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Showing 101 to 120 of 1484 Records
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2025 (3) TMI 1384
Revision proceedings against company dissolved - Resolution Plan provided for the waiver and extinguishment of all the unassessed/assessed tax liabilities for the period prior to the NCLT approval date - HELD THAT:- As relying on case laws Essar 2019 (11) TMI 731 - SUPREME COURT]and Edelweiss [2021 (4) TMI 613 - SUPREME COURT] it is clear that on the complete extinguishment of all tax liabilities of the Corporate Debtor upon the approval of the Resolution Plan on 12.10.2023, there could be no occasion whatsoever for the respondents to issue the impugned notice un/s 263 seeking to revise the Assessment Order for the Assessment Year 2015-16.
Thus, the merits of the impugned notice u/s 263 have become academic and need not be ventured into by this Court. Resultantly, the petition succeeds and the impugned notice dated 13.01.2025 u/s 263 of the Act is hereby quashed and set aside.
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2025 (3) TMI 1383
Validity of penalty order given that the show-cause notice fixed a later date for appearance - HELD THAT:- As we are inclined to grant indulgence in the matter inasmuch as the Notice dated 24th October, 2019 issued under Section 274 r/w Section 271(1)(c) of the Income Tax Act apparently had fixed date 08th November, 2019 for showing the cause as to why penalty proceedings should not be taken up under Section 271(1)(c).
A perusal of the penalty order that was impugned before the Tribunal would show that it was made on 24th October, 2019, i.e. the day on which the show-cause notice was issued fixing 08th November, 2019 as a date of hearing. Thus, there is a gross violation of principles of natural justice that would warrant invalidation of the penalty order and the order of the Income-tax Appellate Tribunal affirming it, by answering the subject substantial question of law, in favour of the Assessee.
This appeal succeeds. Penalty Order and the Income-Tax Appellate Tribunal’s Order which has confirmed it, are set aside.
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2025 (3) TMI 1382
Assessment u/s 153C - Addition u/s 68 - Addition in the absence of incriminating material found during the search - HELD THAT:-We find that in this case addition has been made on account of share application and unsecured loan interest relating to purchase of property. All these items were duly disclosed by the assessee in the balance sheet, hence, the submission of the assessee is correct as no seized material was found on the basis of which the addition has been made.
In this regard, we rely upon the decision of the Apex Court in the case of CIT vs. Abhisar Buildwell Pvt. Ltd. [2023 (4) TMI 1056 - SUPREME COURT] wherein, as expounded that for assessment u/s.153A incriminating material is a sine quo non and in the absence of incriminating material as referred, the assessment is bad in law. Decided in favour of assessee.
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2025 (3) TMI 1381
TP Adjustment - addition in ITeS Segment and SDS Segment - incorrect computation of working capital adjusted margins by the TPO by alleging that the DRP via directions has agreed to the Appellant’s contentions and directed TPO to follow the guidelines provided by OECD for the computation of working capital adjusted margin - HELD THAT:- TPO has fallen in error in giving effect to the DRP directions in correct perspective and rather committing a mechanical error, the issue needs to be rested to ld. TPO, for removing the error and further give an opportunity of hearing to the assessee to show as to how after giving effect to the DRP orders the margin of computation of comparables in both segment shall fall within the range. In aforesaid terms the ground no. 2.5 is decided in favour of assessee.
Comparable selection - Magnasoft Consulting India Pvt. Ltd. and Aptus Software Labs Pvt. Ltd. - As we sustain the contention of assessee that these two comparables needs to be removed and accordingly ALP be determined. Thus these grounds are allowed partly infavour of the assessee.
Deduction claim u/s 80G - We are of considered view that ld. Tax authorities below have fallen in error to deny benefit of Section 80G to the assessee. The ground is sustained.
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2025 (3) TMI 1380
Unexplained credit u/s 68 - loan procurement - HELD THAT:- Additions u/s 68 cannot be made merely on the basis of some perception of culpability towards receipt of loan. The money in the instant case has been received from a company whose financial standing has been demonstrated to be fairly good. The defining feature in the instant case is repayment of such loan in the subsequent years which distinguishes the facts of this case vis-a-vis the facts involved in NRI Steel and other judgements quoted by the Revenue authorities.
