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Showing 461 to 480 of 1346 Records
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2021 (1) TMI 887
Addition u/s 69 - unexplained investment - contention of the ld. AR is that the assessee’s property situated in Ranasinghpet, BVK Iyengar Road, Bangalore was acquired by the Special Land Acquisition Officer [SLAO] for Bengaluru Metro and the assessee received a sum as a compensation from the authorities and assessee disclosed this amount as a sale consideration while declaring long term capital gain from the said acquisition of the property and offered the same for taxation - HELD THAT:- The source of payment of ₹ 34.50 lakhs is out of compensation received towards acquisition of property by BMRCL and this was duly disclosed by the assessee. These receipts and payments were duly reflected in the ICICI Bank’s Current A/c No.6251050390981, OTC Road, Bangalore – 560 002. As such, it cannot be considered as unexplained investment by the assessee. Accordingly, we delete the addition made by the AO and sustained by the CIT(Appeals) u/s. 69 of the Act. This ground of the assessee is allowed.
Addition of capital gain ignoring the fact that the compensation was received by Metro Railway authorities - When the name of BMRCL was mentioned in Form 26AS showing the details of TDS on payment for acquisition of said property, it cannot be doubted that BMRCL has not acquired the said property. In our opinion, the compensation received by the assessee from BMRCL is exempt from tax in view of CBDT Circular No.36/2016 dated 25.10.2016. Accordingly, the compensation received by the assessee on acquisition of the property by BMRCL is not liable for capital gain. This ground of the assessee is allowed.
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2021 (1) TMI 886
Exemption u/s 11 - Non filing of Form No. 10B - HELD THAT:- The assessee has filed revised audit report in Form NO. 10B as well as the Resolution dated 22/5/2017 during the assessment proceedings itself. Merely filing Form No. 10 cannot be held as afterthought.
CIT(A) though saying that the assessee is entitled for exemption u/s 11 with all the consequential benefits, thereafter cannot restricted the claim of the assessee which the assessee is entitled u/s 11 on the ground that filing of Form No. 10 was an afterthought. Therefore, we direct the Assessing Officer to take cognizance of the revised audit report in Form No. 10B as well as the Resolution dated 22/05/2017 and allow the consequential benefits to the assessee as enshrined in Section 11 of the Act. The appeal of the assessee is partly allowed.
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2021 (1) TMI 885
Validity of the notice under Section 153A - Proof of incriminating material found in search - HELD THAT:- As in CIT Vs. Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT] has held that completed assessments can be interfered with by the Assessing Officer, while making the assessment under Section 153A of the Act, only on the basis of some incriminating material un-earthed during the course of search or recovery of documents or undisclosed income or property discovered in the course of search, which were not produced or not already disclosed or made known in the course of original assessment.
Addition of advertisement expenses - There is only reference to some post-search investigation and assessee was asked to furnish the details of advertisement expenses, which was furnished. However, the address and PAN of the parties were not provided and, therefore, these expenses were held to be bogus and disallowed by the ld. Assessing Officer. We do not find any reference to any material, which is incriminating in nature found during the course of search, which has been used by the ld. AO for making this disallowance.
Disallowance under Section 14A - As noted that assessee has made an investment of ₹ 119 crores during the year and, therefore, he made the disallowance under that section. In that case, also we do not find any reference to any incriminating material found during the course of search. In view of this, we find that both the disallowances in appeal before us are made by the ld. Assessing Officer without any incriminating material found during the course of search.DR could not show that any of these additions/disallowances are made on the basis of incriminating material found during the course of search. - Decided in favour of assessee.
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2021 (1) TMI 884
Penalty u/s 271(1)(c) - Addition towards interest paid on TDS and sales tax as well as addition relating to rental income treated as income from other sources - HELD THAT:- It is an undisputed fact that the assessee company furnished rent agreement during the assessment proceedings and TDS was deducted by the tenant u/s 194I - The assessee also disclosed the fact that the land belong to third party and the agreement with Dr. Sarita Kalra and after construction, the assessee company can give the constructed hospital to third party. The assessee company also disclosed the investment in construction in hospital as non current investment in balance-sheet. Thus, the assessee fully and truly disclosed the return of income and, therefore, the charge of furnishing inaccurate particulars of income by the Assessing Officer is not valid.
