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Showing 381 to 400 of 1456 Records
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2024 (1) TMI 1076
Revision u/s 263 - assessee received interest of enhanced compensation u/s 28 of the Land Acquisition Act, 1894 and the A.O. did not conduct enquiry on the said issue - HELD THAT:- After considering the reply given by the assessee, A.O. satisfied that the amount so received under the Land Acquisition Act, 1894 has not been brought to the tax. By going through the above facts and circumstances, it is found that in the original assessment proceedings, the A.O. has already examined the issue of the refund claim which includes the issue of amount received by the assessee under the Land Acquisition Act.
From the above, it is observed that it is not a case wherein the AO failed to conduct enquiry rather it is the case wherein the AO has conducted an elaborate enquiry and adopted one of the two views which was plausible view. The question would be as to whether in such circumstances the power u/s 263 of the Act would be invoked or not. The above said question is no longer res-integra and the said issue is well settled in several decisions. In the case of Malabar Industrial Co. Ltd. vs. Commissioner of Income Tax, [2000 (2) TMI 10 - SUPREME COURT]
Hon’ble Supreme Court in the case of Pr. CIT vs. Canara Bank Securities Ltd. [2019 (10) TMI 1512 - SC ORDER] dismissed the Department’s appeal affirming the view taken by the Bombay High Court [2019 (2) TMI 2020 - BOMBAY HIGH COURT] wherein the High Court held that the question whether the income should be taxed as business income or has arisen from other source was a debatable issue and the Assessing Officer had taken the plausible view that it was a business income after due enquiries and therefore not open for the Commissioner to take such an order in revision.
Even in the present case, whether the receipt of interest related to the additional compensation granted under Land Acquisition Act, 1894 is a part of exempt u/s 10 (37) of the Act or not is a debatable issue, therefore, following the ratio laid down in Malabar Industrial Co. Ltd. [2000 (2) TMI 10 - SUPREME COURT] and other decisions mentioned above, we are of the considered opinion that the impugned order of the Ld. PCIT is found to be erroneous, accordingly, order impugned of the PCIT is hereby quashed.
Appeal filed by the Assessee is allowed.
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2024 (1) TMI 1075
TDS u/s 195 - addition u/s 40(a)(i) - sales commission expenses paid to agents outside India for non-deduction of tax at source - HELD THAT:- We find that the assessee had sufficiently demonstrated that services rendered by the foreign agents were all outside India for procuring the sale orders for the assessee with the agreement clearly pointing out that foreign agents required to procure sales from the respective territories outside India for the assessee.
Certificates furnished by these agents demonstrated that they had no place of business in India and invoices of exports, as also invoices raised by the commission agents sufficiently proved that they had paid commission for the export orders procured by them for the assessee. Thus, all the documentary evidences, placed before us and noted by us, have been sufficiently proved, we hold that the agents were remunerated by way of commission for procuring sale orders for the assessee outside India; that there is no evidence on record to show that any services by these agents was rendered in India.
As considering in the case of Toshoku Ltd. [1980 (8) TMI 2 - SUPREME COURT] commission income earned by such agents cannot be termed to have incurred or arisen in India, and therefore, was not taxable in India - there was no liability on the assessee to deduct any TDS of such commission income. The disallowances therefore made are uncalled for - Decided in favour of assessee.
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2024 (1) TMI 1074
Allowability of Interest Expenditure - disallowance on the ground that the borrowed funds were utilized for non-business purposes - Condonation of delay of 418 in filing the appeal - AO observed that the assessee had claimed deduction on account of interest expenditure - AO proceeded to disallow the entire interest u/s 14A of the Act on the ground that borrowed funds were utilized for making investments in securities and shares which had yielded exempt income to the assessee and completed the assessment - CIT(A) however, addressed the entire dispute on the ground that the borrowed funds were utilized for non business purpose in terms of section 36(1)(iii)
HELD THAT:- The assessee was pursuing an alternative remedy available with him legally before the ld. CIT(A) by waiting for disposal of rectification application. - The reasons adduced by the assessee for the delayed filing of appeal is sufficient cause - Delay condoned.
The assessee had furnished the complete details of borrowed funds together with its utilization thereon before the ld CIT(A) and pleaded that the interest paid on borrowed funds would be eligible for deduction.
CIT(A) sought for a remand report from the ld AO who indeed submitted the remand report, clearly giving the details of utilization of borrowed funds. This remand report has not been properly appreciated by the ld CIT(A) while dismissing the appeal of the assessee.
