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2025 (2) TMI 1042
Application moved seeking a refund of an amount erroneously directed to be refunded to the petitioner along with interest -applicant/respondent/contemnor said that the amount which was attached by the respondent has been erroneously directed to be refunded to the petitioner along with payment of interest @ 6% p.a. from the date of seizure till its realization within six weeks thereof.
HELD THAT:- The interest would be payable after the expiry of the initial 120 days from the date on which the authorization u/s 132 of the Income Tax Act or the requisition u/s 132A of the Income Tax Act was executed.
Thus, pursuant to the notice issued to the non-applicant/petitioner, today a cheque mcontaining the income tax refund order has been handed over to learned counsel for the petitioner, towards the interest which has been calculated in terms of the aforesaid discussion. The same is accepted unconditionally. The copy of the said cheque is taken on record.
Petitioner shall be at liberty to approach the worthy Registrar General, Delhi High Court for refund of the principal amount which already stands deposited with this Court.
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2025 (2) TMI 1041
Penalty u/sec 271(1) - income disclosed during a survey - as per revenue had there been no survey action u/s 133A assessee would not have disclosed the business income and long term capital gains - HELD THAT:- When the assessee has paid sufficient advance tax apart from the TDS / TCS and the due date for filing of return has not expired on the date of return, it cannot be said that the assessee would not have disclosed the income during the financial year 2016-17 had there been no survey. In our opinion, both the AO and CIT(A) have completely ignored the fact of sufficient advance tax paid by the assessee and the due date for filing of return has not expired. It is also an admitted fact that the income returned by the assessee has been accepted without any variation.
Since in the instant case the income declared during the course of survey has been offered in the return which has been accepted by the AO in the order passed u/s 143(3) of the Act and the assessee has paid sufficient advance tax before the survey was conducted and the date for filing of return of income has not expired on the date of survey, therefore, penalty levied by the AO and sustained by the Ld. CIT(A) is not justified - Appeal filed by the assessee is allowed.
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2025 (2) TMI 1040
Non grant of Foreign Tax Credit (‘FTC’) - Form 67 was filed beyond the date of furnishing the Return of Income u/s 139(1) - Scope of DTAA between India and Denmark - HELD THAT:- Undisputedly, the Double Taxation Avoidance Agreement between India and Denmark provides for relief in respect of payment of taxes in one jurisdiction and paid in other jurisdiction as well.
Assessing Officer ought to have verified the correct position whether the assessee had claimed such benefit at source country i.e. Denmark but no exercise has been carried out by the lower authorities. The claim of the assessee is declined purely on the ground that Form No. 67 was filed belatedly.
We, therefore, set aside the orders of the lower authorities and restore the issue to the file of the AO with the direction that he would verify whether the assessee has paid taxes in Denmark and also offered same income for taxation in India but no credit was claimed at Denmark. If, he finds that no such relief has been claimed at Denmark, he would decide the issue in the light of the aforesaid decisions and the Circular of CBDT (supra). All the grounds raised in this appeal are allowed for statistical purposes.
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2025 (2) TMI 1039
Addition on account of provision released - HELD THAT:- We note that the assessee has created a provision in the AY.2016-17 and the same has been added back to the total income in the computation of total income without claiming the provision as an expenditure. Further, during the AY.2017-18 the assessee has released the provision by crediting the same to the P&L account by reducing from the provision created in the earlier AY.2016-17. Therefore, AO and that of CIT(A) have erred in making an addition.
Disallowance of expenditure - As assessee has submitted the entire 17 ledger extracts of all the heads like car expenses, auto expenses, security expenses, data entry, repairs, water, newspaper etc. along with the sample vouchers. Books of accounts of the assessee is audited and the same have been submitted to various statutory authorities.
AO and that of CIT(A) have disallowed the expenditure on adhoc basis at 5% without any cogent reason or identifying any defects. In the present facts and circumstances of the case we do not agree with the lower authorities in disallowing the expenditure on adhoc basis and hence we set aside the order of Ld. CIT(A) by directing the AO to delete the same by allowing the grounds of appeal filed by the assessee.
Appeal of the assessee is allowed.