The reliance of decision in case of CIT Vs. Amit Jain [2013 (1) TMI 340 - DELHI HIGH COURT] is very apt in the present case. Therefore, the CIT(A) was not right in dismissing the contentions of the assessee and confirming the partial penalty. Thus, the appeal of the assessee is allowed.
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2021 (1) TMI 883
Reopening of assessment - Addition on misuse of client code - statemet of third party relied upon - Whether there is document or material which could established that the client code modification was made which allegedly resulted in shifting of profit.? - HELD THAT:- Where the assessee so desires, an opportunity to cross examine the persons whose statements are recorded be provided to the assessee. However, in the instant case, we find that the AO has not shared such information/statements and an opportunity to cross-examine these persons was also not provided and therefore, the principle of natural justice is clearly violated in the instant case which renders the order so passed by the AO as invalid in the eyes of law.
Even during the appellate proceedings, the assessee was not made available any such statements and even the right of cross examination was denied by the ld CIT(A) who exercises the co-terminus powers as that of the AO. Thus, in view of the decision in case of CCE vs. Andaman Timber Industries [2015 (10) TMI 442 - SUPREME COURT] the assessment based on statement of third party without giving an opportunity to the assessee is not sustainable in law.
The statement of a third party cannot be sole basis of the assessment without given an opportunity of cross examination and consequently it is a serious flaw which renders the order a nullity. In light of the same, we don’t deem necessary to examine other contentions raised by the ld AR. The order so passed by the AO is hereby set-aside. The appeal of the assessee is thus allowed.
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2021 (1) TMI 882
Reopening of assessment u/s 147 - Bogus purchases - HELD THAT:- Issue decided in favour of assessee as relying on case [2015 (12) TMI 1538 - ITAT DELHI] herein the Tribunal has quashed the reassessment proceedings initiated by the Assessing Officer and has also deleted the addition made by the Assessing Officer and sustained by Ld.CIT(A) on merit - Decided in favour of assessee.
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2021 (1) TMI 881
TDS u/s 194H - discount extended to its pre-paid distributors on distribution of pre-paid services - as per CIT- A relationship between the Appellant and the pre-paid distributors is not that of ‘Principal to Principal’ and the discount allowed to them is in nature of commission liable for tax deduction at source as envisaged under section 194H - HELD THAT:- CIT (A)/TDS Officer have erred in not appreciating that the discount allowed by the Appellant is not income in the hands of its distributors and that income, if any, arises only when the pre-paid services are further distributed by the distributors.
On the facts and circumstances of the case and in law, the learned CIT (A)/TDS Officer have erred in not appreciating the fact that there is no flow of monies from the Appellant to the distributor of pre-paid services but rather from the distributor to the Appellant, and hence, the provisions of section 194H of the Act fail to apply.
On the facts and circumstances of the case and in law, the learned CIT (A)/TDS Officer has erred in placing reliance on the decision of Delhi High Court in the case of Idea Cellular [2010 (2) TMI 24 - DELHI HIGH COURT] and Kolkata Tribunal in the case of Bharti Cellular Limited [2006 (4) TMI 50 - ITAT, KOLKATA] without appreciating that the facts in those cases were different from the facts of the Appellant’s case.
TDS demand raised under section 201(1) - HELD THAT:- The order of the learned TDS Officer, as upheld by learned CIT(A), is bad in law in so far as it seeks to recover tax demand under section 201 of the Act in contradiction to the settled principle that the payer cannot be held liable for payment of the tax demand in cases involving non-deduction of tax at source and only interest liability under section 201(1A) of the Act, if any, can be levied in such cases.
TDS u/s 194J - non-deduction of tax at source on domestic roaming charges paid to other telecom operators - HELD THAT:- CIT(A)/TDS Officer have erred in not appreciating the fact that roaming services are standard automated services requiring no human intervention which is sine qua non for a service to qualify as a technical service for the purposes of section 194J of the Act.
