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2025 (2) TMI 1082
Revision u/s 263 - Addition under the head income from house property as per Section 22 - HELD THAT:- It is true that provisions of Section 23(5) of the Act are effective from 01/04/2018 whereby notional annual value of property/part of the property held as stock-in-trade has been brought to tax subject to conditions specified in that Section. The amendment is substantive and prospective.
As relying on Ansal Housing Finance & Leasing Co. Ltd.[2012 (11) TMI 323 - DELHI HIGH COURT] we hold that the annual let-out value (ALV) has to be taxed in respect of unsold property.
Determination of ALV by the AO is not tenable in law as he has taken 8% of the bank FD during the period under consideration and calculated the ALV - ALV should be the actual rent or the fair rent which a property may fetch from the open market in the same locality. Therefore, we direct the AO to re-compute the ALV as per the market rate prevalent in and around the same locality and decide the issue afresh after affording a reasonable and adequate opportunity of being heard to the assessee. Accordingly, appeal of the assessee is partly allowed.
Whether addition made as per the provision of Section 56(2)(viib) is beyond the jurisdiction of the AO when the ld. Pr. CIT has cancelled the original assessment order with a direction to decide the case afresh? - We have carefully perused the order of the ld. Pr. CIT framed u/s 263 of the Act and find that no such addition was proposed by the ld. Pr. CIT.
Only issue which prompted the ld. Pr. CIT to assume jurisdiction u/s 263 of the Act was applicability of the provisions of Section 22 of the Act in respect of finished unsold inventory of the assessee and deciding this issue the ld. Pr. CIT cancelled the assessment order and restored the matter to the AO for fresh examination of the issue.
As decided in Royal Western India Turf Club Ltd [2019 (2) TMI 241 - BOMBAY HIGH COURT] Assessing Officer on his own examined said issue. The Commissioner, undoubtedly, has powers under Section 263 of the Act to annul the entire assessment and required passing of fresh assessment order. However, when the Commissioner, as in the present case, requires the Assessing Officer to carry out inquiries with respect to specified issues, the jurisdiction of the AO to pass fresh order must be confined to such issues, failing which we would be giving the power to the Assessing Officer to make reassessment.
We find that the ld. CIT(A) has followed the aforementioned binding decision of the Hon’ble Jurisdictional High Court. Therefore, no interference is called for. Accordingly, effective grounds raised by the revenue are dismissed.
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2025 (2) TMI 1081
Deemed dividend addition u/s 2(22)(e) - loan was taken the partners in their individual capacity has substantial interest in the company -assessee is a LLP converted from the partnership firm - HELD THAT:- The assessee maintained the ledger account of the company, the transactions starts with the opening balance of loan/advance of Rs. 50.61lakhs and during the year, the assessee has taken several amounts and also paid certain amount back. The transactions are in our view, are in the nature of business transactions like trade advances taken and returned during the year and also certain expenses are incurred on behalf of the company.
It looks like a running account maintained by the assessee for the mutual benefits. AO merely stopped with the ledger account and not established how the transactions are carried out for the individual benefits of the shareholders.
In this case, two shareholders have substantial interest and also found to be having substantial controlling interest in the firm (assessee). AO preferred to capture the peak credit and proceeded to treat the same as deemed dividend. He has not further verified whether they are regular business transactions or diverted to the individual benefits of the shareholders, further, whether above said payments were in turn paid by the assessee to the individual shareholders or to the family members of such shareholders. The definition is very clear that such payments are made for the individual benefit of shareholders.
After careful consideration, we are of the view that CIT(A) has given benefit to the assessee based on shareholder i.e., the assessee not a shareholder and the deeming fiction is attracted only to the payments made to the shareholder, since the assessee is not a shareholder after incorporation as LLP. However, in our view, the assessee had regular transaction during the whole year even before it was converted into LLP. Therefore, we are inclined not to disturb the findings of Ld CIT(A). Hence, we are inclined to dismiss the grounds raised by the revenue
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2025 (2) TMI 1080
Penalty u/s. 272A(1)(d) - unexplained expenditure made by the assessee through his credit card - HELD THAT:- The provisions of Section 272A(1)(d) are “deterrent in nature” and not for the purpose of earning revenue. The remedy available with the AO lies in framing of best judgment assessment under the provisions of Section 144 of the Act, as he did in the present and not to impose multiple penalties under Section 272A(1)(d) of the Act, again and again.
