the Commissioner of Income Tax has rightly invoked the powers under Section 263 of the Act in the fact situation of the case. - Decided against assessee.
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2021 (1) TMI 1006
Assessment u/s 153A - Addition u/s 68 - Bogus LTCG - CIT(A) deleted the addition holding that the assessee has discharged the onus cast on it by proving the identity and creditworthiness of the share applicants and the genuineness of the transaction - HELD THAT:- A bare perusal of the assessment order shows that the addition is not based on any incriminating material found as a result of search but is based on the verification of the balance sheet of the assessee. The Hon’ble Delhi High Court in the case of CIT vs. Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT] has held that in absence of any incriminating material found as a result of search, no addition can be made in a completed assessment.
Since the addition in the instant case is not based on any incriminating material found as a result of search in case of the assessee and it is a completed assessment, therefore, we are of the considered opinion that no addition could have been made by the AO in the instant case - Decided in favour of assessee.
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2021 (1) TMI 1005
Addition u/s 14A - Non recording of satisfaction by AO - HELD THAT:- A.O while dislodging the claim of the assessee that as no part of the expenses debited in the profit and loss account was relatable to earning of the exempt dividend income, thus no disallowance under Sec. 14A was called for in its hands, had failed to record his satisfaction as regards the correctness of such claim, having regard to the accounts of the assessee. Rather, we find that the A.O had dislodged the claim of the assessee that no disallowance under Sec. 14A was liable to be made in its hands by holding a conviction that it was beyond comprehension that no expense incurred by the assessee could be related to earning of exempt dividend income.
We are of the considered view that in the backdrop of the judgment in the case of Godrej & Boyce Manufacturing Co. Ltd. [2017 (5) TMI 403 - SUPREME COURT] it was obligatory on the part of the A.O to have recorded his satisfaction, having regard to the accounts of the assessee, as to why the latter claim that no expenditure was attributable to earning of the exempt dividend income was not to be accepted. - Decided in favour of assessee.
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2021 (1) TMI 1004
Rectification u/s 154 - Exemption u/s 11 denied - audit report in Form no.10B of the Act was filed belatedly - as per assessee since 85% out of the income received has been applied for the objects of the Trust, exemption u/s 11 of the Act is available - HELD THAT:- As decided in KASTURI FOUNDATION [2020 (11) TMI 962 - ITAT MUMBAI] the claim of the assessee that it has obtained the audit report prior to the date of filing of return of income and has filed audit report before the due date of return of income under section 139(1) of the Act has not been controverted by the learned Departmental Representative.
Commissioner (Appeals) has also upheld the disallowance of exemption by simply stating that it is not a rectifiable mistake under section 154 of the Act. In our view, when the assessee has complied with the statutory provisions in terms of the CBDT Circular, the delay if any, in filing the audit report should have been condoned. In view of the aforesaid, we delete the disallowance made and allow assessee’s claim of exemption under section 11 of the Act. Grounds raised by the assessee are allowed.
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2021 (1) TMI 1003
Unexplained cash credit u/s 68 - loan taken from M/s. Annapurneshwari Rice Industries a partnership firm and one Mr. Nagaraj is a partner of this firm - HELD THAT:- Without examining Mr. Nagaraj, it is not possible to conclude that the sum which was added as unexplained cash credit in the hands of the assessee is unexplained cash credit. If on examination of Mr. Nagraj, admits having given ₹ 20 lakhs then the addition in question cannot be sustained.
In such an event the assessee should be considered to have explained the source of the credit. In the set aside assessment it will not be permissible to examine the source of Mr. Nagaraj as that would amount to examining source of source. With these observations, we set aside the order of the CIT(A) and allow the appeal of the assessee for statistical purposes.