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2025 (2) TMI 1038
Reopening of assessment u/s 147 - addition of long-term capital gain by AO based on a joint development agreement - contention of the assessee that the joint development agreement was not executed and the vendor did not receive the consideration and therefore, the capital gain u/s 50C did not arise - HELD THAT:- We find that though the joint development agreement was entered into by the assessee with M/s Monark Dealcom Pvt. Ltd. in respect of landed property located at premises no.125A, Motilal Nehru Road, Kolkata of which he was 50% owner and remaining 50% belonged to Guramrit Singh Gill. We note that no money was ever received under this agreement and this was never performed or executed. We also note that the said land was sold by both the co-owners. i.e assessee as well as his brother Shri Guramrit Singh Gill on 28.08.2017 for the agreed consideration and the capital gain arose in the assessment year 2018-19 and would be paid accordingly.
We observed that in the case of another co-owners Shi Guramrit Singh Gill, the same plea has been accepted by the ld. AO in the reassessment proceedings for the same assessment year 2013-14 and no addition was made.
Accordingly, we set aside the order of ld. CIT (A) and direct the AO to delete the addition. Decided in favour of assessee.
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2025 (2) TMI 1037
Condonation of delay - delay in filing appeals before the learned CIT(A) - assessee had filed his appeals before the learned CIT(A) with a delay of 10 years 10 months and 19 days and 11 years 03 months and 05 days for the impugned assessment years 2010-2011 and 2011-2012 - HELD THAT:- There were no proper day-to-day explanation offered by the assessee. We note that the delays are of two kinds i.e., normal delay and inordinate delay. In case of former one, the Court’s/Tribunal’s always take a lenient view to condone such normal delays and proceed to decide the matter in issue before it on merits in the interest of substantial justice. However, in the present cases, there was an inordinate delay of more than 10 years and 11 years for the impugned assessment years 2010-2011 and 2011-2012, respectively, and admittedly, the assessee could not explain the day-to-day delay before the learned CIT(A). Even before the Tribunal also, the assessee had filed the appeals with a delay of 35 days and 50 days for the impugned assessment years 2010-2011 and 2011-2012, respectively.
Taking the spirit from the recent Judgment of Pathapati Subba Reddy (died) [2024 (5) TMI 1319 - SUPREME COURT] dismiss the appeals of the assessee as there were no ‘sufficient cause’ shown by the assessee which could convince the Bench to condone the impugned delays of 10 years 10 months and 19 days and 11 years 03 months and 05 days for the impugned assessment years 2010-2011 and 2011-2012 in filing the appeals before the learned CIT(A). We, therefore find no infirmity in the orders of the learned CIT(A) and accordingly, we confirm his orders. The grounds raised by the assessee are dismissed in both these appeals.
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2025 (2) TMI 1036
Reopening of assessment u/s 147 - reasons to believe - AO noted that the assessee has failed to offer satisfactory explanation about the nature and source of credits into the Axis Bank account - assessee did not comply with the notice by filing the return of income
HELD THAT:- As perused the reasons recorded for reopening of assessment u/s 148(2) AO after extracting the report of the investigation, simply recorded in three lines that I have reason to believe that assessee’s income chargeable to tax has escaped assessment, meaning thereby the AO has not recorded his satisfaction and reasons are vague, unambiguous and scanty.
No details/information have been recorded as from whom the money was received and when it was received. In our opinion the re-assessment can be not be made on vague, scanty and ambiguous reasons recorded.
As there is no satisfaction or independent application of mind by the ld. AO to the information received. Moreover, the reasons are vague, scanty and ambiguous. Therefore, we are inclined to quash the reopening of assessment. Consequently, the appeal of the assessee is allowed.
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2025 (2) TMI 1035
Addition on account of share capital/ share premium - unexplained money - there was no compliance to the summons u/s 131 of the Act by the directors of the subscriber companies as well as by the directors of the assessee company - HELD THAT:- Assessee has furnished all the evidences proving identity and creditworthiness of the investors and genuineness of the transactions but AO has not commented on these evidences filed by the assessee. Besides the investors have also furnished complete details/evidences before the AO which proved the identity, creditworthiness of investors and genuineness of the transactions.
