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Showing 161 to 180 of 1644 Records
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2025 (4) TMI 1484
Deduction u/s 80G - donations made as part of its Corporate Social Responsibility (CSR) obligations - HELD THAT:- We are of the view that the CIT(A)'s conclusion - though acknowledging the inapplicability of clauses (iiihk)/(iiihl) - is contrary to the legislative structure and fails to appreciate the scope and autonomy of section 80G within Chapter VI-A.
In light of the legislative intent behind Explanation 2 to section 37(1), of the Act the structure and operation of Chapter VI-A, judicial consensus from Co-ordinate Benches and full compliance by the assessee with the conditions of section 80G, we hold that the assessee is entitled to deduction u/s 80G. The disallowance made by the AO and sustained by the CIT(A) is hereby directed to be deleted. Appeal of the assessee is allowed.
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2025 (4) TMI 1483
Disallowance u/s 80P(2)(d) - interest income from Co-operative banks - HELD THAT:- It is pertinent to note that only the Sabarkantha District Central Co-operative Bank Ltd. is a registered co-operative society and therefore the component which is an interest received on deposits are allowable as deduction u/s. 80P(2)(d).
As regards, the Dena Gujarat Gramin Bank, AR could not point out whether this was registered cooperative society or not and after taking into account the submission of the AR. It is found that the said Dena Gujarat Gramin Bank is not co-operative society, question of the interest received from the said Dena Gujarat Gramin Bank will not be eligible for deduction u/s. 80P(2)(d). Appeal of the assessee is partly allowed.
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2025 (4) TMI 1482
Addition on account of Club Expenses - HELD THAT:- We find merit in the submissions/arguments/contentions of the AR. AO had not demonstrated the club expenditure as non-business expenditure. It seemed that the AO had disallowed this expenditure by nomenclature of the expenditure only. We do not see any justification therein. Therefore, the same is allowed as business expenditure.
Disallowance of exchange rate difference - HELD THAT:- The tax treatment of foreign exchange gains or losses differs from its accounting treatment. For tax purposes, the revenue transactions resulting foreign exchange gains/losses are taxable/deductible being revenue in nature.
Here, in the present case, the expenditure was allowed in the preceding AY as per the claim but not the exchange rate fluctuation in the relevant year though the same was crystalized/materialized in the relevant year.
AO has not raised any doubt on the claim of expenditure of US $ 39,000/- in the preceding year. The encashment of said cheque, which happened in the relevant year resulting further expenditure due to the exchange rate difference was not allowed on the reasoning that it pertained to the prior period. We are of the considered view that this expenditure is held to have crystalized in the relevant year and thus, it has to be allowed as business expenditure. We therefore, delete the disallowance on this score.
Loss on closure of the stores - HELD THAT:- The only requirement which has to be seen is that the expenditure is of revenue nature and not capital nature. There are series of decisions wherein the Hon’ble High Courts and Hon’ble Supreme Court that has laid down the principle that if an expenditure is incurred for doing the business in a more convenient and profitable manner and has not resulted in brining any new asset into existence then such expenditure is allowable business expenditure. It is also pertinent to note that in the case in hand, the expenditure has been incurred; prima-facie, for assets in respect of the existing business and are capital in nature. However, this issue is restored back to the AO for verification and doing needful.
If the expenditure is of revenue in nature, then the same has to be allowed as business expenditure u/s 37(1) and if new assets have come into existence on which depreciation have been claimed in preceding year(s), then this loss has to be dealt through the Block of assets (WDV) showing sale value of the abandoned assets as NIL and allowing depreciation on the reduced WDV as per the law. In view of the above observations, the issue is being remitted to the AO for deciding it afresh as per the law.
Taxability of interest on the income tax refund - The dispute before us is confined to the quantum of interest and not the taxability of it per se. Therefore, this issue is remitted back to the AO for verification and taxing the actual amount of interest paid by the income tax Department on the refund u/s 244A of the Act during the relevant year.
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2025 (4) TMI 1481
Levy of penalty u/s 271(1)(b) - non-compliance of notice issued u/s 142(1) - HELD THAT:- Hon’ble Supreme Court, in the case of Hindustan steel Ltd.[1969 (8) TMI 31 - SUPREME COURT] has held that an order-imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceedings and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest or acted in conscious disregard of its obligation.