Accordingly, levy of penalty is directed to be restricted to Rs. 10,000/-. In the case of Tarlok Singh Through Legal Heir Gurnam Singh vs. ITO Ward Gurdaspur [2023 (6) TMI 479 - ITAT AMRITSAR] restrict the penalty levied under section 272A(1)(d) of the Act to one default as against multiple defaults on non compliance with these notices under section 142(1) of the Act. Appeal of the assessee is partly allowed.
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2025 (2) TMI 1079
Addition of rental income on unsold inventories held by the Assessee under the head "income from house property" - as argued If the property is shown as stock-in-trade, then the said property would partake the charcter of “stock” of the assessee and income derived from stock would be income from “business” and not “income from house property”- HELD THAT:- We are of the considered view that for the impugned year under consideration there was no spedific charging section which could subject notional value of unsold stock/inventory as income under the head income from other sources. We note that sub-section (5) to Section 23 of the Act was introduced w.e.f. 01.04.2018 to tax income from property held as stock-in-trade.
Accordingly, for the impugned year under consideration, there was no specific charging section which could subject this income in the hands of the assessee.
As in Ahmedabad Tribunal in the case Takshshila Realties [2023 (9) TMI 219 - ITAT AHMEDABAD] has held that where assessee, a builder and developer had unsold flats in various building which were shown as closing stock and no rental income was earned, in view of the amendment to Section 23 effective from A.Y. 2018-19 providing that if an assessee holds house property as stock-in-trade and does not let out for the whole or part of the year, annual value will be considered NIL up to one year from Financial Year in which a completion certificate is obtained any addition made on account of notional ALV is liable to be deleted.
Thus the aforesaid amount is not liable to be added as income of the assessee under the head “income from house property”. Appeal of the assessee is allowed.
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2025 (2) TMI 1078
Reopening of assessment u/s 147 - Addition u/s 68 - bogus Long-Term Capital Gains (LTCG) from the sale of shares - primary contention of the assessee is that the shares were acquired through preferential allotment from the company itself and not through off market transactions, thereby ruling out the possibility of price rigging by the assessee.
HELD THAT:- The issue of penny stock transactions and their taxability u/s 68 of the Act requires a comprehensive and well-founded approach. The mere fact that a stock has exhibited significant price fluctuations or has been categorized as a penny stock does not by itself, render transactions in such shares non-genuine. The stock market operates under a regulatory framework where shares, irrespective of their financial fundamentals, are allowed to be traded on stock exchanges.
Additionally, if the sale or purchase is alleged to be non-genuine, the revenue must demonstrate that the entire money trail, from the purchase to the final realization of sale proceeds, was a façade used to introduce unaccounted income. It is settled principle of law that the primary onus lies on the assessee to substantiate the genuineness of the transaction by furnishing documentary evidence. If the fundamental aspects are satisfied, the burden then shifts to the revenue to bring on record specific material evidence proving that the transactions were merely a colourable device aimed at tax evasion.
The mere fact that a share has been subject to price manipulation does not automatically lead to addition under section 68 of the act unless it is conclusively demonstrated that the assessee was part of the scheme, and the transactions were structured to generate artificial gains or losses. In the present case such detailed investigation by AO is absent.
Assessee’s grounds challenging the addition u/s 68 on account of bogus LTCG and penny stock transactions allowed.
Treating the entire sale consideration as undisclosed income without allowing the purchase cost - We find merit in the assessee’s contention. Even if the transaction was to be doubted, the entire sale consideration cannot be taxed as undisclosed income. Taxing the full sale value without allowing for the cost of acquisition is contrary to established judicial principles. Since the AO’s approach in making the addition is against settled legal principles, the addition of the entire sale consideration is deleted.
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2025 (2) TMI 1077
Denial of Exemption u/s 11 - delay in filing the report - HELD THAT:- We note that the assessee filed a condonation petition u/s 119(2)(b) before the CIT(Exemption) for failing to meet the timeline specified in Section 12A(ba) of the Act.
Assessee also pursued an alternative remedy by filing an appeal before the ITAT. In its appeal order, CIT(A) held that the issue should be remitted back to the jurisdictional AO, instructing him to treat the assessee as not being in default of tax until the petition for condonation u/s 119(2)(b) is resolved by the Ld. CIT(Exemption).