The factum of repayment quells the apprehension entertained by the Revenue. The over-riding factum of repayment of loan itself repels any form of disguise on the part of the assessee and dispels the perception of any sordid or extraneous affairs. The clinching evidences towards loan procurement discharge the primary onus which lay upon the assessee u/s 68 of the Act.
Besides, the loan itself having been repaid, the assessee does not ultimately stand to gain any spurious benefit from such alleged unexplained cash credit. Such fact justifies the plea of the assessee towards existence of bonafides in the transactions. In the totality of facts, where the trail for obtaining of loan and repayment thereof is proved and the lender has duly filed its return of income encompassing the transaction carried with the assessee, the action of the Revenue cannot be countenanced in law.
In the wake of peculiar facts subsisting in the present case, the additions towards unexplained credit u/s 68 and estimated addition u/s 69C is wholly unjustified.
As in the cases of CIT Vs. Ayachi Chandrasekhar Narsangji [2013 (12) TMI 372 - GUJARAT HIGH COURT] and CIT Vs. Mahavir Crimpers [2018 (6) TMI 1058 - GUJARAT HIGH COURT] have held that when the Department has accepted the factum of repayment, the additions under Section 68 is not sustainable in law. Similar view has been expressed in CIT Vs. Karaj Singh [2011 (3) TMI 951 - PUNJAB AND HARYANA HIGH COURT] & Panna Devi Chowdhary [1994 (3) TMI 80 - BOMBAY HIGH COURT].
Decided in favour of the assesse.
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2025 (3) TMI 1379
Assessment order passed u/s 143(3) the name of non existent assessee - applicability of Section 170(2) of the Income Tax Act concerning assessments on successor entities - HELD THAT:- We have no hesitation to hold that the assessment in the instant case has been framed on a non-existing entity (UBI).
Revenue was time and again informed of the amalgamation which was acknowledged in assessment proceedings for AY 2012-13 but completely ignored in assessment proceedings for AY 2018-19. As held by Maruti Suzuki [2017 (9) TMI 387 - DELHI HIGH COURT] that an assessment made on an entity that has ceased to exist, “is substantive illegality and not a procedural violation of nature adverted to in section 292B of the Income Tax Act”.
Therefore, we are of the considered view that the assessment order for AY 2018-19 on United Bank of India is void ab initio and has to be quashed. We order accordingly and set aside the findings of the CIT(A) by quashing the assessment order. Decided in favour of assessee.
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2025 (3) TMI 1378
Income from the provision of background scrutiny screening services as assessable under the head “royalty” - India-UK DTAA - HELD THAT:- Both the learned lower authorities’ respective findings assessing the assessee’s impugned income from the provision of background scrutiny screening services as assessable under the head “royalty”, stands reversed in very terms therefore. Assessee appeal allowed.
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2025 (3) TMI 1377
Rectification proceedings u/s 154 - rectify the assessment order by disallowing the credit of Tax Deducted at Source (TDS) claimed - HELD THAT:- On identical facts, in the case of Sri A.M. Fazil vs DCIT, Circle-1, Alappuzha [2019 (3) TMI 992 - ITAT COCHIN] held that withdrawal of tax credit which was given in the assessment completed u/s 143(3) by resorting rectification proceedings u/s 154 is legally untenable and cannot be sustained.
We hold that the addition by the AO is not a mistake apparent from the record in the given facts of the case and therefore the same is deleted. However, we make it clear that TDS which is given due credit in this assessment year, the same should not be given credit during any other assessment year when income is/was offered for taxation. It is ordered accordingly. Appeal of the assessee is allowed.
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2025 (3) TMI 1376
Rectification of mistake u/s 154 - additions to the assessee's income based solely on the admissions made in an application to the Settlement Commission - HELD THAT:- ACIT did not refer to any incriminating material for the purpose of passing of the said orders.
In the cited decision by the Coordinate Bench of ITAT, Jaipur Bench [2019 (8) TMI 990 - ITAT JAIPUR]] reliance was placed on decision in the case of Anantanadh Construction & Farms Pvt. Ltd. [2017 (5) TMI 1692 - ITAT MUMBAI] wherein it was held that confidential information submitted before the Settlement Commission cannot be the basis of addition in the assessment proceedings in absence of any incriminating material found during the course of search and seizure action.
Admittedly, the application submitted before Settlement Commission was not adjudicated on merits, and rather, the same was found to be not maintainable as the same did not fulfill conditions laid down u/s 245C(1) of the Act.
