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Showing 381 to 400 of 1346 Records
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2021 (1) TMI 967
Grant of anticipatory Bail - irregular input tax credit on the basis of invoices generated by the non-existing firms formed by the petitioner himself in the name of his employees - Section 438 of Cr.P.C - HELD THAT:- As per rejection bail order petitioner is proprietor of M/s Allied Enterprises and had purchased the goods amounting to about ₹ 32 Crore and got 4.97 Crore of input tax credit and the department is investigating the matter. If the petitioner is found to be correct, he should have to personally produce all the documents before the department and would also raise his grievance as to why he is not appearing before the department but he failed to clarify all these things.
Considering the submissions made by learned counsel for CGST and taking into consideration overall facts and circumstances of the case but without expressing any opinion on the merits/demerits of the case, it is not deemed proper to enlarge the petitioner on anticipatory bail - this anticipatory bail application is dismissed.
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2021 (1) TMI 966
Allocation of additional Raw Petroleum Coke (RPC) in favour of M/s Sanvira Industries for production capacity in excess of 2,00,000 Metric Tonnes (MT) - it is the assertion of the petitioners that the decision to consider the Production Capacity of M/s Sanvira Industries as 3.30 lakh MT for purposes of allocation of RPC is contrary to the orders of the Supreme Court - HELD THAT:- Not only was the RPC allocated to industries whose installed capacity had not been taken into account in the EPCA Report dated 06.10.2018, but even for the petitioner-Rain CII Carbon, Production Capacity was taken as 5.11 lakh MT as against 5 lakh MT taken in the Report while determining the quantity of 1.4 million MT for import of RPC.
On the issue as to whether on account of the orders dated 28.01.2019 or 08.07.2019 of the Supreme Court, SANVIRA INDUSTRIES LIMITED AND ANR. VERSUS DIRECTORATE GENERAL OF FOREIGN TRADE AND ANR. [2019 (12) TMI 1300 - DELHI HIGH COURT] Production Capacity could not have been taken as 3.30 lakh MT, I again do not find any merit in the submissions made by the learned senior counsels for the petitioners.
While under the Public Notices dated 26.11.2018 and 22.03.2019, the applicant was to produce documents showing its Production capacity, in the Public Notice dated 17.04.2020, only a Certificate from the State Pollution Control Board indicating capacity of the unit as on 09.10.2018 could suffice. No other document for supporting claim of Production Capacity as on 09.10.2018 could have been taken into account in terms of the Public Notice dated 17.04.2020.
The Consent to Operate from the State Pollution Control Board is required for establishing or operating any industrial plant or operation. As noted hereinabove, DGFT in its Public Notice(s) has required the eligible entity to produce valid Consent to Operate in support of their application for allocation of RPC. While, by the Public Notices dated 26.11.2018 and 22.03.2019, the Consent to Operate was taken as the sole document showing the production capacity of the unit as also the allocation to which it is entitled, a departure was made in the Public Notice dated 17.04.2020 inasmuch as now apart from a Consent to Operate, the industrial unit was also to provide a certificate of its production capacity as on 09.10.2018 issued by the relevant State Pollution Control Board. M/s Sanvira Industries had produced both the documents, that is, a certificate showing the production capacity as on 09.10.2018 issued by the APPCB as also the Consent to Operate.
The submission of the learned senior counsels for the petitioners that certificate mentioned in the first part to the condition of the Public Notice dated 17.04.2020 is the Consent to Operate, also cannot also be accepted. Clearly, the Public Notice dated 17.04.2020 makes a distinction between a certificate in the first part and the Consent to Operate in the second part. If both, the certificate and the Consent to Operate, were the same document, clearly there would have been no necessity of making a separate mention of the certificate and the Consent to Operate in the two parts of the same Clause of the Public Notice. The Public Notice has to be read in a reasonable manner, excluding any superfluity.
It cannot be said that there is no application of mind by the Committee and no reasons recorded while making such allocation in favour of M/s Sanvira Industries - petition dismissed.
