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Showing 161 to 180 of 744 Records
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2020 (5) TMI 584 - ITAT COCHIN
Assessment u/s. 153A - survey action u/s. 133A - HELD THAT:- In view of the uncontroverted and admitted statement given on behalf of the assessee u/s. 133A and the documents impounded during the survey, which were also virtually admitted by the assessee, there was no error in the order of the Tribunal in accepting the materials on record in order to arrive at an assessment.
We cannot say that there was no search action u/s. 132 of the Income Tax Act so as to frame assessments u/s. 153A of the I.T. Act. The assessments were also based on material gathered during the course of survey u/s. 133A - See HOTEL MERIYA [2010 (5) TMI 556 - KERALA HIGH COURT] - we are inclined to dismiss this ground of the assessee.
Unaccounted sale receipts in the form of cash - Estimating the collection of cash outside the books - HELD THAT:- We direct the Assessing Officer to give due credit towards cost of construction relating to the unaccounted sale receipts collected by the assessee which was included in the work in progress that was shown by the assessee in its balance sheet. With this observation, we remit the issue in dispute to the file of the Assessing Officer for limited purpose of re-quantification of the addition in respect of unaccounted cash receipts unearthed by the Department during the course of search/survey action. The Assessing Officer is directed to compare the above cost of construction with the work in progress shown by the assessee in its balance sheet.
Total work in progress shown by the assessee in its books of accounts in each assessment year is to be apportioned between accounted collections and unaccounted collections in their respective ratio so as to arrive at correct undisclosed income of assessee for each assessment year. The resultant figure would be the undisclosed income of the assessee for each assessment year and there is no question of taking any percentage of it as income of assessee as argued by ld. AR.
assessee is only entitled for proportionate deduction towards cost of construction and accordingly AO has to recompute the unaccounted income for all three Assessment Years after giving an opportunity of hearing to the assessee. It is needless to say that the addition made by the Assessing Officer herein is not u/s. 69 or 69A of the I.T. Act. It is with reference to the unaccounted sale receipts which is part of the assessee’s turnover. Being so, the restriction imposed u/s. 69 or 69A of the I.T. Act with regard to granting of deduction towards expenditure does not apply.
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2020 (5) TMI 583 - NATIONAL ANTI-PROFITEERING AUTHORITY
Profiteering - purchase of Flat No. EFP 24-0501 in “Emerald Floors Premier’ project - allegation is that the Respondent had not passed on the benefit of Input Tax Credit (ITC) by way of commensurate reduction in the price of the flat - contravention of provisions of section 171 of CGST Act - application forwarded to the DGAP to conduct detailed investigation in to the complaint according to Rule 129 (1) of the CGST Rules, 2017 - HELD THAT:- It is clear from the perusal of Sub-Section 171 (1) that both the benefits of tax reduction and ITC are required to be passed on by the suppliers to the buyers by commensurate reduction in the prices as they are the concessions which have been granted to them from the public exchequer in the interest of the consumers. Sub-Section 171 (2) provides that the Central Government may on the recommendations of the GST Council constitute an Authority to examine whether the input tax credits availed by any registered person or the reduction in the tax rate have actually resulted in a commensurate reduction in the prices of the goods or services or both supplied by him. Therefore, this Authority has jurisdiction to examine all such cases in which the above benefits are required to be passed on suo moto or to get them investigated through the DGAP and its power to do so is not circumscribed by any restriction to the effect that it cannot examine those cases in respect of which no complaint has been made - It is also apparent from the provisions of Rule 129 (1) that the DGAP shall investigate and collect necessary evidence in all such cases in which rate of tax has been reduced or the benefit of ITC has been granted which is required to be passed on to the buyers and submit his Report to this Authority under Rule 129 (6) and hence he is bound to investigate all those cases where benefit of ITC or tax rate is required to be passed on.
This Authority has not replaced or substituted any function which the Courts were performing hitherto. Though it performs quasi-judicial functions but it cannot be equated with a judicial tribunal. Also, it performs its functions in a fair and reasonable manner in accordance with the Act but does not have the trappings of a Court and therefore, absence of a Judicial Member does not render the constitution of this Authority unconstitutional or legally invalid - the Chairman and the Technical Members of the Authority are being appointed by the competent authority (Appointments Committee of the Cabinet) of the Union Cabinet keeping the requirements of the above mandate of the GST law in perspective. Moreover, the orders passed by this Authority are further subject to the judicial review and therefore, the Respondent should not have any grievance on this account.