In the given facts and circumstances of the case we are in agreement with the contention raised by Ld. AR for the appellant that the ACIT erred in making addition simply on the basis of admission made by the assessee in her application submitted before Settlement Commission, without referring or taking into consideration or discussing any incriminating material therein.
The impugned orders passed by the Learned CIT(A) and the impugned orders u/s 154 of the Act passed by the ACIT deserve to be set aside.
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2025 (3) TMI 1375
Unexplained Cash Credit u/s. 68 - Bogus LTCG - AO disallowed the same on the ground that the assessee had introduced unaccounted income under the guise of bogus/sham LTCG claim u/s 10(38) - HELD THAT:- Buying and selling of shares in a concerted way shows a direct connivance between operators and the assessee and proves the entire process is predetermined and synchronized. The company’s financials, profit, dividend, earning per share etc. if not sole basis for increase in share price but at least is a paramount fact and in the instant case it is clear that all the criteria has given a go-away.
No hesitation to say the scrawny financial parameters cannot command such a high rise of shares in such a small period. Mysterious are ways. In enigmatic ride the assessee has made 400% profit in a span of fat 13 months. This coupled with the investigation conducted by the Income Tax Department with the backing of the statements of the brokers, it can be said that the assessee cannot claim ignorance of the unfair trade practices took place in the Security Market with respect to this scrip. Submitting that the assessee is a passive beneficiary of the operation cannot absolve the accountability of the assessee to claim LTCG as exempt. The said scrip has been in dormant and suddenly sprouted to yield profits of the highest order and then went into oblivion. Further, coupled with the inquires conducted by the SEBI with regard to the scrip do not instil any confidence about the genuineness of the earning of long-term capital gains. Hence, we have no hesitation to hold that NCL Research scrip was a penny stock and used by the assessee to book LTCG. The transactions being ungenuine, this will disentitle the assessee the claim of exemption u/s 10(38). The production of contract notes, bills, invoices, payment of STT, banking channel evidences per se does not explain and demonstrate genuineness of the share transactions unless and until assessee prima-facie shows to the authorities particularly so when LTCG is claimed in return that rise in prices of scrip was a usual market phenomenon which was driven by market force.
In the case of Sanat Kumar [2019 (8) TMI 696 - ITAT DELHI] has held that the so-called sale proceeds of shares received and claimed as exempt u/s. 10(38) was held to be sham transaction because of huge price rise of shares at the time of sale despite the fact that company's profits are negligible and did not support such price rise
In the case of Somnath Maini [2006 (11) TMI 189 - PUNJAB AND HARYANA HIGH COURT] held that claim of genuineness of transactions can be rejected even if the assessee backs the same with evidence which is not trustworthy.
Co-ordinate Bench of ITAT Chennai in the case of Rajnish Agarwal [2019 (1) TMI 1216 - ITAT CHENNAI] as held that the penny stock not having any financial strength of its own and the sale and purchase of these shares were held to be sham and LTCG u/s. 10(38) was denied to the assessee.
We, therefore, hold that the facts and circumstances of the present case are very tightly knit case where the Revenue has gone behind the transaction of capital gains to know the factual operation of sudden volatility in the prices of the scrip. The present case is therefore required to be adjudicated on the given set of facts and evidence.
As rightly observed by the CIT(A) in his order, it is relevant to note that price maneuvering occurred in assessee’s case as confirmed by the DGIT, SEBI, statements of the involved persons recorded. In view of the above, we find that the assessee’s transactions are not genuine and therefore we affirm the well-reasoned order of the Ld. CIT(A). Decided against assessee.
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2025 (3) TMI 1374
Invalid approval granted u/s 153D - HELD THAT:- In the present case, the approval dated 29/12/2016 of the JCIT has been received by the ACIT only on 30/12/2016 and the Assessment Orders have been passed on 29/12/2016. Thus, as on date of passing of the Assessment Order, the approval u/s 153D of the Act has not been received by the A.O., therefore, the assessment order has been passed by the A.O. in the absence of receipt of the approval u/s 153D of the Act.
While granting the Approval the Ld. JCIT only mentioned that the Draft Assessment Order has been approved, which doesn’t prove the applications of mind by the Ld. JCIT.
