- 2020 (1) TMI 972
Review petition - whether referring to guidelines issued by the CBDT in Instruction No.3/2003 the Tribunal was right in observing that by not making reference to the TPO, the AO had breached the mandatory instructions issued by the CBDT? - in this Review Petition it is urged that in view of Circular dated 08.08.2019, benefit ought to be extended in favour of the Review Petitioner as the tax effect in the matter is stated to be less than the limit prescribed in the Circular dated 08.08.2019 - HELD THAT:- Since the matter has been restored to the file of the Assessing Officer so that appropriate reference could be made to the Transfer Pricing Officer (TPO), at this stage the benefit of the aforesaid circular dated 08.08.2019 cannot be extended. Review Petition is dismissed.
- 2020 (1) TMI 971
Application for recall of an ex-parte order - Dismissal of appeal for non-prosecution - compounding the same by refusing to entertain the application for recall of the order - ITAT has dismissed the application for recall of its order solely on the ground of limitation, observing that it has no power to condone the delay - HELD THAT:- Tribunal lost sight of the main provision as enshrined in Rule 24 of the ITAT Rules, which required the ITAT to dispose of the appeal on merits after hearing the respondent. Since it did not proceed to do so, and specifically gave an option to seek recall of its order, we find no justification for dismissing the application for recall on the ground of limitation. Rule 24 of the ITAT Rules, as noted above, enjoined the ITAT to decide the appeal on merits. The appeal filed in 2014, had ripened for final dispos....... + More
- 2020 (1) TMI 970
Extension of time for furnishing online Income Tax return in the Bihar which was expired on 31-03-2018 for the Financial Year-2016-17 - private cause OR public cause - HELD THAT:- The petition in its present form is not maintainable, apart from it being deficient of particular materials. However, Tax Payers of Bihar faces ‘unnatural inconvenience’ in not filing income-tax returns within the stipulated period remains unexplained. The petition appears to be espousing private cause instead of public cause.
- 2020 (1) TMI 969
Enhanced deduction u/s 10A - Further deduction claimed u/s 10A in consonance with the APA Agreement entered by the assessee - Whether the assessee has satisfied the conditions of deduction u/s 10A - HELD THAT:- As decided in own case [2019 (12) TMI 153 - ITAT PUNE] proviso to section 92C(4) does not debar deduction u/s 10A on additional income in assessment u/s 92CD; assessment u/s 92CD provides for granting deduction u/s 10A; and the assessee has satisfied the requirement of section 10A(3) read with section 92CD(2), thereby entitling it to deduction u/s.10A on the additional amount. Thus direct the AO to grant deduction claimed in respect of the incremental invoicing pursuant to APA agreement for computing total income. Thus, the grounds of the assessee are allowed.
- 2020 (1) TMI 968
Disallowance u/s 37(1) - payments have been incurred by way of cash and hence genuineness of these expenses cannot be proved - AO made disallowance u/s 40A(3) of the Act protectively - HELD THAT:- In the instant case, the AO has, presumably, taken the view that these expenses have not been laid out or expended wholly and exclusively for the purpose of business. Accordingly, he has invoked the provisions of sec. 37 of the Act. There should not be any doubt that, merely because certain expenditure has been incurred by way of cash, the same cannot be considered as not related to the business activities of the assessee. Assessee has incurred 90% of expenses by way of cheque, meaning thereby, in case of business necessity only the assessee has been incurring expenses by way of cash. There is no doubt that the expenses incurred by way of cash m....... + More
- 2020 (1) TMI 967
Exemption u/s 11 - disallowance of amount utilized for acquisition of assets as application of income u/s 11 - disallowance of claim of repayment of loan as application of income u/s 11 - HELD THAT:- As submitted that the nexus of loan funds and utilization should be examined to find out exact position. Accordingly, the Ld Counsels submitted that the assessee may be provided with an opportunity to furnish the details of utilization of loans, so that the correct amount of application of income could be quantified in terms of the ratio laid down in the above said decision. D.R also agreed to the plea put forth by the Ld counsels for the assessees. Accordingly, we set aside the orders passed by Ld CIT(A) in respect of above said two issues in all the years and restore them to the file of the AO with the direction to examine these issues afre....... + More
- 2020 (1) TMI 966
Chargeability to tax of long term capital gains - sale of land to assessee's husband which was not disclosed by assessee in return of income filed with Revenue - HELD THAT:- Assessee has brought on record documents such as Vardhamanam Deed, Settlement Deed and affidavit to contend that this entire sale was sham with a view to bring on record market value of said land so that compensation from Government at market value can be claimed. The guideline value of the said property is also higher as against compensation awarded by Government for compulsory acquisition of assessee property being 40.5 cents of land , as we have detailed above . The assessee has filed petition with District Collector for enhanced compensation. The details are elaborated in preceding para of this order. Certain additional evidences are also brought on record by ....... + More