The Respondent has benefited from the additional ITC to the extent of 11.90% of the turnover during the period from July, 2017 to March, 2019 and hence the provisions of Section 171 of the CGST Act, 2017 have been contravened by the Respondent as he has not passed on the above benefit to his customers and thus he has profiteered an amount of ₹ 13,35,79,636/- inclusive of GST @ 12% on the base profiteered amount of ₹ 11,92,67,532/-. Further, the Respondent has realized an additional amount of ₹ 1,04,734/- which includes both the profiteered amount @ 11.90% of the taxable amount (base price) and 12% GST on the said profiteered amount from the Applicant No. 1 - this Authority under Rule 133 (3) (a) of the CGST Rules, 2017 orders that the Respondent shall reduce the prices to be realized from the buyers of the flats of the above Project commensurate with the benefit of ITC received by him as has been detailed above. Since the present investigation is only up to 31.03.2019 any benefit of ITC which accrues subsequently shall also be passed on to the buyers by the Respondent. The concerned Commissioner CGST/SGST shall ensure that the above benefit is passed on to the eligible flat buyers.
Penalty - HELD THAT:- The Respondent has denied benefit of ITC to the buyers of the flats being constructed by him in his above project in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and he has thus resorted to profiteering. Hence. he has committed an offence under Section 171 (3A) of the CGST Act, 2017 and therefore, he is apparently liable for imposition of penalty under the provisions of the above Section - Accordingly, a Show Cause Notice be issued to him directing him to explain why the penalty prescribed under Section 171 (3A) of the above Act read with Rule 133 (3) (d) of the CGST Rules, 2017 should not be imposed on him.
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2020 (5) TMI 582 - DELHI HIGH COURT
Change of physical status of land - resume of possession of land - HELD THAT:- This Court is of the view that such a prayer cannot be granted at this stage, when there are no specific facts asserted on affidavit by the applicant as to when and by whom was the applicant informed about alleged construction activities on the subject land and the exact nature of such construction activities. Thus, there is no occasion for directing the Official Liquidator to file an affidavit to demonstrate that the physical condition of the subject land as was in existence in August, 2019 continues to be so on date.
Application dismissed.
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2020 (5) TMI 581 - AUTHORITY FOR ADVANCE RULING, KARNATAKA
Classification of goods - kraft paper made honeycomb boards - whether classified under HSN code 48081000 or 48089000? - HELD THAT:- On verification of the structure and purpose for which kraft paper honeycomb board or paper honeycomb board used are similar to the corrugated paper board(listed under 48081000), only difference is that this paper honeycomb board consists of honey comb like structure core material at the centre and on either side of this one or more layer of kraft paper is glued by using adhesive with fluting direction being perpendicular to corrugated boards. Hence this honeycomb paper board classified under the heading 48089000 as other instead 48081000.
The kraft paper honeycomb board or paper honeycomb board is classified under the heading 48089000.
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2020 (5) TMI 580 - AUTHORITY FOR ADVANCE RULING, KARNATAKA
Classification of goods - scooter along with retro-fitment - restriction on input tax credit on purchase of vehicle under HSN 8711 at 28% GST - whether the vehicle classified under heading 8713 or 8711? - HELD THAT:- In the instant case, it is an admitted fact that the applicant purchases a vehicle i.e. two-wheeler and also certain additional parts/accessories to retrofit the said vehicle with the said parts/accessories. The word ‘Retrofit’ as a noun is an act of adding a component or accessory to something that did not have it when manufactured. Therefore, the applicant is adding certain components to the two wheeler by retrofitting the same i.e. an attachment is added to the said two wheeler (motor cycles) to enable it to be driven by the disabled person. This does not change the basic feature of the two wheeler. In the instant case the two-wheeler was neither specially designed or constructed nor altered to change its basic structure, after retrofitment.