CIT(A) have erred in not appreciating that even as per the statement of technical experts, the carriage of calls is an automatic activity and human intervention, if any, is required only at the stage of inter-connect set-up, capacity enhancement, monitoring, maintenance, fault identification, repair, etc.
CIT(A) have erred in ignoring the statement of technical experts recorded by the income-tax authorities in case of Vodafone Cellular Limited (now merged with Appellant itself), in the context of roaming services, wherein it has been clearly observed that roaming services are automated services requiring no human intervention.
CIT(A)/TDS Officer has erred in not holding that characterization of a payment must be done having regard to the dominant purpose/intention of the payment. CIT(A) has erred in not following the principles laid down in judicial precedents cited by the Appellant and also ignoring the binding Apex Court judgment in the case of CIT vs. Delhi Transco Limited [2016 (4) TMI 1005 - SC ORDER] and CIT vs. Kotak Securities Limited [2016 (3) TMI 1026 - SUPREME COURT]
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2021 (1) TMI 880
Disallowance u/s 14A r.w.r 8D - CIT(A) restricting the disallowance u/s 14A to the extent of exempt income earned by the assessee which was computed as per Rule 8D of I.T Rules 1962 on the basis of CBDT Circular No.5/2014 dated 11.02.2014 which clearly states that it is not necessary to earn exempt income in a particular year in which the disallowance is made - HELD THAT:- We noted that the CIT(A) has restricted the disallowance to the extent of exempt income at ₹ 3,000/- only by following the decision of Hon’ble Supreme Court in the case of Maxopp Investment Ltd [2018 (3) TMI 805 - SUPREME COURT] and hence we find no infirmity in the order of CIT(A). Hence, the order of CIT(A) is confirmed and this issue of revenue is dismissed
Adjustment made to the book profit under section 115JB on account of expenses relatable to exempt income claimed by assessee under section 14A - HELD THAT:- As relying on case of Vireet Investment Pvt. Ltd [2017 (6) TMI 1124 - ITAT DELHI] wherein it is held that disallowance u/s. 14A is not to be considered for computing book profit u/s. 115JB of the Act. Therefore, this ground of appeal of the assessee is allowed.
Disallowance of additional depreciation claimed by assessee u/s 32(1)(iia) - Asset put to use - HELD THAT:- We find that as per second proviso to Sec. 32(1) the entitlement of an assessee towards claim of depreciation in a case where a new machinery or plant acquired during the previous year is put to use for a period of less than 180 days in that previous year shall be restricted to 50% for the percentage prescribed for the said asset under clause (iia) of Sec. 32(1) of the I.T. Act. However, there is nothing available in the statute from where it can be gathered that the assessee would be disentitled for claiming the balance 50% of the additional depreciation i.e.10% in the succeeding year - there is no restriction made avai1able on the statute as per which the assessee who had put to use the new machinery for a period of less than 180 days during a year, would be divested of its entitlement to claim the balance 10% of the additional depreciation in the succeeding assessment year. Our aforesaid views is fortified by the judgment of the Hon'ble High Court of Hon’ble Madras High Court in the case of CIT, Madurai, Vs. T.P. Textiles (P) Ltd.[2017 (3) TMI 739 - MADRAS HIGH COURT] - no infirmity arises from the order of the CIT(A) who had rightly deleted the disallowance of additional depreciation.
Disallowance of expenditure on account of sales and services under section 37(1) - HELD THAT:- We noted that the CIT(A) has already restored the matter back to the file of Assessing Officer for fresh consideration. Hence, we find no infirmity in the order of CIT(A). But we direct the Assessing Officer to verify the nature of expenditure first and then decide as per law whether the expenses are allowable under section 37(1) or not? Hence, this issue of revenue’s appeal has been set-aside.