JCIT accorded the consolidated single approval u/s 153D of the Act for several Assessment Years. Therefore, the ratio laid down by the Hon'ble High Court of Delhi in the case of Shiv Kumar Nayyar [2024 (6) TMI 29 - DELHI HIGH COURT] is squarely applicable to the captioned Appeals. Thus, the impugned assessment orders deserves to be set aside.
We allow the Additional Ground of Appeal challenging the assessment order which was framed based on an invalid approval accorded u/s 153D. Decided in favour of assessee.
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2025 (3) TMI 1373
Additions u/s 68 - unexplained credits in the bank account of the Assessees, based on the seized software 'Hajir Johri' - HELD THAT:- The cheques issued by Jidnal Bullion Ltd. against the purchase of jewellery from the Assessee’s have been made as basis for initiating the proceedings against the respective Assessee. As per the seized material referred by the AO, no name mentioned with regard to receipt of the cash.
It is the contention of Assessee’s Representative that there is no link between alleged cash receipt mentioned in the seized document and the Assessee’s. Further in the statement of Mr. Parul Ahluwalia and Ekta Soni, no name of the Assessee’s have been stated.
The said fact of selling of jewellery have been duly found recorded in the books of account of Jindal Bullion Ltd. which has been accepted as it is and the fact of receipt of the cash is not forth coming in the documents relied by the A.O. or by the Ld. CIT(A).
By respectfully following the orders of the Tribunal in the case of Smt. Nirmal Uppal [2023 (5) TMI 1431 - ITAT DELHI] and M/s Sanmati Jewellers [2025 (3) TMI 216 - ITAT DELHI] we delete the respective additions made in the hand of the Assessee’s relying on Hazir Johri Software. Decided in favour of assessee.
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2025 (3) TMI 1372
Unexplained cash credit u/s 68 - assessee has submitted that no benefit of long-term capital gains exemption u/s 10(38) has been claimed in respect of the profit derived from the alleged shares - also there is no evidence on record to establish that the assessee was involved in price rigging - HELD THAT:- We respectfully rely on the decision of Aadesh Commodities Pvt. Ltd [2024 (8) TMI 1539 - ITAT MUMBAI] as held that if the sale transactions are treated as bogus, they must be removed from the Profit & Loss Account turnover, which would consequently result in a loss. Such a loss would then be adjustable against the addition made u/s 68 of the Act, rendering the entire exercise tax neutral.
Furthermore, once the assessee has duly disclosed the amount in the Profit & Loss Account, it cannot be subjected to double taxation. In view of the foregoing, we find that the impugned appellate order is well-reasoned and does not warrant any interference. Accordingly, the grounds raised by the revenue are dismissed.
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2025 (3) TMI 1371
Additions on Dividend and Interest Income - CIT(A) and the AO have estimated the gross dividend and interest on debentures by making comparison with the group entities - HELD THAT:- There is no denying of the fact that the dividend is received only by the registered shareholders. Assessee may have purchased shares and the shares must be lying for registration with the companies and, therefore, there is no question of receiving any dividend on any unregistered shares. It is an admitted fact that Harshad Mehta group was notified person and, therefore, the shares belong to a notified person and were in the custody of the Special Court. It is also a fact that some of the shares had not been received by the notified party. We are of the considered view that such dividend in the hands of the owner of shares which were not registered in the name of the assessee could not be assessed as income in the hands of the assessee.
We direct the AO to delete the additions on account of dividend and interest. In fact, most of the debentures were convertible debentures and have been converted into shares, therefore, there is no question of estimating any interest on the same. Accordingly, Ground No. 2 is allowed.
Purchase of shares as unexplained investment - As assessee reiterated that the shares received on bonus have not been considered in the increase in the holding of shares. The details have been furnished. Considering the bonus shares, in the impugned shares, we do not find any merit in the additions sustained by the ld. CIT(A) and the same is hereby directed to be deleted. Accordingly, Ground No. 3 is allowed.
Addition of interest income - HELD THAT:- We are of the considered view that since all the documents including bank statements of the assessee were in possession of either of the Income-tax Department or the Custodian, it would be a futile exercise to expect the assessee to furnish evidence and since no evidence has been brought on record by the revenue, the addition is directed to be deleted. Ground No. 5, is allowed.