Explanatory Notes to the Harmonized Commodity Description and Coding System specifies that the heading 8713 excludes Normal vehicles simply adapted for use by disabled persons or a bicycle fitted with a special attachment and pedalled with one foot and Trolley-stretchers. In the instant case the two-wheeler is simply retrofitted with additional components / accessories to enable it for use by disabled persons. Therefore, the impugned retrofitted two-wheeler gets excluded from the heading 8713 - the retro fitted two-wheeler is nothing but a two-wheeler purchased by the applicant under heading 8711 20 19, added with additional components/accessories and hence does not change its basic structure. Therefore, the said retro fitted two-wheeler merits classification under heading 8711 20 19 only.
Whether the tax paid on two wheelers and retrofit equipment is available to the applicant as input tax credit or not? - HELD THAT:- In the instant case the applicant purchases the two wheelers for “further supply of such motor vehicles”, though they add certain accessories to retrofit the said vehicle. Thus, the applicant is entitled to avail input tax credit of the tax/es paid on the said motor vehicles and the retrofit equipment as the accessories are utilized for value addition of the said motor vehicle.
Thus, the retrofitted vehicle merits classification under heading 8711 20 19 and hence attracts GST @ 28% and applicant is entitled for input tax credit of tax paid on purchase of vehicle i.e. scooter.
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2020 (5) TMI 579 - DELHI HIGH COURT
Input Tax Credit - transition to GST regime - HELD THAT:- The issue decided in the case of BRAND EQUITY TREATIES LIMITED, MICROMAX INFORMATICS LTD., DEVELOPER GROUP INDIA PRIVATE LIMITED, RELIANCE ELEKTRIK WORKS VERSUS THE UNION OF INDIA AND ORS. [2020 (5) TMI 171 - DELHI HIGH COURT] where Respondents are directed to either open the online portal so as to enable the Petitioners to file declaration TRAN-1 electronically, or to accept the same manually.
Issue Notice.
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2020 (5) TMI 578 - ITAT DELHI
Deemed dividend u//s 2(22)(e) - assessee to be in default u/s 201/201(1A) - HELD THAT:- The assessee company had advanced the loan to its associated concern M/s. Arihant Agencies which was then transferred to the account of Sh.Dinesh Kumar Jain and the fund was transferred back to the assessee company on the same day as Director’s share capital.
We find that the issue of deemed dividend u/s 2(22)(e) of the Act in respect of similar transaction being made wherein the transaction of receipt and payment were on the same date itself by both the parties, arose before the Tribunal in series of cases i.e. Seema Devi Bansal i[2018 (7) TMI 1545 - ITAT DELHI] relating to Assessment Year 2010-11 and Sh. Harish Kanwar [2017 (10) TMI 997 - ITAT DELHI] relating to Assessment Year 2011-12. We have also decided similar issue in Surbhi Jain vs ITO [2020 (5) TMI 533 - ITAT DELHI] relating to Assessment Year 2011-12, applying the ratio laid down by Hon’ble Bombay High Court in Praveen Bhimsi Chheda Shivsadan vs DCIT [2011 (5) TMI 857 - ITAT MUMBAI] held that under similar circumstances, it was not case of deemed dividend u/s 2(22)(e) of the Act.
Applying the said parity of reasoning and we hold that the assessee cannot held to be in default u/s 2(22)(e) of the Act and there is no merit in raising the demand u/s 201(1) and charging interest u/s 201(1A).
Penalty u/s 271C for the aforesaid default u/s 201(1) - HELD THAT:- Since we have already deleted the demand raised u/s 201(1) there is no merit in levy of penalty u/s 271(1)(c) and the same is deleted. Grounds of appeal raised by assessee are thus allowed. - Decided in favour of assessee.
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2020 (5) TMI 577 - ITAT COCHIN
Disallowance u/s 14A r.w.r 8D - HELD THAT:- In this case, the assessment year involved is 2006-07. Rule 8D was introduced with effect from 24/03/2008 which was prospective in operation and cannot be applied retrospectively as held by the Delhi High Court in the case of Maxopp Investment Ltd. vs. CIT [2011 (11) TMI 267 - DELHI HIGH COURT].
Accordingly, we direct the AO to disallow only 2% of expenses incurred towards exempted income. Thus, this ground of appeal of the assessee is partly allowed.