Under these facts and circumstances and considering underlying facts in the light of ratio laid down in the decisions as discussed above, we are inclined to set aside the order of Ld. CIT(A) by directing the AO to delete the addition. Appeal of the assessee is allowed.
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2025 (2) TMI 1034
Unexplained investment u/s 69 - assessee made cash-deposits in a bank a/c during demonetisation - HELD THAT:- Admittedly, the assessee made deposit on 15.11.2016 immediately after declaration of demonetisation on 08.11.2016. The assessee is claiming that the impugned deposit was made from cash balance available in books of his business at the time of declaration of demonetisation. To show this factual aspect, the assessee filed Cash-Book and other documents to AO during assessment-proceeding and the same are also placed in Paper-Book and referred by Ld. AR during hearing. On perusal of assessment-order, one thing is clear-cut that the AO has not rejected assessee’s’ books of account, even the AO has not pointed out a single flaw or deficiency in assessee’s books.
Assessee paid VAT on sale of such gold. The impugned purchase transaction of gold from father and subsequent sale thereof were duly informed to VAT authorities in VAT return and the same were accepted.
The gift was made due to love and affection and a gift-deed executed by father was also filed to AO and the same is a part of Paper-Book as well. Therefore, the assessee is very correct in claiming that the gift transaction is nothing to do with purchase transaction and the two transactions are altogether independent of each other. The AO has made a wrong notion that there is a circular transaction by way of gift. It is also noteworthy that the AO has neither disallowed the purchase made from father nor made any addition qua the gift received from father. Thus, the transactions of purchase and receipt of gift are not disturbed by AO.
AO has, however, made addition treating the deposit in bank a/c as unexplained whereas the source of deposit in bank a/c is very much available in Cash-Book of assessee and the same Cash-Book is not even rejected by AO. It is also noteworthy that the AO has made addition u/s 69 even while accepting the books of account of assessee, the books of account in which the impugned cash deposit in bank a/c is recorded. Nobody can dispute that the section 69 applies only when a sum is not recorded in books of account whereas the position of present case is just opposite in as much as the impugned deposit is already recorded in cash-book accepted by AO. Decided in favour of assessee.
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2025 (2) TMI 1033
Disallowance of finance charges made u/s 36(1)(iii) - as per AO interest bearing funds have been diverted to non-business purpose - HELD THAT:- Basic business of the assessee is real estate development, and in that process, the assessee collected advances from customers for sale of flats. As per the agreement with the customers, the assessee has paid interest in case of delay in delivery of flats. The assessee had also proved that the funds received from the customers in the form of advances have been utilized for the purpose of business of the assessee.
In fact, it is not a case of the AO that the assessee had diverted funds for non-business purposes. Assuming for a moment that loans and advances given to group concerns are diversion of interest-bearing funds, the fact remains that, as the AO himself noted, the group companies of the assessee are also engaged in the business of real estate development and there is a business nexus between the appellant and the group concerns and thus, in our considered opinion, loans and advances given to other group companies can be said to be in the normal course of the business of the assessee and thus, there is a commercial expediency.
AO erred in disallowing finance charges being interest paid on customers’ advances without any valid reasons. CIT(A), without appreciating the relevant facts, simply sustained the addition made by the AO. Assessee appeal allowed.
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2025 (2) TMI 1032
Addition u/s 69A - unexplained cash credit - as during demonetization period the assessee had deposited a sum in bank account - assessee could not establish source for the balance cash deposit with no source of income - HELD THAT:- Assessee has filed additional evidences such as income tax returns filed by Mother of assessee and Wife of the assessee for the A.Y. 2017-2018 which are already with the Department and also an affidavits where they were admitted to have paid cash to the assessee and to establish the source of cash deposit and source of income.
From the careful perusal of the above documentary evidences placed before the Tribunal, we find that the assessee has deposited the cash in the Bank out of the income of family members for the purpose of marriage expenditure appears to be bonafide and reasonable. Therefore, we direct the Assessing Officer to delete the addition sustained by the CIT(A) - Decided in favour of assessee.
