|
Advanced Search Options
Case Laws
Showing 21 to 40 of 435590 Records
-
2025 (7) TMI 450
Mandatory procedure u/s 144C - effect of remand by ITAT to AO/TPO to consider the issues afresh - What ifassessment order is passed without a draft assessment order? - HELD THAT:- ITAT had not only remitted the issue regarding selection of most appropriate method, but also had given liberty to assessee to raise any other grounds in support of its claim. Thus, by this remand, ITAT had directed AO/TPO to consider all issues afresh. Therefore, in effect, the earlier draft assessment order ceased to exist.
On fresh consideration, if AO makes a variation which is prejudicial to the interest of assessee, the procedure provided in Section 144C(1) of the Act would take effect. AO, therefore, is bound to forward draft assessment order to enable the assessee to either accept the variations or file its objections to the variations with DRP and AO.
In our view, it would make no difference whether variation was made by AO at the first instance or pursuant to a remand by ITAT as regards the requirement to follow the procedure prescribed under Section 144C of the Act. Any other interpretation would be opposed to the consistent view taken by the Courts with regard to the interpretation of these provisions.
In a similar case, where the tribunal had set aside the Transfer Pricing adjustments and remanded the matter to AO/TPO, for de novo consideration, the Bombay High Court in CWT India Limited's case [2023 (9) TMI 438 - BOMBAY HIGH COURT] in which one of us was a member, held that the failure to forward the draft assessment order would render the assessment order invalid.
We are of the considered view that the remand by ITAT to AO/TPO to consider the issues afresh, would not dispense with the mandatory procedure under Section 144C of the Act, since the variation on the reconsideration by AO is prejudicial to the interest of the assessee. Therefore, the statement of counsel for Revenue that draft assessment order need not be passed cannot be countenanced.
It is well settled that where the assessment order is passed without a draft assessment order, it would be vitiated, as it is not a mere irregularity, but is an incurable illegality.
WP allowed.
-
2025 (7) TMI 449
Reopening of assessment u/s 147 - period of limitation - scope of TOLA - HELD THAT:- As per the decision in case of Union of India v. Rajeev Bansal [2024 (10) TMI 264 - SUPREME COURT (LB)] the notice dated 27.7.2022 would be a time barred notice and in turn the notice dated 30.6.2021 would be an invalid notice, as per aforesaid observations made by the Apex Court.
There is a notice dated 30.6.2021, only one day time was left for the issuance of the notice u/s 148 after granting 14 days time to the assessee from the decision of Union of India v. Ashish Agarwal [2022 (5) TMI 240 - SUPREME COURT], the date of issuance of the notice u/s 148 would be 13.6.2022, whereas in the facts of the case the notice u/s 148 is issued on 27.7.2022 and as such the notice dated 30.6.2021 would be an invalid notice.
Petition succeeds only on this ground.
-
2025 (7) TMI 448
Adjustment of entire amount of refund towards the assessment year 2024-25 for the demand raised towards the assessment year 2016-17 - Stay of demand - first respondent having directed the petitioner to deposit 20% of the demand in pursuance of such orders and failing which, Stay would not be granted, the petitioner has complied with such direction and deposited a sum of the tax demand and balance by way of adjustment towards refund for the AY 2021-22 and 2023-24
HELD THAT:- When the petitioner has already discharged 20% of the tax demand, the petitioner is entitled for stay and if stay is in force, no recovery can be initiated against the petitioner in respect of demand for the assessment year 2016-17, pursuant to the orders passed by the AO dated 26.03.2022 and 23.09.2022.
When that being the case, it is not known, as to why, the respondent-Department had hurriedly rejected the petitioner's Application for refund for the AY 2024-25 and adjusted the refund for the said assessment year in respect of the tax demand for the assessment year 2016-17, when admittedly, the Rectification Petition and Appeals and Stay Petitions are pending.
Thus, this Court finds clear arbitrariness on the part of the respondents in initiating recovery proceedings and recovering the demand by not considering the application for stay filed by the petitioner, despite compliance of the direction issued by the first respondent in depositing 20% of the tax demand for grant of stay by way of adjustment towards refund for the assessment years 2021-22 and 2022-23.
This Court find considerable force in the submission made by the learned counsel for the petitioner. However, taking into consideration of the submission now made by the learned counsel for the petitioner, who would aver that a sum of Rs. 50,00,000/- may be retained over and above Rs. 20,0,000/- already paid by the petitioner, which comes around to more than 20% of the total dispute tax demand, legally, the petitioner is entitled for stay.
