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Showing 161 to 180 of 915 Records

• 2020 (4) TMI 755 - ITAT AHMEDABAD
  

  Exemption u/s 11 - Charitable activities u/s 2(15) - assessee is a regulatory body created by State Government u/s 22 of Gujarat Town Planning and Urban Development Act (GTPUDA), 1976 for proper development of specified area in the state as ensured by the State Government - HELD THAT:- As relying on GUJARAT INDUSTRIAL DEVELOPMENT CORPORATION [2017 (7) TMI 811 - GUJARAT HIGH COURT] and GANDHINAGAR URBAN DEVELOPMENT AUTHORITY VERSUS THE DCIT, GANDHINAGAR CIRCLE, GANDHINAGAR [2019 (7) TMI 1608 - ITAT AHMEDABAD] we find merit in the plea raised on behalf of the assessee for holding the activities of assessee to be for charitable purposes under s.2(15) of the Act and consequence eligibility of benefits under s.11 & section 12 of the Act. The order of the CIT(A) is thus set aside and the AO is directed to grant relief claimed under ss.11(2) and 11(1)(a) of the Act to the assessee in accordance with law. - Decided in favour of assessee.

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• 2020 (4) TMI 754 - ITAT MUMBAI
  

  Bogus purchases - Profit estimation - HELD THAT:- As under oath on 18.12.2007 before the DGIT that M/s Khushi Enterprises, which he was controlling, was engaged in the issuing bogus bills. Further, he mentioned that M/s Moraj Building Concepts Pvt. Ltd. (the assessee) was one of the beneficiaries of such bogus bills. The notice u/s 133(6) issued by the AO dated 14.12.2010 to M/s Khushi Enterprises was not replied to - the enquiry by the Ward Inspector showed that no purchases were made by the assessee from M/s Khushi Enterprises. In such a factual scenario, the Ld. CIT(A) has rightly followed the decision in Simit P. Sheth [2013 (10) TMI 1028 - GUJARAT HIGH COURT] ; Bholanath Polyfab [2013 (10) TMI 933 - GUJARAT HIGH COURT] and brought to tax the profit @ 12.5% of the disputed purchases of ₹ 3,62,881/- which comes to ₹ 45,360/-. As the order passed by the Ld. CIT(A) is based on proper appreciation of facts and position of law, we uphold it.

  TDS u/s 195 - Disallowance on account of Consultancy Charges paid to Modern Line distribution - amount remitted to non-resident - HELD THAT:- Submissions made by the assessee that no tax was liable to be deducted at source as per Article 14 of the DTAA with UAE on account of payment to non-resident for services rendered outside India need re-examination by the AO. Therefore, we set aside the order of the Ld. CIT(A) on the above issue and restore the matter to the file of the AO to make an order afresh after giving reasonable opportunity of being heard to the assessee. We direct the assessee to file the relevant documents/evidence before the AO. Thus the 2nd ground of appeal is allowed for statistical purposes.

  Addition u/s. 69 on account of unexplained expenses - HELD THAT:- We find merit in the observation of the Ld. CIT(A) that when on the same set of papers, more than one entry is made and one such entry is recorded in the books of accounts, it was for the assessee to prove that the other entries were not in respect of unexplained expenditure/investment because the entire document as such has to be either taken as true or dumb.

  Expenditure confirmed by the Ld. CIT(A) need to be re-examined on the basis of evidence of such expenditure to be filed by the assessee. Therefore, we set aside the order of the CIT(A) on the above ground of appeal and restore the matter to the file of the AO to make an order afresh after giving reasonable opportunity of being heard to the assessee. We direct the assessee to file the relevant documents/evidence before the AO.

  Disallowance on account of payment made to Shri Sai Prerna Charitable Trust - HELD THAT:- In the instant case, the assessee has made a donation of ₹ 55,00,000/- to Shree Sai Prerna Charitable Trust. As observed by the Ld. CIT(A), the assessee failed to explain the purpose of making the donation and as to how it was related to assessee’s business. Moreover, it failed to explain that the said Trust was having tax exemption certificate based on which deduction could be claimed by the assessee-company. CIT(A) has rightly observed that as the assessee is following project completion method, the said disallowance would result in reduction of WIP to the extent of ₹ 55,00,000/- leading to a higher profit in the year in which the project is completed and offered to tax. Thus we uphold the order of the Ld. CIT(A) on the above ground of appeal.

