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Showing 101 to 120 of 1081 Records
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2021 (5) TMI 981 - DELHI HIGH COURT
Money Laundering - freezing of petitioner’s bank account - It is the petitioner’s case that the impugned order had been passed without providing it with a copy of the show-cause notice or an opportunity to place on record its objections thereto - HELD THAT:- In order to avoid any further controversy in this matter, it would be in the interest of justice to grant an opportunity to the petitioner to respond to the Show-Cause Notice.
The petitioner is granted 10 days’ time to respond to the Show-Cause Notice dated 08.10.2020. The Adjudicating Authority will thereafter pass a fresh order in accordance with law, after duly considering the petitioner’s response to the show cause notice - Petition allowed.
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2021 (5) TMI 980 - MADRAS HIGH COURT
Attachment of property - allegation against the petitioner company is that the petitioner company had fraudulently availed input tax credit on fictitious invoices to discharge the GST liability - petitioner submits that Section 67 cannot be against the future receivables so as to strangulate the entire business module of the petitioner - Section 83 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- Admittedly, an amount of ₹ 5.68 Crores, which was lying in the account has been appropriated till date. The petitioner has also agreed to remit another sum of ₹ 1 Crore. Thus, as against the proposed/estimated tax due involved i.e. ₹ 21 Crores, the petitioner has already discharged a sum of ₹ 5.68 Crores i.e. 27.05%. After all, there is a mechanism provided under the Act for proper adjudication of the tax due and determination under Sections 73 and 74 of the Act. Therefore, there is no meaning in attaching the bank accounts further - The respondents have reportedly commenced the investigation during October, 2020. The respondents can issue notice under Section 73 of the CGST Act, 2017 and thereafter, determine the amount due and recover the amounts.
The impugned attachment orders dated 12.01.2021 and 28.01.2021 are required to be interfered with - It is made clear that the attachment proceedings cannot be at the cost of right of provision under Article 19(1)(g) of the Constitution of India - the petitioner shall deposit a sum of ₹ 1 Crore within a period of one week from the date of receipt of a copy of this order, as was undertaken by the learned Senior Counsel for the petitioner. On such deposit of Rupees One Crore, the impugned attachment orders shall stand vacated - petition allowed.
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2021 (5) TMI 979 - DELHI HIGH COURT
Refund of IGST - principles of natural justice - HELD THAT:- As the Respondents have not taken any final decision on the refund sought, it is directed the concerned Respondents to decide the claim of the Petitioner for refund of the aforesaid amount under the Integrated Goods and Service Tax Act, 2017 as expeditiously as possible and practicable in accordance with law, rules, regulations, Government policies including principles of unjust enrichment as propounded by Hon’ble Supreme Court in MAFATLAL INDUSTRIES LTD. VERSUS UNION OF INDIA [1996 (12) TMI 50 - SUPREME COURT] and on the basis of evidence on record.
Petition disposed off.
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2021 (5) TMI 978 - BOMBAY HIGH COURT
Permission to file paper return - justification for not fling electronic return of the income tax - HELD THAT:- The Petitioner is permitted to file paper return for the assessment year 2020-21 before 31st May, 2021 subject to the further orders that may be passed by this court at the stage of admission or thereafter till this writ petition is finally decided.
All contentions of the parties are kept open.
It is made clear that whether such paper return proposed to be filed by the Petitioner is incompliance with the Income Tax Act or Rules or not is also kept open.
The Petitioner would be at liberty to file rejoinder to the affidavit in reply dated 20th May, 2021 filed by the Respondents within a period of two weeks from today and serve a copy thereof upon the Respondents’ Advocate.
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2021 (5) TMI 977 - DELHI HIGH COURT
Hawala transaction - proceeds of crime - Scheduled offences - Section 44 of PMLA - HELD THAT:- Keeping in mind the health of the petitioner and also the fact that the petitioner is in custody since 15.01.2021, this Court is inclined to grant interim bail to the petitioner for 30 days from the date of his release on the conditions imposed - application allowed.