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2021 (1) TMI 1002
Estimation of income - bogus purchases - CIT-A restricted addition at 12.5% being profit earned by assessee on unexplained/unverified purchases - HELD THAT:- We noticed that the CIT(A) has applied profit rate at 12.5% by following the decision in the case of CIT vs. Simit P. Sheth [2013 (10) TMI 1028 - GUJARAT HIGH COURT] wherein as held that where purchases were not bogus but were made from parties other than those mentioned in the books of account, not entire purchase price but only profit element embedded in such purchases can be added to income of the assessee.
As the CIT(A) has applied a reasonable profit rate, we do not want to interfere in the same. Hence, the order of CIT(A) is upheld in both the years and appeals of assessee are dismissed.
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2021 (1) TMI 1001
Validity of notice u/s 143(2) - assumption of jurisdiction by the AO/ACIT, Circle International Tax 2(2)(2) -curable defect u/s 292BB or not? - assessee is a non-resident Indian residing in the USA - HELD THAT:- Undisputedly, assessee being non-resident Indian has been filing her return of income as a non-resident Indian and in any case, assessment is required to be framed by the ITO (International Taxation) - notice in this case u/s 143(2) has never been issued by the jurisdictional ITO to the assessee.
Perusal of the notice issued u/s 143 (2) goes to prove that the same has been issued by the Income-tax Officer, Ward 52(5), New Delhi who had no jurisdiction to issue the same. On the basis of notice issued u/s 143 (2) (supra) by the non-jurisdictional AO, the subsequent assessment proceedings on the basis of which assessment order dated 30.12.2018 was framed by the jurisdictional ITO are void ab initio and bad in law. Particularly when AO in para 3 of the assessment order has himself admitted that assessee is a non-resident Indian living in USA.
Assuming wrong jurisdiction by issuing notice u/s 143 (2) by a non-jurisdictional AO and then framing the assessment by jurisdictional AO is an illegality which is not curable under the law and makes the entire assessment proceedings void ab initio. As per instructions issued by the Central Board of Direct Taxes (CBDT), ITO, International Taxation, Ward 2(2)(2) have the jurisdiction u/s 143 (2) and not the ITO, Ward 52 (5).
When notice issued by non-jurisdictional ITO, Ward 52 (5) being quasi-judicial authority and assessment framed by jurisdictional ITO, Ward 2(2)(2) is not a mere regularity curable u/s 292BB of the Act because issuance of notice u/s 143 (2) is a foundational step to initiate and complete the assessment proceedings, so when foundation is missing subsequent assessment framed in this case is not sustainable in the eyes of law being void ab initio, hence liable to be quashed. - Decided in favour of assessee.
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2021 (1) TMI 1000
Penalty u/s. 271(1)(c) - estimation of income - bogus purchases - CIT(A) has sustained the addition at 12.5% of the bogus purchases - HELD THAT:- Penalty u/s. 271(1)(c) cannot be levied when the income has been estimated. The Ld. DR could not controvert the observations of the Ld. CIT(A) with any cogent evidence except relying on the A.O's order. Accordingly, we are not inclined to interfere with the order of the Ld. CIT(A) who relied on the judicial decisions and passed a reasoned order in directing the assessing officer to delete the penalty. See HARIGOPAL SINGH VERSUS COMMISSIONER OF INCOME-TAX. [2002 (8) TMI 65 - PUNJAB AND HARYANA HIGH COURT] - Grounds of appeal raised by the revenue are dismissed.
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2021 (1) TMI 999
Exemption u/s 11 - denying of registration u/s 12AA - On examination of financial statements of last three financial years, the ld. Commissioner of Income Tax, Exemption, Pune observed that the donation received towards corpus funds escaped assessment to tax and, therefore, denied the registration - HELD THAT:- The grant of registration and the issue of assessment or exemption u/s 11 of the Act are separate and distinct.