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2021 (1) TMI 879
Rectification of mistake - Penalty levied u/s.271(1)(c) - Defective notice - error which had occurred in the order of the Tribunal in respect of the action of the Tribunal deleting the penalty levied u/s.271(1)(c) of the Act on the ground that the penalty show-cause notice had not struck off the irrelevant portion and the Assessing Officer had not specifically mentioned the offence committed by the assessee as to whether it had concealed the particulars of income or had furnished inaccurate particulars of income - HELD THAT:- Show-cause notice issued u/s.274 r.w.s. 271(1)(c) of the Act clearly stipulates that the Assessing Officer is supposed to strike off the irrelevant portion and specify Whether the assessee has concealed the particulars of income or Whether the assessee has furnished inaccurate particulars of income or Whether the assessee has concealed particulars of income and furnished inaccurate particulars of income.
Merely because the show-cause notice had mentioned that assessee had concealed its particulars in bold letters that alone would not suffice the requirements. The assessee cannot be expected to know or understand the mind of the Assessing Officer that the Assessing Officer is expecting reply from the assessee only on the aspect of assessee concealing particulars of income.
Assessee on the safe side had given his entire submissions dated 31/08/2013 defending that it had neither concealed particulars of income nor furnished inaccurate particulars of income. This does not tantamount to mere participation in the penalty proceedings by accepting to the mistake committed by the Assessing Officer and the said mistake does not get cured u/s 292B of the Act. Miscellaneous Application of the Revenue is dismissed.
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2021 (1) TMI 878
Disallowance of the carry forward of loss pertaining to the demerged unit - restricting the losses at 84.5% on account of assets being retained by assessee i.e. proportionate allowance of losses by invoking the provisions of section 72A(4)(b) - HELD THAT:- The entire loss set off of by assessee pertains only to the Sinner Unit of EEPL that was demerged with the assessee. The effective date of demerger is 01.4.2013 by the order of Hon’ble High Court dated 01.08.2014. Accordingly, the expenses continued to be incurred by EEPL towards Sinner Unit after 31.03.2013 - since these expenses were not to be taken over by assessee, the same were charged to the continuing company and accordingly the Investment Division of EEPL incurred these expenses. Since these expenses do not pertain to the Investment Division in the computation of income of EEPL, the same has not been claimed as deduction. This fact is explained by assessee’s counsel by drawing our attention to the computation of income filed in assessee’s Paper Book.
Computation of income of EEPL for AY 2013- 14 states that it had earned taxable income of ₹ 14,18,473/- and therefore, the loss finally available for set off in the hands of the assessee is ₹ 1,81,26,485/-. Even year-wise details of losses including the final loss available for set of in the hands of assessee after reducing the income for AY 2013-14 is available in assessee’s Paper Book in the shape of computation of income. Accordingly, we are of the view that the losses finally available to assessee of ₹ 1,81,26,485/- pertains only to Sinner Unit and not for EEPL Investment Division. Hence, we are of the view that the assessee is entitled for carry forward of the entire loss and we allowed the same. - Decided in favour of assessee.
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2021 (1) TMI 877
Revision u/s 263 - wrong working of WIP - AO had in fact collected information on the issue of work-in-progress etc. and had just placed them in the file but has not applied his mind to the information so collected - HELD THAT:- The assessee in this case has been following percentage completion method of accounting for its construction contracts. The assessee is engaged in the business of construction engineering, encompassing mechanical and electrical installation, instrumentation and civil, architectural and/or structural works.
The assessee has given detailed replies during the course of assessment proceedings to the queries of the ld. AO. Before the Pr. CIT the assessee had made elaborate submissions
CIT has not pointed out any specific error in the order of the AO. He states that there was inadequate enquiry. It is well settled that inadequate enquiry is no ground to set aside an assessment order as erroneous and prejudicial to the interest of the Revenue. The Pr. CIT had a suspicion that income liable to tax has escaped assessment as in his view the AO should have conducted more enquiries. What is the nature of further enquiries or what the AO missed to examine and what would have been the income that has escaped is not made clear by the Pr. CIT.
The assessee is following percentage completion method of accounting. In this method, at best the dispute can be the year of taxation of a particular receipt as income but not the total escapement of income. The Pr. CIT is wrong in his understanding of accounting of opening work-in-progress and closing work-in-progress. The assessee maintains project-wise accounts. The assessee is determining the turnover to be disclosed in a year by following AS-7. The revenues are recognised proportionately. Order-wise, Project-wise, Year-wise details are given in a scientific manner.