Dispose of the present Writ Petition by issuing the following directions:-
i) The first respondent is directed to dispose of the Refund Application filed by the petitioner and grant refund of Rs. 3,000,0000/- (Rupees Three Crores only) along with interest within a period of four weeks from the date of receipt of a copy of this order.
ii) The first respondent is also directed to dispose of the Rectification Petition filed by the petitioner's dated 20.06.2024 within a period of four weeks.
iii) Further, the first respondent is directed to defer the recovery proceedings in pursuance of the orders passed by the respondent- Department dated 26.03.2022 and 23.09.2022 till the disposal of the Appeals filed by the petitioner dated 20.09.2022 and 14.10.2022 pending on the file of the CIT (A).
Writ Petition is disposed of on the aforesaid terms.
-
2025 (7) TMI 447
Reopening of assessment u/s 147 - period of limitation - scope of TOLA - notice issued after 31.03.2021 though bearing the date of 31.03.2021 - effect on pending notices which have been covered by the provision of Section 149 of the new regime under the Act - HELD THAT:- Admittedly, the respondent has not issued any notice under Section 148A(b) of the Act within the 30 days from the date of the decision of the Hon’ble Apex Court in case of Ashish Agarwal [2022 (5) TMI 240 - SUPREME COURT] that is 04.05.2022 and therefore, the question of considering the deemed notice under Section 148B of the Act would not arise in the facts of the case and as such, the impugned notice dated 31.03.2021 would be a time barred notice as per the decision of the Hon’ble Apex Court in the case of Rajeev Bansal [2024 (10) TMI 264 - SUPREME COURT (LB)] more particularly, as referred to in paragraph 113 of the said decisions having extracted herein-above. Reassessment proceedings set aside - Decided in favor of assessee.
-
2025 (7) TMI 446
Notice issued on wrong email id - Violation of principles of natural justice on wrongful communication of notice - HELD THAT:- Admittedly original email address of the petitioner was different from that of the present email address furnished in Form No.35. But however, the fact remains that the notices were sent to the earlier email address of the petitioner, even after that the correspondence made by the petitioner by changing the email address to “[email protected]”.
Once the email address is changed and it is within the knowledge of the department, the department ought to have issued notice or communication to the petitioner to the present email address to facilitate him to contest the case and provide fair opportunity of hearing and decide the matter in accordance with law.
Admittedly, this is not done in the present case, therefore the impugned order passed by the respondents cannot be sustained in view of no proper notice and no proper opportunity of fair hearing provided to the petitioner.
-
2025 (7) TMI 445
Validity of assessment framed u/s 143(3) - as alleged mandatory Notice u/s 143(2) (ii) was not served upon the assessee before the expiry of twelve months from the end of the month in which the return is furnished - HELD THAT:- It is mentioned in order dated 03.05.2002 passed by Commissioner Income Tax (Amritsar) that questionnaire was issued on 09.04.1999 and served on assessee on 22.04.1999 and case fixed before AO for the first time on 29.04.1999. When read with observation in assessment order dated 27.08.1999 as reproduced above, it is apparent that notice u/s 143(2) of IT Act was not issued/served before the stipulated date.
Apart from the specific mandate in the Act itself, this issue stands authoritatively decided by Hon'ble the Supreme Court in Assistant Commissioner of Income Tax and another Vs. Hotel Blue Moon [2010 (2) TMI 1 - SUPREME COURT] Learned counsel for the respondent is unable to deny the same.
Argument raised by respondent that question of law as raised should not be permitted, at this stage, is devoid of merit, hence rejected. It is to be noted that at the time of admission of appeal, no specific substantial questions of law were framed with the appeal simply being admitted. It is a settled position that while adjudicating an appeal under Section 260-A(4) of the IT Act, this Court has the power to frame substantial questions of law. At the time of hearing, any question other than the one on which the appeal may have been admitted, can be framed subject to satisfaction that the appeal does involve such question. Gainful reference in this respect can be made to judgment of Mastek Limited [2013 (3) TMI 309 - SUPREME COURT]
Question of law as raised is decided in favour of assessee.
