- 2020 (3) TMI 1237
Deduction u/s.80IB(10) - assessee was not sole owner of the land on which the housing project was constructed - AO observed that, assessee is not entitled to deduction under section 80IB(10) in view of the common commencement certificate/raja-chhiththi because it includes 55 residential units of having more than 1500 sq.ft. built up area - HELD THAT:- It is discernible that as there is no provision of obtaining commencement certificate from the local authority for development and construction of the residential unit having more than 1500 sq.ft area. In the facts of the present case, when the assessee claimed the deduction with respect to the residential units, which are having built up area less than 1500 sq.ft, the condition laid down under section 80IB(10)(c) is fulfilled. Therefore, whether such development permission includes the area....... + More
- 2020 (3) TMI 1236
Penalty u/s 271D - assessee accepted loan or deposit in cash - Default u/s 269SS - diary seized and inventorized as per Annexure A-1 during the course of search, which contains the sharafit transactions of the assessee with Shri Jivraj V.Desai & Group - ITAT deleted the penalty stating there is no material possessed by the Revenue showing acceptance of any loan or deposits by the assessee from Shri Jivraj V. Desai. Revenue has mis-constructed or misinterpreted the seized material as well as statement of Shri Arvindbhai A. Shah, alleged author of the diary - HELD THAT:- In view of the finding of fact given by the Tribunal that the Appellant-Revenue is not able to establish that assessee accepted any loan or deposit from Shri Jivraj V. Desai. In absence of any material showing acceptance of any loan or deposits by the respondent-assesse....... + More
- 2020 (3) TMI 1235
TP Adjustment - arm’s length price of the services provided to the Associated Enterprises (AE) - comparable selection - Assessee is intoproviding non-binding investment advisory services - HELD THAT:- MOTILAL OSWAL INVESTMENT ADVISORIES PVT. LTD. company is engaged in the business of investment banking, merchant banking, merger and acquisition, private equity, syndication, etc. Whereas, the assessee has only one segment of providing non-binding investment advisory services to the AE. Looking at the functional profile of this company, not only different benches of the Tribunal, but even different High Courts including Hon'ble Jurisdictional High Court have consistently held that this company cannot be a comparable to a non-binding investment advisory service provider. ICRA ONLINE LIMITED - as relying on AGM INDIA ADVISORS PRIVATE....... + More
- 2020 (3) TMI 1234
Penalty u/s 271(1)(c) - Bogus purchases - AO restricting the profit element in the purchases @15% - HELD THAT:- It is a settled position of law that penalty cannot be levied when an adhoc estimation is made. In this case an adhoc estimation was made by the Assessing Officer restricting the profit element in the purchases @15%. On identical situations the Coordinate Bench in the case of Shri Deepak Gogri v. Income Tax Officer [2017 (11) TMI 1857 - ITAT MUMBAI] held that no penalty is leviable as Assessing Officer had made only adhoc estimation of profit on certain purchases treated as unexplained expenditure.Assessing Officer did not doubt the sales made by the assessee from out of such purchases - there is no concealment of income or furnishing of inaccurate particulars as the profit element was determined by way of adhoc estimation. Hon&....... + More
- 2020 (3) TMI 1233
Penalty u/s 271(1)(c) - Bogus purchases - CIT-A deleted penalty - HELD THAT:- No valid reason to disturb the findings of the Ld.CIT(A) in deleting the penalty levied u/s. 271(1)(c) of the Act on disallowance of purchases as mere disallowance will not attract penalty and when there is complete disclosure of expenses in the books by the assessee. Grounds raised by the revenue are rejected.
- 2020 (3) TMI 1232
Penalty levied u/s. 271(1)(c) - Non specification of limb on which the penalty was proposed to be levied - non-striking off relevant clause in the notice shows - HELD THAT:- We hold that the notice was issued by the Assessing Officer U/s. 274 r.w.s 271(1)(c) of the Act is without specifying the charge for which the notice was issued as was non striking off of the inappropriate limb on account of non-application of mind and therefore the penalty proceedings initiated are bad in law. Thus, we direct the Assessing Officer to delete the penalty levied U/s. 271(1)(c) of the Act. - Decided in favour of assessee.