Additionally, the assessee contended that no reasonable opportunity was provided u/s 143(1) of the Act during the processing of the intimation.
We find that the assessee has indeed taken an alternative remedy. Therefore, we direct the AO to consider the assessee as not being in default of tax until the petition for condonation u/s 119(2)(b) is disposed of by the CIT(E). Accordingly, the matter is remitted back to the file of the AO with the above instruction. Appeal of the assessee allowed for statistical purpose.
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2025 (2) TMI 1076
Addition made being 8% of gross receipts as per provisions of section 28 - assessee did not produce books of accounts and in absence of documentary evidence to verify bills/vouchers and TDS etc., and the variations between the 26AS and P & L A/c gross receipts, the impugned estimation @ 8% made by the AO common in line of construction activities - HELD THAT:- The assessee was allowed to construct highway and on completion of the work, the assessee is allowed to collect the amount by way of Toll. Therefore, till the completion of the national high way, the assessee could not receive any sum in his hands and as such, it is not a “capital work-in-progress” in the hands of the assessee as no asset is owned by the assessee in it’s name.
The capital asset infrastructure facility belongs to the NHAI and the amount is payable by the NHAI to the assessee. NHAI instead of making payment to the assessee, it has facilitated the assessee to open the toll gate on completion of the work and recover the amount.
Therefore, till such time, the amount will be retained as business asset in the books of the assessee and the said amount actually cannot be considered as a capital work-in-progress but represents the work in progress of the assessee or deferred revenue expenditure of the assessee and would be debited to the P & L A/c proportionately during the period of operation of the toll gate.
AO’s presumption that it has to be treated as capital work-in-progress is not correct. We find force in the submissions of the assessee to the effect that the matter in issue in the instant appeal is squarely covered by the aforesaid CBDT Circular dated 23.04.2014.
Assessee has shown only the matching entries in the P & L A/c and not derived any income for the impugned assessment year. As rightly noted by the CIT(A), when there is no income accrued in the hands of the assessee, then there is no question of estimation of income @ 8% out of total gross receipts in the hands of assessee does not arise.
Addition u/s 40(a)(ia) - addition being 30% of expenses for non-depositing of TDS before due date - CIT(A) noted that the assessee has capitalized all the expenses incurred in construction of high-way and no expenses are claimed during the impugned assessment year - HELD THAT:- As the assessee has not claimed the revenue expenditure and it is settled position of law that when no expenses debited to the P & L A/c and no deduction claimed by the assessee under the head profits and gains of business or profession, then, no disallowance can be made by invoking the provisions of sec.40(a)(ia) of the Act.
Disallowance u/sec.43B - It is settled position of law that expenditure can be disallowed only if it is claimed by the assessee. If there is no claim of expenditure, then there should not be any disallowance. CIT(A) noted that the impugned expenses though incurred by the assessee but are not charged to P & L A/c account as all these expenses are transferred to work-in-progress account and no expenses are claimed. No infirmity in the order of CIT(A) in deleting the addition made u/sec.43B.
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2025 (2) TMI 1075
Unexplained cash credit u/s 68 - Bogus share capital / share premium - HELD THAT:- CIT (A) instead of commenting on the evidences filed by the assessee as well as the replies of the subscribers available in the assessment records chose a very cryptic and wrong manner while disposing off the appeal.
In our opinion, the assessee has filed all the evidences before the AO as well as before the ld. CIT (A) and both the authorities below have failed to carry out any meaningful and purposeful enquiry and draw any legal conclusion based on the said enquiry. For the aforesaid reasons, we are not in a position to sustain the order of the ld. CIT (A).
Assessee has discharged its burden by furnishing all the evidences and both the authorities below have failed to conduct any enquiry intio the same despite the tribunal specific direction. Accordingly, we set aside the order of ld. CIT (A) on this issue and direct the ld. AO to delete the addition. The appeal of the assessee is allowed.
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2025 (2) TMI 1074
Suppression of sale by the assessee - during the impugned financial year the assessee has executed certain contractual works for his clients and certain discrepancies were noted in the said documents - other addition in respect of expenses relating to exempt income u/s 14A also made - HELD THAT:- We find that in this case the ld. AO has passed a very cryptic order and making addition by comparing the opening and closing WIP and then recording a conclusion in two lines that assessee has suppressed sales recorded outside the books of account.