The process of registration is not on occasion for deciding the issue of exemption of donation u/s 11 of the Act. The issue of exemption cannot be examined during the process of registration
CIT-E had lost sight distinction between the process of registration and the exemption or assessment of income u/s 11 of the Act. Therefore, the reasoning of the ld. Commissioner of Income Tax, Exemption, Pune in denying the grant of registration u/s 12AA of the Act cannot be sustained in the eyes of law. In the circumstances, we set-aside the order of the ld. Commissioner of Income Tax, Exemption, Pune and direct the ld. Commissioner of Income Tax, Exemption, Pune to grant the registration u/s 12AA of the Act. Accordingly, the appeal of the assessee is allowed.
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2021 (1) TMI 998
Addition u/s 68 - unsecured loan - HELD THAT:- We consider it just and proper to send back this issue to the file of the AO for giving one more opportunity to the assessee to prove the genuineness of the relevant loans. As rightly submitted by assessee in this regard, the total loan represented opening balance to the extent of ₹ 10,66,42,149/- and the same, therefore, cannot be added to the total income of the assessee in the year under consideration as unexplained cash credit u/s 68.
As regards the balance loan amount AO is directed to give one more opportunity to the assessee to explain the same by establishing the identity and capacity of the concerned loan creditors as well as the genuineness of the relevant loan transactions by adducing the necessary supporting evidence. AO is directed to decide this issue afresh to the extent of loan after necessary verification. Ground No. 1 to 3 of the revenue’s appeal are thus treated as partly allowed while ground no. 1 of the assessee’s cross-objection is treated as allowed for statistical purpose
Disallowance of finance cost incurred by the assessee society - as observed that the finance cost claimed by the assessee under “Capital-Work-in- Progress” was disallowed by the authorities below on the ground that the assessee society was not registered u/s 12AA - HELD THAT:- As claimed by the assessee society by way of raising additional ground in its cross-objection which is admitted by us, it has been granted registration u/s 12AA of the Act w.e.f. A.Y. 2012-13 by CIT(Exemptions), Kolkata vide [2020 (8) TMI 49 - ITAT KOLKATA] and, therefore, the finance cost in question paid on the loans utilised by assessee society for the charitable purpose cannot be disallowed being application of income. The AO is accordingly directed to verify this claim of the assessee and allow appropriate relief to the assessee on this issue.
Disallowance u/s 40A(3) - HELD THAT:- Issue covered in favour of the assessee by the various decisions of the Tribunal including the decision of Hyderabad Bench of this Tribunal in the case of Sree Education Society [2016 (4) TMI 84 - ITAT HYDERABAD] wherein it was held that no disallowance u/s 40A(3) can be made while determining the income u/s 11 of the Act of the assessee which is registered u/s 12AA of the Act. Respectfully following the said decision of this Tribunal, we delete the disallowance made by the AO u/s 40A(3) of the Act and confirmed by the Ld. CIT(A) in the case of the present assessee society which is now duly registered u/s 12AA.
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2021 (1) TMI 997
Suppression of profit made by way client code modification - stock broker who carried out the client code modification was a group concern of the assessee and therefore the contention that there occurred a punching error in large scale entering the trade is remote - CIT-A deleted the addition - HELD THAT:- As decided in M/S PAT COMMODITY SERVICES P. LTD [2015 (8) TMI 973 - ITAT MUMBAI] AO has mainly relied upon the report given by the MCX and has drawn adverse conclusions without bringing any material to support his view.
CIT(A) has also pointed out that modifications carried out by the assessee works out to around 3% of the total transactions only and in our view, the said volume, in fact, vindicates the explanation of the assessee. Further none of the clients has been found to be bogus and all of them have complied with KYC norms, meaning thereby the identity of all the clients stand proved. None of them has disowned the transactions and all of them have also declared the income in their respective returns of income. All these factors, in our view, support the contentions of the assessee.
We are of the view that the Ld CIT(A) was justified in deleting the additions - Decided in favour of assessee.
