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2022 (12) TMI 405
Reopening of assessment u/s 147 - non-issue of a notice u/s 143(2) - assumption of jurisdiction by an officer commences with, and is triggered by, the issuance of a notice under Section 143(2) and failure to do so, would compromise the proceedings fatally - HELD THAT:- There is complete uniformity in the conclusion of Courts on the issue as to whether non-issue of notice under Section 143(2) would vitiate the assessment, answering the issue in the affirmative. CBDT Instruction No.3 of 2003 elucidates upon and explains the provisions relating to Transfer Pricing, as contained in Sections 92 and 92F of the Act that had come into force, with effect from assessment year 2002-03 onwards. The Circular reinforces the position that it is sine qua non for the Assessing Officer to assume jurisdiction prior to taking any steps in the matter of asses....... + More
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2022 (12) TMI 404
Validity of reopening of assessment - reopening as initiated beyond 4 years - Reasons to believe - HELD THAT:- It is settled that if notice under Section 148 of IT Act is to be issued after expiry of four years or before expiry of six years, the assessee should have failed to disclose the ‘material facts’. ITAT on consideration of the material on record has held that AO has not even stated or alleged that there was failure on the part of assessee to disclose fully and truly all the material facts necessary for the said assessment years. Nothing contrary to the findings of the ITAT is demonstrated or urged by the Revenue. In view of the settled position of law and the AO not stating that there was failure on the part of the assessee to disclose material facts, no exception can be taken to the order passed by the ITAT. Resultantly, these appeals must fail.
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2022 (12) TMI 403
Upfront premium amortization - land has been given on long lease/license for 30 years - Entitlement to amortize and offer 1/30th of the amount received as income every year - Whether consideration amount received in respect of an immovable property, either while conveying property or granting long license/lease shall be a capital receipt? - whether tribunal is justified in holding that the entire upfront premium constituted the income for the current year? - HELD THAT:- The issue involved in "Sindhurani Chaudharani" [1957 (4) TMI 3 - SUPREME COURT] is payment of 'Salami' and in this case it is upfront premium which non refundable. Therefore the matter requires reconsideration in the hands of the Assessing Officer referring to relevant facts and law. According to Shri.A.Shankar, if the accounting is as per AS-19 and even ....... + More
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2022 (12) TMI 402
Reopening of assessment u/s 147 or assessment u/s 153C - HELD THAT:- Undisputed facts of the case are, based on the agreement found during the search in the premises of M/s Davanam Jewellers Pvt. Ltd., the assessment was reopened for A.Y.2006-07. The assessment order does not indicate the procedure followed in re-opening the assessment. In addition protective assessment for A.Y.2007-08 has also been completed. As perused the agreement. Shri Chandrashekar is right in his submission that though the agreement is undated, the stamp paper bears the date of purchase as October 9th, 2009. The details of the payments are shown. In agreement, it is stated that the possession of the land shall be handed over after execution of the sale deed. In the facts of this case, in the absence of details in the assessment order with regard to the procedure fo....... + More
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2022 (12) TMI 401
Exemption u/s 10(22) denied - objects of the Trust include commercial activity - appellant's Trust was registered with the primary object to impart education - AO did not allow exemption on the ground that that the assessee-Trust was not solely for the educational purposes, but the trust was making profits - as per AO Trust Deed provided for payment of Honorarium to the Trustees prohibited u/s 13(2), Trust collects abnormally high fees, for acquiring luxury vehicles, using the Trust funds for activities other than education and unexplained cash credit - HELD THAT:- AO has not accepted the explanation on the ground that only upon the Department raising a query, the assessee had shifted the figures of Building and Development Fund to Income and Expenditure Account, as an after thought. The assessee was called upon to produce the details....... + More
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2022 (12) TMI 400
Stay of demand - AO directing the appellant to deposit 20% of the tax as determined in the order of assessment - HELD THAT:- Admittedly, the assessments are high pitched assessments and when such high pitched assessments are appealed against and an order of stay is sought for either before the assessing officer by filing an application under Section 220(6) of the Income Tax Act, orders are passed by the assessing officer either keeping the notice of recovery in abeyance and not treating the assessee as an assessee in default till the appeal is disposed of. There are yet another set of cases where the assessing officer for reasons to be recorded imposes certain conditions as a condition for grant of stay. The appellant’s case falls under the second category where the assessing officer has directed 20% of the demand to be paid by the ....... + More
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2022 (12) TMI 399
Unexplained money - Assessee had deposited the amount in his bank after receiving the same from his father-in-law - lower authorities were in error in confirming the assessment on the ground that the WILL was not properly notarized or registered and on the further ground that creditworthiness of the father-in-law is not established in view of undisputed fact that there was no cash credits - HELD THAT:- It is settled that tax authorities cannot record any findings with regard to validity of the Will. They may look into any Will for satisfying themselves with regard any transaction. In view of the authority in Daulat ram Rawatmull and the fact that another sum of Rs.25 Lakhs has been paid to assessee's co-brother under the very same Will and there has been no enquiry in that regard, we are of the view that the findings recorded by the C....... + More