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2021 (1) TMI 965
Suit for recovery of price of goods sold and delivered - the claim of the plaintiff does not survive the approval of the Resolution Plan - Chapter XIIIA of the Original Side Rules - HELD THAT:- The Adjudicating Authority had accepted the Resolution Plan of the corporate debtor, that is the predecessor-in-interest of the defendant herein. The Resolution Plan has tabulated the liability of such corporate debtor. The plaintiff has not produced any document to establish that, the Resolution Plan approved in respect of the corporate debtor had the claim of the plaintiffs therein. The contentions of the plaintiffs that, the plaintiffs, subsequent to the death of the original plaintiff, was not aware of the insolvency proceedings in respect of the corporate debtor is of no consequence. In view of the ratio laid down in Committee of Creditors of Essar Steel India Ltd. [2019 (11) TMI 731 - SUPREME COURT], the plaintiffs cannot be said to have a valid claim as against the defendant any longer and at least subsequent to the approval of Resolution Plan of the corporate debtor.
In a proceedings under Chapter XIIIA of the Original Side Rules the defendant is entitled to unconditional leave to defend the suit, in the event, the defendant establishes that it has a substantial defense to the claim. In the facts of the present case, the defense set up by the defendant on the basis of the ratio of Committee of Creditors of Essar Steel India Ltd. [2019 (11) TMI 731 - SUPREME COURT], is substantial.
The application of the plaintiffs fail - Application dismissed.
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2021 (1) TMI 964
Principles of Natural Justice - Validity of assessment order - petitioner contends that the Assessment Orders were passed for the said periods on different dates, but none of those orders were served on the petitioner - HELD THAT:- It is not in dispute that notices as well as orders passed are required to be served on the assessee in accordance with Rule 64(1)(b) of the TVAT Rules, which does not contemplate service of either notices or orders through the mode of e-mail.
In Soa Software Engineering India Private Limited Vs. Commercial Tax Officer [2013 (3) TMI 850 - ANDHRA PRADESH HIGH COURT], a Division Bench of this Court held that as per Rule 64(1)(b) of the Telangana State Value Added Tax Rules, 2005 read with Section 9(2) of the Central Sales Tax Act, 1956, show-cause notice should be served on the nominated person or left at the registered office of the person or sent by registered post to any office or place of business of that person, and it cannot be sent by e-mail - This legal position is not disputed by the learned Special Counsel.
It has to be held that there was neither service of a show-cause notice on the petitioner nor service of the Assessment Order on the petitioner for the period 2010-11 and therefore, there was a violation of principles of natural justice which caused prejudice to the petitioner.
Period 2011-12 - HELD THAT:- This order mentions that a show-cause notice was sent through e- mail and was also served through registered post - But there is no material produced by the learned Special Counsel to show service of the show-cause notice on the petitioner through registered post - We have already noticed that service of show-cause notice through e-mail is not a valid service as per Rule 64(1)(b) of the TVAT Rules.
Period 2012-13 - HELD THAT:- But there is no evidence of service of the same on the petitioner. The said Assessment Order was dispatched to the petitioner on 26.05.2016 but is also returned with endorsement "addressee left". Therefore, even for 2012-13 period there is no evidence of service of pre-assessment show-cause notice or even the Assessment Order and it has to be held that there was a violation of principles of natural justice which caused prejudice to the petitioner - Assessment order cannot be sustained.
2013-14 period - HELD THAT:- It is already pointed out that service of such show-cause notice through e-mail is not a valid service and admittedly the notice sent through registered post was not served on the petitioner - The postal cover enclosing copy of the Assessment Order was also returned with endorsement "addressee left". So the said Assessment Order was also not served on the petitioner. So it has to be held that there was a violation of principles of natural justice which caused prejudice to the petitioner - assessment order also not sustainable.
Assessment year 2014-15 - HELD THAT:- A reading of the said Assessment Order indicates that a show- cause notice dt.04.10.2017 was issued to the petitioner, which was served by dispatch and that the petitioner filed a letter dt.23.10.2017 and declared certain turnovers. No proof of service of the pre-assessment show cause notice is filed by the 1st respondent and even the alleged letter dt.23.10.2017 has not been produced - No evidence produced by respondents 1 to 3 of proof of service of the said Assessment Order also on the petitioner - Without service of show cause notice and Assessment Order on the petitioner, the respondents cannot seek to enforce any demand raised thereunder as there has been a violation of principles of natural justice which has caused prejudice to the petitioner.