Addition of sale proceeds of Rubber Trees and of timber under Rule 7A of the Income Tax Rules.1962 - as contended that Rule 7A cannot be applied as the income from sale of rubber trees is not agricultural income - HELD THAT:- High Court observed in the case of Harrisons Malayalam Ltd [2019 (1) TMI 1359 - KERALA HIGH COURT] that sale of old and unyielding trees would not give rise to the exempt income. If there is no exempt income, then there is no question of application of Rule 7A. In such circumstances, the claim of the assessee is to be allowed. Jurisdictional High Court considered its own judgment in the case of CIT vs. Thiruvambadi Rubber Co. Ltd. [2011 (6) TMI 452 - KERALA HIGH COURT]
Being so, the reliance placed by the CIT(A) on the judgment of the Jurisdictional High Court in the case of CIT vs. Thiruvambadi Rubber Co. Ltd. [2011 (6) TMI 452 - KERALA HIGH COURT] is totally misplaced. Accordingly, we hold that the sale proceeds on sale of rubber trees and timber cannot be brought to tax under Rule 7A of the I.T. Rules. Thus, this ground of appeal of the assessee is allowed.
MAT computation - Diminution in the value of investment, provision for lease rent and provision for bad debts - arriving at the book profit u/s. 115JB, treating the same as a provision for an unascertained liability - HELD THAT:- We are of the opinion that the amount set aside as provision for diminution in the value of investment is to be added back to the book profit as shown in the profit and loss account in view of the retrospective amendment introduced by Finance Act No. 2, 2009 by introducing clause (i) (c) . By virtue of the said amendment the amount set aside as provision for diminution in the value of any asset is to be added back in view of the specific clause (i) in the said Explanation. Being so, we do not find any infirmity in the order of the lower authorities in adding back the said amount to the book profits shown in the profit and loss account .
Similar provision was made for lease rent as unascertained liability which is hit by the provisions of clause (c) in Explanation (2) of section 115JB of the Act. The contention of the Ld. AR is that the assessee is following mercantile system of accounting and therefore, the provision is to be allowed, though it was crystallized in the year in which the order of the Government of Kerala in G.O. (Ms) No.162/13/RD dated 26-04-2013 was passed.
We are not in agreement with this contention of the Ld. AR. Being so, we are not in agreement with the Ld. AR’s contention that this ascertained liability is to be allowed in view of mercantile system of accounting followed by the assessee - Provision for lease rent is unascertained liability in the assessment year under consideration and it is to be allowed in the year of crystallization of the expenditure. This ground of appeal of the assessee is dismissed. The appeal of the assessee is partly allowed.
Payment of interest for delay in payment of agricultural income tax as a deduction while computing the income of assessee under Income Tax Act - HELD THAT:- Interest incurred for delay in payment of Agricultural income tax also cannot be allowed u/s 36(1)(iii) as the condition laid down u/s 36(1)(iii) has not been fulfilled. In other words, interest paid is not for the purpose of the business of the assessee on which income assessee is paying income tax. In our opinion, the interest paid is having direct nexus with agricultural income which is exempt from tax u/s 10(1). Therefore, such payment of interest cannot be allowed u/s 36(1)(iii) also. We have also carefully gone through all the case law cited by the Ld. AR, which have no relevance to the facts of the case. In view of this discussion, we are inclined to dismiss all the grounds of appeal of the assessee. The assessee appeal is dismissed.
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2020 (5) TMI 576 - ITAT COCHIN
Disallowance of unpaid service tax u/s 43B - credit balance of service tax payable - HELD THAT:- As considered by the co-ordinate Bench of the ITAT, Hyderabad Benches in the case of M/s. Bartronics India Ltd. v. ACIT [2012 (6) TMI 61 - ITAT HYDERABAD] that when the assessee has not paid the service tax as required under the provisions of section 43B, which is also very much covered u/s 43B. The provisions of section 43B of the Act is very clear and it states that “any sum payable by the assessee by way of tax, duty, cess or fee, by whatever name called, under any law for the time being in force
Service tax collected by the assessee and not paid to the Government exchequer before the due date of filing of return, is to be disallowed, though it was not charged to the profit and loss account and it attracts the provisions of section 43B and the present provisions of section 145A of the Act cannot be applied in view of non obstante clause in section 43B of the Act. Thus, this ground of appeals of the Revenue for both the assessment years is allowed.