Disallowance of various expenses recorded in the books of accounts - assessee has claimed various expenditure including interest on share debenture call money, loss of shares and other expenses - HELD THAT:- We find that on conversion of debentures, the assessee received shares on which it received dividends. Therefore, any difference in the claim of interest expenses qua the interest received on debentures is due to the conversion of debentures into shares. Therefore, the basis on which the interest has been disallowed itself is faulty. Therefore, the addition to the extent of Rs. 16,16,148/- cannot be sustained.
Share trading loss - The assessee has furnished copies of the contract notes of purchase of shares which are placed on record. Considering the same, the share trading loss cannot be disallowed and insofar as the other expenses are concerned, which are mainly related to the accounting and auditing expenses, were incurred for the purpose of business and the same deserve to be allowed. Considering the totality of facts we do not find any merit in the addition and the same is directed to be deleted.
Disallowance of interest expenditure - HELD THAT:- In assessee’s own case for AY 1991-92, the Coordinate Bench has allowed the claim of interest. On finding parity of facts, respectfully following the decision (supra), we direct the AO to allow the entire claim of interest.
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2025 (3) TMI 1370
TP adjustments - Since the assessee had international transactions with Associated Enterprises (AEs), a reference was made to the TPO u/s 92CA - HELD THAT:- It is evident that the CIT(A)-NFAC has dismissed the appeal without rendering any findings on the merits of the case, which is against the principles of natural justice.
Since the core issue in the appeal pertains to Transfer Pricing adjustments, the appeal ought to have been adjudicated by CIT(A)-TP as submitted by the DR. The failure of CIT(A)-NFAC to decide the issues on merits has resulted in an improper disposal of the appeal, necessitating a remand.
Considering the fair concession made by the DR, we are of the opinion that the matter should be restored to the file of the CIT(A)-TP or CIT(A) of any other appropriate charge for fresh adjudication. The concerned CIT(A) is directed to examine all the grounds of appeal raised by the assessee and adjudicate the issues on merits after granting a reasonable opportunity of being heard to the assessee. Appeal of the assessee is allowed for statistical purposes.
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2025 (3) TMI 1369
Bogus purchases - Shri Shailabh Khandelwal/third party in his statement recorded u/s 131 has admitted that the above company provide accommodation entries on commission basis - HELD THAT:- In the present case, the AO made additions towards purchases, merely, on the basis of statement of third party i.e. Shri Shailabh Khandelwal, without providing his statement to the assessee for its rebuttal and also cross examination contrary to the settled principle of law. Therefore, in our considered view, unless the statement is given to the assessee, no additions can be made on the basis of third party statement.
Purchases made by the assessee from M/s Jagannatha Agro Ltd. - As based on few instances of irregularity in transport bills, genuineness of purchases cannot be doubted, when the assessee has furnished every bill for purchases and payment made through proper banking channel. Therefore, we are of the considered view, that the AO erred in making additions towards purchases from M/s Jagannath Agro Ltd. as bogus in nature, without conducting further enquiry and also without bringing further material on record to establish that the payment made against purchases was received back in cash by the assessee.
This principle is supported by the decision of Vaman International (P.) Ltd. [2020 (2) TMI 464 - BOMBAY HIGH COURT] wherein, on similar facts, the Hon’ble High Court held that, the AO solely relying on the statement of a third party made addition on account of bogus purchases, without any inquiry made by him to bring on record any evidence to prove his allegation of bogus purchases.
As genuineness of purchases cannot be doubted only on the basis of third party statements, unless independent enquiry is conducted to ascertain true nature of transactions, in light of various evidences filed by the assessee. In the present case, since the assessee has filed various evidences to prove the genuineness of the purchases, in our considered view, the AO is erred in making addition only on the basis of statement of third party. Decided in favour of assessee.
Treatment to payment as bonus - assessee company had made bonus payment to the Directors and claimed deduction u/s 36(1)(ii) - although the assessee contends that payment of bonus to the Directors is for the services rendered, but the fact remains that the payment is distribution of dividend, which falls under the provisions of 36(1)(ii), therefore, disallowed the bonus payment - HELD THAT:- If we go by the rate of tax payable by the appellant company on this income and the rate of taxes paid by the directors on their total income, there is no difference in taxes paid by the Directors on the performance bonus paid by the appellant company. Had the company has not paid bonus to the employees and paid taxes on its own as its profits, the assessee would have paid 30% tax on such bonus payment. Since the Directors have paid maximum marginal rate of tax on their income, which includes performance bonus received by the appellant company, in our considered view, when there is no loss of taxes, it can at best be said that it is tax neutral and there is no loss of revenue to the Government.