The demand of tax raised in the impugned notice dt.17.02.2020 under Section 29 of the Telangana State VAT Act, 2005 served on the petitioner's banker, the 4th respondent, for the periods 2010-11 to 2014-15 cannot be sustained.
The assessments for the said periods 2010-11 to 2014-15 are all remitted to the 1st respondent for fresh consideration - the 1st respondent is directed to serve pre-assessment show-cause notice for each of the aforesaid periods on the petitioner strictly in accordance with Rule 64(1)(b) of the TVAT Rules, 2005 to the address mentioned in this writ petition affidavit - Petition allowed by way of remand.
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2021 (1) TMI 963
Grant of Bail - offences under Sections 406, 409, 420, 467, 468, 471, 477-A, 201, 120-B of IPC and Section 5 of the Prize Chits Money Circulation Scheme (Banning Act), 1978 and Section 65 of the IT Act - High Court ruled in his favour by holding that the appellant is entitled to bail under Section 167 as a complete charge sheet was not filed within the prescribed period - HELD THAT:- It is clear from the judgment of this Court in Bashir’s case [1977 (10) TMI 125 - SUPREME COURT] that filing of charge sheet by itself cannot be a ground for cancellation of bail. Bail granted under Section 167 Cr.P.C. can be cancelled on other grounds available in law to the prosecution.
Appeal disposed off.
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2021 (1) TMI 962
Deduction u/s 80IB - Reopening of assessment - material evidence being available, the same had been ignored by the Assessing Officer and the same was taken note of by the CIT(Appeals) to allow the deduction claimed under section 80-IB by the assessee - HELD THAT:- We are of the view that the impugned Judgment does not warrant any interference. However, we make it clear that the observations as to the scope of Section 310(2) of the Income Tax Act, made in the impugned Judgment are qua the State of Karnataka, given the particular local act in that case.
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2021 (1) TMI 961
Penalty u/s. 271(1)(b) - AO issued a notice u/s. 142(1) - jurisdiction of the AO by holding that this penalty proceedings has been initiated after the insertion of Section 292BB - HELD THAT:- The assessee has given his reply dated 06.10.2008 that he has not received the earlier notices and given the new address of his Advocate and he further sent a letter dated 10.10.2008 and argued that having not received the earlier notices u/s. 142(1) and there could not be any proceedings pending under the Act before the AO meaning thereby the assessee is having the knowledge of all the notices which has already been served upon the assessee and he was watching the proceedings through his counsel/AR.
Assessee has also requested for various adjournments which was given by the Assessing Officer. Sh. Sachin Kumar, CA/Authorised Representative of the Assessee appeared before the AO and file his Power of Attorney and requested for various adjournments which were granted by the AO, but in spite of the various adjournments given by the AO to assessee, no return of income was filed by the assessee in spite of the various opportunities given by the AO to the Authorised Representative of the assessee and lastly the AR of the assessee shows his inability and therefore, the AO has rightly imposed the penalty in dispute and the Ld. CIT(A) has also rightly dismissed the appeal filed by the Assessee.
Non-cooperation of the assessee before the authorities below, we are of the view that the assessee is not entitled for any leniency in this matter. Therefore, we uphold the impugned order of the Ld. CIT(A) by dismissing the appeal filed by the Assessee.
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2021 (1) TMI 960
Eligible to claim deduction u/s 54 on account of investment made - exemption of reinvestment of capital gain to one residential house property by taking view of phrase "a residential property" in Section 54(1) as only one house property ignoring the explanations and submissions made before him - HELD THAT:- We find that the provisions of Sec. 54 as it stood during AY 2011-12, provides for a deduction against certain Long-Term Capital Gains earned by an individual assessee on account of investment made by way of purchase / construction of ‘a residential house property’ within specified time period. The Finance Act, 2014 substituted the expression ‘a residential house property’ with the words ‘one residential house’ with effect from 01/04/2015. The Finance Act, 2019 has further amended the said provision with effect from 01/04/2020 to provide that in case of capital gain not exceeding ₹ 2 Crores, deduction shall be available even against investment in two residential houses in India.