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2021 (5) TMI 976 - DELHI HIGH COURT
Smuggling - Gold - It is the case of the petitioner that since the respondent appeared to have committed offences punishable under Sections 132 and 135 of the Customs Act, 1962 - HELD THAT:- Perusal of the record shows that the respondent is a native of Afghanistan and there is every possibility that he would abscond and fail to return to India in case he is permitted to go to his country at this stage and thus misuse his liberty. The investigation in the present case is still underway and charge sheet is yet to be filed. In case, the petitioner is allowed to leave the country, the same will hamper further investigation of this case and the filing of the charge sheet. Moreover, keeping in view the nature and gravity of the allegations, it is not a fit case where permission to go abroad should be granted.
The petition stands allowed.
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2021 (5) TMI 975 - KARNATAKA HIGH COURT
Dishonor of Cheque - legally enforceable debt - financial incapacity to repay the debt - Whether the judgments under revision are perverse, illegal and erroneous warranting interference at the hands of this Court? - service of notice - HELD THAT:- In the instant case, the notice has been sent to the correct address of the accused and since he has refused the same, the Registered Post Acknowledgement Due was returned to the sender and also since the accused did not come forward to make good the amount of the cheque immediately after he coming to know about the institution of the criminal case, the argument of the learned counsel for the petitioner that there is no service of notice upon the accused under Section 138 of N.I. Act, is not acceptable.
The financial capacity of the complainant to lend money to the accused also can be gathered from the evidence. As such, the other point of argument of learned counsel for the petitioner on that aspect is not convincing - the entire defence of the accused about denial of the loan transaction has just confined to a mere oral denial made to PW-1. However, the same is not sufficient to rebut the presumption which has been formed in favour of the complainant under Section 139 of N.I. Act regarding the existence of legally enforceable debt.
The trial Court for the proven guilt of the accused for the offence punishable under Section 138 of N.I. Act, had sentenced the accused to undergo simple imprisonment for a period of six months and to pay a fine of ₹ 5,19,300/-, in default of payment of fine, to undergo simple imprisonment for a period of six months, in which, a sum of ₹ 5,14,300/- was ordered to be paid to the complainant. The Sessions Judge's Court in Criminal Appeal No. 69/2013 has confirmed the order on sentence.
Criminal Revision Petition is partly allowed.
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2021 (5) TMI 974 - KARNATAKA HIGH COURT
Dishonor of Cheque - Section 138 of the Negotiable Instruments Act, 1881 - allegation is that neither any witness was examined nor any documents were marked as exhibits - time limitation - rebuttal of presumption - Whether the judgments under revision are perverse, illegal and erroneous warranting interference at the hands of this Court? - HELD THAT:- The first point of argument of the learned counsel for the petitioner/accused that, the cheque was returned on 22-07-2010 whereas the notice was sent on 09-09-2010, thus the notice is barred by limitation, is not acceptable. Thus, from the date of the second dishonour of the cheque which was on 31-08-2010, the notice has been sent within the statutory period as has come out in the evidence of PW-1.
Even though the alleged legal notice dated 09-09-2010 sent on behalf of the complainant to the accused is not marked as an exhibit, but the reply to the said notice which is at Ex. P-11 acknowledges the receipt of the said notice dated 09-09-2010 sent on behalf of the complainant by the accused. It is only after acknowledging the receipt of the said notice, the accused has proceeded to give his reply through Ex. P-11. Therefore, in the light of the un-denied and undisputed evidence of PW-1, which is further corroborated by the evidence of postal receipt and acknowledgement at Exs. P-7 to P-10, and more particularly, in the light of the acknowledgment of receipt of the notice by the accused through his reply at Ex. P-11, the mere non-marking of a copy of the legal notice sent by the complainant to the accused is not fatal to the case of the complainant. As such, the second and the final point of argument of the learned counsel for the petitioner/accused on the said aspect is also not sustainable.