We have taken note of the fact that the assessee has ensured regular compliance of the statutory notices after August, 2018.
Thus, it appears that the provisions of Section 271(1)(b) have been used by the AO as a deterrent to ensure timely compliance.
We are satisfied with the reasons of non-compliance of the notice issued u/s 142(1) as there is no deliberate defiance of law or is guilty of conduct contumacious or dishonest or act in conscious disregard of the legal obligation. We therefore, hereby set aside the impugned order and delete the penalty. Appeal of the assessee is allowed.
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2025 (4) TMI 1480
LTCG - Indexed cost of construction - Evidence (Proof) of expenditure incurred on construction - CIT(A) deleted the additions against cost of construction - HELD THAT:- Perusal of the order of the Ld. CIT(A) reveals that the remand report was called out by the appellate authority but the AO was failed to submit the report.
CIT(A) has examined the issue that the assessee has furnished the valuation report issued by a government approved valuer who estimated the cost of construction. The assessee also filed the additional evidence before the appellate authority on which remand report was called out from the AO.
CIT(A) has examined the issues in the correct prospective and rightly allowed the appeal of the assessee. The reasoning and findings of the CIT(A), while granting relief is on proper appreciation of law expounded by the judicial dicta. No reason to interfere with the findings of the CIT(A). Appeal of the revenue is liable to be dismissed.
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2025 (4) TMI 1479
Addition u/s 69A - suo-moto taking the bank deposits as turnover and estimating the profit @ 8% - assessee has not furnished complete details of bank deposits, the same is added to the total income of the assessee as unexplained money u/s 69A - HELD THAT:- Legal heir of late assessee has furnished evidence to show that, prior to his death, assessee was running a Kirana business which had a turnover that had been verified by the VAT authorities in the course of an assessment.
Non-compliance before the AO is explained by the illness and subsequent demise of the assessee during the period of assessment.
Therefore, the lack of explanation furnished before the AO in the given circumstances of the case, should not be viewed as an attempt to evade notices but has to be seen in the light of the circumstances that befell the assessee and his family.
Since, the total amount of cash deposit and even the total amount of credits in the said bank account are well below the turnover of the late assessee’s business, and since the AO has verified this in the course of remand proceedings and not recorded any adverse comments, when given the opportunity to do so, we are of the opinion that the CIT(A) is justified in accepting the request of the assessee’s legal heir to assess the income from the said business @ 8% of gross receipts in view of the provisions of section 44AD. Appeal of the Revenue is dismissed.
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2025 (4) TMI 1478
Surcharge applicable on income as clubbed with highest rate of income tax against the provisions given in chapter ii, 1st Schedule part 1 of Finance Act, 2022 - CIT(A) NFAC erred in law to invoke the provision section 164 r.w.s 2(29C)
HELD THAT:- As surcharge @ 10% only should have been applied as the income was below Rs. 1 Crore. For A.Y. as the total income was only Rs. 24,78,407, therefore, no surcharge was leviable. Hence, the appeals are allowed for both the assessment years and the AO is directed to apply the surcharge @10% for A.Y. 2022-23 as the income did not exceed Rs. 1.0 Crore and apply NIL surcharge for A.Y. 2023-24 as the income did not exceed Rs. 50,000/-. Hence Ground Nos. 1, 2 and 3 are allowed.
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2025 (4) TMI 1477
Denying the benefit of exemption claimed u/s 10(23C) (iiiad) - funds collected by the assessee trust towards building and repair development expenditure - HELD THAT:- We find that the issue as to whether the funds collected by the assessee trust towards building and repair development expenditure has already been decided in the case of Vidya Bharati Society for Education & Scientific Advancement[2020 (1) TMI 559 - ITAT KOLKATA]
Thus, we set aside the order passed by CIT(A) and direct the AO to recomputed the income of the assessee after excluding the building and repair development expenditure from the gross receipts and allow exemption u/s.10(23C)(iiiad) of the Act. Thus, appeal of the assessee is allowed.