We have perused the appellate order in which the ld. CIT (A) has dealt with the receipts from each party for which the assessee executed contracts during the impugned financial year. Therefore, no infirmity in the order of ld. CIT (A) and same is upheld by dismissing the appeal of the Revenue.
The appellate order has already been affirmed by the Tribunal while deciding the assessee’s appeal. Consequently, the appeal of the Revenue is dismissed.
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2025 (2) TMI 1073
Revision u/s 263 - assessee has incurred CSR expense which were suo moto disallowed in the computation of income at the time of filing of return of income - HELD THAT:- We find that in this case the assessee has incurred CSR expense which were suo moto disallowed in the computation of income at the time of filing of return of income. However, simultaneously claiming 50% of the eligible donations u/s 80G of the Act as made during the year. In our opinion, there is no bar in the Act for the assessee to claim the deduction u/s 80G of course subject to satisfaction of conditions as envisaged in Section 80G of the Act.
The case of the assessee is squarely covered by the aforesaid decision in the case of M/S JMS Mining Pvt. Ltd. [2021 (7) TMI 907 - ITAT KOLKATA] as held since the assessee satisfies the condition u/s. 80G of the Act of the donees, the assessee’s claim for deduction of CSR expenses/contribution u/s 80G of the Act was allowed after enquiry by the AO. Thus we are of the opinion that the action of the AO allowing the claim u/s. 80G of the Act is a plausible view. Therefore we find that the PCIT has not been able to make out a case that on this issue raised by him, the AO's order is erroneous as well as prejudicial to the revenue. So the jurisdictional fact as well as law is absent for invoking revisional jurisdiction. Therefore, the usurpation of jurisdiction by Ld. PCIT u/s 263 of the Act is bad in law. Appeals of the assessee are allowed.
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2025 (2) TMI 1072
Treatment to the profit from sale of shares - under the head income from business or section 68 - HELD THAT:- The entire transaction of sale was through BSE and the payment was received through banking channel. We notice that the investigation report prepared by the Investigation Wing, Kolkata is a disclosed report with modus adopted for manipulation of prices of certain shares and generation of bogus capital gains.
AO has placed reliance on the said report without bringing any material on record to show that the transactions entered into by the assessee were found to be a bogus and manipulated transaction. It was not proved that the assessee has carried out this transaction of purchase and sale of shares in connivances with the people who were in the alleged rigging of price. Finding the report of the SEBI, we do not find any such adverse report against the assessee.
Decision rendered in case of PCIT vs Ziauddin A Siddiqui [2022 (3) TMI 1437 - BOMBAY HIGH COURT] shall apply to the present case, since the Ld.AO has not established that the assessee was involved in price rigging and further, the AO did not find fault with any of the documents furnished by the assessee.
AO has assessed the amount as unexplained cash credit under section 68 of the Act. It is pertinent to note that the purchase of shares made in earlier year was accepted by the revenue. The sale of share has taken place in on-line platform of BSE and the consideration has been received through stock broker through banking channel. So these transactions cannot be taken as unexplained cash credit under section 68 of the Act. Related to payment of brokerage, no such evidence was established by the Ld.AO, as to whether the assessee has paid the amount to the broker or not. So the addition under section 69 is deleted - Appeal of assessee allowed.
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2025 (2) TMI 1071
Disallowance u/s. 14A - it was a claim of the assessee that it had not incurred any expenditure to earn exempt income - HELD THAT:- The disallowance u/s. 14A is restricted to the extent of exempt income and this issue now stands covered in the case of Nirved Traders Pvt. Ltd. [2019 (4) TMI 1738 - BOMBAY HIGH COURT] and also this issue stands covered by the decision of the Tribunal in assessee’s own case for A.Y.2012-13 wherein disallowance has been limited to the extent of exempt income.
Nature of expenses - Disallowance of consultation charges - assessee made payment to consultants / institutions for consultancy services rendered by them - CIT (A) has reversed the treatment of these expenses as being capital in nature and has allowed them as revenue expenses and consequently allowed the ground of the assessee - HELD THAT:- In view of the fact that this issue has been decided in favour of the assessee by the Tribunal in assessee’s own case for A.Y.2007-08 and 2004-05 and also in the subsequent year, no disallowance has been made by the AO, therefore, the addition on account of disallowance of consultancy charges is deleted.