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2021 (1) TMI 996
Seeking restoration of Company's name in the Register maintained by the Registrar of Companies - Section 252 of the Companies Act, 2013 - HELD THAT:- The failure of the Company in filing the statutory returns and statements was due to inadvertence and was not intentional. Report of the RoC has been received. We are satisfied with the reasons shown by the Applicant for restoration of the name of the Company in the register of companies maintained by the Respondent. Admittedly, the relevant documents which are to be filed, are ready with the Company and the Company is willing to file the same, if so permitted - The Company has not deposited heavy cash in its Bank Account during the period of demonetization as noticed from the annexed Affidavit along with the Application. We are satisfied with the reasons shown by the Applicant for restoration of the name of the Company in the register of companies maintained by the Respondent.
It is deemed to be a fit case to order restoration of the Company by RoC (H) in the interest of the Company, its shareholders and the Creditors - Registrar of Companies, the respondent herein, is ordered to restore the original status of the Company as if the name of the company has not been struck off from the Register of Companies and take all consequential actions like change of company's status from off' to Active (for e-filing), to restore and activate the DINs if applicable, to intimate the bankers about restoration of the name of the company so as to defreeze its accounts - application allowed.
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2021 (1) TMI 995
Levy of penalty for Non disclosures as required under the LODR Regulations - appellant had issued non-convertible debenture securities - CIRP proceedings were ongoing - penalty imposed for violating Regulations 52(4) and 54(2) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ( 'LODR Regulations, 2015' - whether the impugned order imposing penalty upon the appellant for alleged contravention during the period prior to the approval of the resolution plan could be passed by the adjudicating officer? - HELD THAT:- In clear terms of the resolution plan, the show cause notice could not be issued to the appellant for the alleged contravention relating to the period prior to the acquisition and, consequently, the impugned order could not be passed against the appellant.
What could not done by SEBI when the moratorium under section 14(1) of the IBC was in force cannot certainly be done after a resolution plan is approved and becomes binding on all creditors including government and local authority under section 31 of the IBC.
We are of the opinion that once a resolution plan has been approved it becomes binding on all creditors including the government and local authorities including the respondent under section 31(1) of the IBC. It is no longer open to the respondent to issue a show cause notice or adjudicate and pass an order of penalty upon the appellant. Consequently, the impugned order cannot be sustained and is quashed. The appeal is accordingly allowed with no order as to costs.
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2021 (1) TMI 994
Assessment u/s.158BC - limitation to complete the assessment - Reference to limitation provisions of section 158 BE - HELD THAT:- Merely because no seizure was effected on the new valuables found in the search carried out just to extend the time limit to pass the assessment order. Keeping in view of the facts and circumstances explained above, after examining the three panchnamas dated 23.3.1999; 21.5.1999 and 16.7.1999, we are of the considered view that search was validly concluded only in July, 1999 and assessment was separately framed within the time limit which expires only on 31.7.2001 being 2 years from the end of the month in which the search was conducted as the assessment order was passed on 25.7.2001.
Legal grounds raised by the assessee is not supported by any valid documentary evidences, but on the contrary, revenue’s case is well supported by the documentary evidences, as per the paper books filed by department also. The case laws cited by assessee are having the different facts and are not relevant to the present case. Therefore, the legal issue involved decided against the assessee and in favour of the Revenue .
Unexplained investments - The assessee was the Director at that time as the audited balance sheet of M/s Esam Trading Company Ltd. as on 31.3.1993 filed with the Registrar of Companies, New Delhi. Therefore, keeping in view of the facts and circumstances as explained above, with the support of documentary evidences, we are of the view that investment of ₹ 37 lacs made by the assessee as per the documents seized from his residence during the search, hence, the addition in dispute has been rightly made by the AO as undisclosed income of the assessee which was also rightly upheld by the Ld. CIT(A). Hence, we uphold the order of the Ld. CIT(A) on this issue of undisclosed income amounting to ₹ 37 lacs on account of investments in M/s Esam India Ltd.