  Addition u/s 69 of purchases - HELD THAT:- Goods amounting to ₹ 1,27,999/- were returned to Satya Narayan Marble for which no payment was made by the assessee. In fact it was not payable at all. In such a situation, the addition of ₹ 1,27,999/- confirmed by the Ld. CIT(A) cannot be sustained. Therefore, we delete the above addition of ₹ 1,27,999/- and allow the 5th ground of appeal.

  Addition being alleged discrepancy in cash in hand - HELD THAT:- Difference in cash was explained by way of cash lying at sites viz. Plot 448 (H.O.) : ₹ 25,517/-, Plot 448 – Khare (H.O.) : ₹ 1,87,599/- and Plot : ₹ 53,709/-. A perusal of the above explanation which was furnished during the course of survey and also before the ADIT (Inv.) and the AO is further corroborated by the books of account.

  Addition u/s 68 on account of alleged untallied trial balance - HELD THAT:- Assessee has maintained regular books of accounts which have been duly audited. In the instant case, the AO has not rejected the books of accounts. There is nothing on record brought out by the AO to prove that the transactions were not accounted and included in the books of accounts. All the more the said excel sheet does not represent any income or expenditure and it was prepared by the accountant to record the results of trial run taken for the purposes of shifting from Foxpro accounting software to Tally. The assessee at the year-end has drawn final accounting on the basis of regular account which included the transactions in the said two rough trial balances.

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• 2020 (4) TMI 753 - ITAT MUMBAI
  

  Disallowance u/s. 14A - Whether AO recorded the requisite satisfaction before proceeding to compute disallowance u/s 14A - HELD THAT:- No suo-moto disallowance was offered by the assessee despite earning exempt income in the form of dividend income and LTCG. AO specifically took note of the fact that most of the income earned by the assessee was in the form of dividend income and capital gains. The said analysis, in our opinion, was quite sufficient to establish that Ld. AO had recorded the requisite satisfaction before proceeding to compute disallowance u/s 14A. Therefore, this plea raised by Ld. Sr. Counsel could not be accepted.

  While computing the disallowance, only those investments were to be considered which yielded exempt income during the year - AO is directed to verify the computations and restrict the disallowance considering only those investments which have yielded exempt income during the year. The separate disallowance of Bank Charges for ₹ 1.38 Lacs would not be warranted since it could not be said that the bank was used only for the purpose of earning exempt income. Ground No. 1 stand partly allowed.

  MAT computation u/s 115JB - HELD THAT:- Unless the factum of debit of actual expenditure was brought on record, adjustment of disallowance u/s 14A while computing book profits u/s 115JB would not stand test of law. Similarly, disallowance u/s 40(a)(ia) was a statutory disallowance for want of TDS. Unless the same was specifically covered by manner of computations as provided u/s 115JB, the adjustment of the same would also not be justified.

  Disallowance u/s 41(1) - outstanding debt - HELD THAT:- Assessee has placed on record debt-confirmation dated 24/02/2016 issued by M/s Status Marketing Pvt. Ltd. The said confirmation letter acknowledges the fact that amount of ₹ 90.43 Lacs was receivable from the assessee as on 31/03/2014. It also acknowledges the fact that amount of ₹ 59.56 Lacs was due by the director of that entity to the assessee company against booking of flats in the Hill view park project. Upon perusal of the same, it could not be said that the amount payable by the assessee had ceased to exist or there was remission or cessation of trading liability. The factum of outstanding debt was duly acknowledged in the confirmation of M/s Status Marketing Pvt. Ltd. Therefore, the provisions of Sec. 41(1), in our considered opinion, could not be applied to the fact of the case.

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• 2020 (4) TMI 752 - ITAT MUMBAI
  

  Treating the reimbursement of the expenses as income for the year - DRP treating the travel expenses reimbursed to the Appellant by 'GIA India Laboratory P. Ltd.' as the income of the Appellant - HELD THAT:- We find that the issue and facts are identical to this year and the Coordinate Bench for the immediately preceding assessment year i.e. A.Y. 2014-15 in [2018 (6) TMI 1107 - ITAT MUMBAI] held that the fee for technical services is different from the expenses incurred on third party cost and there is a clear bifurcation in the agreement between the internal cost incurred and external cost paid by the assessee on behalf of GIA India Laboratory Pvt. Ltd. The Tribunal applying the ratio of the decision of the Hon'ble Supreme Court in the case of DIT v. A.P. Moller Maersk [2017 (2) TMI 993 - SUPREME COURT] held that amount received towards reimbursement of cost cannot be taxed in the hands of the assessee.