Interpreting the provisions of Section 54, Hon’ble Madras High Court in recent decision titled as Tilokchand & Sons V/s ITO
[2019 (4) TMI 713 - MADRAS HIGH COURT] held that if the word 'a' as employed under Section 54 prior to its amendment and substitution by the words 'one' with effect from 01/04/2015 could not include plural units of residential houses then there was no need to amend the said provisions by Finance Act No.2 of 2014 which the Legislature specifically made it clear to operate only prospectively from AY 2015-16.
Once it is held that the word 'a' employed can include plural residential houses also within the meaning of Section 54 prior to its amendment, then such interpretation will not change merely because the purchase of new assets in the form of residential houses is at different addresses. So long as the same Assessee purchased one or more residential houses out of the sale consideration for which the capital gain tax liability is in question, in its own name, the same Assessee should be held entitled to the benefit of deduction u/s 54 of the Act, subject to the purchase or construction being within the stipulated time limit in respect of the plural number of residential houses also. It was also held that the amendment made by The Finance Act, 2014 was intended to be specifically applied only prospectively with effect from AY 2015-16 since it took note of the judicial precedents for period prior to 01/04/2015.
In view of the foregoing & accepting the interpretation of word ‘a’ as occurring in Section 54 as made by Hon’ble Madras High Court in Tilokchand & Sons V/s ITO [2019 (4) TMI 713 - MADRAS HIGH COURT] we hold that on the facts and circumstances, the assessee would be eligible to claim deduction u/s 54 on account of investment made in both the flats. We order so. The Ld. AO is directed to re-compute assessee’s income in terms of our above order. AO is directed to re-compute assessee’s income in terms of our above order.
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2021 (1) TMI 959
Addition on account of bonus payable to General Electric International Ltd. - HELD THAT:- Assessee has entered into a long term Comprehensive Service Agreement (CSA) with GE International, a renowned International organization, on 20.06.2009 for the power plant and the said agreement is valid till March 31, 2025. As per the agreement with GE, the party has to ensure 90% availability of the Power Plant for operation and if they ensure availability above 90% then they are eligible for Bonus otherwise they are liable for penalty.
This will accrue on year to year basis and will be finally settled on closure of the contract. During the year under consideration, the contractor has ensured the 90% availability of the power plant to the assessee. Accordingly, the assessee booked an expenditure on account of bonus payable to the contractor.
These facts were not disputed by the revenue at any point of time. There was no uncertainty regarding the incurrence of the expenditure and assessee becomes liable to pay the bonus to the contractor as soon as the contractor fulfills the conditions of annual availability of power plant in terms of the factors given under the said contract.
Assessee has established that a business liability has definitely arisen in the accounting year which is year to year basis. The assessee is following the mercantile system of accounting which is not disputed by the revenue. Therefore, the liability is ascertained liability and is allowable u/s 37(1) of the Act which was not taken cognizance by the Assessing Officer as well as the CIT(A). - Decided in favour of assessee.
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2021 (1) TMI 958
Addition u/s 40A(2)(a) - interest expenditure crystallized as an liability to the assessee during the previous - admission of additional evidence is a loan availed by the assessee from Kotak Mahindra Bank @ 13.5% without security which will have a bearing on a decision on grounds 4 to 8 and the invocation of provisions to section 40A(2)(b) - HELD THAT:- We are of the view that the issue sought to be raised in grounds 4 to 8 which is a disallowance under section 40A(2)(b) of the Actand the issue sought to be raised in grounds 9 to 12 with regard to the question whether interest expenditure of ₹ 1,90,06,180/- crystallized as an liability to the assessee during the previous year relevant to Assessment Year 2011-12 requires fresh consideration by the AO in the light of the additional evidence filed before us by the assessee - we remand the aforesaid two issues to the AO for fresh consideration, after affording opportunity of being heard to the assessee.