Therefore, once the assessee has proved the payment of bonus to the directors as part of remuneration in terms of contractual obligation between the parties and further, there is no loss of revenue, in our considered view, the AO cannot bring the said payment within the provisions of section 36(1)(ii).
In our considered view, the provisions of section 36(1)(ii) will come into play, where assessee makes payment to any employee, as bonus or commission for services rendered, where such sum would not have been payable to him as profit or dividend, if it had not been paid as bonus or commission. Since the assessee has paid performance bonus for the services rendered to the Directors, in our considered view, the provisions of section 36(1)(ii) cannot be pressed into service. CIT(A), after considering the relevant facts has rightly directed the AO to delete the additions made towards performance bonus. Thus, we are inclined to uphold the findings of the CIT(A) and dismiss the appeal filed by the Revenue.
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2025 (3) TMI 1368
Rejecting the application for final registration u/s 12AB and cancelling the provisional registration granted u/s 12A(1)(ac)(vi) - HELD THAT:- In the present case, the assessee was granted provisional registration on 27.10.2021, and it was required to file Form 10AB by 26.04.2024 (six months before expiry). The application was filed late on 29.06.2024. While the delay is not substantial, the failure to respond to notices issued by the CIT(E) contributed to the rejection of registration.
The submissions of both parties and examined the records. It is evident that the assessee filed Form 10AB late, beyond the prescribed due date. CIT(E) issued two notices, which remained unanswered by the assessee. CIT(E), however, did not discuss or examine the documents already submitted by the assessee along with Form 10AB. DR did not object to remanding the matter back to the CIT(E) for fresh consideration.
As per the provisions of Section 12A(1)(ac) of the Act, the correct form for final registration after obtaining provisional registration under Section 12A(1)(ac)(vi) is Form 10AB, and not Form 10A. The assessee had already been granted provisional registration, and therefore, Form 10AB was the appropriate form to be filed for final registration. The contention of the AR that Form 10A should have been filed is misplaced and does not hold merit.
We also note that the CIT(E) has committed a procedural lapse by not addressing the evidence that was already on record before rejecting the application. The mere non-response to notices cannot be the sole basis for rejection if relevant documents were available in the assessment file. A fair assessment would require an evaluation of all materials submitted before reaching an adverse conclusion.
The assessee's failure to respond to notices caused unnecessary delays in the proceedings. Non-cooperation with the regulatory authority is not a practice that can be condoned without consequences. To balance the equities, we find it just and appropriate to impose a cost of Rs.10,000/- on the assessee for its non-responsiveness, while setting aside the order of the CIT(E).
We set aside the order of the CIT(E) and restore the matter back to the CIT(E) for fresh consideration. Assessee is allowed for statistical purposes.
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2025 (3) TMI 1367
TP Adjustment - TPO determining the Transfer Pricing taking another suitable methodology with cogent reason - HELD THAT:-The assessee has established 4 power plants as mentioned for captive power supplies to its cement unit at Nimbahera. These units are eligible for deduction u/s. 80IA of the Act, whereas the cement plant was not eligible for the same.
Total electricity generation of these power plants are being used in assessee’s cement plant only and there is no outside sale of the electricity. The assessee adopted Comparable Uncontrolled Price (CUP) method, based on the average price charged by the AVVNL to the cement plant, i.e. Rs. 7.40 per unit. Whereas the TPO, benchmarked the transaction based on the supplies made by the Sasan Power Ltd., Shree Cement Ltd., Coastal Gujarat Tata/ NTPC/ PTC and Reliance etc.
As decided in M/s. Jindal Steel and Power Ltd. [2023 (12) TMI 417 - SUPREME COURT] as held Tribunal had rightly computed the market value of electricity supplied by the captive power plants of the assessee to its industrial units after comparing it with the rate of power available in the open market i.e., the price charged by the State Electricity Board while supplying electricity to the industrial consumers. Therefore, the High Court was fully justified in deciding the appeal against the revenue.