Disallowance of proportionate interest on borrowed funds - HELD THAT:- We find that the assessee has not established in the cash flow statements about the availability of enough own funds at the time of making investments in the exempted income yielding assets. Hence, it is appropriate to verify the fact whether enough own funds are available with the assessee as on the date of making investments in the exempted income yielding assets. Being so, the assessee is directed to produce cash flow statements showing availability of enough own funds for making such investments with supporting documents which have to be examined by the AO before making disallowance. Accordingly, we remit this entire issue in dispute to the file of the Assessing Officer for fresh consideration with a direction to the assessee to produce relevant cash flow statements to show that interest free funds were available with the assessee to make such investments.
Depreciation on undivided share of land treating them as cost paid towards building - HELD THAT:- The assessee has shown the land as undivided share of land separately in the block of assets which is not entitled for depreciation. The CIT(A) is not justified in granting depreciation on the undivided share of land. Accordingly, we vacate the findings of the CIT(A) on this issue. Thus, this ground of appeals of the Revenue for both the assessment years is allowed.
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2020 (5) TMI 575 - ITAT JAIPUR
Rejection of books of accounts - Suppressed production - determination of quantum of clay which can be extracted/produced from mines - HELD THAT:- AO has proceeded ahead and basis his own investigation and understanding of the mining process involved, and basis his own calculation and understanding of variables has worked out the quantum of clay which could be extracted from one of the mines owned by the assessee without referring the matter to the domain experts in the field of mining such as geologists and mining engineers.
AO in the instant case, was totally unsuited for undertaking the activity of determining the exact production of the material, which itself involves very complicated procedures.”
Such calculation AO has determined the shortfall or suppression in the clay production vis-à-vis production disclosed by the assessee in respect of one of the mines. Using the same percentage of suppressed production, he has proceeded ahead and worked out proportionate suppression of production in the other two mines without getting into specific of functioning of such mines which again cannot be accepted. Without getting into the merits of the formula so arrived by the AO as we find ourself not competent enough to comment upon, we find that effectively, the AO has tried to determine the quantum of clay which could potentially be extracted from the mines and that’s where whole case of the Revenue rest.
The question for consideration here is not the potential extraction of clay rather the actual clay which has been extracted from the mines and which has been sold/dispatched during the year under consideration and which has not been disclosed in the return of income and what credible material is available on record in support of such findings. There is no material on record and no finding recorded by the AO that quantum of clay so determined by him as part of suppressed production has been actually dispatched and sold and more so, when the assessee’s activities comes under the jurisdiction of State Mining Department and both its production and dispatches are closely monitored by the Mining Department
As held in case of CIT vs. Shri Girija Smelters (P) Ltd [2014 (10) TMI 890 - TELANGANA AND ANDHRA PRADESH HIGH COURT] the occasion to levy income tax would arise, only when the product in question was found or alleged to have been sold, and the sale proceeds, constituting income were not reflected in the returns.
Not even alleged that the product shown in the form of discrepancies, was sold at all. Royalty assessments were carried out by the Mining Department without any adverse findings and copy of royalty assessment orders, copy of monthly returns, details of production at mines and dispatches from the mines and reconciliation thereof were admittedly furnished before the lower authorities and even acknowledged by the CIT(A) and no discrepancy has been highlighted therein either by the AO or by the ld CIT(A) and there is no material on record which highlight dispatches from the mines without paying the requisite royalty.There is no basis for alleging suppression of production by the assessee and the findings of the lower authorities are hereby set-aside. - Decided in favour of assessee.
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2020 (5) TMI 574 - ITAT JAIPUR
Reopening of assessment u/s 147 - non disposing off the objection raised by the assessee - HELD THAT:- Reassessment proceedings completed without disposing off the objection raised by the assessee cannot be sustained and consequent reassessment order u/s 147 r/w 143(3) is hereby quashed and set aside. - Decided in favour of assessee.
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2020 (5) TMI 573 - ITAT CHANDIGARH
Addition u/s 36(1)(iii) - Less interest charged from the partners - A.O. disallowed the difference of the interest actually charged i.e. @12% and the interest that should have been charged i.e @15% - HELD THAT:- Assessee has paid interest on unsecured loans during the impugned year at an average rate of 10% which is demonstrated from the facts and figures of unsecured loan and interest paid thereon reflected in the financial statements of the assessee which are duly audited. The revenue has been unable to controvert before us.