Nature of expenditure - compensation paid on termination of the licence agreement - capital expenditure or revenue expenditure - HELD THAT:- We are of the view that the payment in question was owing to commercial expediency and enabled the assessee to avoid payment of future licence fee and thereby reduced the operating cost of the assessee. Such payment cannot be regarded as a capital expenditure. We, therefore, hold that the expenditure in question is revenue in nature and should be allowed as a deduction
Eligibility for MAT credit u/s 115JAA arrived at after considering surcharge and cess - AO has not considered surcharge and cess applicable on such MAT credit and allowed MAT credit which has been set off against the tax liability arrived under normal provisions inclusive of surcharge and cess, which has resulted in an increased tax liability - HELD THAT:- In the case of Consolidated Securities Ltd. v. Asstt. CIT [2018 (7) TMI 1722 - ITAT DELHI]wherein, it was held that the amount of the MAT tax credit, inclusive of surcharge and education cess etc., if any, should be reduced from the amount of tax determined on the total income after adding surcharge and education cess, etc., and only the resultant amount payable will suffer interest under the relevant provisions of the Act.The aforesaid decision is applicable to the facts of the present case on all fours and by respectfully following the same, we set aside the impugned order and remit the matter to the file of the Ld. AO for ascertaining the correct amount of MAT tax credit available to the assessee including of surcharge/cess and then allow tax credit.
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2021 (1) TMI 957
Validity of reopening of assessment u/s 147 - whether new information or facts for issuance of notice of re-assessment should be seen? - whether the reopening of the assessment amounts to “review” or “change of opinion” should be seen at a next stage? - HELD THAT:- In the instant case in the light of the decision of the Hon’ble Delhi High Court in the case of Madhukar Khosla [2014 (8) TMI 568 - DELHI HIGH COURT] it is evident that the Assessing Officer has merely perused the records available with him and formed reason to believe that income had Assessment. There is no mention of any ‘trigger’ as how the Assessing Officer came to know this under assessment. If without any information or any new fact came into his possession, he simply revisit or peruse the completed assessment, it definitely amounts to review of the assessment by the Assessing Officer, which is not permitted in law.
Even in the instant case, no addition has been made on this issue either in the earlier or subsequent regular assessments. As the reassessment in the instant case fails at this stage of examining “reasons to believe”, we are not required to examine the stage of “change of opinion”.
In the instant case before us, the information regarding dues from Iraqi Government was available at the time of regular assessment u/s 143(3) in the form of notes to account of annual report, which is evident from the reasons recorded. - Decided in favour of assessee.
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2021 (1) TMI 956
Revision u/s 263 - loss on OTS is nothing but the claim of deduction of bad debt during the previous year and same is allowable as a deduction u/s.36(1)(vii) - HELD THAT:- The provisions of section 36(1)(vii) provides that in case of the banks, who are eligible deduction u/s.36(1)(viia), deduction on account of bad debts relating to rural advance/loans shall be first set off against credit balance in the provision for bad and doubtful debts account and deduction will be allowed to the extent of debts relating to rural debts which exceeds credit balance available in the said provision created under section 36(1)(vii).
Present case are that the assessee had a credit balance in its balance sheet as on 31.3.2014 as “provision for bad and doubtful account”. Thus, as per proviso to section 36(1)(vii) of the Act, the amount of loss on TOS, which was in the nature of rural debts which was extended as benefit to the weaver in the rural areas, which should have been first set off against credit balance available in the balance sheet, which was more than the actual rural bad debts was not available u/s.36(1)(vii).
The rider created by the legislature by way of insertion of proviso to section 36(1)(vii) of the Act raises a clear-cut bar on the allowability of claim of the assessee made before the AO during the original assessment proceedings under the head “loss on OTS account” in a situation, when the amount standing in the balance sheet as “provision for bad & doubtful debts” is higher than the amount of bad debts shown as “loss on OTS a/c.”.