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2025 (2) TMI 1031
TP Adjustment - transaction of payment of royalty in relation to licensed manufacturing segment of the Appellant on various models - ALP benchmarking of Royalty Payment to non-UK entities - HELD THAT:- Facts and circumstances of the case required the learned TPO to be more objective in his approach to counter the compensation of 4 to 5% accepted in the case of assessee in the MAP proceedings for A.Y. 2013-14 or APA for A.Y. 2018-19 to 2022-23 and the treatment in A.Y. 201-11, 2011-12 and 2012-13 when no addition was made in respect of Germany entities for royalty payment of 4-5%.
MAP proceedings or APA may not have a precedent effect on different assessee’s but in case of same assessee they at least have far reaching persuasive value and without countering anything on the basis of facts coupled with evidence, the ends of justice require giving assessee benefit of principles of consistency, which are recognized principles for determination of income and adjudication in tax matters. Reliance in this regard can be placed on the judgment of Radha Swami Satsang [1991 (11) TMI 2 - SUPREME COURT] However, the ld. Tax authorities seems to have artificially distinguished the transaction of assessee with Non-UK and UK AEs, to apply a different rate in case of non-UK AE.
We are inclined to allow ground nos. 4 to 6 and the additional ground, as raised. TPO is directed to accept the parameters of determination of compensation as accepted in APA and accordingly benefit the assessee in determination of ALP of disputed transaction with non-UK AE, too.
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2025 (2) TMI 1030
Assessment u/s 153A - Assessment in case of search or requisition - as argued no material belonging to or pertaining to assessee was seized from the premises of the director where search was conducted - HELD THAT:- Notice u/s 153A of the Act can be issued only in the case of a person where a search is initiated u/s 132 or books of account, other documents or any assets are requisitioned u/s 132A of the Act.
Admittedly in the case of the assessee neither of any such action was carried out thus the notice issued u/s 153A dt. 23.01.2019 is without jurisdiction and is bad in law.
As no search warrant was issued in the name of the assessee thus no proceedings u/s 153A could be initiate in the case of the assessee accordingly the notice issued us 153A is hereby quashed. Appeal of the assessee is allowed.
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2025 (2) TMI 1029
Unexplained stock - Difference between the stock submitted to bank and the stock found during the course of the survey - Addition on account of difference between the physical stock and the stock position submitted to the bank, which were held as unexplained stock - HELD THAT:- Hon’ble Gujarat High Court in the case of Avi Polymers Limited [2016 (7) TMI 965 - GUJARAT HIGH COURT] also held that no addition could be made on account of difference between the stocks as per the books and the stocks statements submitted to the bank. Therefore, we are of the view that, for computing the stocks position as per the books of accounts as on the date of survey, the AO should have taken into consideration the stocks as per the books of accounts as on 31.01.2015, as against the stocks as per the statement submitted before the bank.
Value of the stock - Physical valuation is reduced, and difference which is less than 10% of the stock physically found and valued by survey authorities. This difference could be for the reason that the valuation at the time of survey was based on an estimate value stated / informed by the assessee without referring to the bills and vouchers, in this regard. Therefore, such difference is nothing but due to such estimation.We find that the stock of the assessee as on the date of survey was in parity with the stock physically found and, therefore, no addition is required to be made, and accordingly, the assessee will get the relief.
Disallowance made on account of various expenses @ 10% for possible personal purposes - CIT(A) concurred with the findings of the AO without going into the merits. After going through the orders of the lower authorities, we find that no single instant of personal use were pointed out by the AO and only on whims and fancies, the disallowance were made. No disallowance can be made in the present case of the assessee, more particularly, when there was a survey carried out in the case of the assessee, and revenue has failed to bring any evidence of personal use gathered as a result of survey. As the result, ground of assessee’s appeal is allowed.
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2025 (2) TMI 1028
Validity of Approval granted u/s 153D - As argued approval was granted in a mechanical manner without the necessary application of mind - HELD THAT:- In the instant case from the perusal of the approval it is seen that the approval was granted conditionally with certain directions. The approval so given has been reproduced herein above. Another aspect which needs to be considered is that the AO in the instant case is at Dehradun and the Addl. CIT who has granted approval is form Central Range, Meerut thus for obtaining the approval entire records needs to be carried to Meerut from Dehradun and the Addl. CIT has to examine all the material including the assessment folders, appraisal report and seized material before granting the approval which cannot be humanly possible in such a short period of time of few days.