Since the basic premise with the revenue for making disallowance in the present case U/s 36(1)(iii) was that the assessee had charged less interest on the advances made to its partners and others as opposed to that paid on borrowings made by it, the same does not survive since the assessee has demonstrated that it had actually paid less interest on borrowings and charged more from the partners and others. In view of the above, the disallowance made U/s 36(1)(iii).
Addition u/s 68 - treating loans received as ingenuine and unexplained - bank statements submitted of these parties showing transactions were either unreadable or incomplete or were not submitted at all - HELD THAT:- Since the assessee has demonstrated before us that the bank statements of all the loan givers was filed to the revenue authorities and is therefore, available, we consider it fit to restore the issue back to the A.O. to consider the bank statements of all the loan depositors alongwith other evidences filed and adjudicate the issue afresh thereafter in accordance with law. Accordingly, ground of the appeal are allowed for statistical purposes only.
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2020 (5) TMI 572 - ITAT CHENNAI
Revision u/s 263 - depreciation u/s.32(1) on expenditure was incurred towards export product development expenditure - HELD THAT:- If the AO allowed depreciation for the assessment year 2013-14 without due application of mind, the PCIT ought to have revised the order for the assessment year 2013-14. It may not be correct to say that the AO has not applied his mind for the assessment year 2013-14 in the proceeding for the assessment year 2014-15. The fact remains is that on identical expenditure the Assessing Officer disallowed the claim of the assessee u/s.37 and treated the same as capital expenditure and allowed depreciation. This order of AO attained finality. For the assessment year 2014-15 which is under consideration, the AO by following his own order allowed the claim of the assessee for depreciation at the rate of 25%.
When the assessee incurred expenditure for creation of an intangible asset namely the brand name “Pantherkid”, this Tribunal is of the considered opinion that such expenditure has to be treated as capital in nature. Therefore the assessee is entitled for depreciation u/s.32(1). This is one of the possible views taken by the Assessing Officer. PCIT is not justified in revising the order of the Assessing Officer in exercise of his power u/s.263.
Exemption claimed U/s.2(14) - evidence for consumption of electricity - HELD THAT:- when the assessee establishes that land in question is agricultural land, electricity is obtained for agricultural purpose from TamilNadu Electricity Board, this Tribunal is of the considered opinion that there is no reason to doubt the nature of the land. Moreover under the SARFEASI Act, the property of the assessee was taken over by the bank and no useful purpose would be served in directing the Assessing Officer to re-examine the matter. Moreover, the Assessing Officer has made through enquiry through the Inspector of Income Tax.
It is not a case of non-enquiry as observed by the PCIT. AO has made thorough enquiry and bring on record the entire material facts. AO has also taken into consideration the valuation report obtained by the Syndicate Bank. Therefore this Tribunal is of the considered opinion that the Assessing Officer has made a proper enquiry and has taken one of the possible views in the assessment order. Therefore, there is no justification in revising the order of the Assessing Officer by the PCIT. We are unable to uphold the impugned order of the PCIT. Accordingly the impugned order of the PCIT is set aside and the appeal of the assessee stands allowed.
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2020 (5) TMI 571 - ITAT MUMBAI
Penalty u/s 271BA - non- filing of report as required u/s 92E in respect of the international transactions - penalties thus proceed on the basis that there were ‘international transactions’ that the assessee had with its associated enterprises - HELD THAT:- We have held that the Kaybee Exim Pte Ltd, which is alleged to be an associated enterprises of the assessee, is not an associated enterprise of the assessee
Once we hold that the assessee and the alleged AE could not be treated as associated enterprises, and there are no other alleged ‘international transactions’ on the facts of this case, it could not be said that the assessee had entered into any international transactions. As a corollary to this finding, the very foundation of impugned penalties ceases to hold good in law. The impugned penalties, therefore, must be deleted. - Decided in favour of assessee.
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2020 (5) TMI 570 - ITAT MUMBAI
Addition on account of peak investment with regard to interception of gold jewellery in Mumbai airport which was sold to M/s SBM Jewellers - HELD THAT:- Interception of above said jewellery was made on 14.02.12 and subsequently assessee has already recorded the above said sales in its books of accounts and the same was part of the turnover disclosed in return of income submitted before tax authorities. Since, these sales were already recorded in the books of accounts, we do not see any reason to interfere with the order passed by Ld. CIT(A), accordingly ground no. 1 raised by the revenue is dismissed.