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2025 (4) TMI 1476
Unexplained expenditure on election - Post Search Assessment u/s 153A - expenditure recorded in a diary seized during search in the name of a third party and the assessee denied ownership or connection with the diary - HELD THAT:- The diary found with the assessee was in the name of Third party/Mr. Alok Tiwari, that it contained details of expenses incurred during election and the source of these expenses remained unverified by the Department, the only conclusion which can be drawn is that the diary belonged to Third party/Mr. Alok Tiwari and the said expenses were incurred by him.
We do not agree with the CIT (A) that applying the provisions of section 132( 4A) and section 292C of the Act, the diary is to be attributed to as belonging to the assessee and addition to be confirmed in the hands of the assessee. The addition made in the hands of the assessee is therefore directed to be deleted.
Addition made on account of cash found deposited in the bank account of the assessee - source of the same remained unexplained - AO made addition of the peak of the bank deposits while the CIT (A) rejected the addition made of the peak balance and on the basis of data available with him, extracted from the Balance Sheet of the assessee, reworked the availability of cash with the assessee and accordingly noted that an partly deposited in the bank account of the assessee remained unexplained - HELD THAT:- We have gone through the contents of the Balance Sheet, which was placed before us in a paper book at page number 21-24. The said Balance Sheet, we have noted, records the opening and closing balances of both the bank accounts in which the Revenue authorities have noted cash to be deposited by the assessee.
Considering the fact that both the bank accounts are recorded in the balance sheet of the assessee, there can be no case with the Revenue of the cash found deposited therein being from unexplained sources .As long as the cash and bank balances are recorded in the Balance Sheet of the assessee, it is simple accounting, that all the transactions recorded therein are duly accounted for in the books of the assessee and therefore are from accounted sources. The addition therefore made by the Revenue authorities, we hold, is without any basis and is therefore directed to be deleted.
Unsecured loans from different persons found to be not genuine - Not allowing credit for redeposit of surplus business funds in bank account and the addition sustained - HELD THAT:- The only reason for holding the loans ingenuine was the fact that the said persons could neither be produced by the assessee for examination nor did they respond to notices issued by the AO with regard to the same.
This is not sufficient for treating the impugned loans as not genuine. Undoubtedly the assessee had furnished the names and details of all persons from whom the loans had been taken and had also given their affidavits. In this regard no infirmity has been pointed out as such in the affidavits furnished by the assessee of these persons. Merely because the said persons did not respond to notices issued by the AO cannot be read adversely against the assessee and neither does it establish that the loans were not genuine.
As we find that the assessee had duly discharged its onus of establishing the genuineness of the loan by furnishing all details of the lenders and also their affidavits. Addition deleted.
Addition of entries of expenses and investments found recorded in seized document BK 2 treating them to be unexplained - HELD THAT:- The findings of the CIT (A) noted, is a detailed finding who has considered all the contentions of the assessee and after dealing with all of them has given part relief to the assessee.The original edition made by the AO was to the tune of Rs.20,23,567 /-which the Ld. CIT(A), after considering each and every argument and contention made before him and corraborating it with the documents on record, has confirmed to the extent of ₹12,75,317/- which he noted to have remained unexplained. In the absence of any assistance on behalf of the assessee on this factual issue we are left with no option but to confirm the order of the Ld. CIT(A) upholding the addition.
Unexplained expenditure incurred through the employee Rajan Dubey for the purchase of fertilizer for agriculture - HELD THAT:-CIT(A), we have noted,has confirmed the addition since the assessees explanation of having made the payment out of his available cash balance was not substantiated through any cash book and the assessee, as per its Balance Sheet,was found to have only nominal cash balance of 3000 odd rupees. We find no merit in the ground raised by the assessee seeking deletion of the impugned addition in the absence of any assistance from the assessee controverting the findings of the AO and Ld.CIT(A).
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2025 (4) TMI 1475
Validity of reopening of assessment - notices issued u/s 148 challenged on the basis that same are beyond the limitation period prescribed u/s 149 - HELD THAT:- Similar issue pertaining to the challenge against notices issued u/s 148 for the assessment year 2015-16 on the basis that same are beyond the limitation period prescribed u/s 149 of the Act has been decided in favour of the taxpayers after noting the submission of the Revenue before the Hon’ble Supreme Court in Rajeev Bansal [2024 (10) TMI 264 - SUPREME COURT (LB)], wherein it was conceded by the Revenue that for the assessment year 2015-16, all notices issued on or after 1st April, 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (“the TOLA”).