As mentioned earlier by the ld. AR that there are 35 cases in this group. It is surprising that Addl. CIT has been able to go through the assessment orders, appraisal reports and other related materials for a minimum of 35 cases within such a short period of time more particularly looking to the fact that the entire records must have been shifted from Dehradun to Meerut for the perusal of the Addl. CIT.
We use the word “minimum of 35 cases” because this group alone contains 35 cases and the Addl. CIT could avail his other files also before him. The assessment orders, in the instant case is of 6 pages, appraisal reports was also to be quite a few pages and the submissions of the assessee would be innumerable. We are not aware about the nature and issues involved in the other cases and other assessment years. This is physically impossible task which has been admitted to by the ld. Addl. CIT. Consequently, the approval granted in this case is without application of mind.
Thus approval u/s. 153D of the Act granted in the impugned appeal by the Addl. CIT, is held to be invalid - Decided in favour of assessee.
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2025 (2) TMI 1027
Bogus purchases - AO made addition after excluding the GST amount from the total purchases - HELD THAT:- Sales of the assessee have not been disputed and the books of account have also not been rejected.
Assessing Officer in assessee's own case for the four preceding assessment years has adopted the profit rate of 5% on account of bogus / untested purchases, therefore, we are of the considered opinion that adoption of the same profit rate of 5% on account of untested / bogus purchases of Rs. 13,80,63,994/- will meet the ends of justice. We, therefore, set aside the order of the Ld. CIT(A) and direct the AO to adopt the profit rate of 5% on the total purchases of Rs. 13,80,63,994/- and restrict the addition to Rs. 69,03,200/-. The order of the Ld. CIT(A) is accordingly modified. We hold and direct accordingly. The grounds raised by the Revenue are accordingly partly allowed.
Unexplained money - CIT(A) deleted addition - HELD THAT:- Admittedly, the documents were found from the premises of Director of the assessee company during the course of search action at his residential premises. In his statement recorded u/s 132(4) of the Act, he has owned up the transactions as belonging to him in his personal capacity and the cheque was wrongly issued by the party in the name of Metarolls Ispat Pvt. Ltd. Therefore, once the person from whose residence the documents were seized and in his statement recorded u/s 132(4) of the Act he has owned up the transactions, therefore, the AO in our opinion was not justified in making the addition in the hands of the assessee company.
Amount received as distribution of amounts received in the form of flat against the unaccounted transaction - HELD THAT:- Since we have directed the AO to adopt the profit rate of 5% on account of such bogus / untested purchases, therefore, we are of the considered opinion that adoption of the same percentage of profit i.e. 5% on such unaccounted sale of Rs. 17,42,000/- should be added to the total income of the assessee which in the instant case comes to Rs. 87,100/-. When the documents found containing certain transactions, the Ld. CIT(A) was not justified in deleting the addition stating that due to lack of evidence and in absence of any corroborative evidence addition is not sustainable. We set aside the order of the Ld. CIT(A) and direct the AO to adopt the profit rate of 5% on the unaccounted turnover of Rs. 17,42,000/- which comes to Rs. 87,100/-. The order of the Ld. CIT(A) is accordingly modified and the ground raised on this issue by the Revenue is partly allowed.
Unexplained money - CIT(A) deleted addition on the basis of subsequent retraction - HELD THAT:- A perusal of the seized documents shows that two entries were found where it is mentioned as 6kg and 7kg. Although the AO has taken such entries as Rs. 6 lakh and Rs. 7 lakh, the assessee in its clarification has mentioned the same to be of Rs. 6,000/- and Rs. 7,000/- respectively. It is also not understood as to why the same should not be read as Rs. 60,000/- and Rs. 70,000/- or Rs. 6 lakh and Rs. 7 lakh. Since the seized documents contain the entries of 6kg and 7kg and it is not sure as to whether it is Rs. 60,000/- and Rs. 70,000/- or Rs. 6 lakh and Rs. 7 lakh and since Shri Ashish Bhala subsequently retracted from his statement by filing an affidavit before the DDIT(Inv) and since no other corroborative material was found, therefore, considering the totality of the facts of the case, addition of Rs. 60,000/- and Rs. 70,000/- both totaling to Rs. 1,30,000/- under the facts and circumstances of the case will meet the ends of justice. The order of the Ld. CIT(A) on this issue is accordingly modified and the ground raised by the Revenue on this issue is partly allowed.