Undisclosed sales and undisclosed stock which was found during survey proceedings - HELD THAT:- We notice that the stock found during survey proceeding to the extent of 3,863.697 gms and assessee has already shown in stock in trade to the extent of 3942.152 gms in its books of accounts and the same was disclosed in financial statements and part of return of income filed before the tax authorities. There is no discrepancy found with the stock maintained by the assessee, therefore we are inclined to accept the findings of Ld. CIT(A).
Interest on loans and advances taken from Bhanwarlal Jain Group - CIT(A) deleted this addition with observation that AO has rejected the books of account and the same book results cannot be considered for making this addition - HELD THAT:- We are not in agreement with the observation of Ld. CIT(A) and Ld. CIT(A) has deleted most of the additions based on the book results, therefore we are not inclined to accept the deletion on account of interest payment on alleged bogus loans. We do not know the outcome of the appeal filed by the assessee in AY 2010-11, it all depends upon the findings in above said appeal. Before us, Ld. AR has not made any submission. Moreover, we notice that assessee has only credited the interest and not actually paid. We are inclined to sustain the addition made by AO.
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2020 (5) TMI 569 - ITAT NAGPUR
Late filing fees payable u/s 234E - Intimatation u/s 200A - defaults of non-filing of TDS statements - HELD THAT:- Unavailability of enabling the provisions to the AO for levy of late filing fees on the assessee in respect of defaults of non-filing of TDS statement for the period prior to 01.06.2015. We find that this issue has already been adjudicated by the Co-ordinate Bench of the Tribunal, Nagpur (through e-Court, Pune) in the case of M/s. Rajyas Software Pvt. Ltd. Vs. ACIT, CPC-TDS, Ghaziabad & Others. [2020 (1) TMI 1192 - ITAT NAGPUR]
We direct the Assessing Officer to examine closely the facts, dates of defaults, claims of the assessee etc once again and ensure that the above law is correctly applied to the facts of the present set of 111 cases. In case, the default pertains to the period later to 01.06.2015, the provisions for late filing fees u/s 234E r.w.s. 200A - Decided in favour of assessee.
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2020 (5) TMI 568 - ITAT HYDERABAD
Business income taxability - year of assessment - land held by the assessee as stock in trade - as per CIT-A it is taxable only in the year of sale of Villas and not in the relevant AY - HELD THAT:- In the case of a capital asset, if it is transfer under any of the provisions of section 2(47), coupled with handing over of possession of the capital asset, capital gain is to be offered on mercantile basis in the year in which the possession is given. As rightly pointed out by the CIT(A) in the case of the assessee, the land has been treated as stock-in-trade and the assessee has only contributed its portion of land to the JDA and is liable to offer business income in the year in which the stock-in-trade is sold. The CIT(A) has observed that the assessee has offered business profits in the AYs 2015-16 and 2016-17 i.e. the years in which the Villas have been sold.
Since the stock-in-trade has only been contributed and has not been sold during the relevant AY, there is no receipt or accrual of business receipt during the relevant AY. Further, such position has been confirmed by the coordinate bench of Tribunal at Bangalore in the case of Dheeraj Amin Vs. ACIT [2014 (6) TMI 1017 - ITAT BANGALORE] the authorities below indeed erred in bringing to tax the anticipated business profits on assessee’s entering into a development agreement in respect of the land held by the assessee as stock in trade - Decided against revenue.
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2020 (5) TMI 567 - ITAT KOLKATA
Reopening of assessment u/s 147 - addition received by the Assessee as non-refundable grant under section 28(iv) - application of section 44AB - HELD THAT:- Income billed by the Firm to its clients towards rendering of professional services is taxable under the head 'Profits & gains of business or profession'. Another grievance of the AO was that assessee did not get his accounts audited u/s 44AB - in case of an assessee carrying on profession, (for A.Y. 2009-10), is required to get his accounts audited in terms of section 44AB if his gross receipts in profession exceeds ten lakh rupees in any previous year.
In the assessee`s case under consideration the gross receipts therefore assessee is not required to get his accounts audited u/s 44AB. Interest income does not fall under the head “income from business or profession” therefore it does not come under the ambit of tax audit. Assessee which is carrying on profession, had gross receipts in profession only, as stated above which is less than the threshold of Rupees ten lakhs for application of section 44AB of the Act for the year under consideration. Therefore, tax audit provisions are not applicable to the assessee.