TP adjustment - purchases of equipment which was on account of purchases of following laboratory equipment by the assessee from its AE - HELD THAT:- Here in this case the adjustment has been made on the ground that the bills produced by the assessee were not for the equipment purchases whereas the assessee has produced all those bills before the ld. DRP and also before the ld. TPO as noted above. Once these bills have been produced there cannot be any doubt for the purchases and accordingly, no adjustment should have been made on this issue. Accordingly, the addition adjustment made by the ld. TPO is deleted.
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2025 (2) TMI 1070
Revision u/s 263 - allowability of payment of license fee, spectrum usage charges (SUC), interest, and penalty thereon - HELD THAT:- Interest and penalty clauses are enshrined in the license agreement as compensatory mechanism for delayed payment of three components i.e entry fee, license fee and charges. Charges is not specifically defined but when we take into consideration the aforesaid clauses we find that apart from entry fee and license fee the Licensee was supposed to pay Radio Spectrum Charges and royalty for the use of spectrum for point to point links and access links. These charges admittedly were considered as revenue expenditure.
It is very much apparent from the clauses of license agreement that the interest is payable on the quantum of delayed payment of license fee determined as per the license agreement. Penalty is payable in case the total amount paid as quarterly License Fee for the 4 (four) quarters of the financial year, falls short by more than 10% of the payable License Fee. Delayed payment of penalty shall also be liable to interest.
In the absence of rights of revocation/termination of the agreement for default in payment of penalty/interest cannot be equated with consequences arising out of default in payment of the license fee which as per the judgement of Bharti Hexacom [2023 (10) TMI 786 - SUPREME COURT] was similar to one time entry fee. Therefore, the interest/penalty payment arising out of default in payment of the license fee is merely compensatory in nature.
Delayed payment of license fee would result in benefitting the assessee in terms of availability of the funds available for use in its own business and that in turn lead to payment of compensatory cost of the delayed payment of the license fee in the form of interest or penalty. The license here was to grant ‘services’ as defined. Thus it is the right to provide services in lieu of entry free, license fee or charges, formed the intangible asset and interest or penalty were only by way of default in payment in time as per agreement. So there could have been no situation like loan borrowing.
The reasoning given by the ld. PCIT as followed by the ld. AO in the effect giving order is that the interest and penalty will take the colour of license fee to hold that the same is capital expenditure.
We consider the same to be not a justified manner of determining the taxability of an expenditure. Every expenditure or income giving rise to a tax incidence should be categorically defined either in the statute or be otherwise impliedly decipherable from the transaction. It is not justified to draw any inferences about the nature of an expenditure being revenue or capital on the basis of another expenditure without analyzing the surrounding circumstances and the context in which the liability of expenditure arises.
On the one hand the assessee has established that the issue was genuinely examined by the AO before passing of the assessment order and on the other hand, it is established that the conclusion drawn by the PCIT and as followed by the AO at the time of effect giving order to colour the interest and penalty component similarly to license fee, and hold them to be of capital expenditure is not sustainable under law. This issue no. 1 is decided in favour of the assessee.
Allowability of carry forward of accumulated business loss and unabsorbed depreciation relatable to the consumer wireless undertaking - PCIT in his order u/s 263 of the Act had directed the AO to deny the benefit of section 72A and withdraw the allowance of brought forward business loss and unabsorbed depreciation relatable to the consumer wireless undertaking of TTSL - HELD THAT:- Ld. Sr. Counsel has sufficiently established on the basis of the queries which were raised by the AO that a comprehensive response was submitted to the AO explaining the scope and terms of the schemes of arrangement. The details of the accumulated business loss and unabsorbed depreciation of consumer wireless mobile undertaking of TTSL were provided to the AO. Still, PCIT has held that the AO had not conducted in-depth inquiries. On the contrary we are of the firm view that if this all was part of assessment record then PCIT was supposed to take that first into consideration and then examine the issue.