Rebuttal of presumption - HELD THAT:- The un-denied evidence of PW-1 which is further corroborated by Exs. P-1 to P-12 would clearly go to show that, in response to the loan availed by the accused of a sum of ₹ 11,00,000/-, he had issued the cheque at Ex. P-3 to the complainant, which came to be dishonoured, when presented for its realisation, for the reason of insufficiency of funds. Thereafter, despite making a demand for payment of the cheque amount within time, the accused has failed to make good the payment of the same, as such, not only the presumption that has arisen in favour of the complainant under Section 139 of the N.I. Act, but also the un-denied evidence of PW-1 which is further corroborated by Exs. P-1 to P12 crystalises the said presumption in favour of the complainant proving the accused guilty of the alleged offence.
Both the Trial Court as well the Sessions Judge's Court since have held the accused guilty of the alleged offence and since the Trial Court has passed an order on sentence proportionate to the gravity of the proven guilt, there are no perversity, illegality or irregularity, warranting interference at the hands of this Court.
Criminal Revision Petition stands dismissed as devoid of merits.
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2021 (5) TMI 973 - MADRAS HIGH COURT
Grant of approval under Non-Automatic route as stipulated under Section 7 of the Industrial Park Scheme 2002 - Notification dated 08.01.2008 - HELD THAT:- The Industrial Park scheme, for which, the petitioner applied had expired on 31.03.2006. The Government of India Notification issued on 1st April 2002 unambiguously contemplates the period of the operation of the scheme. As per the period of operation, the scheme shall be applicable for any undertaking which develops, develops and operates or maintains and operates an Industrial Park for the period beginning on the 1st day of April 1997 and ending on the 31st day of March 2006 - However, the application itself was filed by the petitioner on 10th October 2006, after the lapse of the scheme itself. When the application itself was belated and more specifically, after the expiry of the period of operation of the scheme, the very relief sought for in the present writ petition deserves no merit consideration - Also, the petitioner admitted that the I.T Park became functional only after the expiry of the period of operation i.e., 31st March 2006.
Petition dismissed.
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2021 (5) TMI 972 - MADRAS HIGH COURT
Maintainability of appeal - appropriate Forum - Refund of the amount already remitted - Allegation is that mandatory formalities such as issuing notice were not complied with - Questions of facts involved - HELD THAT:- Since factual aspects are involved, the petitioner can as well avail the alternative remedy of appeal. Taking note of the facts and circumstances of the case, if the appeal is filed before the appellate authority within a period of three weeks from the date of receipt of a copy of this order, the appellate authority will entertain the same without reference to limitation.
Petition dismissed.
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2021 (5) TMI 971 - GUJARAT HIGH COURT
Dishonor of Cheque - disputed questions of fact are involved - case of applicant is that there was no legal dues to be paid to the complainant as the cheque was given only for the security purpose - legally enforceable debt or not - HELD THAT:- Considering the facts of the present case, question of snatching possession of the Kvory plant from the applicant by threatening and beating him on 27.02.2020 by the complainant and the contents of the police complaint filed by the applicant-accused against the complainant and his son-in-law are disputed question of facts and they can only be considered after recording evidence by the prosecution/accused before the learned Trial court. Non producing the lease agreement executed between the parties and no legal debt of the complainant would be also a question of facts, which can be considered by the trial court that after recording evidence and examination/cross examination of the complainant.
This is a case wherein the disputed questions of fact are involved. Under these circumstances, when there is disputed question of fact is involved and there is prima facie material showing that the cheques were issued by the accused to the complainant with his signature and there was monetary transaction between them, then in such case, inherent powers under Section 482 of the Code of Criminal Procedure cannot be exercised.
This court is of the considered view that the High Court should not have interfered with the cognizance of the complaints having been taken by the trial court and High Court should not discharge the accused from his liability at the threshold. Unless the parties are given opportunity to lead evidence, it is not possible to come to a definite conclusion as to what was the date when the alleged possession of Kvory plant was handed over to him and while the police complaint was given against the complainant and his son-in-law and what was the lease agreement executed between the parties - Admittedly, cheque was under the signature of the present applicant given to the complainant. The purpose of alleged security, as argued by learned advocate for the applicant, can be decided before the trial Court on recording evidence.