Expenditure on bank charges and printing & stationery are routine expenditure, the expenditure debited under the account-head 'legal expenses' have been incurred by the Firm for the purpose of representation inter alia before the ICAI, New Delhi in the matter of audit carried out by the Firm of erstwhile Global Trust Bank for the financial year 2002-03. The expenses debited under the account head External Consultants Professional fees have been incurred for drafting and amending legal agreements including non-compete agreements etc.
AO was of the view that assessee made provisions - We note that none of the expenditure aggregating are in the nature of provision as alleged. These expenses have been disclosed in the return of income filed by the assessee u/s 139 therefore it is not a new tangible material to reopen the assessment u/s 147.
So far this issue/ item is concerned there is no tangible material before the AO to frame ‘reason to believe’ that income has escaped assessment, hence reassessment proceedings are not valid.
Capital reserve - We note that in assessee`s case no assessment was carried out by AO u/s 143(3) of the Act and only intimation has been issued under section 143(1) of the Act. However, we note that assessing officer has every power to issue notice under section 143(2) of the Act to do the scrutiny assessment u/s 143(3) of the Act, which he has failed to do so in the assessee`s case and for that assessee should not be penalized. The assessee has disclosed every item/issue in the return of income filed by the assessee u/s 139 of the Act, and AO failed to point out any new tangible material to reopen the assessment u/s 147 of the Act.
Assessee has disclosed every item/issue in the return of income filed by it u/s 139 of the Act, and AO failed to point out any new tangible material to reopen the assessment u/s 147.
Initiate reopening of the assessment, the AO must have 'reason to believe’ that income chargeable to tax has escaped assessment. Such reason to believe must be based on some material coming to the possession of the AO which may trigger reason to suspect
“Reason to believe” must have a rational connection with or relevant bearing on the formation of the belief, i.e, there must be the direct nexus or link between the material and the formation of such belief. Since in the instant case, the issues/items for which the AO has reopened the assessment had already been disclosed by the assessee in the return of income filed by him u/s 139(1) - AO having not carried out the scrutiny assessment within the prescribed statutory limit, cannot be given another innings for no fault of the assessee and therefore in the facts and circumstances of the case, we are of the considered opinion that ‘reason to believe’ which is the jurisdictional precondition to reopen the assessment as required by the law has not been met in the reasons recorded in the instant case and therefore the action of the AO to reopen the assessment is null in the eyes of law and hence we are inclined to quash the initiation of reassessment proceedings being ab-initio void. - Decided in favour of assessee.
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2020 (5) TMI 566 - CESTAT NEW DELHI
Confiscation of imported goods - allegation that goods at the time of import were not bearing MRP/RSP - HELD THAT:- There is no violation by the appellant as the goods have been imported through Nava Sheva which is the notified sea port and further ICD, Garhi Harsaru falls under the jurisdiction of Commissioner of Customs, ICD, Patparganj. The provision of Legal Metrology Act read with the rules thereunder do not prohibit stickering as regards MRP, prior to out of charge given to the customs - Admittedly, such stickering has been done in the facts of the present case.
Appeal allowed - decided in favor of appellant.
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2020 (5) TMI 565 - DELHI HIGH COURT
Principles of Res-Judicata - Maintainability of application - Winding up order - physical condition and status of the lands, over which the applicant claims a right - HELD THAT:- It defies comprehension as to how, in the face of the order, dated 24th April, 2020, and the observations entered, by this Court, in para 7 thereof, the applicant could maintain yet another application, with the very same prayer, without curing the defects/defaults highlighted in para 7 of the said order.
There is no question, here, of application of the principle of res judicata. The fact of the matter is that an application containing an identical relief, already stands dismissed, by this Court, on the ground that such prayers could not be urged without, in the first instance, placing specific facts, on affidavit, regarding the alleged construction activities, the exact nature thereof and the manner in which the applicant obtained knowledge. It is completely impermissible, in my view, for the second application, to be preferred, with the same prayers, again suffering from the same defects, i.e., in the absence of any assertion of facts, regarding the alleged construction activities, the exact nature thereof and the manner in which the applicant obtained knowledge. Allowing such an application would amount to allowing the applicant to indulge in forum shopping, which has, from time immemorial, been deprecated.
Application dismissed.
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