  Levy of surcharge and education cess - whether once the DTAA rates are applied education cess and surcharge cannot be levied separately? - HELD THAT:- As relying on M/S. EPCOS ELECTRONIC COMPONENTS S.A [2019 (7) TMI 708 - DELHI HIGH COURT] and SUNIL V. MOTIANI [2013 (12) TMI 1105 - ITAT MUMBAI] direct the Assessing Officer to delete the education cess and surcharge levied on the assessee. This ground is allowed.

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• 2020 (4) TMI 751 - ITAT MUMBAI
  

  Bogus purchases - onus to establish the genuineness of such purchases by providing documentary evidence - CIT-A deleted the addition - HELD THAT:- CIT(A) after considering the submissions of the assessee concluded that the assessing officer allowed purchases from both the parties in the assessment order passed under section 143/147 dated 29.01.2019 and 20.10.2016. Moreover the requirement of producing the proprietor of Girnar Sales Corporation and Jainam Enterprises is impossible, accordingly ld CIT(A) directed the assessing officer to allow the purchases from both the parties. CIT(A) has taken a correct view and directed the Assessing officer to allow the purchases. We are also of the view that the assessing officer must follow the consistency on same set of facts. - Decided against revenue.

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• 2020 (4) TMI 750 - ITAT INDORE
  

  Penalty u/s 271(1)(c) - defective notice - non specification of charge - HELD THAT:- In the instant appeal are similar to those adjudicated by us in the case of Varad Mehta [2018 (12) TMI 1091 - ITAT INDORE] we therefore respectfully following above referred judgments and in the given facts and circumstances of the case are of the considered view that the alleged notice issued u/s 271(1)(c) of the Act is invalid, untenable and suffers from the infirmity of non application of mind by the AO.

  Since we have held the notice u/s 274 of the Act as invalid, the subsequent proceeding u/s 271(1)(c) of the Act are thus held to be void ab initio. We accordingly allow the legal ground raised by the assessee on the legality of the penalty proceedings initiated u/s 271(1)(c) of the Act. - Decided in favour of assessee.

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• 2020 (4) TMI 749 - ITAT DELHI
  

  Disallowance of deduction u/s 10B - HELD THAT:- Wherein in respect of the claim of deduction u/s 10B of the Act, a coordinate bench of this Tribunal found that by applying the decision of Textile Machinery Corporation Ltd. Vs. CIT [1977 (1) TMI 3 - SUPREME COURT] CIT(A) had rightly extended the relief to the assessee u/s 10B of the Act and, therefore, the revenue cannot have any grievance against the same. It is not the case of the revenue that any appeal was preferred against the order or that this position was disturbed. It is not the case of Revenue that there is any change of facts and circumstances involved in this case to taken a different view.

  Transfer Pricing Adjustment - international transaction - international transaction in respect of ‘firewall charges’ reimbursement to AE - HELD THAT:- In the instant case, the assessee has incurred expenditure and not making payment of mark-up is not adverse to the entity in Indian Jurisdiction. The assessee has claimed the expenditure paid by the AE on its behalf. The contention of the TPO is that the assessee was not required to incur the said expenses. But it was under jurisdiction of the Assessing Officer whether particular expenditure was incurred wholly and exclusively for the purpose of business and not in the domain of the TPO to hold that in view of the warranty etc., the assessee was not required to incur expenditure on firewall charges. The contention of the assessee seems plausible that motors were required to checked for content of moisture acquired in transport from India to the USA, i.e., the destination point and it was the responsibility of the assessee to provide defect free motors to the end customers. Thus, respectfully following the finding of EKL APPLIANCES LTD [2012 (4) TMI 346 - DELHI HIGH COURT] we delete the transfer pricing adjustment.