We find that in Pratishtha Garg [2024 (12) TMI 1540 - DELHI HIGH COURT] allowed the writ petition filed by the taxpayer and set aside the notice issued u/s 148.
Thus, the re-assessment notice issued u/s 148 of the Act for the assessment year 2015-16 is barred by limitation. Decided in favour of assessee.
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2025 (4) TMI 1474
Delay of 445 days in filing the appeal by the assessee against the order passed u/s 263 - as submitted appellant was not aware of the order passed by the PCIT - HELD THAT:- AO has passed order u/sec.143(3) r.w.s 263 on 30.03.2022 and served on the appellant. In fact, the appellant has claimed in it’s petition that, after receipt of the order from the Assessing Officer dated 30.03.2022, the appellant-company has filed RTI application on 07.04.2022 before the learned PCIT to obtain necessary information. From the above facts, it is undisputedly clear that, the appellant was aware of the proceedings before the learned PCIT u/sec.263 of the Act and also participated in the proceedings by filing relevant evidences. Therefore, reasons given by the appellant in the petition for condonation of 445 days delay that, the appellant was not aware of the order passed by the learned PCIT u/sec.263 dated 29.03.2021 till the AO passed his consequential assessment order u/sec.143(3) r.w.s 263 on 30.03.2022 is devoid of merit and contrary to the facts available on record. Therefore, we are of the considered view, that the reasons given by the appellant for delay in filing appeal does not come under “sufficient and reasonable cause”
Appellant claims that the Managing Director of the company was suffering from cancer and he was admitted to M.S. Ramaiah hospital at Bangalore - Although, the claim of the appellant that it’s Managing Director was suffering from cancer and was admitted in hospital, but, the fact remains that when the Director of the company was in hospital, the appellant company has filed appeal against the order passed by the learned PCIT u/sec.263 the Act on 16.08.2022 which is evident from the date of admission into the hospital and date of death of the Managing Director. Further, in a company there are more than one Directors and in case one Director or Managing Director is not able to attend any proceedings because of illhealth or for some other reasons, but, the other Director can very well attend the proceedings. Therefore, in our considered view, the reasons given by the appellant in the petition that due to ill-health of the Managing Director of the company, the appeal could not be filed on or before the due date is devoid of merits and does not come under “reasonable and sufficient cause” going by the facts available on record. Therefore, on this reason, the delay of 445 days cannot be condoned.
Arguments of the appellant in light of Covid-2019 pandemic period if we exclude the delay covered in the order of Hon’ble Supreme Court, then, the actual delay is 79 days and, therefore, considering the short delay of 79 days, the appeal may be admitted in the interest of justice - Once there is a delay, it is the duty of the appellant to explain the total delay including the delay covered under Covid period and delay not covered under Covid period. Therefore, even if we exclude delay covered by the Covid period, still there is a delay 79 days, which could not be explained by the appellant with “sufficient reasons”. Therefore, we are of the considered view that, the reasons given by the appellant on this account also cannot be accepted.
As the reasons given by the appellant in the petition for condonation of delay, does not come under “sufficient and reasonable cause” for condonation of huge delay a 445 days in filing the appeal before the Tribunal.
Deduction u/sec. 80IA(4) applicability to the constituent of the JV Consortium - assessee had not directly entered into agreement with Central/State Governments or any Local Authority or Statutory Body, but, entered into agreement through JV/Consortium and, therefore, the Assessing Officer disallowed the claim of deduction u/sec.80IA(4) of the Act to the assessee - HELD THAT:- We note that contracts awarded to JVs and whether the assessee can claim the same as a constituent of the above JVs, the coordinate bench of ITAT, Visakhapatnam in the case of Transstory (India) Ltd [2011 (7) TMI 810 - ITAT VISAKHAPATNAM] held that the constituents of JVs are eligible to claim deduction u/s 80IA. Decided in favour of assessee.