Pr. CIT has not pointed out as to where the error has occurred. He had a suspicion that income is not accounted for correctly. Mere suspicion is no ground for exercise of power u/s. 263 of the Act. No verification or examination of the audited accounts is done by the Pr. CIT. As he has suspicion, he simply set aside the matter to the file of the AO for fresh adjudication. This is not permitted in law.
CIT should have conducted enquiries and should have verified the accounts and other documents and details himself and pointed out specifically as to where an error has occurred which is prejudicial to the interest of the Revenue and which in his opinion would result in the assessee being not assessed at the correct amount of income and only after such enquiries, examination and verification he can come to a conclusion that there is an error insofar as it is prejudicial to the interest of the Revenue. The Pr. CIT is not authorized to simply set aside an assessment order by making certain general observations based on suspicion and wrong working out of the WIP - Decided in favour of assessee.
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2021 (1) TMI 876
Exemption u/s 11 - cancelling the registration of the assessee Trust U/s 12A - PCIT jurisdiction in cancelling registration - transfer of the cases u/s 127 sent to the assessee for the purpose of Co-ordinate assessment - non-filing of I.T. return and audit report or on account of misdeeds of ex-president - HELD THAT:- Sec. 127 of the Act empower to transfer cases among Assessing Officers but not to Commissioners of Income Tax as CIT is not an Assessing Officer. In our view, to pass an order u/s 12A for registration or cancellation is not within the jurisdiction or power of an Assessing Officer. Hence registration u/s. 12A can be withdrawn only by the ‘Prescribed Authority’ who has been empowered to grant the same and by the Notification dated 22.10.2014 the ld.CIT(Exmp.) has empowered for the same, hence the Pr.CIT (Central) cannot cancelled the same.
In assessee’s case, the case u/s 127 was transferred to the Central Circle for limited purpose of Co-Ordinate assessment admittedly which do not mean that the Section 12A proceeding has been transferred to the Pr. CIT(Central) Automatically, when both the proceedings are separately or independent and also has to be done or conducted by the different rank Authorities. More particularly when for the purpose of Exemption cases or 12A registration a Separate Commissioner of Income Tax has been Authorized for whole of Rajasthan by the CBDT by its Notification dated 22.10.2014. PCIT had no jurisdiction to pass order U/s 12AA(3) & 12AA(4) of the Act and the same is not sustainable in the eyes of law and accordingly stands quashed
In the instant case, the ld. Assessing Officer & ld. Pr. Commissioner of Income-tax without any independent verification have alleged misappropriation of funds. The assessment of the assessee appellant trust and its ex-president Shri Tejendra Pal Singh was done by the same Assessing Officer and in the assessment orders passed u/s. 153A of the Act dated 20-21.12.2018 for the A.Y. 2014- 2015 to 2016-2017 in the case of Shri Tejendra Pal Singh, no addition has been proposed for so called misappropriated income. Thus, without carrying out any independent verification and on account of mere suspicion, without any proof the said allegation has been levelled against the assessee appellant Trust.
Assessee had file the ROI and Audit report in response to the notice u/s 148 of the Act also much prior to issuance of show cause notice for cancellation and therefore, at the time of issuance of Show cause notice u/s 12AA(3)/12AA(4) no return or Audit report were pending - Assessee is trust registered u/s 12A and not a businessman and not doing the business. In our view, Tax Audit u/s 44AB is not applicable in this case. Hence the allegation of the ld. Pr. CIT is wrong and invalid. The Audit of the trust comes u/s 12A(b) in form 10B.
Because of the misdeeds of ex-president, the whole trust cannot be allowed to suffer, which is otherwise against the principles of natural justice. Further nowhere it has been proved that the Act of the President was in the knowledge of the assessee and the other members were involved knowingly and were part of that fraud. And if any fraud has been done behind the assessee, then the same cannot be treated as done by the assessee. Therefore, keeping in view our above discussion and observation, we are of the view that registration of the assessee could not be cancelled because of non-filing of I.T. return and audit report or on account of misdeeds of ex-president.