Commission income unexplained - In response to the questionnaire dated 17.6.2001 the assessee recorded his statement dated 16.7.1999 by stating that the only investment in the share capital of M/s Esam India Ltd. has been made in 1991-92 which is a cash deposit in company account amounting to ₹ 35 lacs. This was made from his undisclosed and unaccounted income, which he was offering for taxation and he shall file the return of income declaring such amount and pay the necessary taxes on this income. We are of the view that in view of the statement made by the assessee and non-furnishing of any evidence showing that assessee has not received this commission income. The AO has rightly made this addition and Ld. CIT(A) has also rightly upheld the same, hence, we uphold the order of the Ld. CIT(A) on this issue.
Addition on account of foreign travels expenditure - The assessee has not filed any evidence in support of his claim on this addition and by merely denying that assessee has not incurred any expenditure. Hence, this addition is liable to be made in the absence of any evidence filed by the assessee. Addition on account of foreign travel expense has rightly been made by the Assessing Officer and upheld by the Ld. CIT(A), because the assessee has not produced any documentary evidences supporting his claim.
Addition on account of deposit in the bank - AO has provided opportunity to the assessee to explain this deposits, but the assessee has not availed the same and has not filed any evidence, even no explanation regarding this deposit has been given by the assessee. Therefore, the revenue authorities have rightly treated the same as undisclosed income of the assessee, hence, we uphold the order of the Ld. CIT(A) on this issue.
Addition on account of expenditure on repair and renovation on the accommodation owned by the Central Government of India - Revenue has made this addition on the basis of the documents which were found and seized at the residential premises of the assessee and from the office premises of the company Esam India Ltd. wherein 99.98% equity shares is held by the assessee. These documents were recorded in respect of repair and renovation.
Assessee has not explained the source of such expenses and hence, we are of the view that in the absence of any explanation and documentary evidences, the AO has rightly made the addition in dispute and Ld. CIT(A) has rightly upheld the same, therefore, we uphold the order on this issue and upheld the impugned order of the Ld CIT(A) on this issue.
Addition of expenditure on purchase of cell phones and treated the same as undisclosed income - On the basis of Annexure A-1 seized during the search operation in the case of the assessee on 23.3.1999 for the purchase of cell phones, after giving opportunity to the assessee. The assessee has not attended the AO and not filed any reply. Therefore, in our view this addition has rightly been made and upheld by the Ld. CIT(A). Hence, we uphold the order of the Ld. CIT(A) on this issue.
Addition of investments in purchase of cars and treated the same as undisclosed - No doubt the assessee has denied the ownership of these vehicles, but has not substantiated his version with the support of any evidence. On the contrary, the Rolls Royce car no. DLIC1233 and Ferrari and Contessa were found and mentioned in the documents seized from the premises of the assessee owned by the assessee and the assessee has not able to explain the source of investments in these vehicles. Therefore, we uphold the impugned order on this issue.
Unexplained expenditure - CIT-A unexplained expenditureheld that opportunity given by the AO was not availed by the assessee and due to lack of evidences supporting the claim of the assessee, the Ld. CIT(A) has given the relief of ₹ 2,20,940/- and the balance of ₹ 36,53,504/- was rightly been upheld by the Ld. CIT(A) as undisclosed income of the assessee for this block period. In spite of the fact that the assessee remained non-cooperative before the revenue authorities, sufficient relief has been given to the assessee, hence, no interference is called for in the well reasoned order of the Ld. CIT(A) on this issue, therefore, we uphold the finding of the Ld. CIT(A) on this issue.
Addition on account of deposits in the Bank of Maharastara and treating the same as undisclosed income - The chain of ownership and authorized signatories of each of these concerns as brought out by the AO in the assessment order clearly prove that the main person to whom all these accounts belonged is the assessee only as this chain started with the bank account of Kudos Exports Pvt. Ltd. which is a 100% subsidiary of Esam India Ltd. wherein the assessee has ownership of 99.98% equity. Ld. CIT(A) has elaborately discussed the same at page no. 55-56 of the impugned order and held that all these firms were found to be non-existence at the given address and therefore, in our view the AO has rightly been made the addition which the Ld. CIT(A) has upheld. Hence, we uphold the impugned order on this issue.