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• 2020 (4) TMI 748 - ITAT NEW DELHI
  

  Admission of additional evidence by CIT-A - partial relief has been granted by CIT(A) to the assessee on the basis of additional evidences - failure to provide reasonable opportunity to the Assessing Officer - HELD THAT:- No specific mention in the impugned appellate order of the Ld. CIT(A) to the effect that the Additional Evidences had been admitted by him - CIT(A) has failed to record the reasons in accordance with Rule 46A(2) of Income Tax Rules, 1962.

  CIT(A) is duty bound, under Rule 46A(3) to allow a reasonable opportunity to the Assessing Officer (a) to examine the evidence or document or to cross-examine the witness produced by the appellant, or (b) to produce any evidence or document or any witness in rebuttal of the additional evidence produced by the appellant but he failed to provide such reasonable opportunity to the AO. CIT(A) had only provided a perfunctory opportunity, and a very short time to the Assessing Officer. The letter asking the AO to send report is dated 08.03.2016 whereas the time was allowed to the Assessing Officer up to an earlier date 16.03.2015. It is not understood how a letter dated 08.03.2016 can be responded to by the AO by an earlier date of 16.03.2015.

  CIT(A) had failed to provide reasonable opportunity to the Assessing Officer for which the Assessing Officer was entitled under Rule 46A(3) of Income Tax Rules. CIT(A) had failed in due compliance of Rule 46A(2) as well as Rule 46A(3) of Income Tax Rules; in granting partial relief to the assessee on the basis of Additional Evidences furnished by the Assessee during the appellate proceedings before Ld. CIT(A) - We set aside the impugned appellate order dated 30.03.2016 of the Ld. CIT(A), and direct him to pass a fresh order on merits after following due procedure prescribed under Rule 46A of Income Tax Rules. - Revenue Appeal is partly allowed for statistical purposes.

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• 2020 (4) TMI 747 - ITAT BANGALORE
  

  TDS u/s 195 - software expenses u/s 40(a) (i) for non-deduction of TDS - payments towards purchase of 'off-the-shelf shrink-wrapped software' as 'Royalty' under the Act as well as under the India-Malaysia tax treaty - HELD THAT:- The issue is against assessee vide decision in CIT v Samsung Electronics Co. Ltd. [2011 (10) TMI 195 - KARNATAKA HIGH COURT] wherein it is held that payments towards purchase of software are in the nature of 'royalty' and liable for TDS. - Decided against assessee.

  Sales promotion and advertisement expenses u/s 37 (1) - HELD THAT:- In the present facts of the case the expenditure towards advertisement has been incurred by assessee for promoting sales and therefore, ratio laid down in the decisions relied upon by Ld. AR is squarely applicable i.e. SPICE DISTRIBUTION LTD. [2014 (9) TMI 732 - DELHI HIGH COURT], M/S. ASIAN PAINTS (INDIA) LTD. [2016 (11) TMI 258 - BOMBAY HIGH COURT] and INDO NISSIN FOODS LTD. [2012 (11) TMI 1246 - KARNATAKA HIGH COURT] - Accordingly, we direct Ld. AO/TPO to delete addition made on account of advertisement expenses under section 37 (1).

  Disallowance of warranty expenses - HELD THAT:- Assessee's case dearly fans in line with the legal ratio set out by the various appellate decisions cited at Bar in so far as the provision for warranty stood crystallized as soon as the sate was made which a customer would like to be fulfilled within the warranty period and is at the cost of an assessee's goodwill. Therefore, the residual amount purported to have been held by the Assessing Officer as an excess provision cannot be considered as a contingent provision and not an ascertained liability. The warranty period continues beyond an year which fact was rightly considered by the Id. CIT(A). - Decided against revenue.

  Disallowance of foreign exchange loss - DR submitted that foreign exchange loss cannot be allowed, as the transactions are speculative in nature and contingent in character - HELD THAT:- Accounting treatment is to recognise exchange fluctuation gain or loss in the profit and loss account as on the valuation date. Hon’ble Supreme Court in case of CIT vs Woodward Governor India (P) Ltd [2009 (4) TMI 4 - SUPREME COURT] held that, a transaction in which a legal liability has been incurred before it is actually disbursed would be regarded as revenue in nature. In the facts of present case assessee incurred foreign exchange loss far year under consideration towards trading activities, and therefore it is directly attributable to business of assessee, which is an allowable expenditure.