Rather, from the conclusions which have been drawn by the PCIT, it appears that more than analysis of questions of facts on the basis of material available from assessment record by the queries raised by the AO and response of the assessee, the PCIT has gone on a different tangent discussing more about the manner in which the provisions of section 2(19AA) of the Act can be interpreted. However, that cannot be a basis to hold the assessment order to be erroneous so far as prejudicial to the interest of revenue. Thus we firmly hold that at one end there was sufficient examination of the issue by the AO at time of assessment. Then on merits the case as made out by the PCIT is not sustainable as all the conditions u/s 2(19AA) r.w Section 72A(4) of the Act stood fulfilled and there was erroneous conclusion to hold assessment to be erroneous so far as prejudicial to the Revenue.
Taxation of difference of asset over liability with TTSL u/s 56(2)(x) - The provisions of section 56 of the Act, are deeming income provisions and come into effect where there is some sort of allegation that the transaction of acquisition of an asset is without consideration or the consideration is less than the fair market value. The consumer mobile business undertaking of TTSL was acquired by the appellant on a wholesome basis without valuation of an individual asset and a lumpsum consideration through the process of demerger was paid. It has been established before us that the valuation of this demerger was done by professional valuers and the valuation was accepted in the scheme of arrangement by NCLT and High Court.
That being the case, on the one hand, it was erroneous on the part of the PCIT to have gone beyond the scope of notice u/s 263 of the Act, on the other hand, to allege that there was a deemed capital gain on acquisition of consumer wireless business of the TTSL. Therefore, we are inclined to allow this issue in favour of the assessee and corresponding ground nos. 10 to 10.4 are allowed.
TP adjustment - PCIT had directed an adjustment on account of alleged incorrect reduction of proportionate adjustment allowed by the TPO - HELD THAT:- We are of the considered view that only for the reason that an issue is pending before the Hon’ble Supreme Court that cannot be a basis for interference into an assessment order and direct for an adjustment in the transfer pricing while exercising powers u/s 263 of the Act. The assessment order being erroneous so far prejudicial to the interest of the Revenue is to be examined in the light of the existing state of affairs including the settled provisions of law so far and only for the reason that Revenue is contesting the settled provision before the Hon’ble Supreme Court cannot be the basis for invoking exceptional jurisdiction of Section 263. Here the AO had sufficiently examined the issue and benefitted assessee on basis of decision of Hon’ble Jurisdictional High Curt, so a contrary direction is rather not appreciable.
Rather it is established before us on the basis of a decision of Mumbai benches in the case of M/s Damco India Pvt. Ltd [2019 (3) TMI 2080 - ITAT MUMBAI] Hon’ble Supreme Court is merely dealing with the issue of disallowance u/s 14A of the Act, in M/s Firestone case [2015 (6) TMI 1123 - BOMBAY HIGH COURT] SLP. Thus that all the more requires setting aside the directions of PCIT on this issue.
AO has not examined the issue of disallowance u/s 40(a)(i) of the Act while huge payments were made without deduction of tax - HELD THAT:- As decided in Bharti Airtel Ltd.[2024 (10) TMI 699 - ITAT DELHI] has held that the appellant is not liable to deduct tax at source on payment of bandwidth charges to non-residents including where payees are from non-treaty countries. Thus, the said issue squarely covers the case of the appellant. On the basis of aforesaid, we are of the considered view that not only the issue was duly examined by the AO during the assessment but the law, at time of assessment, stood settled that when the payments are not in regard to royalty or FTS under the Act, then also, in respect of non-treaty countries the payments on account of bandwidth charges to non-residents are not subject to TDS provisions. Thus the issue did not require any fresh enquiry by AO by interference u/s 263 of the Act. Consequently, we are inclined to decide this issue in favour of the assessee.
Disallowance u/s 14A - HELD THAT:- We find that during the year, the assessee has received exempt dividend from its subsidiary company Bharti Infratel Ltd. only and there was no other source of exempt income nor fresh investment was made during the year in the shares of Bharti Infratel Ltd.. Still a suo-moto disallowance was made. There were no borrowed funds used for investments and no disallowances u/s 14A were made in the past. However, as during the consequential assessment ld. AO has not given any adverse findings on the issue, the aforesaid submissions become academic.
AO did not investigate the issue concerning non-availability of depreciation - HELD THAT:- No depreciation on good will was claimed by appellant during the year and as with regard to tangible assets detailed enquiry was conducted by the AO vide notice dated 06.09.2023 and 11.09.2023 as replied by assessee by reply dated 16.09.2023, copy available. Though, in the consequential proceedings, no adverse inference has been drawn by the AO. Thus, the grievance of the assessee on the directions issued by the ld. PCIT as challenged do not survive, but certainly as the issue was duly examined by the AO, we are of considered view that issue did not deserved to be interfered u/s 263.