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2025 (2) TMI 1026
Disallowance of payment made towards employees’ contribution to Provident Fund (PF) and Employee’s State Insurance Corporation (‘ESIC’) u/s. 36(1)(va) - HELD THAT:- Section 36(1)(va) of the Act very clearly provides that if employees contribution to PF & ESIC are not paid within the stipulated time period, such amount has to be treated as ‘income’ of the assessee u/s. 2(24)(x) of the Act. In fact, the issue is no more res integra in view of the ratio laid down in the case of Checkmate Services Pvt Ltd [2022 (10) TMI 617 - SUPREME COURT] Even, the assessee accepts the aforesaid position. However, the assessee has made an alternative claim that the payment can still be allowed as ‘business expense’ u/s. 37(1).
This claim of the assessee has to be rejected at the threshold in view of the position of law declared in the case of Checkmate Services Pvt Ltd [2022 (10) TMI 617 - SUPREME COURT] has decided that delayed payment of employee’s contribution to PF & ESIC cannot be allowed as deduction, the assessee cannot expect the very same relief under another provision. When section 36(1)(va) of the Act mandates that such contribution has to be treated as ‘income of the assessee’. Insofar as, the judicial precedents relied upon by the learned counsel of the assessee, on a careful perusal, we are of the view that in none of the decisions the alternate claim of deduction u/s. 37(1) of the Act has been accepted. Decided in favour of assessee.
Taxability of unrealized foreign exchange fluctuation gain - HELD THAT:- Assessee has consistently followed a Revenue recognition method, under which the gain/loss arising on account of foreign exchange fluctuation has been treated as ‘revenue in nature’. Therefore, wherever gain arose, the assessee offered it as ‘income’ and wherever there was loss, the assessee has claimed the loss.
Following such revenue recognition principle, the assessee has offered the gain as ‘income’ in the impugned assessment year.
Therefore, since the offer of gain as income is consistent with the accounting principle regularly followed by the assessee, claim of withdrawal of such income cannot be accepted. If assessee’s claim of foreign exchange fluctuation loss has not been accepted by the Revenue in some other assessment years, the issue has to be thrashed out in those assessment years and not here.
Rule of consistency applies not only to the assessee, but also to the Revenue. In case, the gain derived is treated to be in the character of revenue, the loss arising in similar account also has to be treated to be on revenue account. The department has to take a consistent stand on this issue. With the afore-said observations, this ground is dismissed.
Disallowance of additional claim of deduction - additional claim made by the assessee has been rejected only on the ground that such claim was not made through a revised return of income - HELD THAT:- The restriction imposed on the A.O. in entertaining an additional claim not made through revised return of income, does not apply to the appellate authorities. Therefore, learned first appellate authority should have examine the additional claim made by the assessee. Since, we have held that the assessee can make additional claim, which was not made in the return of income, assessee’s claim has to be verified factually by looking into the relevant facts and evidences. Such examination having not taken place before the Departmental Authorities, we are inclined to restore the issue to the A.O. for fresh adjudication.
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2025 (2) TMI 1025
Addition u/s. 69A r.w.s. 115BBE - unexplained cash deposits -CIT(A) deleted addition on assessee’s submissions with regard to cash deposits during demonetization period is supported with documents and evidences - HELD THAT:- When the sale has been reflected in the books of accounts and offered to tax, adding the same again would amount to double taxation, which is impermissible in law. The cash sales made by the assessee have been credited in the books of accounts and the same form part of the assessee’s cash book.
On these facts, it could be very well said that the assessee claim was backed up by relevant evidences. Thus, the assessee has discharged the burden of proving the source of the cash/SBN deposited in the bank and the AO failed to rebut the same.