The present applicant is dismissed at the stage of admission without issuing any notice to the other side.
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2021 (5) TMI 970 - GUJARAT HIGH COURT
Reopening of assessment u/s 147 - penny stock transactions - information received from ITO (CIB-1), Mumbai at DIT (I & CI, Mumbai) that as per the penny stock transaction data assessee had sold 3300 shares of Karma Ispat Limited and earned long term capital gain - HELD THAT:- Applying the principle of law, in the case of Aayojan Developers [2011 (2) TMI 738 - GUJARAT HIGH COURT] to the facts of the present case, we are of the view that, the facts mentioned in the affidavit by the revenue could not be termed as “new ground” or “new reasons” to supplement the reasons recorded by the AO. Therefore, the contention raised by the learned counsel for the writ applicant that, by way of affidavit in reply, the revenue has improved the reasons recorded, has no any merit and cannot be accepted to hold that, the exercise to reopen the assessment is without jurisdiction.
Independent finding as to how the income has escaped assessment - AO as satisfied with regard to the information and other material on record, formed an opinion that, the income has escaped assessment. Therefore, when the information was specific with regard to transactions of penny stock entered into by the assessee with the Karma Ispat Ltd., and the AO had applied his independent mind to the information and upon due satisfaction, led to form an opinion that, the amount of claim of LTCG claimed by the assessee is chargeable to tax has escaped assessment, which facts suggests that, there is live link between the material which suggested escapement of income and information of belief. Under the circumstances, we are satisfied that, there was enough material before the AO to initiate proceedings under Section 147 of the Act.
We do not agree with the contention that, merely on the information, the AO has recorded the reasons and on the basis of borrowed satisfaction, he formed an opinion with respect to the income chargeable to tax has escaped assessment.
As examined the issue of valid sanction as raised by the learned counsel for the writ applicant. We take the notice of the fact that, the copy of the approval has been provided to the assessee at the stage of passing the order of disposing the objections raised by the assessee. Therefore, it is evident that, in the instant case, the authorities concerned have given approval after due application of mind and expressed their satisfaction with regard to the reasons recoded for reopening of the assessment.
No hesitation to hold that it could not be said to have that there was no material or grounds before the AO and the assumption of jurisdiction on the part of the AO under Section 147 of the Act to reopen the assessment by issuing impugned notice under Section 147 of the Act is without authority of law, which render the notice unsustainable. Therefore, the assessee failed to make out a case. - Decided against assessee.
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2021 (5) TMI 969 - GUJARAT HIGH COURT
Reopening of assessment u/s 147 - penny stock purchases - “new ground” v/s “new reasons” - information in respect of the penny stock transaction made by assessee - HELD THAT:- Though the reopening of the assessment after expiry of four years from the end of the relevant assessment year, it is not necessary for the AO to show that, there was any failure to disclose fully or truly all material facts necessary for the assessment. When return is processed under Section 143 (1) of the Act and intimation sent to the assessee, it is not an “assessment”. Therefore, when reopening is sought of an assessment, the initial return was processed u/s 143(1) of the Act, the AO can form ‘’reason to believe’’ that income has escaped assessment by examining the return and/or the documents accompanying the return. It is not necessary in such case for the AO to come across some fresh tangible material to form ‘’reason to believe’’ that the income has escaped assessment.
Applying the principle of law, in the case of Aayojan Developers [2011 (2) TMI 738 - GUJARAT HIGH COURT] to the facts of the present case, we are of the view that, the facts mentioned in the affidavit by the revenue could not be termed as “new ground” or “new reasons” to supplement the reasons recorded by the AO. Therefore, the contention raised by the learned counsel for the writ applicant that, by way of affidavit in reply, the revenue has improved the reasons recorded, has no any merit and cannot be accepted to hold that, the exercise to reopen the assessment is without jurisdiction.