Pr.CIT (Central) cancelled such approval from A. Y. 2014-15, though the assessee has already assessed from A.Y. 2014-15 under section 143(3)/148 of the Act. It is also settled legal position of law that Registration cannot be cancelled from retrospective effects.
CIT(C) has found or made allegation or objection of diversion or mis appropriations of funds and not filling the Audit report and ITR, if any only in A.Y. 2014-15 to 2016-17 & not in other years either prior years or later years, then the cancellation of Registration u/s 12A cannot be made for other years. Even otherwise we are also of the view that no retrospective cancellation could be made as neither in the Sec. 12AA(3) nor in Sec. 12AA(4) it has been provided or is seen to have explicitly provided to have a retrospective character or intend. Therefore, without a specific mention of the amended provisions to operate retrospectively no cancellation for the past years could be ordered. cancellation of registration with retrospective effect is invalid in the present case. See M/S. AURO LAB VERSUS INCOME TAX OFFICER [2019 (1) TMI 1478 - MADRAS HIGH COURT]
CIT(C) has stated that the activities of the assessee associations are not genuine and are not being carried out in accordance with the stated objects of the assessee. However, the allegation of the ld. Pr. CIT(C) are incorrect. Because there was no change in the activities of the assessee since starting to till date. The ld. PCIT(C) has failed to state that which activities have been done by the assessee in these years which were apart to earlier years and what activities are not according to the aims and objects of the Associations or have not been followed or done. The assessee has not violated any provision of Sec. 12AA(3)/12AA(4) of the Act. Therefore, in view of the above facts and circumstances, case laws discussed and the material placed on record, we found merit in the contention of the ld. AR. The ld. CIT-DR has not filed any contrary material against the assessee Trust, therefore, we set aside the order of the ld. Pr.CIT(Central) and allow the grounds taken by the assessee.
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2021 (1) TMI 875
Estimation of Income - bogus purchases - CIT(A) sustaining the disallowance made @12.5% - HELD THAT:- Since the revenue had not doubted the corresponding consumption / sales made out of such disputed purchases in the peculiar facts of the instant case, it would be just and reasonable to estimate only the profit element embedded in such disputed purchases and bring to tax the same.
In the case of Simit P Sheth [2013 (10) TMI 1028 - GUJARAT HIGH COURT] had estimated the profit percentage to be at 12.5%. We also find that in series of decisions rendered by this Tribunal the very same profit percentage of 12.5% has been considered for the similar line of industry in which assessee is engaged in. Hence, we hold that the ld. CIT(A) had rightly estimated the profit percentage at 12.5% on value of alleged disputed purchases - Decided against assessee.
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2021 (1) TMI 874
Disallowance u/s 40A(2)(b) - diversion of income by the appellant to CCCPL and from CCCPL to CCCPL’s directors - HELD THAT:- As the documents placed by the Ld. AR reveals the receipt of professional fees of CCCPL to the doctors for carrying out research work and non-research work to particularly being part of the annual accounts which was somehow missed out by the Hon’ble Bench while deciding the issue which is an error apparent on the face of the records and thus further consideration on this issue is required. It was obviously not open to disregard a Co-ordinate Bench decision said to be directly on the issue – particularly when Bench’s attention was specifically drawn to the same. We, thus, find substance in the argument advance by the Ld. Senior Counsel appearing for the assessee and the miscellaneous application is, therefore, allowed to that extent. Ground therefore, have to be adjudicated afresh.
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2021 (1) TMI 873
Bogus purchases - Determination of GP rate at 56.6% - assessee argued when the AO accepted the corresponding sales of the bogus purchases, it is not practicable not to believe the purchases in the event of which the situation gives rise to abnormal GP and NP - HELD THAT:- Record speaks that it was made basing on the report of the Income Tax Inspector who reported that when he contacted one Sh. Rakesh Kumar Aggarwal one of the sellers to the assessee in the showroom, it was reported that the assessee was not carrying on any business activities of Pooja articles of brass and so on and so forth. There is no dispute that when the assessee filed voluminous record in support of his contentions, the same were forwarded to the learned Assessing Officer seeking remand report offering his remarks on the documents filed on behalf of the assessee, it goes undisputed that the learned Assessing Officer did not offer any adverse comments on the detailed submissions on facts by the assessee.