AO has not verified the relevant transactions from the perspective of section 269SS and thereby did not initiate penal action u/s 271E - The case of the assessee was that the issue was extensively examined and all transactions were through banking channel only. The ld. Sr. Counsel has pointed out various notices and replies communicated between the AO and the assessee during the assessment proceedings. In the effect giving order, no adverse inference was drawn by the AO and he was satisfied by the evidences of the assessee and upon verification of the same, therefore, as such, no grievance of the assessee survives substantially.
In any case, we are satisfied that as issue was considered duly by AO vide notice dated 06.09.2023 and response of assessee dated 16.09.2023 copies of which are part we are of considered view that issue did not deserved to be interfered u/s 263.
Genuineness of claim with regard to huge expenses were not examine by the AO and no supporting documentary evidences were called - The assessee had provided party wise details of five major expenses along with supporting documents like invoices, Form 16A, etc. In the effect giving proceedings, the assessing officer was satisfied and no addition has been made. Thus, substantively, no grievance of the assessee is left. In any case, we are satisfied that as issue was considered duly by AO so the issue did not deserved to be interfered u/s 263 of the Act.
Allegation of Ld. PCIT that during the assessment proceedings the AO has failed to make inquiries to ascertain the genuineness of liabilities claimed - Counsel has also pointed out that the issue was set aside by the ld. PCIT without minimal inquiries and for that reason, the directions were not sustainable in the light of the decision in the case ITO vs. DG Housing Projects Ltd.[2012 (3) TMI 227 - DELHI HIGH COURT]. As a matter of fact, in the effect giving proceedings, no adverse inference has been drawn. Thus, substantially, no grievance survives. In any case, we are satisfied that as issue was considered duly by AO so the issue did not deserved to be interfered u/s 263.
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2025 (2) TMI 1069
Not giving the TDS credit as per 26AS statement - As per CIT(A) AO is directed to allow the credit of the prepaid taxes after due verification of the Form 26AS as per the provisions section 199 - HELD THAT:- We do not see any infirmity in the impugned order. The tax-payer should not be subjected to harassment merely on the basis of some mistake occurred due to technical glitch of software.
Undisputedly, in this case, the assessee had not claimed credit of tax in its Income Tax Return. As per the assessee, the assessee had deducted tax during the year amounting to Rs. 1,32,68,202/- but due to technical glitches TDS deducted to the tune of Rs. 52,95,646/- was only updated by the software in the return of income. Therefore, the assessee had made an application for seeking rectification of mistake. Undisputedly, it is not the case of the revenue that the tax deducted as per Form No. 26AS was only Rs. 52,95,646/- as uploaded by the assessee.
It is incumbent upon the assessing authority to ensure that the credit of tax deducted at source has been given as per Form No. 26AS. AO has not brought any materials to rebut this fact. Even otherwise also, it is not the case of AO that tax so deducted was not deposited in government account.
It is apparently a mistake that could not have been the basis of denial of credit of tax under the facts and circumstances of the present case. Thus, looking to the material placed before us and the finding of the Ld. CIT(A), we are of the view that the Ld. CIT(A) was justified in directing the Assessing Officer to give credit to the tax deducted at source. Therefore, we do not see any reason to interfere in the finding of the Ld. CIT(A). The grounds of appeal of the Revenue are hereby dismissed.
Non-payment of interest on the refund due - Undisputedly, the assessee himself had not claimed credit of taxes in the return of income. The case of the assessee is that due to the technical glitches entire claim could not be uploaded in the return of income. Under these facts, we do not see any fault on the part of the assessing authority for not granting refund along with interest thereon. Moreover, no material has been placed before us that any effort was made by the assessee for bringing to the notice of the assessing authority about the technical glitches. Grounds raised by the assessee in cross objection are hereby rejected.