Considering the fact that the ld AO had given the remand report and that remand report was very much available before the ld CIT(A), CIT(A) ought to have considered the observations given by the ld AO in the remand report. Hence, we deem it fit and proper to restore this quantum appeal to the file of ld CIT(A) qua the issue in dispute before us with regard to disallowance of interest for re-adjudication in the light of remand report submitted by the ld AO. Accordingly, the grounds raised by the assessee are allowed for statistical purposes.
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2024 (1) TMI 1073
Reopening of assessment u/s 147 - Reason to believe - notice issued beyond the period of 4 years - as alleged assessee was one of the beneficiary of Client Code Modification (CCM) by some broker - HELD THAT:- The assessee filed objections for the reasons recorded and these objections were not disposed of by the speaking order by the AO thereby violating the guidelines provided by the Hon’ble Supreme Court in the case of GKN Driveshafts Ltd [2002 (11) TMI 7 - SUPREME COURT].
AO had initiated the re-assessment proceedings way back on 31.3.2016 itself and had been waiting for the assessee to file a return in response to notice u/s 148 of the Act by offering the alleged profit earned by the assessee due to CCM .
There is no information provided in the reasons as to in whose hands, a survey u/s 133A of the Act was conducted by Ahmedabad Investigation wing. The reason only speaks that some survey in Ahmedabad conducted revealted that some broker was involved in misusing the CCM facility of NSE and engaged in providing non-genuine losses and profits.
The reason does not specify whether the broker through whom the assessee had carried out the transaction of trading of shares and securities was involved in such malpractices. Infact during the course of re-assessment proceedings, the ld. AO even sought to examine the broker of the assessee M/s S S Corporate Securities Ltd u/s 133(6) of the Act and that the said broker had duly replied directly to the ld. AO confirming the fact of CCM being carried out by them for their clients due to punching errors committed by their staff but had never confirmed that their actions had enabled the assessee to shift the losses or profits.
Dispute is squarely covered by the decision of Globus Power Generation Ltd [2023 (5) TMI 215 - ITAT DELHI] as held there is no material to infer that such client code modification has been done with malafide purpose of shifting of the profit or evasion of the tax. There is no material before the Assessing Officer to form such a belief that income had escaped due to such client code modification and thus there is no live link between the material before the Assessing Officer and inference made. Hon'ble Supreme Court in the case of Rajesh Jhaveri Stock Brokers (P) Ltd [2007 (5) TMI 197 - SUPREME COURT] has held that for validity of reason recorded it is essential that there should be a relevant material on which a reasonable person could make requisite belief. Assessment cannot be reopened validly on the basis of the above reasons recorded in absence of any tangible material to infer that income escaped in the case of the assessee. Also see Coronation Agro Industries Ltd [2017 (1) TMI 904 - BOMBAY HIGH COURT] Decided against revenue.
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2024 (1) TMI 1072
Validity of assessment u/s 153C - Period of limitation - Date of recording of satisfaction - calculation of six assessment years - whether CIT(A) is correct in holding that assessment made for assessment year 2013-14 is invalid as 6 previous assessment years from the year of search has to be reckoned from the date when the books of accounts or seized documents were handed over to the Assessing Officer or when the satisfaction was recorded?
HELD THAT:- We are guided by the judgment of RRJ Securities Ltd. [2015 (11) TMI 19 - DELHI HIGH COURT] proviso to Section 153C(1) of the Act expressly indicates that reference to the date of initiation of search for the purposes of second proviso to Section 153A shall be construed as a reference to the date on which valuable assets or documents are received by the AO of an Assessee (other than a searched person). Thus, by virtue of the second proviso to section 153A of the Act, the assessments/reassessments that were pending on the date of receiving such assets, books of accounts or documents would abate - date on which the AO of the person other than the one searched assumes the possession of the seized assets would be the relevant date for applying the provisions of Section 153A of the Act. We, therefore, accept the contention that in any view of the matter, assessment for AY 2003-04 and AY 2004-05 were outside the scope of Section 153C of the Act and the AO had no jurisdiction to make an assessment of the Assessee's income for that year.
Also see Jasjit Singh case [2023 (10) TMI 572 - SUPREME COURT] as held that in the case of the other person, which in the present case is the petitioner herein, such date will be the date of receiving the books of account or documents or assets seized or requisition by the Assessing Officer having jurisdiction over such other person. In the case of the other person, the question of pendency and abatement of the proceedings of assessment or reassessment to the six assessment years will be examined with reference to such date
Thus we have no hesitation to hold that the Assessments made for A.Y. 2013-14 u/s. 153C consequent to the satisfaction note recorded on 26.03.2021 (A.Y. 2021-22) is beyond the time limit prescribed and hence, treated as void ab initio. Appeal of the Revenue is dismissed.