- 2020 (1) TMI 965
Deduction u/s 80P(2) - CIT(A) passed order u/s 154 wherein the claim of deduction u/s 80P was denied - HELD THAT:- In the case of Chirakkal Service Co-operative Co-operative Bank Ltd. v. CIT [2016 (4) TMI 826 - KERALA HIGH COURT] had held that when a certificate has been issued to an assessee by the Registrar of Co-operative Societies characterizing it as primary agricultural credit society, necessarily, the deduction u/s 80P(2) has to be granted to the assessee. Full Bench of the Hon’ble jurisdictional High Court in the case of The Mavilayi Service Co-operative Bank Ltd. V. CIT [2016 (4) TMI 826 - KERALA HIGH COURT] had held that the A.O. has to conduct an inquiry into the factual situation as to the activities of the assessee society to determine the eligibility of deduction u/s 80P. In view of the dictum laid down by the Full Ben....... + More
- 2020 (1) TMI 964
Reopening of assessment u/s 147 - long-term capital had escaped assessment - tangible material - HELD THAT:- Specific information received by the Assessing Officer, which constituted tangible material, was analysed, verified and cross-checked by the Assessing Officer and after such analysis and cross verification, a belief was formed by him that this substantial long-term capital gain chargeable to tax in the hands of the assessee for the year under consideration had escaped assessment. He accordingly recorded the reasons giving the details of specific information received by him, analysis and inquiries made by him to cross verify the said information and findings of fact arrived at on the basis of such analysis and cross-verification, which ultimately formed the basis or reason to believe that the income of the assessee in the form of lo....... + More
- 2020 (1) TMI 963
Unexplained cash deposits - CIT-A estimated the income @4% on total turnover - Estimation of income - turnover of the assessee in purchase and sale of digital dollars - HELD THAT:- There is no provision in the Income Tax Act to tax the unutilized balance received from the customers. If the assessee fails to provide the digital dollars, it would remain as liability and the assessee is obliged to return the money to the depositor. Therefore, the same cannot be treated as income of the assessee. AO also did not invoke any provision of the Act to tax the difference amount. During the course of survey conducted in the case of 133A also, no evidence was found by the AO to hold that the assessee has acquired the assets equivalent to the difference amount taxed by the AO as observed by the Ld.CIT(A). Therefore, we hold that the amount of ₹ ....... + More
- 2020 (1) TMI 962
Penalty u/s 271AAB - No undisclosed income found - HELD THAT:- When the Revenue has failed to explain any undisclosed income as per the statutory definition and affirm the CIT(A)’s findings deleting the impugned penalty(ies). Revenue fails in its sole substantive grievance
- 2020 (1) TMI 961
Disallowance u/s 36(1)(iii) out of interest payment on the ground that borrowed funds has not been utilised for business purpose - contention of the assessee is that the amount was not given in the year under consideration - HELD THAT:- Question of genuineness, creditworthiness and business expediency is to be verified in the year when this advance was given. Contention that if genuineness, creditworthiness and business expediency is not proved in that year, in that event, the A.O. would be at liberty to make addition in this year as relying on ACIT Vs. Auto Light (India) Ltd [2016 (7) TMI 1557 - ITAT JAIPUR] merits acceptance. This Tribunal in the case of ACIT Vs. Auto Light (India) Ltd. (supra), has observed that assessee was required to prove whether on the date of making investment or giving the interest free amount to the sister conc....... + More
- 2020 (1) TMI 960
Allowability of interest expenses on trade advances u/s 36(1) - whether interest on borrowed capital for the purpose of construction of building can be disallowed on interest accrued only upto the date of completion of building or put to use of building to capitalize the same? - HELD THAT:- AO has not doubted the genuineness of the capital expenditure incurred by assessee nor there is any doubt about payment of interest on these trade advances by assessee to Brakes India Limited It is observed from audited financial statements placed before the Bench that assessee is also claiming depreciation on building. As carefully perused audited financial statement of the assessee and we could not find that there was any diversion of funds by assessee for non business purposes nor it is the case of the AO that diversion of funds for non business pur....... + More
- 2020 (1) TMI 959
Exemption u/s 11 - Anonymous donation - assessee accommodating such donations received as fees - HELD THAT:- In this case, the seized material for the assessment year 2013-14 gives an impression that the amount was collected from the students. However, it is not known that such donations were collected from students or any other party who are related to the students at the time of admission. These facts were not examined either by the Assessing Officer or by the CIT(A). Even though there was no prohibition for receiving voluntary donations from the general public, collecting capitation fee for admission of the students in any educational institution is prohibited and it is a punishable offence under the State Enactment. The assessee claims that necessary materials were filed before the Assessing Officer to establish the identity of the do....... + More