-
2025 (7) TMI 444
Revision u/s 263 on excess set-off of brought forward unabsorbed depreciation losses allowed - scope of term “erroneous” - as per CIT AO erred allowing excess set-off of brought forward unabsorbed depreciation losses in the assessment framed under section 143(3) r.w.s. 144B for A.Y. 2020–21 - HELD THAT:- The basis for the PCIT's invocation of section 263 is the alleged mechanical allowance of Rs. 48.03 crore of depreciation loss, out of which Rs. 31.80 crore purportedly pertains to A.Ys. 2016–17 and 2017– 18 years in which depreciation on goodwill had already been disallowed and, therefore, not eligible for carry forward. Computation portion of the assessment order demonstrates that the AO allowed set-off only to the extent of Rs. 16.38 crore, which, as per the records, pertains to unabsorbed depreciation of A.Y. 2018–19, post set-off of Rs. 2.31 crore in A.Y. 2019–20. This figure has been consistently explained and substantiated by the assessee, both during the assessment proceedings (reply dated 14.09.2022) and in its response to the PCIT (reply dated 19.03.2025).
In this context, it is necessary to reiterate that an assessment order cannot be termed “erroneous” merely because the PCIT forms a different opinion based on a reading of the return of income or its schedules.
As held by the Hon’ble Supreme Court in CIT v. Max India Ltd. [2007 (11) TMI 12 - SUPREME COURT] and Malabar Industrial Co. Ltd. [2000 (2) TMI 10 - SUPREME COURT] two conditions must co-exist for invoking jurisdiction under section 263: (i) the assessment order must be erroneous, and (ii) such error must be prejudicial to the interest of Revenue. The absence of either renders the assumption of jurisdiction invalid.
In the present case, the record clearly evidences that the AO had conducted detailed inquiries. Notices under section 143(2) and 142(1) were issued on multiple occasions, and the assessee’s replies as, explained the workings of unabsorbed depreciation and details of claim under section 80IBA.
AO not only disallowed depreciation on goodwill but also correctly allowed set-off of Rs. 16.38 crore which was eligible under law. Thus, the assessment order is a result of conscious examination and application of mind. The finding of the PCIT that the AO failed to verify the availability of brought forward depreciation losses and also failed to verify the details of deduction u/s 80IBA, is factually unsustainable and legally untenable.
Further, the record reveals that prior to the issuance of the 263 notice AO had already issued a notice under section 154 proposing to rectify the very same issue i.e., the alleged excess set-off of depreciation loss. In the said notice, the AO computed the excess allowance at Rs. 31.80 crore and resultant tax impact at Rs. 14.81 crore.
The fact that the AO himself considered this matter under the rectification jurisdiction of section 154 belies the PCIT’s assumption that there was non-application of mind or lack of inquiry. The initiation of section 154 proceedings by the AO is itself a recognition of the fact that the issue is a matter of record-based computation and was consciously considered in the assessment. The pendency of such rectification proceedings, prior in time to the 263 proceedings, renders the PCIT’s assumption of jurisdiction unsustainable.
PCIT has failed to establish how the order is prejudicial to the interest of the Revenue. The allegation of prejudice is based entirely on a presumed excess set-off a presumption not borne out from the assessment record.
Once this factual premise is demolished, the question of “prejudice” does not arise. The mere possibility of a computational inaccuracy or clerical inconsistency in ITR cannot be the basis for invoking drastic powers under section 263. Appeal filed by the assessee is allowed.
-
2025 (7) TMI 443
Penalty levied u/s 271(1)(c) - disallowance u/s. 43B - HELD THAT:-Assessee had claimed deduction for interest disallowed u/s. 43B in assessment year 2007-08, in the current year, under bonafide belief, on treating the unpaid interest as income. It is relevant to consider that disallowance made in A.Y. 2007-08 was not allowed as relief in appeal, at the time when the return for A.Y. 2012- 13 was filed.
Therefore, the claim of the assessee as made in the return for assessment year 2012-13 cannot be held as outrightly inaccurate. In view of these facts, the AO was not correct in imposing penalty u/s. 271(1)(c) of the Act, in respect of this claim. Thus, invocation of Section 271(1)(c) is not justified and hence the appeal of the assessee is allowed.
-
2025 (7) TMI 442
Revision u/s 263 - Allowance of relief u/s 90 in respect of foreign tax credit claimed on income earned by the assessee’s branch office in the Philippines - HELD THAT:- PCIT does not substantiate how the facts for A.Y. 2020–21 are materially different from those considered in A.Y. 2018–19. No material deviation in the nature of income, source of receipts, DTAA provisions, tax treatment in the Philippines, or methodology of computation has been pointed out.
PCIT merely refers to the reconciliation submitted by the assessee and raises doubt on the admissibility of certain expenses without conclusively demonstrating how such treatment renders the assessment order erroneous. Importantly, the reconciliation was not only submitted during assessment but was considered and accepted by the AO after due inquiry.
The fact that the AO has not elaborated the acceptance in the assessment order is not ipso facto evidence of non-application of mind or lack of inquiry, particularly when the record contains detailed submissions, evidences, and calculations in response to statutory notices.