Deduction u/s 80IA - AO after examining the submissions of the assessee, allowed the 80IA deduction only to the extent of assessee-company’s proportionate share with respect to the works executed through JV/Consortium and disallowed excess claim - HELD THAT:-The assessee-company had executed 100% project-work in respect of the above 02 projects. Since the back-to-back agreement entered into by the assessee company with JV/Consortium with respect to their proportionate share of project works in the above 02 projects are not verified either by the AO or by the CIT(A), we deem it appropriate to remit the issue back to the file of AO to the limited extent of examining the issue of back-to- back agreements with the JV/Consortium for execution of proportionate share of JV/Consortium project works by the assessee-company in respect of 02 projects and if the assessee-company furnishes relevant agreements with respect to completion of the project works to be done by the JV/Consortium by the assessee-company, then, the Assessing Officer is directed to allow the deduction claimed by the assessee-company u/sec.80IA of the Act. Needless to say, the Assessing Officer should provide adequate opportunity of being heard to the assessee. Accordingly, the grounds raised by the assessee are allowed for statistical purposes.
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2025 (4) TMI 1473
TDS u/s 194H - Addition u/sec.40(a)(ia) - disallowance of commission and cash incentives paid to the retailers on non deduction of TDS - HELD THAT:- In the present case, there is no dispute with regard to the fact that, the appellant-company has paid sales incentives to the retailers on behalf of the Principal’s and the same has been reimbursed by the Principal to the appellant-company. Since there is no Principal and Agent relationship between the appellant-company and the retailer traders, the provisions of sec.194H cannot be applied. Therefore, in our considered view, the AO is erred in invoking the provisions of sec.194H and consequently, disallowed the expenditure u/sec.40(a)(ia) of the Act for non-deduction of tax on such payments.
Disallowance of expenditure on the ground that the appellant-company failed to prove genuineness of the expenditure by filing relevant evidences - HELD THAT:- AO has completely erred in coming to the conclusion that, the expenditure incurred by the appellant-company is non-genuine only on the basis of enquiry conducted during the course of assessment proceedings, because, the AO conducted enquiries in the year 2010, whereas, the appellant-company carried-out business in the year 2007-2008 and there is almost more than 03 years gap between the business conducted by the appellant-company and the enquires conducted by the AO. Since the assessee has filed relevant evidences and argued that the license period is only for a period of 1-2 years and as and when the license period is over, the retailers will discontinue business and not available in the given address, in our considered view, going by the nature of business of the assessee and the trade practice, the Assessing Officer cannot disbelieve the arguments of the assessee only on the ground that notices issued u/sec.133(6) of the Act are returned un-served by the postal authorities.
We are of the considered view that, when the assessee has filed various evidences including confirmation from the parties to prove the genuineness of expenditure, in our considered view, merely for the reason of non-service of notice, adverse inference cannot be drawn against the genuine expenditure incurred by the appellant-company.
Therefore, we are of the considered view that the Assessing Officer is erred in coming to the conclusion that the assessee has designed tax avoidance method for payment of tax which is nothing but a colourable device.
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2025 (4) TMI 1472
Loss of PE against the FTS income earned by the assessee - whether the two steam of income to be treated as one income for the taxation purpose? - as submitted that PE also belongs to the same entity, therefore, the assessee should be allowed to claim the set of inter head adjustment - HELD THAT:- We observed that the assessee has PE in India and during the current year, the ‘PE’ has no offshore supply and it has attributed expenses for running the same in India, therefore, it has declared loss attributing to its PE in India.
Assessee is a foreign company taxable in India to extent of the income earned or sourced by it in India. We noticed that the assessee has two sources or stream of income, one is from the services to its clients through its PE and another is by providing services to its clients directly. We noticed that the first stream falls under the Art.7 and the other under Art.12 of the DTAA. However, both stream of income falls under the head business as far as the assessee is concerned. It is only classification and inter play between the two articles of the DTAA. There is no dispute as far as the classification of income is concerned. The AO has accepted that the loss claimed by the assessee is attributable to the PE and the FTS earned by the assessee is from the other services provided directly.
In the given case, no doubt the assessee has declared loss in the PE and at the same time, the income earned by it falls under FTS, as far as assessee is concerned it has earned the above income or loss sourced thru India. Therefore, the provisions of section 71 are applicable. Just because the income is chargeable to tax under special provisions and also TDS is collected, it does not change the determination of income under the Act. The Provisions of section 44DA and 115A are applicable or not and how it will impact the income declared by the assessee has to be analysed.