- 2020 (1) TMI 958
Deduction u/s 80P(2) - CIT(A) passed order u/s 154 wherein the claim of deduction u/s 80P was denied - HELD THAT:- In the case of Chirakkal Service Co-operative Co-operative Bank Ltd. v. CIT [2016 (4) TMI 826 - KERALA HIGH COURT] had held that when a certificate has been issued to an assessee by the Registrar of Co-operative Societies characterizing it as primary agricultural credit society, necessarily, the deduction u/s 80P(2) has to be granted to the assessee. Full Bench of the Hon’ble jurisdictional High Court in the case of The Mavilayi Service Co-operative Bank Ltd. V. CIT [2016 (4) TMI 826 - KERALA HIGH COURT] had held that the A.O. has to conduct an inquiry into the factual situation as to the activities of the assessee society to determine the eligibility of deduction u/s 80P. In view of the dictum laid down by the Full Ben....... + More
- 2020 (1) TMI 957
Deduction u/s 80P(2) - CIT(A) passed order u/s 154 wherein the claim of deduction u/s 80P was denied - HELD THAT:- In the case of Chirakkal Service Co-operative Co-operative Bank Ltd. v. CIT [2016 (4) TMI 826 - KERALA HIGH COURT] had held that when a certificate has been issued to an assessee by the Registrar of Co-operative Societies characterizing it as primary agricultural credit society, necessarily, the deduction u/s 80P(2) has to be granted to the assessee. Full Bench of the Hon’ble jurisdictional High Court in the case of The Mavilayi Service Co-operative Bank Ltd. V. CIT [2016 (4) TMI 826 - KERALA HIGH COURT] had held that the A.O. has to conduct an inquiry into the factual situation as to the activities of the assessee society to determine the eligibility of deduction u/s 80P. In view of the dictum laid down by the Full Ben....... + More
- 2020 (1) TMI 956
TDS u/s 194C - addition u/s 40(a)(ia) - payments made towards subcontract without deducting tds - assessee JV had assigned the work allotted to its member companies - HELD THAT:- As decided in own case [2017 (8) TMI 1595 - ITAT PUNE] in absence of any contract or sub-contract work by joint venture to its member companies, provisions of section 194C were not applicable for the purpose of TDS - The two corporate entities forming joint venture were already being assessed since A.Y. 2000-01 onwards on their respective shares and TDS apportionment certificates were also issued by the AO every year for these eight years including the current assessment year to enable them to claim the same - there was no Profit and Loss Account in the assessee’s case and there was no claim of any expenditure - there was no question of any disallowance und....... + More
- 2020 (1) TMI 955
Addition u/s 68 - addition being the amount outstanding in the name of the three sundry creditors - HELD THAT:- Since the assessee in the instant case, has filed the various details giving the statement of account, confirmation, etc., and has substantiated that the said sundry creditors were paid in the subsequent year through banking channels and that the assessee has had regular transactions with the same parties in the subsequent years which were not doubted by the Revenue and considering the fact that the trading results shown by the assessee for the impugned year have not been disturbed by the AO, therefore, in the light of the above discussion and relying on the decisions cited (supra), we hold that the addition made by the AO u/s 68 of the Act in respect of the three sundry creditors which has been sustained by the CIT(A) is not justified. We accordingly set aside the order of the CIT(A) and direct the AO to delete the addition. The grounds raised by the assessee are allowed.
- 2020 (1) TMI 954
Disallowance of labour expenses - CIT (A) confirmed disallowance to the extent of 25% instead of 50% disallowed by AO - HELD THAT:- CIT(A) has stated that assessee has also produced bills in respect of most of the discrepancies and the gross profit of the assessee firm has tremendously gone up from 4.89% to 14.01% in the earlier years. CIT(A) has held that many discrepancies noted by the assessing officer were explained by the assessee during the course of appellate proceedings but many have not been explained. Therefore, the ld. CIT(A) has restricted he disallowance to the extent of ₹ 25% to the amount of ₹ 37,28,270/-. In the light of the findings of the ld. CIT(A) and considering the there was tremendous jump in the gross profit from 4.89% to 14.01% in the year, we consider it will be reasonable to restrict the disallowance....... + More
- 2020 (1) TMI 953
Disallowance of interest expenses u/s 36(1)(iii) - interest expenses incurred by the assessee on the borrowed money utilized for the acquisition of the machineries - HELD THAT:- Admittedly, there was the acquisition of the new machinery out of the borrowed fund which was not put to use during the year under consideration. But the question arises whether such acquisition of machinery amounts to the extension of the existing business. None of the authorities below has put some light on this aspect. As such the proviso to section 36(1)(iii) of the Act mandates to capitalize the amount of interest on the machine acquired out of the borrowed fund provided such acquisition results in the extension of the business Value of the machine acquired by the assessee during the year is negligible to the total value of the plant and machineries shown by ....... + More