Whether AO failed to record an independent finding as to how the income has escaped assessment? - AO himself was satisfied with regard to the information and other materials on record, he formed an opinion that, the income has escaped assessment. Therefore, when the information was specific with regard to transactions of penny stock entered into by the assessee with the Tuni Textiles Ltd., and the AO had applied his independent mind to the information and upon due satisfaction, led to form an opinion that, the amount of claim of LTCG claimed by the assessee is chargeable to tax has escaped assessment, which facts suggests that, there is live link between the material which suggested escapement of income and information of belief. Under the circumstances, we are satisfied that, there was enough material before the AO to initiate proceedings under Section 147 of the Act.
We do not agree with the contention that, merely on the information, the AO has recorded the reasons and on the basis of borrowed satisfaction, he formed an opinion with respect to the income chargeable to tax has escaped assessment.
As examined the issue of valid sanction as raised by the learned counsel for the writ applicant. We take the notice of the fact that, the copy of the approval has been provided to the assessee at the stage of passing the order of disposing the objections raised by the assessee. Therefore, it is evident that, in the instant case, the authorities concerned have given approval after due application of mind and expressed their satisfaction with regard to the reasons recoded for reopening of the assessment.
No hesitation to hold that it could not be said to have that there was no material or grounds before the AO and the assumption of jurisdiction on the part of the AO under Section 147 of the Act to reopen the assessment by issuing impugned notice under Section 147 of the Act is without authority of law, which render into the notice unsustainable. Therefore, the assessee failed to make out a case.
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2021 (5) TMI 968 - ITAT MUMBAI
Income chargeable to tax in India - IDR dividend received from SCB-India - receipts from India based depository, i.e., Standard Chartered Bank- India, in respect of shares of Standard Chartered Bank plc- UK represented by the India Depository Receipts (IDRs) - business connection between this income and India - assessee before us is a company incorporated in, and fiscally domiciled in, Mauritius - when is the amount, so distributed to the IDR holders on account of dividend receipts, can be said to be received in the hands of the IDR holders- at the point of time when the amount is received by BNY Mellon outside India, on behalf of the SCB-India, or when is it received by the IDR holders in India from the SCB-India? - HELD THAT:- We find that it is an admitted position all along that SCB-India is a branch office of Standard Chartered Bank UK, and there is no material before us to dislodge this position.
Because a depository must only be an Indian company under the law, even if that be so, does not mean that even when a domestic depository is admittedly branch of a foreign company, it must be treated as an Indian company. The approval by the SEBI to SCB-India, being a domestic depository for the issuance of IDRs representing equity shares in SCB-UK is a reality; we cannot wish it away, and we must interpret the tax liability in the light of this reality. Even today, there is nothing more than a suspicion lurking in the mind of the learned Commissioner (DR) that the SCB-India could be a company incorporated in India. If the approval given by the SEBI to the Indian depository is given wrongly, that is something which has no bearing on the issue that we are dealing with, and that is tax implications flowing from distribution of dividend by the domestic depository.
Learned counsel has also pointed out that the expression ‘depository’ and ‘domestic depository’ are expressions with distinct connotations and the requirements of ‘depository’ cannot be read into the requirements of ‘domestic depository’. As learned counsel rightly points out, the expression ‘domestic depository’ is defined, under rule 3(i)(c) of the Companies (Issue of Indian Depository Rules, 2004), as “custodian of securities registered with the Securities and Exchange Board of India, hereinafter referred to as SEBI and authorised by the issuing company to issue Indian Depository Receipts”. The objection raised by the learned Departmental Representative is thus devoid of legally sustainable merits.
As regards the submissions about unintended benefit to the assessee, from an overall global perspective, we are not really concerned with such a question at this stage. All we have to examine is whether the impugned income taxable in India is treaty-protected in the hands of this assessee or not, and, so far as this question is concerned, for the detailed reasons set out above, our answer is in affirmative. The income in question is treaty-protected inasmuch as it cannot be taxed in the hands of the assessee, in India, by virtue of Article 22(1) of the Indo Mauritius tax treaty. In view of the above discussions, the reasoning adopted by the Dispute Resolution cannot meet our judicial approval. We reject the stand of the DRP as devoid of legally sustainable merits.