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2024 (1) TMI 1071
Deemed dividend u/s 2(22)(e) - transactions of advancing of money by the company to appellant and earning interest on it is not amounted to business transactions - HELD THAT:- The factum of interest and deduction of TDS thereon is also reflected in the ledger account and the confirmation thereof by the corresponding party. Hence, the advances made by the lender company to the assessee is not a loan/advance simplicitor but is beset with the character of quid pro quo owing the charge of interest for the benefit of lender company.
In the circumstances, in the case of Pradip Kumar Malhotra [2011 (8) TMI 16 - CALCUTTA HIGH COURT] has observed that advances given by lender firm was not for the individual benefit of the share holder but for business purposes and therefore, such transaction could not fall within the sweep of deeming fiction created under section 2(22)(e) of the Act. This reason, on a standalone basis, is sufficient to exclude the applicability of section 2(22)(e) of the Act on the money received by the assessee.
Similar view has been expressed in PCIT vs. Mohan Bhagwatprasad Agrawal [2020 (1) TMI 1139 - GUJARAT HIGH COURT] and JAYSON INDUSTRIES [2022 (8) TMI 217 - ITAT DELHI]
We see considerable force in the plea of the assessee for exclusion of loan and advances in question from the ambit of deeming fiction provided in section 2(22)(e) of the Act. Appeal of assessee allowed.
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2024 (1) TMI 1070
Revenue recognition - interest on bank deposits - Business Income OR income from other sources - proof of commencement of business - As per AO assessee has not commenced its business, thus interest earned on bank deposits was liable to be charged to Income tax as income from other sources - HELD THAT:- A perusal of the balance sheet show that the assessee was having inventories of Rs. 37.88 crores as on 31.03.2014 which was increased to Rs. 80.50 crores as on 31.03.2015. The assessee has purchased a land in Gautam Budh Nagar measuring 222.58 sq. yds. for construction of group housing duly approved by the Yamuna Expressway on 12.12.2012, which means that the business of the assessee commenced in F.Y. 2012-13. Therefore, the observation of the Assessing Officer that the assessee has not commenced its business is factually incorrect and on proper appreciation of facts, we decline to interfere with the findings of the ld. CIT(A). Ground No. 1 is dismissed.
Addition u/s 68 - failure on part of assessee to submit the confirmation from the lender, proof of source of income outside India, proof of residential status or copy of passport of the lender for proving identity, genuineness and creditworthiness of the lender to pay the huge money - CIT(A) deleted addition - HELD THAT:- We have carefully perused the bank statement of Kotak Mahindra Bank belonging to Shri Owais Usmani and we find that Shri Owais Usmani is having more than sufficient balance in his bank account to make the impugned investment.
Since he is 100% share holder in the company, there is no question of doubting his identity. The entire money has been remitted through proper banking channel with the approval of RBI. Therefore, the same can be safely concluded to have established the genuineness of the transaction and bank statements are showing the capacity of Shri Owais Usmani. No error or infirmity in the findings of the ld. CIT(A).
Appeal of the Revenue is dismissed.
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2024 (1) TMI 1069
Allowability of Derivative loss - Business loss or speculative transaction - AO denied the set off of the derivative loss against the profits of the wine shop. - Estimation of income on the basis of alleged payment of margin monies - AO concluded that the assessee had not carried out the derivative transactions through a stock broker or sub-broker or intermediary registered u/s 12 of the SEBI Act and accordingly treated the said derivative transaction as a speculative transaction in terms of section 43(5) of the Act and disallowed the same.
HELD THAT:- It is not in dispute that transactions were entered by the assessee with three sub brokers - The maximum amount of investment on one date of derivative transaction was Rs 1,27,20,985/- considering in aggregate of all the three parties. It is not in dispute that the assessee had incurred total loss in derivative transactions amounting to Rs 14,43,040/- which was separately disallowed by the ld. AO in the assessment. This point was not agitated by the assessee before the ld. CIT(A).
Plea of the assessee is that she had not deposited any margin money with the sub-brokers - We find that the ld. AR placed on record the ledger account copies of the three sub-brokers along with contract notes of their respective brokers. - The total loss incurred by the assessee out of doing transactions with aforesaid three parties which has been paid by the assessee on the following dates from her bank account maintained with State Bank of India
The sources for making the aforesaid payments are drawn from the books of accounts regularly maintained by the assessee and in any case, the same is not disputed by the revenue before us.