The decision of the Coordinate Bench in [2025 (2) TMI 648 - ITAT AHMEDABAD] squarely covers the issue. The Co-ordinate Bench, in assessee’s own case for A.Y. 2018–19, accepted the claim for foreign tax credit after examining the branch’s income, supporting documentation, and compliance with the provisions of section 90 and DTAA, without disputing the eligibility of the tax paid in the Philippines for relief under section 90. PCIT’s distinction is based merely on a narrow interpretation of reconciliation entries without addressing the central finding that the income is taxed in both countries and eligible for relief under the DTAA.
Allowance of deduction u/s 80G for donations forming part of CSR expenditure - We find no error in the AO’s approach. The assessee had claimed deduction u/s 80G only in respect of donations made to registered institutions satisfying the conditions of section 80G(5), and not as general business expenditure u/s 37(1).
PCIT’s reference to Explanation 2 to section 37(1), inserted by Finance Act 2014 to deny CSR expenditure as business expenditure, is inapplicable in the context of section 80G. Where donations meet the independent eligibility criteria of section 80G, they cannot be denied deduction merely because they also fulfil CSR obligations. This principle has judicial approval in several decisions. Therefore, the Assessing Officer having verified the approval of donee institutions under section 80G(5) and the satisfaction of all statutory requirements, the claim of deduction was rightly allowed. The revisionary interference by the learned PCIT on this count is thus not legally sustainable.
An assessment order passed after due consideration of facts, supported by submissions and evidence furnished by the assessee in response to statutory notices, reflects application of mind by the AO. Where the AO has applied his discretion and reached a plausible conclusion based on the material on record, the revisionary authority cannot invoke section 263 merely because it holds a different opinion or would have come to a different conclusion.
Thus, we hold that the assessment order passed u/s 143(3) was not erroneous or prejudicial to the interest of Revenue. The revisionary order passed u/s 263 is therefore quashed. Appeal of the assessee is allowed.
-
2025 (7) TMI 441
Validity of reopening of the assessment u/s. 148 - Reasons to believe - appellant company has not shown the purchase of shares of from one company in its books of accounts - information received from a third party viz. DCIT, Central Circle-2(2), Mumbai before 3 years - HELD THAT:- As purchases were not paid and therefore the assessment order u/s.143(3) has dealt with the said issue and not made the addition at the original assessment stage. The contention of the ld. A.R. that the reasons recorded were already the part of the original assessment order passed u/s.143(3) of the Act dated 31-03-2015 appears to be justified as the reasons recorded has basically relied on the said purchases itself and the fact that the same was not paid enumerates in para 7 and para 9 of the reasons recorded.
Thus, the reopening of the assessment u/s. 147 is merely a change of opinion and cannot be invoked u/s. 147 and thus the reopening of assessment is invalid and bad in law. Therefore, the very basis of the assessment order becomes infructuous and void ab-initio and therefore assessment passed u/s.143(3) r.w.s. 147 of the Act is quashed. Appeal of the assessee is allowed.
-
2025 (7) TMI 440
Depreciation on goodwill as acquired by the appellant company during the year under consideration on amalgamation - AO held that the intangible assets which were owned/held by the amalgamating company, prior to amalgamation at NIL cost, has to be taken at NIL cost only, in the hands of the amalgamated company. For taxation purposes, the value cannot be enhanced and depreciation cannot be allowed.
HELD THAT:- AO has totally ignored the decision of Hon’ble Apex Court/NCLT which categorically approved the scheme of amalgamation/scheme of arrangement at which point the Revenue/AO has not objected the valuation report regarding the difference between the net acquisition of assets and total consideration.
The same was recorded as goodwill by the assessee at the said point of time through valuation report.
Looking into the decision of Smifs Securities Ltd. [2012 (8) TMI 713 - SUPREME COURT] in case of amalgamation if consideration paid by amalgamated company to the amalgamating company is more than the net assets acquired by it, then the differential amount shall be treated as goodwill and the amalgamated company shall be eligible for claim of depreciation on such goodwill. Thus, CIT(A) has rightly allowed the depreciation on goodwill. Assessee appeal allowed.
-
2025 (7) TMI 439
Delay filling appeal before ITAT - delay of 984 days - Eligible reasons for delay - HELD THAT:- Whether the appellant established that there was sufficient cause with appellant in not filing appeal in prescribed period? - HELD THAT:- Condonation of delay should not be used as an anticipated benefit for the government departments and unless the department has reasonable and acceptable genuine reason for the delay with bona fide efforts. It is true that that when there is no any gross negligence or deliberate inaction or lack of bona fide, liberal approach has to be adopted to advance substantial justice but the claim on account of impersonal machinery and inherited bureaucratic methodology of making several notes cannot be accepted and the law of limitation undoubtedly binds everybody, including the Government.