- 2020 (3) TMI 1231
Penalty levied u/s 271(1)(c) - Bogus purchases - AO estimated the profit element from the non-genuine purchases at 12.5% - HELD THAT:- It is a settled position of law that penalty cannot be levied when an adhoc estimation is made. In this case an adhoc estimation was made by the Assessing Officer restricting the profit element in the purchases @12.5%. On identical situations the Coordinate Bench in the case of Shri Deepak Gogri v. Income Tax Officer [2017 (11) TMI 1857 - ITAT MUMBAI] held that no penalty is leviable as Assessing Officer had made only adhoc estimation of profit on certain purchases treated as unexplained expenditure. Assessing Officer did not doubt the sales made by the assessee from out of such purchases - there is no concealment of income or furnishing of inaccurate particulars as the profit element was determined by way....... + More
- 2020 (3) TMI 1230
Disallowance of expenditure incurred by the assessee towards project - non commencement of business - Methods of accounting - HELD THAT:- Upon perusal of clause-19, we find that General administration costs and selling costs are generally not considered a part of contract cost unless they are contract specific. Applying the same to the fact of the case, we find that the assessee has debited expenditure of such a nature only in the Profit & Loss Account. Theses expenditure was not project specific and allowable as period cost. Nothing on record establishes that there was any change in aforesaid method of accounting by the assessee during the year under consideration. As held that AS-7 as an approved system of accounting and regular accounting methodology adopted by the assessee could not be disregarded by the department. On the basis o....... + More
- 2020 (3) TMI 1229
Business loss or not - Payment of additional Custom Duty after the department of Customs found that goods were under-valued - the duty was paid in the names of other parties but the same related to the assessee only. - CIT(Appeals) not allowing to the appellant the deduction of custom duty being the business loss - HELD THAT:- Assessee has paid certain duty pursuant to action carried out by DRI. The matter of duty was finalized by Hon’ble Settlement Commission and the assessee made the payment as determined. The payment so made amounted to ₹ 197.60 Lacs out of which deduction to the extent of ₹ 104.47 Lacs has already been allowed to the assessee. The basis of disallowance is the fact that the payment is not in assessee’s account. However, as rightly pointed out by Ld. AR, the said payment was made by the assessee ....... + More
- 2020 (3) TMI 1228
Disallowance of bad debts u/s 36(1) - assessee had written off inventory of land - Diversion of income by overriding title - as concluded by directing the AO to restrict the addition on account of amount received through e-auction of impugned land and property by HDFC to only 5% of the receipt and recomputed income after giving benefit for amount of inventory of land written off - HELD THAT:- By no stretch of imagination it can be said that entire sum was received only against land belonging to the assessee. It is further clear from sale certificate wherein in the description of the property it has been mentioned that the same consists of immovable property being sold by way of sale of residuary right including receivable of HPGPL with step-in obligation in respect to the immovable property. Hence, it is quite evident that the receipt of ....... + More
- 2020 (3) TMI 1227
Deemed dividend addition u/s 2(22)(e) - assessee has beneficial share holding in 2 companies namely M/s Jasubhai Business Services Pvt Ltd and M/s. ABM Steels Pvt M/s.- as per AO ABM Steels Pvt. Ltd is not a company in which public is substantially interested and assessee is holding beneficial interest and voting right and M/s ABM Steels Pvt. Ltd. is having accumulated reserves - HELD THAT:- Any credit or advantage taken by the persons having substantial interest will attract the provision of section 2(22)(e) - Even though, assessee has repaid the deposit within the same year, it does not mean that the loan or benefit is not taken. We can call any name but ultimately assessee has taken a credit/ benefit, the assessee should have known that it is surpassing the deeming provisions particularly when it has holding beneficial interest. It is ....... + More
- 2020 (3) TMI 1226
Exemption u/s. 54F - Whether assessee could avail benefit u/s 54F if the construction of new asset commenced before the sale of old assets? - Whether the amount paid for land used for new asset should be considered for purpose of section 54F? - HELD THAT:- The condition preceded and for claiming benefit under the provision is that capital gain realised from sale of capital asset should have been invested either in purchasing a residential house or and constructing a residential house. In the present facts of case assessee utilised part of sale consideration earned from sale of 2 parcels of land in construction of residential house, which started on 13/01/2014 (which is within one year prior to the sale of capital asset) and, construction was completed in financial year 2016-17 (which is before expiry of 3 years from the sale of capital as....... + More
- 2020 (3) TMI 1225
Disallowance of professional fees paid by the assessee as well as interest expenditure incurred - assessee not carrying on any business - HELD THAT:- The only solitary transaction is demerger of business of the assessee against which the shares have been allotted in the demerged entity. There is neither frequency nor volumes. Therefore, it does not also apply. Thus, we do not find any reason upset the finding of the lower authorities. Hence, we are also of the view that assessee is not carrying on any business during the year and therefore the learned assessing officer as well as the learned CIT - A has rightly disallowed professional fees paid by the assessee as well as interest expenditure incurred. In the result, ground number 1, 2 and 3 of the appeal are dismissed. Revenue earned because of renting of space of ATM - Business income - ....... + More