Considering the various evidences submitted by the assessee as stated supra, we are inclined to accept to the contentions of the assessee and the loss of Rs 14,43,040/- alone had to be disallowed which had already been done by the ld. AO in the assessment and accepted by the assessee by not filing any appeal. Hence there is no need to make any separate addition on account of alleged payment of margin monies on an estimated basis and accordingly, the addition made in the sum is hereby deleted. Decided in favour of assessee.
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2024 (1) TMI 1068
Validity of Reopening of assessment u/s 147 - proceedings initiated after the expiry of 4 years - reasons to believe - scope of change of opinion - loss claimed by assessee company towards foreign exchange loss on transaction and translation - HELD THAT:- As there was no failure on the part of the Assessee to make full and true disclosure of the primary facts. Relying upon the judgment of New Delhi Television Limited [2020 (4) TMI 133 - SUPREME COURT] the CIT(A) had concluded that the Assessee, having disclosed truly and fully the primary facts, was not under obligation to communicate to the Assessing Officer the possible inferences which could have been drawn from the primary facts disclosed. We concur with the aforesaid view taken by the CIT(A). Further, in our view Explanation 1 to Section 147 of the Act could be not attracted in the facts and circumstances of the case as the primary facts were apparent from the details and documents submitted by the Assessee.
CIT(A) had noted that specific queries were raised by the AO in relation to Foreign Exchange Loss/(Gain) in response to which the Assessee had provided relevant financial statements, documents, details and submissions.
CIT(A) had further noted that in the reasons recorded the AO had drawn inference that income has escaped assessment on the basis of facts already on record and not on the basis of any new material which came in the possession of the Assessing Officer subsequent to the conclusion of the assessment proceedings.
CIT(A) had concluded that reassessment proceedings were initiated on re-appraisal and re-examination of the assessment records without bringing any tangible material to show that income has escaped assessment on account of failure on the part of the Assessee to furnish true and full facts. We do not find any infirmity with the aforesaid conclusion drawn by the CIT(A).
In our view, on the basis of the primary facts disclosed by the Assessee, the Assessing Officer drew inference in favour of the Assessee and accepted Assessee’s claim for deduction for ‘Net Loss/(Gain) on account of Foreign Currency Transaction & Translation’ of INR 604.35 Crores’. Subsequently, reassessment proceedings were initiated on account of change of opinion formed on re-appraisal of the facts already on record and examined during the regular assessment proceedings which was contrary to the judgment of CIT Vs. Kelvinator India Ltd [2010 (1) TMI 11 - SUPREME COURT].
As have already concluded that there was no failure on the part of the Assessee to disclose the primary facts and therefore, in view of the provisions contained in First Proviso to Section 147 of the Act re-assessment proceedings could not have been initiated in the case of the Assessee after the expiry of 4 years for the end of relevant assessment years.
CIT(A) was correct in quashing the Assessment Order passed u/s 147 read with Section 144B of the Act of the Act. Ground No. 1 to 4 raised by the Revenue are dismissed.
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2024 (1) TMI 1067
Addition u/s 68 - AO was not satisfied with the source of source aspect of the investors - assessee has failed to prove the credit worthiness and genuineness of parties who have paid the loan amount to the share subscribers of assessee company - CIT(A) deleted addition - HELD THAT:- When the order of learned CIT(A) is considered it establishes that on account of exempt income declared from the sale of equity shares of the alleged penny stock of SCTL, no addition was made in the hands of Dinesh Gupta HUF in assessment u/s 143(3) or in the hands of Rajesh Gupta HUF. The addition was made in the hands of Dinesh Gupta in assessment u/s 143(3). However, the same was deleted by learned CIT(A)-26, New Delhi and the order stands sustained [2021 (4) TMI 258 - ITAT DELHI]. Lastly, there was no allegation of Renu Gupta having source arising out of disinvestment of alleged penny stock and primarily her source was refund of loan in certain companies or sale of equity shares of Mangal Kalas Services Pvt. Ltd. Thus, learned CIT(A) has not erred in not finding substance in the conclusion of learned AO that the source of source is tainted.
CIT(A) has taken into consideration all the relevant information about the identity of the investors, their bank statements, another financials which were duly filed to give details of the financial credibility of the investors.
In the absence of any allegation of any cash deposits in the bank accounts of the investors so as to draw inference that it was assessee’s own money which was accounted back by the investors, AO certainly had fallen in error in stretching the principles of test of improbability too far to hold that the transactions were created to mask the apparent as real.