As per the provisions of section 44DA, the income of Royalty or FTS earned by the assessee through its PE is concerned, the same is chargeable to tax under this provisions and it is chargeable to tax on gross basis. In the given case, the assessee has earned the FTS directly without the assistance of its PE. Therefore, the above section has no application. Coming to the provisions of section 115A, the provisions starts with the words, ‘Where the total income of’ connotes the meaning that first we have to determine the total income and if the above total income includes the FTS as per the provisions of section 115A(1)(b) then the relevant FTS has to be excluded from the above income and then chargeable to tax at the specified rate (as per section 115A(1)(b)(B) of the Act). We observe that as per the provisions of section 115A(3) of the Act, no deduction in respect of any expenditure or allowance shall be allowed to the assessee under the sections 28 to 44C and 57 of the Act in computing the income referred in section 115A(1) of the Act.
If there is any loss in the PE, the same can be set off against the Gross income of FTS.
Provisions of section 115A(3) does not allow any expenditure or allowance, the set off of loss is to be allowed or not? - It is clear that the legislature specifies the restrictions specifically in the statute. Therefore, the provisions of sec.115A is silent, hence, the assessee is eligible to set off of the loss of its PE against the income earned through other sources in India under the provisions of section 71 of the Act.
As noticed a reported decision of the coordinate bench in the case of Foramer S.A [1994 (11) TMI 177 - ITAT DELHI-B] has considered the issue of allowability of depreciation, when the rate of depreciation and allowability of the same are not prescribed under the Treaty, the assessee may choose to apply the relevant provisions contained in the provisions of the Act applicable in the contracting state and also it was held that the a foreign national governed by avoidance of double taxation treaty is entitled to ask for application of provision of the Income Tax Act, to the extent they are more beneficial to that assessee. Similarly in this case, the issue involved is the issue of allowability of Set off of intra head of income, the similar provisions are not present in the relevant treaty, in case of absence of relevant provisions of set off, the assessee has liberty to follow the provisions of Income Tax Act, which is beneficial to it. In the absence of any provision of set off in the treaty, the relevant findings of the coordinate bench applicable to the present case mutatis mutandis. Decided in favour of assessee.
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2025 (4) TMI 1471
Denial of deduction u/s 80-IB(10) - profits from a housing project - A.Y. 2008-09 - HELD THAT:- In assessee’s own case for the assessment year 2007-08, it is evident that the claim of deduction u/s 80-IB(10) was allowed to the assessee only in respect of Wing-A to Wing-F of the housing project “Aakash Nidhi”, while in respect of Wing-G of the aforementioned housing project the claim of the assessee u/s 80-IB(10) was denied.
Therefore, in the absence of any distinguishing facts pertaining to the claim of deduction u/s 80IB(10) in respect of housing project “Aakash Nidhi” in the present case, respectfully following the settled position in the assessee’s own case AO is directed to grant the deduction u/s 80-IB(10) to the assessee proportionate to the profits earned from Wing-A to Wing-F of the housing project “Aakash Nidhi”. Accordingly, Ground No. 1 raised in assessee’s appeal is partly allowed.
Deduction claimed u/s 80-IB(10) was denied as so many flats were sold to the spouses of the existing flat owners - A.Y. 2010-11 - We are of the considered view that whether the flats were allotted to the spouse of the existing flat owners or the same were allotted to the major children of the flat owners requires verification. Therefore, we deem it appropriate to restore this aspect of the issue to the file of the jurisdictional AO for necessary examination of the details placed reliance upon by the assessee.
Exemption u/s 80IB(10) on proportionate basis - housing project “Aakash Nidhi” comprising of seven buildings, namely Wing-A to Wing-G - HELD THAT:- Insofar as the claim of the assessee in respect of Wing-A to Wing-F deduction under section 80-IB(10) of the Act is allowed respectfully following the settled position in assessee’s own case for the assessment year 2007-08. Further, insofar as the claim of the assessee in respect of Wing-G of the housing project “Aakash Nidhi”, we deem it appropriate to restore the issue to the file of the jurisdictional AO for de novo adjudication in light of the decision of the Hon’ble Jurisdictional High Court in Vandana Properties [2012 (4) TMI 54 - BOMBAY HIGH COURT]
Same flat has been sold twice by the AO - Having considered the submissions of both sides, we deem it appropriate to restore this aspect of the issue also to the file of the jurisdictional AO for necessary verification to examine whether the same flat was re-sold or reallotted by the assessee. It is further directed that if, upon examination, it is found that the assessee merely re-allotted the same flat due to non-fulfilment of allotment conditions by the earlier allottee, then the AO is directed to grant deduction under section 80-IB(10) of the Act to the assessee in respect of the balance deduction claimed by the assessee in the year under consideration.