Addition on transactions recorded in the diary alleged to be handed over by Ms. Asmita Aggarwal on 16.7.1999 and treated the same as undisclosed income of the assessee - This addition has been made by the revenue authorities on the basis of documentary evidences and especially to the assessee who remained non-cooperative with the revenue authorities and for lack of evidence. Assessee has not discharged his burden of his onus laid upon him to prove that this diary did not belong to him, but he failed to prove the same and in the absence of any valid explanation and evidence, the AO has rightly made the addition found recorded in the diary and which has been rightly been upheld by the Ld. CIT(A).
Undisclosed investments in house hold items - Assessee was requested to explain the source of acquisition of these traveler cheques failing which an amount of ₹ 38,500/- was proposed to be treated as undisclosed income. Vide his reply dated 24.7.2001 assessee has stated that the traveler cheques were purchased out of income earned out of India. During the block assessment proceedings, assessee has not brought on record any information showing that he in fact earned income out of India during the block period. The AO as well as Ld. CIT(A) has rightly made the additions.
Undisclosed foreign exchange - AO has made the addition on the basis of seized material and after giving opportunity to the assessee, which the Assessee has not availed the same and the Ld. CIT(A) has rightly upheld this addition in dispute by dismissing the ground of the assessee.
Undisclosed of payment made to Ms. Rita Luther - AO has made the addition on the basis of seized material mentioned in the assessment order and the impugned order. No contrary evidence has been filed by the assessee. Therefore, the AO has rightly made this addition and Ld. CIT(A) has rightly upheld the same.
Addition on account of profit of M/s Delhi Exports - In reply to the question raised by the AO the asessee has not furnished any proof of having filed the income tax return of his concern M/s Delhi Exports, hence, Assessing Officer has made the addition in dispute. Ld. CIT(A) has also upheld the impugned addition on the basis of the finding given by the AO. We have gone through the orders passed by the revenue authorities and we are of the view that assessee has not furnished any proof, which is contrary to the evidence collected by the revenue authorities therefore, in the absence of the same the addition in dispute is deserve to be upheld, hence, we uphold the same
Addition on account of profit of M/s Globetrotters - To negative the version of the revenue authorities assessee has not given any explanation whatsoever the amount of ₹ 3.34 crores is verifiable from the seized documents is held to be correctly added by the AO to the undisclosed income of the assessee, which was upheld by the Ld. CIT(A). Hence, we uphold the action of the Ld. CIT(A) which has been made on the basis of the seized material.
Undisclosed income on account of receipt by M/s Vino Veritas - AO is of the view that the assessee is a real beneficiary of the amount transferred to the order of Vino Veritas and added this amount as undisclosed income of the assessee. Ld. CIT(A) has also upheld the order of the Assessing Officer by holding that assessee has not able to explain the source of ₹ 7,67,30,400/- having been transferred from M/s Esam India Ltd. to Vino Veritas. After going through the orders passed by the Revenue authorities, we are of the view that revenue authorities have righty made the addition in dispute for lack of evidence and non-cooperation of the assesee, hence, there is no need to interference in the impugned order on this issue, therefore, we uphold the same
Addition on account of receipts from Sh. SC Bharjatia - The assessee is a real beneficiary of this amount, hence, we are of the view that the findings given by the ld. CIT(A) is as per record and evidence and therefore, the same is upheld.
Unexplained payment made by M/s Kudos Exports Ltd, deposits made with General Credits Finance Ltd., payment to Sh. Arjun Amla upheld because for lack of evidence on the issue in dispute filed by the assessee
Assessing Officer as well as Ld. CIT(A) has given full opportunity to the assessee for substantiating his claim on legal as well as on merits, but the assessee remained non-cooperative before the revenue authorities, hence, Assessing Officer has made the additions in dispute on the basis of the search material, after confronting the same to the assessee, but the assessee has not substantiated his claim by filing any evidence before the authorities below. Therefore, no interference is called for in the well reasoned orders of the revenue authorities - Decided in favour of revenue.