AO neither rejected the books of accounts nor invoked the provisions of section 145 of the Act before disturbing the trading results. The submission of the assessee that the learned Assessing Officer did not bring any documentary evidence on record to show that the assessee did not purchase any goods as alleged in the assessment order goes undisputed.
The prime factor which convinced the Ld. CIT(A) is that the learned Assessing Officer examined the books of accounts and documents punished by the assessee, both at the time of the assessment as well as during the first plate stage, but notice it was pointed out in them. Sales were accepted, but the purchases were suspected, leading to the rumours situation of producing the abnormal GP rate at 56.6%, which is not common in the business conducted by the assessee. Learned Assessing Officer failed to notice this factor also. For these reasons, taking a comprehensive review, we are of the considered opinion that the view taken by the learned Assessing Officer does not appear to be sound and the Ld. CIT(A) deleted the addition by taking a pragmatic view. We, therefore, do not think it necessary to interfere with the same.
Unexplained deposits in the savings bank account - HELD THAT:- It is not the case of the revenue before us also that the documents produced by the assessee or their books of accounts are untrustworthy or suffer any legal infirmity. It is only on examination of these documents in the books of accounts, Ld. CIT(A) found that all the deposits are properly explained and are supported by relevant documents, which were available before the learned Assessing Officer, but the learned Assessing Officer failed to verify the same properly to reach a just conclusion. In the circumstances, we find it difficult to reject the factual findings of the Ld. CIT(A), which are formally based on the books of accounts and the other documents submitted by the assessee. Thus addition cannot be sustained and the Ld. CIT(A) rightly deleted the same.
Revenue appeal dismissed.
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2021 (1) TMI 872
Accrual of income - Addition of notional interest on the loans given to certain companies / persons by the assessee - income from other sources - HELD THAT:- CIT(A) has rightly taken note of the decision of Goyal MG Gases P Ltd. (2007 (7) TMI 241 - DELHI HIGH COURT) wherein it was held that what has to be seen is whether income can be said to have really accrued to the assessee. When there was no real accrual of interest and the assessee has also not recorded interest in its books of account, no notional interest can be levied on such loans - CIT(A) has given finding of fact that the assessee in its books of accounts has not charged any interest against the loans of these two companies. This findings of fact has not been assailed before us. - CIT(A) has rightly deleted the notional interest. Therefore, the ground raised by the revenue is dismissed.
Write off of irrecoverable principal amount of loan which was claimed u/s 36(1)(vii) read with Section 36(2) - HELD THAT:- CIT(A) noted that in this assessment year the assessee in addition to its business of manufacturing of tea, fertilizer etc, had also carried on the business of granting of loans and ICDs. The ld. CIT(A) noted that the interest on loans was held assessable under the head profits and gains of business and the assessee had written off the principal amount of loans as also the unrealized amount of interest as bad debts - AO had allowed the claim of bad debts in respect of the unrealized interest but had disallowed the claim in respect of write off of principal amount of loan on the reason that the department has preferred an appeal before the Hon’ble High Court against the decision of Tribunal in AY 2002-03 wherein decided the issue in favour of assessee and allowed the write off of bad debts. Decided in favour of assessee.
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2021 (1) TMI 871
Seeking debit-freeze of one account of the petitioners - time limitation - whether a provisional attachment of bank account can be continued beyond the period of one year? - HELD THAT:- Section 110 of the Customs Act deals with seizure of goods, documents and things. Sub-section (5) was inserted in the said provision by Finance (No.2) Act, 2019 with effect from 01.08.2019 - Sub-section (5) of section 110 states that provisional attachment of bank account can be for a period of six months but the said period can be extended for a further period not exceeding six months for reasons to be recorded in writing and communicated to the affected person before expiry of the initial period of six months.