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2025 (4) TMI 1470
Addition u/s 68 - unexplained cash - CIT(A) deleted addition instead making estimation of net profit of 4% of turnover - as per revenue assessee failed to discharge the onus to prove the identity, creditworthiness and genuineness of the parties to whom cash sales were made during the year - HELD THAT:- Since the assessee failed to prove the identity, creditworthiness and genuineness of the impugned bank deposits, the AO was justified in invoking the provisions of section 68 of the Act.
Quantification of the addition - GP estimation - CIT(A) held that once the book results have been rejected by the AO, only the profit element there in could be added. Accordingly, he applied a flat rate of 4% of the total turnover - As decided in M/s ISMT Limited [2021 (12) TMI 549 - ITAT PUNE] wherein it was observed that once the books of accounts of an assessee are rejected by the A.O under Sec. 145(3) of the Act, then he cannot rely upon on the same books of account for the purpose of making any addition, and the only course of action available with him is to determine the income by application of a flat rate of profit by taking into consideration the business conditions of the assessee as in comparison to profits disclosed by other assessee’s in the similar line of business.
CIT(A) has taken a very pragmatic view of the entire matter. His conclusion as stated above is based on correct appreciation of facts of the case which are in consonance with judicial findings as well. We therefore, hold that he has correctly appreciated the facts and his conclusion and application of the net profit on the total turnover being the addition, does not need any interference.
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2025 (4) TMI 1469
Incorrect computation of Transfer Pricing Adjustment - HELD THAT:- We note that as per the final Assessment Order, ALP was determined at INR.438,44,64,758/- as against the actual sales of INR.426,48,22,811/-. As the difference between the aforesaid two amounts, which comes to INR.11,96,41,940/-, should have been added as APL Adjustment Whereas transfer pricing addition has been made. Therefore, we find merit in the contention of the Assessee that the actual transfer pricing adjustment challenged by way of Ground.
TPO had selected final list of comparables consisting of four comparables - MPS Limited as functionally dissimilarities and in absence of segmental data, MPS cannot be taken as a comparable. Therefore, respectfully following the decision of the Tribunal in the case of the Appellant for the AY 2017-2018, we direct the AO/TPO to exclude MPS Limited from the list of comparables.
Inclusion/exclusion of R. Systems International Limited - We direct the Assessing Officer/TPO to include R. Systems in the list of comparable after examining the functional comparability keeping in view that TNMM has been adopted as the most appropriate method.
Short grant of credit for Dividend Distribution Tax (DDT) - On perusal of the said application we find that the Appellant has filed before the AO copy of challans for deposit of DDT. Accordingly, the AO is directed to grant credit of DDT after verification of the aforesaid challans as per law and re-compute consequential interest under Section 115P of Act, if any, and thus, dispose off the aforesaid rectification application.
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2025 (4) TMI 1468
Time limitation for issuance of SCN - impugned order issued after a substantive delay of approximately five years and ten months which is hit by Section 73 (4B) of the Finance Act, 1994 - HELD THAT:- In Kanak Automobiles Private Limited case [2024 (4) TMI 1223 - PATNA HIGH COURT], the learned co-ordinate Bench has agreed to the said submission to the extent that the period of limitation is not absolute period stated in clause (b) of sub-section (4B) of Section 73 of the Act of 1994, but then a question arises as to whether a duty has been cast upon the Department to show that it was not possible to pass an order determining the amount within one year from the date of notice in respect of cases falling under the proviso to sub-section (1) or the proviso to sub-section (4A) of the Act of 1994. This Court has taken a view that in an appropriate case, this would be a matter of fact which would be required to be looked into in the context of a particular case.