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2021 (1) TMI 993
Disallowance of depreciation of software @60% - Claim allowed by the ld AO @25% - CIT(A) allowed the claim of assessee - HELD THAT:- DR could not show us any reason that why we should deviate from the orders of the coordinate bench in assessee’s own case, as far as the rate of depreciation on the software is concerned.
With respect to the existence of the work in progress we have already dealt with this issue earlier wherein reading the management discussion and analysis in the director’s report clearly shows that assessee has several of the software, it cannot be said that assessee does not have the asset on which depreciation is claimed. Naturally, when the software is developed in-house as stated by the assessee, there cannot be any bill for purchase of the software. The assessee has maintained the books of accounts and shown the work in progress therein which is evident from the fixed assets schedule, on which depreciation is year by year by year claimed and allowed. Though the learned assessing officer has challenged the existence of the software for the first time during the year, however, the assessee has been allowed depreciation at least at the rate of 25% on the software in earlier years also. Thus, the learned CIT – A has correctly held that it is not a fictitious asset.
Accordingly, we uphold the order of the learned CIT appeal while allowing depreciation on the software holding it to be an actual asset and allowing depreciation thereon at the rate of 60% following the order of the coordinate bench in assessee’s own case for earlier years.
Addition u/s 68 - cash credit in the books of accounts - HELD THAT:- For proving the identity of the party, the assessee submitted the permanent account number, and income tax jurisdiction of the investor company is, Bank statement of the investor company is and copies of the returns of those investors. With respect to the creditworthiness and genuineness of the investor, assessee submitted the audited financial statement of the investor company and bank statement showing the relevant entries of Davidson credits of the investor company is to show the sources of the funds. With respect to the genuineness of the transaction, assessee once again submitted the confirmations of the above parties were issued the convertible warrants.
As assessee has submitted the complete details before the assessing officer and therefore the initial onus cast on the assessee has been discharged. Further, the learned assessing officer has also not made any enquiry with respect to the above depositors. The inquiries made in the subsequent years clearly show that assessing officer is satisfied with respect to the creditworthiness and the genuineness of the transaction of issue of shares warrant of ₹ 220 crores. No infirmity in the order of the learned CIT – A in deleting the above addition - Decided in favour of assessee.
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2021 (1) TMI 992
NP rate determination - net result of trading operations of assessee JV - applying net profit rate of 8% on contract receipts by assuming that the contract work was executed by the assessee itself and not by its lead partner M/s KIEL though the payments made to it were not doubted - two entities joined together and formed a Joint Venture (JV) for making a bid for the supply and installation, testing & Commissioning of Signaling equipment - furnishing bills and supporting vouchers in respect of expenses claimed by KIEL - HELD THAT:- M/s KIEL is a separate legal entity and assessee had neither access to books of accounts of KIEL nor had authority to direct its office bearers to provide books of accounts to be produced before AO. Therefore, during the course of assessment proceedings, it was requested by the assessee before AO that direct enquiry may be made from KIEL by issuing notice u/s 133(6) of the Act and it may be directed to furnish books of accounts.
No action was taken by AO and rather adverse inference was drawn against the assessee and it was presumed that assessee JV may have executed the project, which is quite contrary to the facts on record. Further without having any material in possession and also without bringing on record any comparable case, profit rate of 8% is applied.
CIT(A) while upholding this exorbitant profit rate has observed that in the case of M/s KIEL the profit rate of 8% is applied in its assessment completed u/s 143(3) of the Act and failed to appreciate the fact that such a high rate of profit as applied was deleted in appellate proceedings in the case of M/s KIEL.