Determination of price of electricity is a regulated activity and therefore the price at which power is supplied by generation company to transmission or distribution company cannot be said to be under 'uncontrolled condition' to be considered for benchmarking purpose. The activities of generation, transmission and distribution of electricity is a regulated activity in India with the primary legislation being The Electricity Act, 2003, under terms of which Central Electricity Regulation Commission ("CERC") and State Electricity Regulation Commission ("SERC") for various states have been established.
A price which is applied or proposed to be applied in a transaction between persons other than associated enterprises in uncontrolled conditions, it is evident that the transaction of purchase of electricity by State Electricity Boards from independent power producers is a regulated activity, being subject to approval of SERC, and therefore is not a transaction undertaken in uncontrolled conditions. Thus, the transaction between power producers and state electricity board is not fit to be considered comparable to the tested transaction of sale of electricity by eligible unit to non- eligible unit. Thus, the average rate of Rs 4.57 per unit, being the price for transfer of electricity by power producers to third party customers cannot be treated as arm's length price as it is a price under controlled conditions.
Decisions in favour of the Appellant supporting the ALP determination made by the Appellant.
Thus, we are of the considered opinion that the transfer price of electricity considered by the Appellant is ALP and therefore the additions proposed by the TPO and further confirmed by the Ld. DRP not sustainable in law. Hence directed to be deleted.
Decided against revenue.
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2025 (3) TMI 1366
Rejection of application for registration in Form No.10AB under clause (iii) of section 12A(1)(ac) and application for approval in Form No.10AB under clause (iii) of first proviso to sub-section (5) of section 80G - HELD THAT:- We find that admittedly the assessee made compliance to the initial notice issued by Ld. CIT, Exemption, Pune, but the subsequent notice could not be answered by him.
It is the sole contention of Ld. AR that if the assessee has not furnished requisite information/documents on the requisite date, one further opportunity should have been provided to him by Ld. CIT, Exemption, Pune.
It was further submitted that somehow the notice was missed & the assessee could not respond in time.
We find some force in the arguments of Ld. AR & therefore considering the totality of the facts of the case & in the interest of justice and without going into the merits of the case, we deem it appropriate to set-aside the order passed by Ld. CIT, Exemption, Pune and remand the matter back to him with a direction to give one more opportunity to the assessee to file the requisite details and 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 documents/information in support of the application for registration without taking any adjournment under any pretext, otherwise Ld. CIT, Exemption, Pune shall be at liberty to pass appropriate order as per law. Thus, the grounds of appeal raised by the assessee are partly allowed.
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2025 (3) TMI 1365
Revision u/s 263 - assessee’s claim for deduction u/s. 54B was not found in order - validity of the jurisdiction that was assumed by the Pr. CIT for dislodging the order of reassessment that was passed by the A.O u/s. 147 r.w.s. 144B - Satellite data taken by ISRO - HELD THAT:- We are of a firm conviction that as the ISRO’s report and CCOST report wherein it was stated that no agricultural activities were carried out on the subject land were there before the A.O in the course of the reassessment proceedings, and the same were rebutted by the assessee based on his exhaustive submissions and supporting documents filed in the course of the said proceedings, which, thereafter, had been accepted by the AO who had not drawn any adverse inferences on the aforesaid issue which, inter alia, had formed the very basis for reopening of his concluded assessment, therefore, it can safely be concluded that the AO had after considering the aforementioned documents arrived at a possible and plausible view that the subject land in the two years immediately preceding the date on which the same was transferred was used for agricultural purposes.
We are unable to comprehend, that now when the AO had queried the assessee on the aforesaid issue which had a material bearing on his claim for deduction u/s 54B and further, deliberated upon the latter’s reply and the supporting documents, then on what basis the Pr. CIT had observed that the A.O while framing the assessment had failed to examine the said claim for deduction in the backdrop of the aforesaid reports.
On the contrary, we are of the view that the Pr. CIT in the garb of his revisional jurisdiction had sought to substitute the view that was arrived at by him by analyzing the satellite imageries provided by ISRO and the CCOST report, as against the plausible view that was arrived at by the A.O after carrying out necessary verifications, inquiries and deliberations. We are afraid that seeking of such substitution of view by the Pr. CIT falls beyond the scope and realm of the revisional jurisdiction vested with him under Section 263 of the Act.