There are no justification to continue with the provisional attachment of the bank accounts of the petitioner - The initial period of six months had expired in November, 2019. Even assuming and giving benefit of further six months to the respondents, the outer limit of one year expired in May, 2020. That apart, Finance (No.2) Act, 2019 was given prospective application with effect from 01.08.2019. The provisional attachment was made on 08.05.2019 when the said provision was not available in the statute book.
The petitioner's accounts are allowed to be released/unfrozen - petition allowed.
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2021 (1) TMI 870
Non-fulfilment of export obligation in case of import of goods under EPCG License - HELD THAT:- However, now as per the submission of the learned counsel the EODC issued by DGFT was obtained only after passing of the impugned order. In these circumstances, the entire matter should be reconsidered by the adjudicating authority in the light of the EODC issued by the DGFT.
The appeal is allowed by way of remand to the adjudicating authority.
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2021 (1) TMI 869
Jurisdiction - power to entertain the present suit - approval of dependent cards and Green Cards to the children of UCPs as also upgrading of Green Cards to UCP - interpretation of Article 13 (3) (b) of the Articles of Association - petitioners claim that the way the said article is interpreted gives rise to inequitable classification - HELD THAT:- The suit at the instance of an individual shareholder, alleging the infringement of a right for an action and the majority shareholders being opposed to the memorandum and article of association, cannot be said to be an imperfect suit liable to fail on the parameters of Order 7 Rule 11 of the Code. Mere reference of more than 3100 members does not, ipso facto, raise a presumption that the suit is not maintainable in absence of any leave under Order 1 Rule 8 of the Code. Section 9 of the Code of Civil Procedure postulates that the Civil Courts have jurisdiction to try all suits of civil nature unless there is an express or implied bar. It is no longer res integra that such exclusion should not be readily inferred and the rule of construction being that every presumption should be made in favour of his existence rather than exclusion of the jurisdiction of the Civil Court - Section 397 & 398 of the Companies Act provides a remedy which is of preventive in nature so as to bring an end to oppression and mismanagement on the part of the controlling shareholders but does not in express terms take away the power of the Civil Court to declare a resolution to be ultra vires to the memorandum and article of association.
The subsequent events can be taken note of if the original proceeding has become infructuous as it would be a futile exercise to allow such suit to continue. It is based on the legal maxim ex debito justitiae i.e. it is a duty of the Court to take such action which is necessary in the interest of Justice. Every facts germinated after the litigation having a substantial nexus and/or bearing on the relief claimed in the suit may be taken into consideration for ends of Justice.”
Section 242 of the Companies Act which provides for the power of the Tribunal contemplates an action relating to the affairs of the company which is being conducted in a manner prejudicial or oppressive to any member or members and that to wind up the company would unfairly prejudice such member or members, but the facts justify the makings of a winding up order, the power of the NCLT can be invoked. However, in the present suit the plaintiffs do not claim winding up of the defendant No.1 Club which is a company by guarantee - the cause of action pleaded by the plaintiff in this suit is the manner in which Article 13(3)(b) of the Articles of Association of the defendant company is being interpreted thereby creating irrational and illegal classification. NCLT not being empowered to determine the said cause of action, this Court is of the opinion that the plea of the defendant that the present suit is not maintainable and only a petition before the NCLT is maintainable, is liable to be rejected.
The plea of defendant is to be rejected - issue decided in favour of the plaintiffs and against the defendant No.1.
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2021 (1) TMI 868
Seeking restoration of the name of the struck off company in the Register of Companies maintained by the ROC - Section 252(3) of the Companies Act, 2013 - HELD THAT:- It is noted that company has failed to file returns since 2010 which prompted ROC, Gwalior, Madhya Pradesh to strike off the name of such company from its Register of Companies. However, from the records produced before us it is noted that Company has filed the Income Tax Returns for A. Y. 2010-11 to 2019-20, which indicate that the Company was in operation.
It is further noted that company is neither a shell company nor it has engaged itself into any other illegal activities. It is considered just and proper to restore the name of the company in the Register of Companies, from date of its striking off subject to payment of cost for non-compliance of rules relating to filing the Statutory Returns and Audited Financial Statements.
The name is ordered to be restored - application allowed.
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