We are inclined to hold that since the AO has ignored the relevant provisions of the Act before allowing the claim of the assessee of loss on OTS account and without making proper and adequate enquiry and the view taken thereafter was also not sustainable, therefore, the impugned order passed by ld Pr. CIT revising the order u/s.263 is fully justified and correct alleging the impugned assessment order as erroneous and prejudicial to the interest of the revenue and there is no valid reason to interfere with the same. - Appeal of the assessee is dismissed.
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2021 (1) TMI 955
Disallowance of the expenditure claimed on account of interest paid on borrowed funds - HELD THAT:- Issue decided in favour of assessee as relying on assessee's own case. [2016 (8) TMI 1522 - ITAT JAIPUR].
Disallowance of depreciation charged for the year under appeal - HELD THAT:- There is no dispute that there are assets which were acquired in the earlier years and forms part of the opening block of assets and there are fresh assets in the nature of air conditioner and open well (pump) to the tune of ₹ 62,455 which have been acquired by the assessee during the year under consideration and used for the purposes of business. Therefore, in absence of any adverse finding by the AO, the disallowance of claim of depreciation is hereby set-aside and the ground of appeal so taken by the assessee is allowed.
Disallowance of expenditure in nature of exceptional items claimed u/s 36(1)(vii) - HELD THAT:- It is the case of the assessee that it had cancelled the allotment of certain flats in its commercial complex as the allottees/debtors refused to pay the outstanding amount towards the interest, complex maintenance charges and electric installation charges and the same were reversed and written off in respective ledger accounts of the parties and claimed in its profit/loss account for the previous year relevant to impugned assessment year.
As further submitted that such interest, complex maintenance charges and electric installation charges were duly offered to tax in previous assessment years and the return for those years have been assessed u/s 143(3) wherein such charges have been brought to tax and accepted by the Assessing officer. We find force in the contentions so advanced on behalf of the assessee and agree with the same.
It is a settled legal position as laid down by the Hon’ble Supreme Court in case of TRF Ltd [2010 (2) TMI 211 - SUPREME COURT] and also accepted by the CBDT as communicated vide circular no. 12/2016 dated 30.05.2016 that claim for any debt or part thereof in any previous year, shall be admissible under section 36(1)(vii) of the Act, if it is written off as irrecoverable in the books of accounts of the assessee for that previous year and it fulfills the conditions stipulated in sub section (2) of section 36 i.e, such debt or part thereof has been taken into account in computing the income of the assessee of the previous year in which the amount of such debt or part thereof is written off or of an earlier previous year.
All the AO has to examine is whether the amount of aforesaid charges so recoverable have been actually reversed in respective ledger accounts of individual allottees/debtors and written off in the books of accounts of the assessee during the previous year relevant to impugned assessment year or not. AO has to examine whether such charges which have not been claimed as irrecoverable and written off were forming part of income and offered to tax in the previous assessment years or not. Given that these details have been claimed to be on record and in absence of findings of the AO, we are constrained to remand the matter to the file of the AO. Therefore, for the limited purposes of verifying these two aspects, the matter is set-aside to the file of the AO and where the same is found to be in order, the AO is directed to allow the necessary relief to the assessee. In the result, the ground of appeal is partly allowed for statistical purposes.
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2021 (1) TMI 954
Disallowance of Printing & Stationery expenses - Whether the payments (expenses) disallowed by AO were such that they violate the IRDA regulations and are therefore hit by the Explanation to Section 37(1) ? - Whether the expenses disallowed were indeed business expenditure with reference to the details of expenses and the benefits derived from them? - Whether the expenses disallowed, were also claimed by the sister concerns. And if the payments were in the nature of reimbursements, then whether the reimbursement and the related expenses were duly accounted in the books of the sister concerns.
HELD THAT:- Since the assessee has not furnished satisfactory explanations before the AO with regard to the manner of utilisation of printed materials, in the interests of natural justice, we are of the view that this issue may be restored to the file of AO so that the assessee may furnish explanations to the satisfaction of the AO.
Accordingly we set aside the order passed by Ld CIT(A) on this issue in AY 2008-09, 2010-11 and 2012-13 and restore the same to the file of AO. We direct the assessee to furnish the details of manner of utilisation of printing and stationery expenses for the purposes of business of the assessee. After hearing the assessee, the AO may take appropriate decision in accordance with law.