We are of the considered opinion that merely because of some sort of control of Gupta family into companies transacting in the alleged penny stock cannot be basis to question the source of source in the hands of the assessee company without any direct evidence or circumstantial evidence giving a complete link of circumstances. Mere inference of Ld. AO, out of valid and reported transactions to question the source of source for addition u/s 68 could not have been sustained by learned CIT(A). Decided against revenue.
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2024 (1) TMI 1066
Validity of assessment u/s 153C - Relevant Date - Period of limitation - Date of recording of satisfaction - calculation of six assessment years - whether CIT(A) is correct in holding that assessment made for assessment year 2013-14 is invalid as 6 previous assessment years from the year of search has to be reckoned from the date when the books of accounts or seized documents were handed over to the Assessing Officer or when the satisfaction was recorded?
HELD THAT:- We are guided by the judgment of RRJ Securities Ltd. [2015 (11) TMI 19 - DELHI HIGH COURT] proviso to Section 153C(1) of the Act expressly indicates that reference to the date of initiation of search for the purposes of second proviso to Section 153A shall be construed as a reference to the date on which valuable assets or documents are received by the AO of an Assessee (other than a searched person). Thus, by virtue of the second proviso to section 153A of the Act, the assessments/reassessments that were pending on the date of receiving such assets, books of accounts or documents would abate - date on which the AO of the person other than the one searched assumes the possession of the seized assets would be the relevant date for applying the provisions of Section 153A of the Act. We, therefore, accept the contention that in any view of the matter, assessment for AY 2003-04 and AY 2004-05 were outside the scope of Section 153C and the AO had no jurisdiction to make an assessment of the Assessee's income for that year.
Also see Jasjit Singh case [2023 (10) TMI 572 - SUPREME COURT] as held that in the case of the other person, which in the present case is the petitioner herein, such date will be the date of receiving the books of account or documents or assets seized or requisition by the AO having jurisdiction over such other person. In the case of the other person, the question of pendency and abatement of the proceedings of assessment or reassessment to the six assessment years will be examined with reference to such date
Thus we have no hesitation to hold that the Assessments made for A.Y. 2013-14 u/s. 153C consequent to the satisfaction note Assessments made for A.Y. 2006-07 and A.Y. 2007-08 u/s 153C consequent to the satisfaction note recorded on 18.11.2013 are outside the scope of Section 153C of the Income Tax Act, 1961 and hence, the assessments are treated as void ab initio. Consequently, the assessment made u/s 143(3) for A.Y. 2012-13 shall also be treated as void. Decided in favour of assessee.
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2024 (1) TMI 1065
Estimation of income - Addition u/s 69C - bogus purchases of diamonds - HELD THAT:- We find force in the contention of the assessee that the Ld. CIT(A) erred in sustaining the 100% disallowance of purchases from M/s. Mohit Enterprises and thus, erred in confirming the addition u/s 69C of the Act. Therefore, as per the ratio laid down in Nitin Ramdeoji Lohia [2022 (11) TMI 480 - BOMBAY HIGH COURT] profit embedded in the transaction only need to be brought to tax particularly when the tax authorities have not disturbed the sales declared by the assessee in this year as well as balance shown as closing stock.
And since we have noted that the assessee had itself offered gross profit of 3.95% this year and 17.59% in AY. 2014-15, therefore, in this year only profit element of gross profit @ 2% of the purchases from M/s. Mohit Enterprises would be just and reasonable and it is ordered accordingly. Appeal of the assessee is partly allowed.
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2024 (1) TMI 1064
Validity of Order u/s 201(1) and 201(1A) - period of limitation - deeming a person to be an assessee-in-default - Non deduction of TDS - bone of contention is the order u/s. 201(1) of the Act which is dated 31.10.2019. The TDS return was filed by the assessee on 07.05.2013, therefore, the contention of the assessee that the impugned order is barred by limitation as it expires after two years which means that the order ought to have been framed on or before 31.03.2015 and as the order has been framed on 31.10.2019 it is barred by limitation - HELD THAT:- Similar issue was considered by this Tribunal in M/s. Cantabil Retail India Ltd. Versus ACIT Circle – 73 (1) New Delhi [2023 (7) TMI 462 - ITAT DELHI] as the time limitation for passing an order under sub-section (1) to Section 201 i.e deeming the present assessee before us, as an assessee-in-default under sub-section (1) to Section 201 of the Act could have validly been done within a period of 2 years from the end of the financial year in which the statement u/s. 200 was filed by the assessee, i.e., latest by 31.03.2014, as per the law as was then available on the statute, therefore, the order passed by the AO u/ss. 201(1) /201(1A) of the Act, dated 29.03.2018 is clearly barred by limitation. Appeal of assessee allowed.