As the taxability of the IDR dividends fails, in terms of the provisions of the applicable tax treaty, i.e., Indo-Mauritius tax treaty, and as the provisions of the applicable tax treaty, being more beneficial to the assessee, override the provisions of the domestic law, the taxability of the dividends on the IDRs fails. The addition being IDR dividend received from SCB-India, thus stands deleted. It must, however, be clarified that relevant treaty provision of Article 22 having been subjected to significant change by insertion of sub-article (3) thereto, this decision on treaty protection will hold good only for the pre-amendment period i.e., pre-1st April 2017. Decided in favour of assessee.
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2021 (5) TMI 967 - ITAT HYDERABAD
Unexplained sundry/trade credits - CIT-A deleted the addition - HELD THAT:- The observations of the CIT(A) are worth to mention here that “it is relevant to observe that the claims of the expenses relatable to the credits under reference were not denied by the AO, and there was no disallowance to the extent, as could be seen from the assessment order. It was not the case of the AO to show that such amounts are not allowable as business expenses. Where the expenses, which were not denied to be allowed as business expenses, if the liability related to such expenses may not be treated as unexplained liability or credit and catena of judicial decisions supports this view.” We, therefore, do not find any reason to interfere with the order of CIT(A) in deleting the addition and upholding the same, we dismiss the ground raised by the revenue on this issue. Appeals of the revenue are dismissed.
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2021 (5) TMI 966 - ITAT HYDERABAD
Addition for unaccounted cash - HELD THAT:- As perusal of the statement, AO has observed that the assessee has purchased a land of 2 acres in his name as well as purchased a house in Hyderabad in his wife’s name - This transaction itself has accepted by the assessee during the course of search proceedings at question & answer No. 15. Therefore, we are of the view that the AO has rightly made the addition for unaccounted cash.
The assessee has submitted before the CIT(A) wrong facts that in the particular land there was a well and bore-well, but, on perusal of the sale deed executed on 02/08/2012, nowhere it has been mentioned under the ‘Declaration’ that there is a well or bore-well -When the property was purchased in 2001 was a dry agricultural land, but, subsequently, when sale was materialized on 02/08/2012, nowhere it is mentioned in the translated document that the land was agricultural land. Before the CIT(A) at para (c) the assessee has submitted agricultural operation is carrying on and the source of irrigation for the agricultural operations is the open well and also a borewell situated in the land.
Therefore, the argument of the assessee that the said land is an agricultural land cannot be accepted. Earlier the sale agreement was made on two times i.e. 13/03/2012 and 23/07/2012 for a consideration of ₹ 62,00,116/- per acre and the same property has been sold on 02/08/2012 at ₹ 12,67,500/-, which is clearly proved that something has been concealed and during search the assessee clearly stated the actual facts which is clear from the statements recorded during the search and seizure. The statements are also supported that the assessee has made investment of ₹ 2 crore as per question & answer No. 15
As relying on SUMATI DAYAL [1995 (3) TMI 3 - SUPREME COURT] and DURGA PRASAD MORE [1971 (8) TMI 17 - SUPREME COURT] we set aside the order of the CIT(A) and restore the order of AO in making the addition on account of unaccounted cash towards sale of land. Accordingly, the grounds raised by the revenue on this issue are allowed.
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2021 (5) TMI 965 - ITAT HYDERABAD
Correct head of income - whether the very amounts could also be allowed to be assessed under the head ‘business’ once they have been assessed as income from other sources? - HELD THAT:- As assessee has itself conceded its challenge to correctness of learned lower authorities’ action treating the impugned sums; assessment-year wise as income from house property and business income; as the case may be; respectively.