- 2020 (3) TMI 1224
TDS default - Order passed u/s 201(1) and (1A) - Period of limitation - Effective date of amendments by Finance Act (No. 2) of 2009 - The impugned year under examination is Assessment-year 2010-11. Finance Act (No. 2) of 2009 inserted subsections (3) and (4) with effect from 1-4-2010. It provided that an order under section 201(l) for failure to deduct the whole or any part of the tax as required under the Act, if the deductee is a resident payer, shall be passed within two years from the end of the financial year in which statement of tax deducted at source is filed by the deductor. The assessee submits that the said amendment is applicable to the year under appeal. HELD THAT:- Having heard rival contentions, we are of the view that the order passed by Ld CIT(A) quashing the impugned order as barred by limitation does not call for any in....... + More
- 2020 (3) TMI 1223
Deduction u/s.80IAB(4)(iii) - Deduction under the said provision in respect of income derived from a SEZ project known as Millennium Towers - HELD THAT:- AO considers income from Millennium project as Business income then he should allow all the expenses claimed by the Assessee and therefore the income from Millennium project arrived at by the AO at ₹ 1,17,35,191 was not proper. By reason of this conclusion, there would be only loss from the project Millennium and therefore there is no occasion to allow deduction u/s.80IAB(4)(iii). There was also a disallowance of expenditure u/s.14A of the Act. The disallowance u/s.14A of the Act was sustained by the CIT(A) at a sum of ₹ 65,65,245/-. The CIT(A) in para 6.10 of his order observed that if the profit of the Assessee increases after the disallowance of expenses u/s.14A of the Act....... + More
- 2020 (3) TMI 1222
TDS u/s 194A - interest payments where it exceeded the threshold limit - interest payments coveringjoint deposit holders - TDS liability u/s 201 and interest u/s 201(1)(1A) - HELD THAT:- As seen from the order of Ld. the CIT(A), we observe that the Ld.CIT(A) examined the details and confirmed the amount to the extent of ₹ 68,24,522/- in respect of 162 cases. During the appeal hearing, for a query from the bench, the Ld.AR neither furnished the actual tax liability nor furnished the details. The case was posted for hearing in as many as 20 occasions and the A.R continuously taken the adjournment. The appeal was filed was way back on 03.05.2017 and the Ld.A.R. could not explain the mistake in the order of the Ld.CIT(A). In the instant case, the Ld.AR could not bring any mistake of calculation of tax liability u/s 201 and 201(1A). We a....... + More
- 2020 (3) TMI 1221
Penalty u/s 271(1)(c) - non recording of satisfaction - Defective notice - HELD THAT:- On perusal of facts, we find that the Ld. AO has initiated penalty proceedings u/s 271(1)(c) for both limbs, i.e, for concealment of particulars of income and for furnishing inaccurate particulars of income. The said lapses continued in show cause notice issued u/s 274 r.w.s. 271(1)(c) where the Ld. AO has issued printed notice without striking of inapplicable part of notice. From the above, it is very clear that the Ld. AO has not arrived at clear satisfaction, as required under law before initiation of penalty proceedings u/s 271(1)(c) of the I.T.Act, 1961,whether said penalty proceedings has been initiated for furnishing inaccurate particulars of income or for concealment of particulars of income. Therefore, we are of the considered view that the who....... + More
- 2020 (3) TMI 1220
Addition of interest expenses - addition made on the basis that the assessee has filed only a written explanation but has not provided the evidences proving nexus between the expenditure incurred and the interest free fund available - HELD THAT:- As perused the materials available on record and gone through the orders of the authorities below. The assessee has demonstrated that the assessee had made investment in fixed assets namely Oil Mill Machinery of ₹ 34,35,045/- and Oil Mill Building of ₹ 20,95,190/- totaling to ₹ 55,30,235/- during the year. The Assessee has submitted during the Assessment Proceedings that funds which were invested in fixed assets were out of funds available in the capital account. It is also stated that the loan which was taken by the assessee was utilized for the purpose of business. In support ....... + More
- 2020 (3) TMI 1203
Reopening of assessment u/s 147 - deemed dividend addition u/s 2(22)(e) - gap of more than four years - failure on the part of the petitioner to disclose fully and truly all material facts necessary for his assessment - second mode of payment envisaged under clause (e) of section 2(22) viz. to any concern in which such shareholder is a member or a partner and in which he has substantial interest. - HELD THAT:- In the facts of this case, the petitioner being an individual does not fall in the first category; and since his gross total income is only ₹ 1.48 crores, he also does not fall under the second category of enterprises. Therefore, also there does not appear to be any specific requirement for the petitioner to disclose such transaction. In the aforesaid premises, this court is of the view that on the reasons recorded by the Asse....... + More
- 2020 (3) TMI 1202
Exemption u/s 11 - condonation of delay in filing Form 10 - claim of accumulation requires filing of Form 10 within the specified time limit - whether the prescription of Form 10 for the purpose of accumulation under section 11(2) was mandatory or directory - HELD THAT:- The Supreme Court in the case of Commissioner of Income Tax V. Nagpur Hotel Owners Association [2000 (12) TMI 99 - SUPREME COURT] considered the question of whether the prescription of Form 10 for the purpose of accumulation under section 11(2) was mandatory or directory. The conclusion was that the requirement of filing Form 10 at the time of assessment was only directory and it would suffice if the same were filed even thereafter so long as relevant information in support of the claim of accumulation was furnished by the assessee even at the time of assessment. The impu....... + More