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2022 (12) TMI 398
TDS u/s 40 (a)(ia) - additions made towards disallowance of interest paid on partners capital account - assessee is following mercantile system of accounting, income and expenditure pertains to relevant accounting period is required to be accounted whether or not such expenditure/income is received by the assessee - HELD THAT:- When it comes to deductibility of any expenditure, it is subject to provisions of section 40(a)(ia) of the Act and as per said provision, expenditure debited to profit and loss account cannot be allowed as deduction, in case the assessee has not deducted TDS on said expenditure. The provisio provided to section 40(a)(ia) further states that said expenditure can be allowed as deduction in the year in which the assessee has deducted TDS and remits to Government account. Assuming for a moment, the assessee has made a ....... + More
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2022 (12) TMI 397
Exemption u/s 11 - assessee is a registered society u/s 12A since past more than 25 years - Charitable activity u/s 2(15) - HELD THAT:- As assessee has established that the income generated from this activity is not applied for any individual benefit or transfer to the benefit of any particular person, entity or group of persons but the application is for the benefit of public at large. This amply proves that the AO accepted the claim of the assessee that the assessee is a charitable society. It was in the backdrop of such a finding of the AO that the CIT(A) arrived at the conclusion that the income of the assessee has to be computed in accordance with the provisions of section 11 to 13 which would include accumulations as per section 11(1)(a) and section 11(2). He, then directed the Ld. AO to re-compute the income after giving benefit of....... + More
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2022 (12) TMI 396
Set off loss against addition of undisclosed income - losses in share transaction in derivative segment and in cash delivery segment - CIT(A) upheld the addition to the extent of peak investment - CIT(A) held that such claim cannot be entertained at this stage - HELD THAT:- Though the Assessing Officer is not entitled to admit or entertain additional claim during the assessment proceedings, however the appellate authority has such jurisdiction to admit such additional claim as has been held by Hon'ble jurisdictional High Court in the case of CIT Vs. Mitesh Impex 2014 (4) TMI 484 - GUJARAT HIGH COURT Thus,admit the additional plea of set off of loss of current year against the income of assessee in the impugned year. So far as merit is concerned, the Hon'ble jurisdictional High Court in the case of Shilpa Dyeing & Printing Mill....... + More
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2022 (12) TMI 395
Denial of foreign tax credit u/s 91 - delay in filing Form no.67 - HELD THAT:- As in Anuj Bhagwati [2022 (9) TMI 1397 - ITAT MUMBAI] while deciding a similar issue held that section 90/91 of the Act has not been amended insofar as grant of foreign tax credit is concerned and Rules cannot override the Act and therefore filing of Form No. 67 is not mandatory but it is directory. Mere delay in filing Form No. 67 as per the provisions of Rule 128(9), as they stood during the year under consideration, will not preclude the assessee from claiming the benefit of foreign tax credit in respect of tax paid outside India. Since in the present case, the claim of the assessee was denied on this technical aspect without going into the merits, therefore, we deem it appropriate to direct the jurisdictional AO to decide the claim of the foreign tax credit....... + More
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2022 (12) TMI 394
Penalty u/s 271(1)(c) - expenditure which was claimed by the assessee as exceptional item in the profit & loss a/c - HELD THAT:- The penalty imposed by the AO and confirmed by the CIT(A) is not correct as further reason that the assessee has disclosed all the facts in the tax return filed by the assessee and thus all the facts were available before AO and nothing was concealed. Even if, the assessee has made a claim which is not correct or not as per provisions of the Act or which the AO considered to be not correct even then the penalty cannot be levied as the full facts were before the AO in the return of income. The facts of the assessee finds that in the case of CIT vs Reliance Petro Products (P) Ltd. [2010 (3) TMI 80 - SUPREME COURT] has held that making of claim which is not sustainable in law and claim made in the return cannot....... + More
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2022 (12) TMI 393
Rectification of mistake u/s 154 - Set-off of Losses of 10A Unit against the adjustment u/s 92CA and 40(a)(i) - As per AO set off of business loss being the loss of Chennai and Gurgoan undertakings, which was directed by CIT(A) to be set off, resulted into business loss being set off against the income from other sources and therefore, there is a mistake apparent from the record which needs to be rectified - Whether TP adjustment and the disallowance is question in altogether a separate adjustment/disallowance, which cannot be apportioned to a specific unit? - HELD THAT:- We have carefully considered the rival contentions and orders of the lower authorities. Fact shows that order giving effect to the order of the ld.CIT(A) was passed on 08.03.2012. According to that order, the loss incurred by the assessee was set off against other busine....... + More
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2022 (12) TMI 392