Faced with this situation, we deem it appropriate to restore the instant issue back to the file of Assessing Officer to this limited extent only to the extent that whatever is the income assessed as income from other sources in the assessee’s hands out of its books/P&L A/c of the corresponding assessment years, shall not be assessed under the head business income as well so as to avoid double addition. It is made clear that it shall be the assessee’s risk and responsibility only to file on record all the relevant details proving that the very sums of additions before us have also been assessed under the head income from house property and business income; as the case may be.
Un-explained cash credits u/s.68 - Revenue’s vehement contention before us is that the assessee has not been able to prove the corresponding nexus between the impugned addition viz-a-vis the sum assessed in M/s.J.B.Educational Society, Hyderabad’s hands - HELD THAT:- Fact remains that the Assessing Officer appears to have filed a remand report dt.22-04-2014 prima facie indicating the alleged nexus. Be that as it may, since much water is flown down the stream since 2013, we deem it appropriate to restore the instant second issue as well back to the file of Assessing Officer for his afresh factual re-conciliation to ensure that the impugned double addition is not made in the assessee’s group entities’ hands. It is further made clear that it shall be a risk and responsibility of the assessee only to file its supportive evidence proving live nexus of the impugned sister concern.This second issue also accepted partly for statistical purposes in foregoing terms
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2021 (5) TMI 964 - ITAT DELHI
Disallowance u/s 14A of interest expenditure - assessee has disallowed suo motto u/s 14A - As argued AO failed to record any satisfaction as to the correctness of the claim of the assessee - HELD THAT:- The details reasons given of the ld AO at page 7 and 8 of the assessment order clearly shows that AO has recorded proper satisfaction as provided u/s 14A(2) of the act - when the assessee was questioned about the suo motto disallowance of ₹ 2 lacks, its basis and its working the assessee failed to provide the same to the AO. AO also held that this itself shows that the assessee is contradicting its own stand that it has not incurred any expenditure for earning of the exempt income. In view of this, we do not find any infirmity so far as the recording of the satisfaction u/s 14A(2) of the AO is concerned for invoking provision of Rule 8D of the Income tax Rules.
The details reasons given of the ld AO of the assessment order clearly shows that AO has recorded proper satisfaction as provided u/s 14A(2) of the act. However, when the assessee was questioned about the suo motto disallowance its basis and its working the assessee failed to provide the same to the ld AO. The ld AO also held that this itself shows that the assessee is contradicting its own stand that it has not incurred any expenditure for earning of the exempt income - we do not find any infirmity so far as the recording of the satisfaction u/s 14A(2) of the AO is concerned for invoking provision of Rule 8D of the Income tax Rules.
Administrative and managerial expenditure attributable to the exempt income @0.5% of the average of investment - We do not find any infirmity in the confirming the disallowance of ₹ 13.20 lakhs because the assessee itself has disallowed a sum of ₹ 2 lakhs for which no bifurcation is available. Therefore, only alternative is left is to apply the percentage prescribed under that Rule. The stand of the assessee that it has not incurred any expenditure is devoid of any merit as assessee itself has disallowed a sum of ₹ 2 Lakhs. In view of this, solitary ground of appeal of ld AO and ground No. 2 of the appeal of the assessee are dismissed.
Disallowance towards corporate social responsibility expenditure - HELD THAT:- On examination of the above expenditure, we find that for allowable of expenditure u/s 37(1) of the Act the expenditure should have incurred by the assessee wholly and exclusively for the purpose of the business. In the present case no evidence are adduced before us to show that these expenditure are wholly and exclusively incurred for the purpose of the business of the assessee. However, it was merely an statement of the assessee it will increase the goodwill of the assessee, however, no evidence were produced that why such expenditure not related to the business of the assessee could have fallen into allowability domain of section 37(1) of the Act. In view of this we do not find any infirmity in the order of the lower authorities in deleting the above sum u/s 80G (5) of the Act as well as also not allowing the same as an expenditure u/s 37(1) of the Act.