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2025 (2) TMI 1068
Rejection of application for registration in Form No.10AB under clause (iii) of section 12A(1)(ac) - sole contention of the assessee in the grounds of appeal that if CIT, Exemption, Pune was not satisfied with the compliance made by the assessee trust he should have had provided at-least one further opportunity to the assessee to explain his case - HELD THAT:- In the interest of justice without going into the merits of the case, we set-aside the order passed by Ld. CIT, Exemption, Pune and remand the matter back to him with a direction to decide the application for registration afresh as per fact and law after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to comply with the notices issued by Ld. CIT, Exemption, Pune and produce requisite/ desired documents/information in support of the application for registration without taking any adjournment further. Grounds of appeal raised by the assessee are partly allowed.
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2025 (2) TMI 1067
Denial of exemption u/s 11 - assessee failed to file original registration certificate u/s 12A - HELD THAT:- In the Return of Income, assessee has specifically mentioned that assessee is registered u/s 12A.
As during the assessment proceedings, AO was aware about the registration number of the 12A certificate. 12A Certificate is issued by Commissioner of Income Tax, Kolhapur in those days. The Department is custodian of all these documents.
ITO-Kolhapur, who passed the assessment order sits in Income Tax Office, Kolhapur, and Commissioner of Income- Kolhapur also sits in the same. However, the ITO did not bother to visit the Commissioner of Income Tax-Kolhapur to verify the registration number issued by Commissioner of Income Tax, Kolhapur in 1991.
Subsequently, during the appellate proceedings before ld.CIT(A), assessee filed copy of registration certificate under section 12A of the Act. The ld.CIT(A) called-for a remand report from the Assessing Officer. The ITO in his remand report stated that additional evidence is not admissible, ITO further stated that assessee has not produced original copy of registration certificate under section 12A of the Act. Thus, the entire allegation of the Department in denying exemption claim under section 11 of the Act to the assessee is that original registration certificate under section 12A of the Act, was not filed. Thus, it is an admitted fact that copy of registration certificate was filed by the assessee.
When Department is custodian, the Department cannot blame assessee for not filing original certificate. We have also observed that for A.Y.2017-18, assessee was granted exemption under section 11 of the Act. Thus, AO had erred in denying Assessee’s claim of exemption u/s 11. Decided in favour of assessee.
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2025 (2) TMI 1066
Condonation of gross delay of 544 days in filing and 44 days in refiling the appeals - delay not satisfactorily explained - Classification of imported goods - plastic trigger sprayer for plastic bottles lotion pump for plastic bottle and fine mist sprayer for plastic bottles - whether classifiable under 84242000 as held by the Commissioner (Appeals) in the impugned order or under CTH 96161000 as claimed by the Revenue? - it was held by CESTAT that 'The fact that the mounts were used on bottles of toilet sprays in Reckitt and Coleman and in this case they are used for sanitizers makes no difference.'
HELD THAT:- There is a gross delay of 544 days in filing and 44 days in refiling the appeals which have not been satisfactorily explained - there are no good reason to interfere with the impugned order passed by the Customs Excise & Service Tax Appellate Tribunal, New Delhi.
The appeals are, therefore, dismissed on the ground of delay as well as on merits.
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2025 (2) TMI 1065
Maintainability of appeal - appellant states that the appeal may be disposed of due to its low tax effect - HELD THAT:- The appeal is disposed of, without deciding the question of law, due to low tax effect.
Appeal disposed off.
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2025 (2) TMI 1064
Classification of imported goods - defatted coconut - to be classified under CTH 08011990 or under CTH 23065020? - Benefit of Notification No.50/2017- Customs dated 30.06.2017 Sl. No. 114 - it was held by CESTAT that 'Revenue is directed to classify the goods as per the declaration made by the respondent by extending the benefit of notification as applicable.'
HELD THAT:- In view of the factual finding recorded by the Customs, Excise and Service Tax Appellate Tribunal, Bengaluru, that the fat content in the product in question was less than 55%, there are no error or mistake in the impugned judgment.
Hence, the present appeal is dismissed.
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2025 (2) TMI 1063
Challenge to SCN - SCN has not been issued by a proper officer in terms of the Section 28 of the Customs Act, 1962 - opportunity of hearing - principles of natural justice - HELD THAT:- The Petitioner shall be given an opportunity to file a reply and a personal hearing shall also be afforded by the concerned Adjudicating Authority - The Court notices that the remaining matters in the connected batch of writ petitions which were adjourned sine die on 25th September, 2023 could also be decided on the basis of the decision of the Supreme Court in Cannon - II [2024 (11) TMI 391 - SUPREME COURT (LB)].
Petition disposed off.
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