Remedial action u/s 264 not taken by M/s KIEL - As has been observed by ld. CIT(A) making it as a ground for not following the earlier order of this bench of ITAT, in this regard, it is submitted that the return of income for AY 2010-11 was originally filed by M/s KIEL on 25.9.2010 and the same was revised on 23.3.2011 which is also available at page No. 16 of the paper book. As per Section 264 of the Act, application can be filed by the assessee within a period of one year from the communication of order in question.
In the present case, since no order was passed in the case of M/s KIEL, thus there was no occasion with M/s KIEL to file any petition u/s 264 of the Act. Further the assessee has the option of filing of appeal, thus had pursued the appellate proceedings. Even under the identical circumstances, the Coordinate Bench has allowed the appeal in one of the group Joint Venture namely M/s Kiran Tirupati Mangla JV [2016 (5) TMI 1542 - ITAT JAIPUR] and therefore, under such circumstances, assessee was confident of getting the relief in appellate proceedings.
Joint venture was entered into for getting the eligibility for participating in the tender and accordingly in the Joint Venture Agreement, specific role of the parties was defined i.e. the execution of entire contract work was to be done by KIEL that too from its own resources, manpower, equipment etc., and other party Eliop, SA would be responsible for providing the technical support. Since the receipts in the year were solely towards the execution of the work therefore, entire receipts were owned by M/s KIEL and profit earned thereon was offered by M/s KIEL for taxation in the return of income filed in due course after incorporation such income in its financial statements. Now making trading addition in the case of assessee on the same receipts again by holding the same as its income, amounts to double taxation of an income, therefore, in our view, the said act of the Revenue is contrary to the provisions of law.
We allow the appeal of the assessee and direct to delete the addition so made and confirmed.
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2021 (1) TMI 991
Addition u/s 68 - unexplained cash deposits - Non maintenance books of accounts - As the assessee filed return of income U/s. 44AD i.e. under presumptive tax scheme, the assessee was not maintaining books of account - HELD THAT:- The Co-ordinate Bench of the Tribunal in the case of Shri Kokarre Prabhakara vs. ITO [2020 (9) TMI 536 - ITAT BANGALORE], in a similar situation where the assessee had declared income under section 44AD of the Act without maintaining books and the Assessing Officer had invoked the provisions of section 68 of the Act, the Tribunal deleted the addition by placing reliance of various decisions of the Tribunal holding that where the returns are filed on the basis of income declared under section 44A of the Act, there cannot be any application of section 68 of the Act.
Thus, in the back drop of the facts, relevant provisions of the Act and case laws discussed above, no addition under section 68 can be made in the instant case. We find merit in ground raised by the assessee in appeal.
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2021 (1) TMI 990
Revision u/s 263 - provision for expenses disallowable or it is provision for contingent liability - HELD THAT:- Finding of the CIT-2, Pune that the provision for expenses is contingent liability is not based on any material, it is mere ipse dixit - impugned order does not contain an allegation by the ld. Pr. Commissioner of Income Tax-2, Pune that the Assessing Officer had not enquired into this issue during the course of assessment proceedings. Thus, it is clear that it is not even case of learned CIT that AO had not enquired into this case. Therefore, the case even does not fall within ambit of Explanation 2 to sub-section (1) of section 263 of the Act inserted by Finance Act, 2015 w.e.f. 1.6.15.
Considering all the above facts, it cannot be said that the assessment order is erroneous causing consequence prejudice to the interests of the revenue. - Decided in favour of assessee.
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2021 (1) TMI 989
Approval of scheme of amalgamation - section 230-232 of Companies Act - HELD THAT:- It is noticed from the material on record that the Scheme appears to be fair and reasonable and does not violate any provisions of law and is not contrary to public policy or public interest. In the absence of anything inherently abhorrent in the Scheme, there are no reason why the Scheme should not have the imprimatur of this Tribunal.
Since all the requisite statutory compliances have been fulfilled, scheme is approved absolutely - application allowed.
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