  TPA - AMP expenses addition - HELD THAT:- No adjustment needs to be done in respect of AMP expenses as relying on assessee's own case [2019 (5) TMI 1541 - ITAT BANGALORE]

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• 2020 (4) TMI 746 - ITAT BANGALORE
  

  TP Adjustment - filters application - HELD THAT:- As observed that authorities below have cherry picked on using filters without understanding business model of assessee. It is observed that DRP applied on-site revenue filter suo moto, without being considered by TPO. We are of the opinion that transfer pricing adjustment made by AO/TPO needs to be re-looked in accordance with law. As observed that AO while passing final assessment order in computation of assessed income has not considered transfer pricing adjustment that has been made in para 3 of assessment order. This shows a sheer negligence on behalf of Ld. AO and non-application of mind.

  Provision for warranty disallowed - HELD THAT:- We direct Ld. AO to verify the claim of assessee in the light of decision by Hon’ble Supreme Court in case of Rotork Controls India (P) Ltd., vs CIT [2009 (5) TMI 16 - SUPREME COURT] and Hon’ble Delhi High Court in case of CIT vs Goetz India Ltd., [2010 (1) TMI 29 - DELHI HIGH COURT]

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• 2020 (4) TMI 745 - ITAT MUMBAI
  

  Disallowance u/s 35 - bogus donations - assessee company had given donation to Matravaini Institute of Experimental Research Education, Kolkata - HELD THAT:- Assessee is entitled to deduction of section 35(1)(ii) of the Act as the said research institute was eligible to accept donation and on the date of giving donation by the assessee and that Notification was valid and it is only by way of subsequent letter it was cancelled from back date. The case of the assessee is squarely covered by a series of decisions as referred to and relied by the Ld. A.R. In the case of Borsad Tobacco Company Pvt. Ltd. vs. DCIT [2019 (6) TMI 1484 - ITAT MUMBAI]the co-ordinate bench of the Tribunal has held that donor is not affected due to subsequent withdrawal of recognition with retrospective effect

  Hon’ble Bombay High Court in the case of Ram Das Maniklal Gandhi vs. UOI [1999 (9) TMI 64 - BOMBAY HIGH COURT] has held that the donation to an institution whose approval was withdrawn by the prescribed authority with retrospective effect would not affect the assessee who gave the donation. The assessee is entitled to rely upon the certificate granted to an institution under section 35CCA of the Act for claiming deduction under section 35CCA of the Act for claiming deduction under that section which was valid and subsisting when donation was made to it - We set aside the order of Ld. CIT(A) and direct the AO to allow the deduction as claimed under section 35 of the Act by the assessee.

  Addition towards depreciation on the let out property - HELD THAT:- As decided in own case 2019 (9) TMI 544 - ITAT MUMBAI] no deprecation u/s 32 of the 1961 Act can be allowed on the two properties which were acquired in earlier years and were let out throughout the year under consideration income thereof being offered for tax under the head income from house properties, as doctrine of supervening impossibility has set in as neither these properties were used for business purposes, nor ready to be used for business nor available for business user for the purposes of business of the assessee, for the entire year under consideration. Thus, deprecation u/s 32 of the 1961 Act under these circumstances can not be allowed on these two properties merely on the grounds that once these properties entered Block of Assets viz. Building many years back and continues to be part of Block of Asset viz. Building despite the fact that factual matrix surrounding these two properties had undergone substantial change over years which cannot be given complete go bye.

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• 2020 (4) TMI 744 - ITAT MUMBAI
  

  Rectification u/s 154 - CIT (A) held that forex loss or gain arising on account of Foreign exchange fluctuation pertaining to Foreign currency convertible bonds (FCCB) utilized for general business purpose and not with respect to capital account is in the nature of “Capital Loss” - HELD THAT:- Assessee has been consistently following the same treatment for all the subsequent. During the course of original assessment proceedings, while responding the query on section 14A the assessee has specifically stated that foreign currency convertible bonds were used for capital account purposes. The revenue has not rebutted the fact that the assessee has followed the same treatment in earlier years. Paper book wherein the assessing officer has reproduced the assessee’s submission in its order. We notice that the assessee has contended before the AO that as per the settled law foreign exchange gain on capital account transaction is not chargeable to tax, therefore, the case is covered in favour of the assessee. Hence, we find merit in the contention of the Ld. counsel that there is no infirmity in the findings of the Ld. CIT(A).