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2024 (1) TMI 1063
Accrual of income - interest due on NPA accounts - Urban Co-operative Bank - assessee's not accepted by the AO stating that since the assessee was following mercantile system of accounting, the interest income on NPA need to be included in its total income and has referred to the CBD T Instruction No.17/2008 dated 26.11.2008 issued in the context of Section 145 - HELD THAT:- As decided in Kangra Central Co- operative Bank [2022 (12) TMI 449 - HIMACHAL PRADESH HIGH COURT] although the amendment in section 43D was sought to be made effective w.e.f 1/04/2018 but it was liable to be treated as retrospective in nature and has upheld the view taken by the Tribunal that the assessee was required to tax the interest on the sticky loans/NPAs on receipt basis. We, therefore, find that the matter is squarely covered in favour of the assessee by the decision of the Hon'ble jurisdictional High Court.
The amendment whether to be read as retrospective or prospective being a question of law where so decided by the Hon’ble Jurisdictional High Court is binding on all the authorities under its jurisdiction and we see no reason but to respectfully follow the said decision. In the instant case, it is not in dispute that the assessee is a Co-operative Bank and covered under Non Scheduled Bank as per the Banking Regulation Act, 1949 and therefore, the amendment brought in by the Finance Act, 2017 which has been held to be retrospective in nature applies in the case of the assessee. Thus the addition so made by the AO and confirmed by the ld. CIT(A) is hereby set aside. Appeal of assessee allowed.
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2024 (1) TMI 1062
Bogus share transactions - disallowance of loss in respect of transaction of the shares - Reliance on the statement of broker/entry operator - exemption u/s 10 (38) with respect to alleged income under the head “Long Term Capital Gain” on sale of shares of penny stock - as argued by assessee statement as been recorded from entry operator by the DDIT (Investigation) Kolkata was not provided to be cross examined - HELD THAT:- It is trite law that if any evidence is available with the Revenue and the same is going to be used against the assessee, it is compulsory that such evidence must be put to the assessee for assessee’s cross examination or rebuttal. The denial of opportunity of cross examination by the AO itself is absolute failure of principles of natural justice and this itself will make the evidence to be discarded.
Other than the statement of Shri Sanjay Vora, the Assessing Officer is not in possession of any evidence to show that the transaction entered into by the assessee in respect of purchase and sale of shares of Shreenath Commercial and Finance Ltd., as colourable device, is available.
The assessee on the contrary has produced ledger accounts, purchase bills, sale bills and even bank account statement in respect of the transaction. It was very much open to the AO to invoke his powers u/s. 133(6) of the Act or to call for information from the stock brokers. This has not been done. AO has blindly relied upon the statement recorded from one stock broker who has given names of various companies and Shreenath Commercial and Finance Ltd., is also one of them. The shares purchased by the assessee and sold by the assessee are on Bombay Stock Exchange. STT has also been clearly paid on both the transactions. These are not off-line transactions.
AO has also not considered the fact that the assessee had to sell the shares of Maa Tarini Industries Ltd., to protect itself from the financial loss caused on account of loss incurred in the transactions of shares of Shreenath Commercial and Finance Ltd. This being so, respectfully following the principles laid down in the case of Smt. Bimala Devi Singhania (2023 (10) TMI 1351 - ORISSA HIGH COURT] the disallowance of loss in respect of transaction of the shares of Shreenath Commercial and Finance Ltd., in the case of the assessee as made by the AO and as confirmed by the ld CIT(A) stands reversed. Decided in favour of assessee.
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2024 (1) TMI 1061
Deduction u/s 80P(2)(a)(i) - interest income received on investments made with District Co-operative Bank - as per AO interest income received from Kanara District Co-operative Bank was not entitled to deduction - HELD THAT:- On identical factual situation, the Bangalore Bench of the Tribunal in the case of Canara Bank Staff Credit Co-operative Societies Ltd [2023 (10) TMI 1350 - ITAT BANGALORE] had restored the matter to the AO to examine whether the amounts invested with the Co-operative Banks are out of compulsion under the Karnataka Co-operative Societies Act and the relevant Rules. It was further held by the Tribunal that if the investments are out of compulsion under the Act and the relevant Rules, the interest income received out of the investment made under such compulsion would be liable to be taxed as ‘income from business’ which would entail the benefit of deduction under section 80P(2)(a)(i) of the Act.