We also note that the assessee has sold only 17.50% on 08.11.2016 out of the stock held before the demonetisation day. The allegations/statistics relied upon by AO to take an adverse view is not backed up by relevant evidence/material and therefore the action of AO, which has been rightly set aside by the ld.CIT(A) and hence cannot be interfered.
Finding of the AO that such abnormal sales could not be achieved immediately upon announcement of demonetization by the Governmentare bereft of any concrete evidence to prove otherwise on record. It is trite law that no addition could be made merely on the basis of suspicion, conjectures and surmises.Moreover, since cash generated out of sales has been credited in the books of accounts, the provisions of section 69A could not be invoked in the present case.
Thus additions are not sustainable in the eyes of law and hence, we are of the considered view that the action of the ld.CIT(A) in deleting the addition need not be interfered and hence we dismiss the grounds raised by the Revenue.
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2025 (2) TMI 1024
Disallowance of payment of interest u/s 40(a)(ia) - HELD THAT:- Revenue has reclined against the observations and findings recorded by CIT(A) in upholding the additions, and submitted that there is no merit in the contentions raised on behalf of the appellant, particularly, when there was no justification for non deduction of TDS on the said payments.
In the course of arguments, appellant has not disputed that NBFCs are not banks. Ignorance of law is no excuse. It is not case of the appellant that he had no assistance of any Chartered Accountant. When enquired in the course of hearing, Learned counsel admits that the assessee did not furnish any information by way of Form No. 27BA i.e. certificate by the Accountant regarding said payments and deductions required by law.
Having regard to the provisions of section 40(a)(ia) of the Act, and non compliance thereof by the assessee, we do not find any merit in the submission that the appellant was under the impression that NBFCs are not Banks or that the addition be deleted. As a result, the impugned orders upholding the additions for the two Assessment Years under consideration are upheld.
Lump sum disallowances as regards certain expenses - AO called upon the assessee to produce record to explain as to whether the subject expenses were incurred for business purposes, but the assessee was found to have not been maintaining any details or log book of the running vehicle and about use of telephone. Assessing Officer specifically observed that the assessee did not produce any evidence in support of the reply to the query raised i.e. to establish that the expenditures were incurred for business purposes.
In absence of any such evidence, it can safely be said that the assessee failed to prove the version put forth for the purposes of deletion of the disallowances. CIT(A) was justified in sustaining the orders passed by the AO whereby disallowances were made.
Penalty order u/s 271AAB - The appeal filed qua the quantum assessment stands dismissed. In view of the above findings and having regard to the provisions of section 271AAB(1)(c) of the Act, no fault can be found with the penalty order.
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2025 (2) TMI 1023
Classification of goods - Small Form Factor Pluggable (SFP) devices - whether the Small Form Factor Pluggable (hereinafter ‘SFP’) is a part of a machinery and is liable to be classified under CTH 8517 7990 or whether it is to be classified as an apparatus/ machine under CTH 8517 6290? - HELD THAT:- In IBM India Private Limited vs. Commissioner of Customs (Import) CESTAT, Mumbai [2024 (4) TMI 972 - CESTAT MUMBAI] had again considered the same products i.e., Transceiver for Ethernet Switch/ Transceiver modules of different models and had relied upon the Reliance Jio Infocomm [2022 (8) TMI 76 - CESTAT MUMBAI] and had observed that the SFP’s Optical Transceivers 9.1 were entitled to exemption from Basic Custom Duty and would be classified as held in Reliance Jio Infocomm.
In view of the fact that the classification of SFP’s has already been decided in various decisions and has also been accepted by the Department, the impugned ruling dated 26th September, 2024 by which the Authority has observed that SFP’s would be classifiable under 85176290 with Basic Customs Duty Act of 20% would not sustain and the same is liable to be set aside. The goods i.e., SFPs shall stand covered under Entry 85177990 and shall also be entitled to applicable exemptions.
Conclusion - SFPs should be classified under Entry 85177990 and be entitled to applicable exemptions.
The impugned rulings are set aside - Appeal allowed.
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9911796707