  Action of the AO in passing order u/s 154 coordinate Bench in the assessee’s own case for the AY 1996-97 has upheld the findings of the Ld. CIT (A) holding that as per the settled law the only mistake apparent from record can be rectified u/s 154 of the Act and a debatable issues cannot be said to be a mistake apparent from record. - Decided against revenue.

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• 2020 (4) TMI 743 - ITAT DELHI
  

  Rejection of books of accounts - profit estimation - assessment u/s 144 - profit rate determination - HELD THAT:- Assessee has explained the difference in the closing stock figure of the last year and the opening stock figure of the current year filed before the AO and the CIT(A). However, the same was rejected on the ground that the details of the expenditure and date of incurring such expenditure along with the purpose was not given.

  Books results were rejected u/s 145(3) and the AO has gone for estimation of profit. Considering the fact that there is difference of ₹ 77,08,967/- in the closing stock of preceding year and the opening stock of the current year, we are of the considered opinion that adoption of net profit rate of 3% on ₹ 2,16,78,967/- (i.e., the turnover of ₹ 1,39,70,000/- + ₹ 77,08,967/- being the difference in stocks) will meet the ends of justice - direct the AO to recompute the addition by considering the net profit at ₹ 6,50,369/- less net profit already disclosed by the assessee at ₹ 1,15,812/- (subject to verification). Grounds of appeal No.2 and 3 filed by the assessee are accordingly partly allowed.

  Addition u/s 68 - assessee could not substantiate the amount received from three different parties on account of share application money - HELD THAT:- Since the ld.CIT(A) has sustained the addition to the tune of ₹ 57 lakhs on the ground that no confirmation was filed by the assessee and considering the fact that there is a running account between the assessee and M/s Rama Ply Board Industries Ltd., therefore, considering the totality of the facts of the case, we deem it proper to restore the issue to the file of the AO with a direction to grant one final opportunity to the assessee to substantiate the nature of transaction to his satisfaction and decide the issue as per fact and law.

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• 2020 (4) TMI 742 - ITAT CHENNAI
  

  Disallowance on advertising expenses and professional expenses including Branding expenses - allowable revenue - HELD THAT:- As decided in own case [2019 (10) TMI 828 - ITAT CHENNAI] AO is not expected to question the necessity of the expenditure. The brand expenditure is nothing but business promotion expenditure which is Revenue in nature and which is clearly allowed as deduction - Decided in favour of assessee.

  Delayed employees contribution towards PF - whether contribution remitted before the due date of filing of the return u/s.139(1) - HELD THAT:- This issue is covered by the order of the Hon’ble Madras High Court in the case of Industrial Security & Intelligence India Pvt. Ltd. [2015 (7) TMI 1063 - MADRAS HIGH COURT] in favour of assessee.

  Disallowance of depreciation on trade mark - HELD THAT:-This issue is covered in favour of the assessee in the assessee’s own case [2019 (10) TMI 828 - ITAT CHENNAI] wherein held that law is settled to the extent that it is outside the domain of the ld. AO to question the necessity of incurring an expenditure. Thus the reasons assigned by the Assessing Officer that the transaction for purchase of trademark are not genuine cannot stand test of the law. Furthermore, it is an settled principle of law that intangible assets such as trademark, goodwill are also qualifies for depreciation at prescribed rates. We do not concur with the views of the lower authorities in disallowing the claim for depreciation on trademark.

  ‘Cessation of liability’ u/s 41(1) - HELD THAT:- It is clear from the above that the very same AO allowed the write off of M/s.Rocky Marketing (Chennai) Pvt. Ltd., in its hands. Therefore, M/s.Rocky Marketing (Chennai) Pvt. Ltd., has waived off the liability from the assessee’s hand. As per the explanation extracted, supra, the remission or cessation of any liability by a unilateral Act, is covered u/s.41(1) and hence, we do not find any reason to interfere with the order of the Ld.CIT(A). Therefore, corresponding grounds of the assessee fail.

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• 2020 (4) TMI 741 - ITAT AHMEDABAD
  

  Penalty u/s 271AAB - disclosure of additional income in the return of income filed under section 153A - no undisclosed income or the inflation of expenditure during the search/ assessment proceedings - HELD THAT:- Unable to accept the contention of the revenue that the loose sheet found during the course of search indicates any undisclosed income or asset or inflation of expenditure.