CIT in the course of the revisional proceedings, had vide his letter sought a “fresh opinion” of the CCOST, Raipur pursuant whereto, the latter had vide its letter dated 06.08.2024 filed its “fresh opinion/report”, but a careful perusal of the same does not reveal any new opinion/view but only a reiteration of its earlier view that the subject land was a “fallow land” on the aforementioned specific dates, viz. 23.03.2012, 02.10.2011, 19.11.2011, 29.05.2012 and 23.01.2010. Accordingly, the aforesaid report dated 06.08.2024 of the CCOST, Raipur cannot be construed as an additional information before the Pr. CIT which was not considered by the A.O while framing the reassessment vide his order passed u/s. 147 r.w.s. 144B of the Act, dated 30.05.2023.
Land Revenue Records, viz. (i) Manual report of the Village patwari, dated 03.09.2019; (ii) Form P-II Khasra issued by patwari based on computerized land revenue records; and (iii) Order of Naib Tehsildar, District : Raipur, dated 12.03.2020 - A.O in the present case had after considering the reply filed by the assessee, wherein he had in the course of reassessment proceedings rebutted/dispelled the adverse inferences which the A.O had sought to draw as regards his claim of deduction u/s.54B of the Act, i.e., inter alia, for the reason that as per the patwari report, dated 03.09.2019 (supra) no agricultural operations were carried out on the subject land in F.Y.2010-11, had, thus, arrived at a possible and plausible view, therefore, the Pr. CIT in the garb of his revisional jurisdiction could not have sought to substitute his view as against that which was arrived at by the A.O based on necessary inquiries and verifications.
Physical Verification Report obtained by FAO from the AO (Verification Unit) - A perusal of the A.O(VU)’s “Physical Verification Report” reveals that he had after carrying out necessary physical verification, recording the statements of the assessee and Shri Hrithram Nisad, i.e. the erstwhile care taker, clicking photographs of the site, consulting the records as were filed before him, and deliberating upon the documents that were filed by the assessee with him, had concluded that the subject land was used for agricultural purposes in the two years immediately preceding the date on which the same was transferred.
Considering the fact that the A.O(VU) in his “Physical Verification Report” (supra) had based on his inquiries/verifications reported that the subject land was in the two years immediately preceding the date on which it was transferred used for agricultural purposes, we find no reason as to why the view taken by the A.O in his order of reassessment passed u/s. 147 r.w.s. 144B of the Act, dated 30.05.2023 by relying on the said report amongst others, wherein he had accepted the assessee’s claim as regards usage of the land during the relevant period for agricultural purposes is not to be construed as a possible and plausible view arrived at by him while framing the reassessment.
We, thus, based on the judgment of Construction of park at NOIDA near Okhla Bird Sanctuary Vs. Union of India & Ors. [2010 (12) TMI 1367 - SUPREME COURT] are of a firm conviction that in the case of the present assessee, the revenue records which evidence that the subject land in the two years immediately preceding the date on which the same was transferred was used for agricultural purposes ought to have been given credence as against the satellite imageries that have been pressed into service by the Pr. CIT, i.e. satellite images obtained from ISRO and CCOST reports (supra) analyzing the said satellite images.
Accordingly, we are of a firm conviction that as the A.O in the present case before us had arrived at a plausible and possible view, i.e. the subject land in the two years immediately preceding the date on which the same was transferred used for agricultural purposes, therefore, there was no justification for the Pr. CIT to have exercised his revisional jurisdiction for the purpose of substituting his view as against the possible view that was arrived at by the A.O based on the material as was available before him in the course of the reassessment proceedings.
Thus, as the Ld. Pr. CIT had in exercise of the powers vested with him u/s. 263 dislodged a possible and plausible view that was arrived at by the A.O after carrying out necessary inquiries, verifications and deliberations on the issue in hand, i.e. the subject land in the two years immediately preceding the date on which the same was transferred was used for agricultural purposes and, thus, had observed that the assessee’s claim for deduction u/s. 54B of the Act was well founded and in order; therefore, the Pr. CIT by seeking substitution of his view as against the possible and plausible view arrived at by the A.O based on the same set of documents/material, had, thus, traversed beyond the scope of his jurisdiction u/s 263 of the Act.
Accordingly, we herein set-aside the order passed by the Pr. CIT u/s. 263 and restore the order of reassessment passed by the A.O u/s. 147 r.w. Section 144B. Decided in favour of assessee.
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