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2021 (1) TMI 953
Addition u/s 68 - Bogus LTCG on the sale of equity shares - HELD THAT:- The sale of such shares is corroborated by contract notes issued by SEBI registered broker M/s Edelweiss Financial Advisors Ltd., a copy of contract note is placed - These contract notes show the order time, trade number and trade time of the shares sold and also show that Security Transaction Tax and Service Tax was also paid by the assessee. See SHRI ACHAL GUPTA, SHRI UDIT GUPTA, SHRI RAKESH NARAIN GUPTA VERSUS INCOME TAX OFFICER-3 (1) , KANPUR. [2021 (1) TMI 896 - ITAT LUCKNOW]
The sale proceeds of such shares was credited to the bank account of the assessee. A copy of bank account where the proceeds are reflected is placed. The copy of DEMAT statement of assessee reflects various other shares also which the assessee was holding. All these documentary evidences, which were before the Assessing Officer, show that assessee did earn Long Term Capital Gain on the sale of equity shares of CCL International Ltd. - Decided in favour of assessee.
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2021 (1) TMI 952
Addition u/s 68 - main grievance of the assessee is that when the AO asked the assessee to produce the cash flow statement, though it filed the cash flow statement, there was a mistake which crept into the cash flow statement, which led to the misunderstanding and led to the addition - HELD THAT:- According to the assessee, though the accounts were maintained correctly in tally system, however due to wrong classification of the entries made by the accountant while entering the same certain mix-up happened like sale in cash were wrongly classified under the credit sales etc. Realizing this mistake which crept in to the cash flow statement filed at the assessment stage, the assessee at the first appellate proceedings has filed reconciliation of the cash flow statement which has been reproduced by the Ld. CIT(A) -
Rather than examining the correctness of reconciliation statement filed by the assessee, the Ld. CIT(A) has erred in confirming the action of AO and that too without even calling for a remand report from the AO. From the records, it is evident that the assessee's aforesaid submission and reconciliation is before the authorities below - We set aside the order of Ld. CIT(A) and remand the matter back to the file of AO. with a direction to verify the reconciliation statement/summary and submissions made by the assessee in this respect and in the event it is found to be correct after due verification, then no addition on this issue is warranted - Appeal of the assessee is allowed for statistical purposes.
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2021 (1) TMI 951
Deemed unexplained expenditure u/s 69C - admission of additional evidence - HELD THAT:- In the appeal before the Tribunal, the assessee has produced on record certain documents by its application dated 3rd May, 2011 and those documents inter alia includes reference to certain cheques which explains the source of the amount and the source of expenditure. Along with the application, even agreement dated 30th March, 2004 was produced.
In the case of M/s. Braganza Construction Pvt. Ltd [2019 (12) TMI 382 - BOMBAY HIGH COURT] has observed that the Tribunal in the first round of appeal before it has not considered the application by the assessee for admitting those evidences and also there is no discussion whether such materials/evidences could be admitted as evidence at the appellate stage or not. Taking the proviso of Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963, the Hon'ble High Court was satisfied that substantial question of law was involved in this matter and hence, the matter was admitted.
As both the parties agreed that in conformity with the procedure of law laid down in the Act for admission of additional evidences, the matter may be restored to the file of the Assessing Officer and the assessee may be directed to produce all the necessary documents/evidences before him in order to represent his case on merits.
Having heard the parties herein, we are of the considered view that in the due process of natural justice, the additional evidences placed on record before the Tribunal should have to be always verified by the Sub-ordinate Authorities, more particularly, by the Assessing Officer and his submissions are also to be brought on record while admission of the same - Appeal of the Revenue is allowed for statistical purposes.
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2021 (1) TMI 950
Rejection of books of accounts - NP determination - adoption of N.P. at 8% by the Assessing Officer - HELD THAT:- CIT(A) has reproduced the submissions of the assessee in Para 3 of the impugned however, the contentions as raised by the assessee in the written submission regarding the rejection of books of account, adoption of N.P. at 8% by the AO, without considering the past history of the assessee own case as well as comparable cases and the additions made on account of loan and advances and cash in hand have not been properly analyzed and discussed by the ld. CIT(A).