In the event it is found that assessee is not entitled to get the benefit under section 80P(2)(a)(i) of the Act, the AO shall also examine whether it is entitled to deduction u/s 80P(2)(d) in light of the recent judgment of Kerala State Co-operative Agricultural Rural Development [2023 (9) TMI 761 - SUPREME COURT] If the assessee is not entitled to benefit of deduction either under section 80P(2)(a)(i) or under section 80P(2)(d) of the Act, the AO shall consider the claim of deduction under section 57 of the Act in respect of the cost of funds for earning such interest income which is assessed as income under the head ‘income from other sources’. For the direction to grant deduction for the cost of funds, we rely on the judgment of Totgar’s Co-operative Sales Society Ltd [2017 (1) TMI 1100 - KARNATAKA HIGH COURT] Appeal filed by the assessee is allowed for statistical purposes.
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2024 (1) TMI 1060
Transfer of pending application for winding up of the respondent company to the NCLT under IBC - non-payment of dues arising out of a contract for services entered into between the parties - Section 433(e) read with Sections 434 and 439(1)(b) of the Companies Act, 1956 - HELD THAT:- Reliance may be placed on the decision of the Supreme Court in the case titled ACTION ISPAT AND POWER PVT. LTD. VERSUS SHYAM METALICS AND ENERGY LTD. [2020 (12) TMI 535 - SUPREME COURT], whereby it was held that those winding up proceedings pending before High Courts, which have not progressed to an advanced stage, ought to be transferred to the NCLT.
It is the opinion of this Court, that since no substantive proceedings have been undertaken towards winding up of the company, the present petition does not deserve to be continued before this Court. The present company petition is at a very nascent stage and no effective orders as such have been passed towards the winding up of the company. Before parting with this matter, it would be suffice to state that the three decisions [WEST HILLS REALTY PRIVATE LTD. & RAVI GHAI AND ANOTHER VERSUS NEELKAMAL REALTORS TOWER PVT. LTD. [2016 (12) TMI 1253 - BOMBAY HIGH COURT], COMMISSIONER OF INCOME TAX-8, MUMBAI VERSUS REGISTRAR OF COMPANIES, MUMBAI, MR. KESAVAN VARADARAJAN DIRECTOR, MOTECH SOFTWARE PVT. LTD., MR KAUSHIK VRAJDAS VED [2017 (5) TMI 315 - BOMBAY HIGH COURT], THE JAYABHARAT CREDIT LIMITED VERSUS JALGAON RE-ROLLING INDUSTRIES LTD. [1996 (10) TMI 527 - BOMBAY HIGH COURT]] have no bearing on the matters in issue in view of categorical directions of the Supreme Court in the above noted case of Action Ispat and Power Limited.
The instant petitions are transferred to the NCLT. Parties to appear before the NCLT on 01.04.2024. The interim orders passed by this Court in these petitions, if any, shall continue till the said date.
Petition disposed off.
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2024 (1) TMI 1059
SUBKA VISHWAS” [Legacy Dispute Resolution] Scheme Rules, 2019 - petitioner was unable to make payment due to technical glitch - HELD THAT:- The “SUBKA VISHWAS” [Legacy Dispute Resolution] Scheme Rules, 2019, is self contained code. The SVLDRS-1 was to be uploaded online and SVLDRS-3 was also to be uploaded online within 60 days from the date of receipt of the SVLDRS-1. A declarant was required to make payment online within 30 days from the date of uploading of SVLDRS-3.
Petitioner knew the provision as he had chosen to take benefit of the scheme by uploading SVLDRS-1. He knew that within 60 days from the date of uploading of SVLDRS-1, SVLDRS-3 would be uploaded and he would be required to make the payment within 30 days from the said date. Therefore, the petitioner’s contention that he could notice the SVLDRS-3 only on the website of the CBIC on or around 15.6.2020, and thereafter, he tried to make the payment but he failed for ‘technical glitches’ is not convincing. The petitioner’s allegation that there were ‘technical glitches’ is not supported by any cogent and credible evidence. The petitioner ought to have made the payment within 30 days from 19.02.2020 or till the extended time, which he failed to do so.
Once the petitioner failed to comply with the provisions of the scheme, which is a complete code in itself, this court would not like to extend the limitation for making the payment under the scheme in exercise of its jurisdiction under Article 226 of the Constitution of India.