There is a consistent view on this point that the time frame of six months/one year as mentioned in Section 73 (4B) cannot be extended for an inordinate period. In this case, it is over five years and the Revenue has failed to explain as to how such a delay has taken place.
Conclusion - i) The impugned order-in-original imposing service tax liability, interest, and penalty was passed beyond the prescribed limitation period and is therefore liable to be quashed. ii) The Revenue failed to demonstrate that it was not possible to pass the order within the one-year period prescribed by Section 73(4B).
Application allowed.
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2025 (4) TMI 1467
Blocking of ITC in terms of Rule 86A (1) (a) of the Bihar Goods & Service Tax Rules, 2017 - mandatory requirement of recording "reasons to believe" before blocking the ITC under Rule 86A - Principles of natural justice - HELD THAT:- The respondent no. 3 had before him sufficient materials to satisfy himself with regard to necessity of passing an order under Rule 86-A (1) of the CGST/BGST Rules of 2017.
There is no illegality or infirmity may be found with the impugned order (Annexure ‘P/2’) which is in the nature of an interim measure taken by respondent no. 3. The respondent no. 4 has acted on the basis of Annexure ‘P/2’, however, the order, if any of respondent no. 4 is not under challenge specifically. The petitioner has a remedy available against the blocking of ITC. If so advised, the petitioner may avail it’s remedy in terms of paragraph 3.4 of the guidelines. If any such request is made by the petitioner, the respondent no. 4 shall consider the same as expeditiously as possible and pass a reasoned order after hearing the petitioner/its authorized representative.
Application disposed off.
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2025 (4) TMI 1466
Seeking grant of regular bail - offence under Sections 132(1)(b), 132(1)(c), 132(1)(i) of Central Goods and Services Tax Act, 2017 - availing ineligible Input Tax Credit on the basis of invoices issued by non-existent firms, and without receipt of concomitant goods the fake Input Tax Credit was further passed on to various buyers - Admissibility of Applicant's Statement under Section 70 CGST Act - HELD THAT:- This Court finds that the prosecution case is primarily based upon the documentary evidence relating to alleged involvement of M/s Aadya Trading Company in availing ineligible Input Tax Credit and further passing it on to three other beneficiary firms noticed above. During the course of hearing, it is fairly stated by learned Counsel that as per records of M/s. Aadya Trading Company, Ghanshyam Aggarwal is the proprietor of the said firm, but according to him, the applicant is the person who is actually managing the affairs of the said firm. Learned counsel for the opposite party has also not disputed this fact that the applicant is at least not involved in creation of the alleged 21 non-existent firms, which were utilized for availment and further passing on ineligible Input Tax Credit.
As far as the statement of applicant recorded under Section 70 CGST Act 2017, is concerned, its admissibility or evidentiary value would be tested during trial. A perusal of the zimni orders passed by the trial court would show that after filing of the charge-sheet in January, 2025, the case is being adjourned for recording pre-charge evidence and no witness has been examined so far by the prosecution. Thus, it is evident that the trial has not yet started.
Conclusion - Admittedly, the alleged offences are triable by Magistrate and provide for a maximum punishment of five years imprisonment, and trial is likely to consume considerable time to conclude, therefore, this Court has no hesitation in holding that the further detention of the applicant behind the bars would not serve any useful purpose, who has already spent more than five months in judicial custody since his arrest on 19.11.2024. Further, the prosecution witnesses are official witnesses and presently there does not appear to be any possibility of their being won over, therefore, considering the nature of the trial as well as period of more than five months undergone by the applicant as an undertrial, this Court deems it appropriate to extend the concession of regular bail to the applicant.
It is ordered that the applicant- Ankur Garg be released on regular - Bail application allowed.
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2025 (4) TMI 1465
Demand in respect of late fee and wrongful availment of input tax or short payment of tax - rejection of refund claim on the ground of being time barred - HELD THAT:- In the impugned order dated 7th January, 2025, the reply and the written submissions of the Petitioner have been considered. A perusal of the adjudication order would show that there is a detailed adjudication of various factual issues.
At this stage, a writ petition would not be entertainable. The Petitioner ought to avail of the appellate remedy under Section 107 of the CGST Act in accordance with law.
Petition disposed off.
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