Accordingly, in the facts and circumstances of the case, the impugned order of ld. CIT(A) is set aside and the matter is remanded to the record of the ld. CIT(A) for deciding the same afresh after giving one more opportunity of hearing to the assessee as well as to produce the books of account and other supporting evidence. Appeal of the assessee is allowed for statistical purposes.
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2021 (1) TMI 949
Reopening of assessment u/s 147 - borrowed satisfaction - non independent application of mind by AO - argued approval granted u/s. 151 for issuance of notice u/s. 148 of the Act by the JCIT, Range-24, New Delhi was a mechanical approval, hence, initiation of proceedings u/s. 147 of the Act on this ground is also invalid - accommodation entries received - HELD THAT:- Reasons to believe recorded by the AO are mechanically based on borrowed satisfaction of Investigation Wing even does not disclose the nature of alleged accommodation entries whether loan, share application, share capital etc.
The entire reasons to believe recorded by the AO is reproduction of conclusions drawn by the Investigation Wing. It is settled law that reopening of assessment based on the opinion and information wherein the AO has not investigated/enquired the matter independently, then the Department was not entitled to reopen the assessment. It is noted that AO has not investigated the matter himself and has not made any enquiry to corroborate the Information of the Investigation Wing on which basis the case of the assessee has been reopened, meaning thereby the AO has not applied his mind and only issued notice u/s. 148 of the Act. Thus, the AO has acted mechanically and without any independent application of mind. It is further noted that initiation of proceedings is based on non application of mind much less independent application of mind but is a case of borrowed satisfaction. Nothing is independently examined or considered by the AO which can demonstrate application of mind by him.
Even otherwise, we find that Ld. Joint CIT, Range-24, New Delhi has granted the approval in a mechanical manner by mentioning only "Yes, I am satisfied that this is a fit case for issue of notice u/s. 148 of the I.T. Act." which is not valid for initiating the reassessment proceedings. Thereafter, the AO has mechanically issued notice u/s. 148 - Even otherwise, we find that Ld. Joint CIT, Range-24, New Delhi has granted the approval in a mechanical manner by mentioning only "Yes, I am satisfied that this is a fit case for issue of notice u/s. 148 of the I.T. Act." which is not valid for initiating the reassessment proceedings. Thereafter, the AO has mechanically issued notice u/s. 148 - Decided in favour of assessee.
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2021 (1) TMI 948
Income from house property - ALV determination - AO estimated rental income @8% of value of the property - assessee has offered the deemed rental value on the basis of Municipal Valuation and property has not been let out, at all, during the year - HELD THAT:- As per the provisions of Sec. 23(1)(a), the annual value of such property shall be deemed to the sum for which the property might reasonably be expected to be let out from year to year
In the case of CIT V/s. Tip Top Typography [2014 (8) TMI 356 - BOMBAY HIGH COURT] concurred with following principles laid down by full bench of Hon'ble Delhi High Court in the case of CIT V/s. Moni Kumar Subba [2014 (8) TMI 356 - BOMBAY HIGH COURT] and held Annual Letting Value (ALV) of the property could not exceed Standard Rent as per the Rent Control Legislation as applicable to the property and the Standard Rent is the upper limit. ALV of the property has to be determined at sum at which property might reasonably be let out between willing parties.
Methodology as adopted by Ld. AO to estimate the income @8% of value of the property is not in accordance with the above principles laid down by Hon'ble Court and therefore, the same could not be sustained. Nothing has been brought on record by Ld. AO that the aforesaid estimation was the approximate sum between willing parties. The assessee offered the rent on the basis of Municipal Valuation which is in accordance with the principle laid down by Hon'ble Court as above. Therefore, the estimation thus made and confirmed by lower authorities could not be sustained. We direct Ld. AO to adopt the ALV of the property at ₹ 8,400/-, being deemed rental value based on municipal valuation of the property - Decided in favour of assessee.
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