In an identical matter, the Supreme Court has dismissed the Special Leave petition against an order of the jurisdictional High Court refusing to extend the time under the scheme for making payment as per SVLDRS-3.
The present writ petition is dismissed.
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2024 (1) TMI 1058
Eligibility for abatement of 67% of gross value under the Notification No. 1/2006-ST - Classification of services - Commercial and Industrial Construction Service - Finishing and Completion work or not - works executed by the appellant in the nature of false ceiling, partitions, flooring, modular systems, painting, carpeting, electrical connected works wall paneling, supply and fixing of various furniture, brick works etc. - HELD THAT:- There is ample evidence to show that the appellant has used goods and materials in construction service which are composite in nature. So also, from the different work orders we have no confusion to conclude that these are not completion and finishing service so as to get excluded from the ambit of Notification No. 1/2006-ST. It also requires to be mentioned that the Tribunal in its earlier Final Order dated 02.07.2014, had remanded the matter with specific direction to the Adjudicating Authority to verify and scrutinize documents furnished by the appellant with regard to their claim of abatement in spite of such directions, the Adjudicating Authority has denied the benefit of abatement with observing that appellant has not produced details of site-wise/ bill-wise for the purchase of materials. This observation is highly erroneous and not acceptable.
The Tribunal while analyzing a similar situation in the case of M/S. OCEAN INTERIOR LIMITED VERSUS COMMISSIONER OF G.S.T. & CENTRAL EXCISE, CHENNAI [2019 (11) TMI 124 - CESTAT CHENNAI] observed that when there is sufficient evidence to establish that the appellant has purchased materials for execution of work and also paid VAT on such goods, the department cannot deny abatement and demand service tax on entire gross amount received. In the present case also, the appellant has produced VAT returns to show that they have paid VAT on the materials used in the execution of work orders.
Similarly in the case of M/S RAJ INTER DECOR PRIVATE LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, AND SERVICE TAX, DELHI-III [2023 (7) TMI 1180 - CESTAT CHANDIGARH] the Tribunal while considering the eligibility of abatement of 67%, as per Notification No. 01/2006-ST held that in case of construction services of composite nature, abatement has to be granted.
Thus, appellant has used goods and material for execution of construction work. The allegation of the department that the works are entirely ‘Completion and Finishing service’ is factually and legally incorrect - the appellant is eligible for abatement. Following the ratio of decisions cited, it is opined that the demand raised cannot sustain. Accordingly the impugned order is set-aside.
Appeal allowed.
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2024 (1) TMI 1057
Demand of Service Tax for extended period, not extending cum duty benefit - Imposition of penalties under Section 77 and 78 of the Finance Act, 1994 - demand in respect of services provided to Indian Railways - HELD THAT:- In the case of M/S. MUKESH KALWAY VERSUS COMMISSIONER OF CENTRAL EXCISE, BHOPAL [2017 (3) TMI 615 - CESTAT NEW DELHI], SAROVAR HOTELS PVT. LTD., VERSUS COMMISSIONER OF CUSTOMS, CENTRAL EXCISE & SERVICE TAX, HYDERABAD – IV [2018 (8) TMI 816 - CESTAT HYDERABAD] and M/S DYNAMIC ENTERPRISES VERSUS CCE & ST, JAIPUR [2018 (5) TMI 787 - CESTAT NEW DELHI], the Tribunal has held that service tax is payable in respect of cleaning services provided to railways. In view of above, there are no merit in the order of the Commissioner dropping the demand in respect of cleaning services provided to railways and the order to that extent is set aside and appeal of Revenue to that extent is allowed.
Extended period of limitation - penalties - HELD THAT:- The Commissioner himself has held that no duty was payable in respect of the services provided to railways under the belief that the said services are not chargeable to tax for various reason cited in the impugned order. In those circumstances, it will not be out of place to hold that the assessee could also have harbored similar beliefs in respect of services provided to railways. Thus, extended period of limitation cannot be invoked in respect of the amount demanded as service tax in respect of supply of services of railways.
Benefit of cum tax calculation for the purpose of demand - HELD THAT:- Section 67(2) of the Finance Act 1994 clearly stipulates that gross amount charged by service provider should be treated as inclusive of Service Tax payable. In the instant case, the entire calculation stand made on the basis of gross amount charged by the appellant and therefore, the benefit of cum tax has to be granted to the appellant.
The appeal of revenue is partly allowed to the extent that the demand for the period within the limitation is up held in respect of the services provided to railways. No penalty under section 78 or 77 can be imposed in respect of this demand.
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