  An addition has been made on the basis of loose document, which did not closely prove any concealment or furnishing of inaccurate particulars by the assessee - Penalty u/s 158BFA (2) is not leviable. The facts of the assessee's case shows that there was no undisclosed income found during the course of search and no incriminating material was found, hence we hold that there is no case for imposing penalty u/s 271AAB of the Act, accordingly, we set aside the order of the lower authorities and cancel the penalty u/s 271AAB of the Act.- Decided in favour of assessee.

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• 2020 (4) TMI 740 - ITAT AHMEDABAD
  

  Revision u/s 263 - depreciation on being Foreign Exchange Fluctuation u/s 43A - HELD THAT:- As inferred from the revisional order u/s.263 is different from the reasons set-out in the show-cause notice and therefore, we are of the considered view that when a ground of revision is not mentioned in the show-cause, then it cannot be made the basis of the order for the reason that assessee would have had no opportunity to meet the point. Considering the judgements relied upon by the ld.AR, we find that the ground mentioned by the CIT, while passing the order u/s.263 with regard to claiming of depreciation on account of Foreign Exchange Fluctuation was not mentioned in the show-cause notice u/s.263(1) of the Income Tax Act.

  Therefore, the assessee could not get opportunity to explain the point recorded at the time of passing final order.

  We hold that the order of ld.CIT u/s.263 qua directing the ld.AO to pass a fresh order denovo on account of claim of depreciation on account of Foreign Exchange Fluctuation is bad in law and is thus not sustainable in Law. Therefore, that portion of the order is quashed, and this ground raised by the assessee is allowed.

  Disallowance on account of repairs to Plant & Machinery - HELD THAT:- It is not a proviso to proviso in other words. Learned Departmental Representative further fails to dispute that the question whether or not a port terminals Jetty / Trestle is to be treated as plant and machinery is no more res integra since this tribunal’s co-ordinate bench decision in Kandla Port Trust case [2006 (4) TMI 243 - ITAT RAJKOT] has held such assets to be plant and machinery entitled for 25% rate of depreciation. Hon'ble jurisdictional high court has upheld the said view in Revenue’s tax [2016 (8) TMI 111 - GUJARAT HIGH COURT]. We therefore find no reason to accept in Revenue’s arguments seeking to treat assessee’s Jetty & Trestle as building block of assets instead of plant and machinery in all cases on merits as well.

  Depreciation on electric installation - HELD THAT:- We find that the issue is squarely covered in M/s.Gujarat Chemical Port Terminal Co.Ltd., Vs. DCIT, Circle-1(1)(1) [2019 (12) TMI 1294 - ITAT SURAT] opinion that assessee is eligible for depreciation @ 15% instead of 10% allowed by the ld.AO.

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• 2020 (4) TMI 739 - ITAT SURAT
  

  Exemption u/s 11 - Registration u/s.80G(5) rejected as assessee failed to file documentary evidences to enable him to bring satisfaction about the genuineness of the Trust activities - HELD THAT:- After considering the rival submissions, we are of the view the matter requires reconsideration at the level of Learned CIT(Exemption). Since the assessee had already submitted all the required documents by email before the ld.CIT(Exemption) which do not find mention in the order, therefore it can be inferred that those were not considered. The principle of audi alteram partem is the basic concept of natural justice. The expression “audi alteram partem” implies that a person must be given an opportunity to defend himself. This principle is sine qua non of every civilized society.

  The right to notice, right to present case and evidence, right to rebut adverse evidence, right to cross examination, right to legal representation, disclosure of evidence to party, report of enquiry to be shown to the other party and reasoned decisions or speaking orders. We took this guidance for right of hearing, from the ratio as is laid down by the Hon'ble Supreme Court in the case of Maneka Gandhi v. Union of India, wherein Hon'ble Supreme Court has laid down that rule of fair hearing is necessary before passing any order.

  We find that it is pre-decision hearing standard of norm of rule of audi alteram partem. We, are therefore, of the view the matter requires reconsideration at the level of Learned CIT(Exemption).