Disallowance u/s 35AC - assessee failed to furnish the certificate required under that section and therefore, deduction were denied - HELD THAT:- Naturally when the assessee does not have a requisite certificate u/s 35AC2(b) in the prescribed format, deduction u/s 35AC is correctly disallowed.
Alternative claim of relief u/s 80G - This contention was also negated in view of the fact necessary details could not be produced before the lower authorities. However, before us the assessee has submitted that all the receipt of donation of Himalaya School Society wherein, donation of ₹ 6 lakhs is given and it was acknowledged vide receipt No. 142 dated 22.09.2008. The assessee has also submitted certificate issued to the above society u/s 80G(5) dated 12.09.2008 which is applicable for the period of 01.04.2008 to 31.03.2010. In view of this, we direct the ld AO to allow the deduction u/s 80G of the Act on the donation of ₹ 6 lakhs which has been correctly disallowed by him u/s 35AC of the Act. Accordingly, ground No. 4 of the appeal is partly allowed.
Credit of tax deduction at source as claimed by the assessee in its revised return of income - grievance of the assessee is that credit towards TDS is reflected in Form No. 26AS was not allowed - HELD THAT:- CIT (A) directed the ld AO to verify the claim of the TDS made on account of the assessee and allowed TDS credit admissible as per 26AS. According to us the ld CIT (A) has categorically directed to the ld AO to grant credit of TDS as per Form No. 26AS. We do not find that such direction would have caused any grievance to the assessee to that extent. The assessee may have certain TDS certificates validly issued by the deductor not appearing in form no 26AS, there is no reason why assessee should not get credit for the same. Even otherwise, we direct the ld AO to verify the credit claimed by the assessee in return of income and TDS certificates available with it and give credit for the same as pre paid tax in accordance with the law. He may carry out necessary verification , if ld AO deems fit. In the result, ground No. 5 of the appeal is allowed.
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2021 (5) TMI 963 - ITAT HYDERABAD
Reopening of assessment u/s 147 - value of shares purchased by the assessee as penny stocks were treated as unexplained investment u/s 69B - HELD THAT:- As relying on SRI NARENDER KUMAR GUPTA VERSUS ASSTT. CIT CIRCLE 7 (1) HYDERABAD [2021 (5) TMI 887 - ITAT HYDERABAD] this appeal of the assessee is also remitted to the file of the Assessing Officer with a direction to supply the assessee, the reasons for reopening of the assessment and only after disposal of the objections, if any, raised by the assessee to the reopening, the Assessing Officer shall proceed to recompute the income of the assessee in accordance with law. Needless to mention that the assessee shall be given a fair opportunity of hearing. Assessee’s appeal is treated as allowed for statistical purposes.
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2021 (5) TMI 962 - ITAT DELHI
Exemption u/s 11 & 12 - Charitable activity u/s 2(15) - exemption denied as assessee was involved in trade, commerce or business as there was a restaurant run in the name of Dilli Dastarkhwan in the premises of the assessee and the assessee was receiving income from the restaurant - HELD THAT:- We find that the Ld.CIT(A) has followed the decision of the Tribunal pertaining to Assessment Year 2009-10. [2014 (7) TMI 1339 - ITAT DELHI] - The Revenue has not brought any other binding precedent into our notice. Therefore, we find that there is no reason to interfere in the findings of Ld.CIT(A). Ground No.1 raised by the Revenue in this appeal is dismissed.
Allowance of depreciation on fixed assets - CIT-A allowed deduction - HELD THAT:- CIT(A) has followed the judgement of Hon’ble Delhi High Court in the case of DIT(Exemption) vs Charanjiv Charitable Trust [2014 (3) TMI 760 - DELHI HIGH COURT] and also the judgement in the case of DIT(Exemption) vs Indraprashta Cancer Society [2014 (11) TMI 733 - DELHI HIGH COURT] No infirmity in the order of Ld. CIT(A) and same is hereby affirmed. Thus, Ground No.2 of the appeal raised by the Revenue is dismissed.
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