Revision u/s 263 - additions made by the A.O. as commission received after allowing 50% expenses against the impugned commission - HELD THAT:- We are of the considered opinion that the assessee even during the second round of litigation has failed to substantiate its claim for allowing 95% of the expenses alleged to be incurred in earning the commission income received by the assessee from MSEDCL. The assessee neither before us, nor before the lower authorities have filed any additional evidences pertaining to its claim. We are of the considered view that the assessee has been given sufficient relief by the lower authorities in allowing 50% of the expenses claimed by the assessee in earning the impugned commission received from MSEDCL. Assessee has failed to prove that the said expenses were incurred wholly and exclusively for the purpose....... + More
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2022 (12) TMI 391
Rectification u/s 154 - claim the allowance of 50% of the expenses against the commission income - HELD THAT:- When the grounds raised by the assessee in the present appeals that “Ld. CIT(A) has erred in law and in facts in not allowing the expenses to the extent of 50% of the turnover” has already been decided by the co-ordinate Bench of the Tribunal in the first round of litigation having not been pressed and miscellaneous application against the same has also been dismissed, the assessee is not entitled to re-agitate the matter again by filing rectification application under section 154 of the Act before the AO and then to again file the appeal against the order passed under section 154 before the Ld. CIT(A) and then before the Tribunal. AO in order passed under section 154 of the Act has duly complied with the order passed....... + More
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2022 (12) TMI 390
Penalty levied u/s 271(1)(b) - non-compliance of the notice issued during the course of assessment proceedings -assessee contended that she is a salaried person and tax was deducted by the employer on the salary and therefore no return of income was filed by her in the regular course of income and due to change in her residential address, the notices issued could not be served upon her - HELD THAT:- We find that the AO has not mentioned any mode of the service of the notice dated 05.10.2019 u/s 142(1) of the Act before levy of the penalty. It is the responsibility of the Assessing Officer to confirm whether the notice was sent by notice server or through post or through e-mail and ensure whether same was served upon the assessee. No such fact has been brought on record by the AO - Further, we find that assessee has raised the change of ad....... + More
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2022 (12) TMI 389
Penalty u/s. 271(1)(b) - no legal service of the notices - assessee failed to explain the reason for non-compliance of notices issued under section 142(1) - HELD THAT:- As in the identical facts and circumstances the Delhi Tribunal in case of Smt. Rekha Rani [2015 (5) TMI 1100 - ITAT DELHI] has decided the issue in favour of assessee in part by observing that penalty for the first default of non-compliance of notice under section 143(2)/142(1) of the Act was sufficient enough. As the assessment has been framed under section 143(3) read with section 263 of the Act but the assessee did not furnish the details called for by the AO during the assessment proceedings. Therefore the reference made by the learned counsel for the assessee to the order of the Delhi tribunal in the case of Akhil Bhartiya Prathmik Shikshak Sangh Bhawan Trust[2007 (8) TMI 386 - ITAT DELHI-G] cannot help the assessee. Appeal of the assessee is partly allowed.
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2022 (12) TMI 388
Unexplained cash credit u/s 68 - no documentary evidence was submitted by the assessee on ITBA portal to substantiate the claim with regard to filing the confirmation of the creditors and therefore the NFAC confirmed the order of the AO - HELD THAT:- As along with the written submission, the assessee had filed the confirmation of the 2 creditors and those confirmations are available - The only error was that it was filed in physical form and was not uploaded in the ITBA portal in soft form and the confirmation filed in physical form was not taken cognizance by the NFAC. Thus in the light of the availability of confirmation filed in physical form before the First Appellate Authority, the issue with regard to the aforesaid addition should be remanded to the AO for consideration afresh in the light of the confirmation already filed before th....... + More
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2022 (12) TMI 387
Validity of order of CIT(A) allowing the claim of assessee - Earlier the order of revision made by CIT u/s 263 was quashed by the ITAT - As per CIT transaction of sale of shares was not looked into by the A.O. by not applying his mind and thereby allowing carry forward loss - PCIT remanded the matter to the A.O. to verify the legal tenability of the Special Purpose Vehicle (SPV), the source of evidences of SPV to acquire the shares of ABMWL, the valuation of shares of ABNL IT & ITES Limited and sale of shares - HELD THAT:- CIT(A) has allowed the claim of the assessee, pertaining to LTCL which is to be carry forward for set off in subsequent years. It is pertinent to point out that the ld. CIT(A) has passed the impugned order by placing reliance on the decision of the co-ordinate bench [2021 (5) TMI 791 - ITAT MUMBAI] which has quashed....... + More
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2022 (12) TMI 386
Deduction u/s 54 - assessees could not furnish proper materials and could not make proper representation before ld. PCIT - HELD THAT:- Since the issues contested in these appeals relate to factual aspects and since the ld. AR submits that the assessees would be in a position to place all availabile records to prove their claim for deduction u/s 54 of the Act before Ld PCIT, in the interest of natural justice, we are of the view that these assessees may be provided with one more opportunity to present their case before ld. PCIT. Accordingly we set aside the orders passed by ld. PCIT in the hands of these assessees and restore all the issues to his file for examining them afresh. We also direct the assessees to furnish all information and explanations relating to the issues examined by ld. PCIT. Appeals filed by the assessees are treated as allowed for statistical purposes.