  Thus, while setting aside the order of ld.CIT(E), we restore it back to Ld.CIT(Exemption) and direct that all the documents filed by assessee through E-mail be considered and the assessee be given one more opportunity of being heard and to file all the documents before the ld.CIT(Exemption), Ahmedabad as called-for - Appeal of the assessee is allowed for statistical purpose.

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• 2020 (4) TMI 738 - ITAT PUNE
  

  Estimation of income - Addition on statement during the course of survey - CIT- A deleted the addition - As per revenue basis for making addition was not only the statement recorded by the Revenue during the course of survey but also the profit and loss account extracted from the computer system of the assessee on the basis of which the assessee has disclosed his income - HELD THAT:- CIT(Appeals) has failed to appreciate the statement of the assessee and further failed to examine the profit and loss account retrieved at the time of survey which was admitted to be correct by the assessee. On the basis of this extracted profit and loss account from the computer for the relevant assessment year upto 19.01.2010, the assessee has declared his income of ₹ 8.63 Crores . The assessee on his own in reply to Question No.25 had over and above the already agreed income of ₹ 8.63 Crores have also admitted that he would have an income of ₹ 9.5 Crores (inclusive of ₹ 8.63 Crores) upto 31.03.2010. Besides that the assessee had also declared the additional income of ₹ 2.60 Crores and ₹ 2.20 Crores for the assessment year 2008-09 and 2009-10 respectively.

  CIT(Appeals) had wrongly read the statement of the assessee and have further failed to appreciate the accounts as on 19.01.2010 were duly admitted and acknowledged by the assessee as correct. Hence, the right course would be for the Ld. CIT(Appeals) to freeze the profit and loss account of the assessee upto 19.01.2010 and thereafter, the profit and loss account for the remaining period was required to be re-casted and based on that profit of the assessee should have been calculated. Needful was not done by the Assessing Officer or by the Ld. CIT(Appeals) - remand the matter to the file of the Ld. CIT(Appeals) - Appeal of the Revenue is allowed for statistical purposes

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• 2020 (4) TMI 737 - ITAT SURAT
  

  Penalty u/s. 271D and u/s. 271E - default u/s 269SS and 269T - acceptance and repayment of loans or deposits in cash - Co-operative Societies to be treated as credit societies as alternative to Bank - bonafide belief - HELD THAT:- Assessee has accepted and repaid deposit of loans above ₹ 20,000/- otherwise then by the account payee cheque or account payee draft on a bonafide belief that provisions of section 269SS and 269T are not applicable in its case.

  AO had also accepted that deposits made by the assessee are genuine and the breach of provisions of section 269SS and 269T was occurred due to bonafide belief. Even no addition was made on account of these impugned deposits in the Return of Income and thus the veracity of the creditors was not doubted by the Revenue. In case, if the veracity was doubted, then the additions would have been made u/s.68 of the Act. It is an undisputed facts that these credit societies function in villages/taluks etc., for farmers or related persons, as an alternative to banks and if the deposits were taken/repaid only in cheques, then it may loose all relevance. Even the Chartered Accountant who audited the books of accounts was not showing these as being in contravention of the Act in the relevant columns of Audit Report.

  Under bonafide belief assessee could accept and repaid loan or deposits in cash as is done by the Co-operative Banks, the assessee had accepted and repaid loans or deposits in cash. Provision of section 269SS are not applicable in the present case. - Decided against revenue.

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• 2020 (4) TMI 736 - ITAT MUMBAI
  

  Allowable revenue expenditure u/s 37 - training charges incurred on non-executive director - HELD THAT:- Shri Jashan Bhumkar completed the higher education with the financial assistance of the assessee company and assessee company had incurred the education expenditure for the last year of graduation and Shri Jashan Bhumkar was working in the company as non-executive director at the time of availing the above benefit. The company has decided to approve the above expenditure by passing a resolution in this regard and entered into an education sponsorship agreement. As per the above agreement Shri Jashan Bhumkar has to work with the assessee company for a period of 3 years in return for the above said sponsorship.

  Assessee has sponsored the education of son of the M.D. What is relevance, whether the person who was sponsored, is relevant for the existing business and whether the business benefitted. If it is yes, then it is valid business expenditure and respectfully following the aforesaid decisions which is applicable mutatis mutandis in the present case, we are inclined to accept the submission of Ld. AR. Accordingly, we allow the grounds raised by the assessee.

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