The government departments are under a special obligation to ensuring performance of their duties with diligence and commitment and condonation of delay is an exception which should not be used as an benefit for the government departments.
We are not inclined to discuss on the merits of the case as not convinced that sufficient cause has been made out for condonation of such inordinate delay and it is established that the present appeal filed beyond prescribed limit and appellant/Respondent have failed to prove that they were reasonably diligent in prosecuting the matter and this vital test for condoning the delay is not satisfied in this case and on the basis of the foregoing facts situation the appeal of the Revenue liable to be dismissed as it is time barred. As we decide the instant appeal on time barring, no need to adjudicate other grounds of appeal.
-
2025 (7) TMI 438
Revision u/s 263 - PCIT held the assessment order passed by the AO u/s 143(3) r.w.s. 144B as erroneous in so far as it is prejudicial to the interest of the Revenue - no or inadequate enquiry - allowability of deduction u/s 80G in respect of donations forming part of the assessee's CSR expenditure and allowability of deduction claimed as “GST Credit Expenses Written Off”
Allowance of deduction u/s 80G - HELD THAT:- Assessee had duly furnished the particulars of the donation, including supporting receipts and confirmation from the donee trusts, in its reply dated 06.01.2022 and again on 07.02.2022 in response to the Assessing Officer’s notices issued u/s 142(1) of the Act. The donation was made to GMDC Gramin Vikas Trust and GMDC Gramya Vikas Trust, which were duly approved under section 80G(5). These particulars were available before the AO and were duly verified.
Computation clearly reflects suo motu disallowance of the entire CSR expenditure, and a separate claim under section 80G was made, strictly in accordance with the provisions of the Act.
As decided in Gujarat State Financial Services Ltd.[2025 (5) TMI 790 - ITAT AHMEDABAD] has held that the restriction u/s 80G(2)(a)(iiihk) and (iiihl) is confined only to donations made to the Swachh Bharat Kosh and Clean Ganga Fund and does not prohibit deduction in respect of donations to any other institution approved under section 80G(5), even if such donation is sourced from CSR expenditure. This view is fortified by the legislative scheme wherein Explanation 2 to section 37(1) operates independently and is confined to business expenditure. It cannot override or read into the specific deductions provided under Chapter VI-A, unless such restriction is explicitly stated. There is no statutory bar under section 80G disqualifying donations made in the course of discharging CSR obligations, except to the extent of specified funds mentioned in section 80G(2)(a).
Thus, once the donation is made to eligible institutions, and the requisite statutory conditions under section 80G are fulfilled, deduction cannot be denied merely because it coincides with or arises out of CSR obligations. Therefore, we find no infirmity in the assessment order on this issue, and the action of the PCIT in invoking section 263 is unsustainable in law.
Failure to examine the allowability claimed as write-off of GST input credit -We observe that the assessee had furnished detailed replies before the AO in the course of assessment proceedings, explaining the nature of the unutilized GST input credit. The assessee clarified that due to an inverted duty structure—input GST on mining services being 18% and output GST on lignite sales being 5%—a substantial portion of ITC became unutilisable. It was further explained that refund of such ITC was not permissible under the extant GST rules.
Assessee therefore treated the accumulated and non-refundable ITC as irrecoverable and claimed it as a deduction u/d 37(1). We find that the AO had access to the relevant material and formed a view after examining the explanation of the assessee. Merely because a different view could be taken or further inquiries could have been made does not justify revision u/s 263.
Hon’ble Supreme Court in Kwality Steel Suppliers Complex [2017 (7) TMI 620 - SUPREME COURT] held that where the AO has taken a plausible view on the basis of facts and inquiries made, the jurisdiction under section 263 cannot be invoked merely because the Commissioner believes that a different view should have been taken.
In the present case, no finding that the AO is wrong in allowing the claim of “GST Credit Expenses Written Off” has been recorded by the PCIT. The observation that the AO failed to conduct adequate verification is not borne out from the record. Hence, the pre-condition for exercise of jurisdiction u/s 263 is not satisfied.
This is not a case of "no inquiry" but at best, a case where the PCIT disagrees with the conclusion drawn by the AO. As held in Kamal Galani [2018 (6) TMI 1052 - GUJARAT HIGH COURT] the PCIT is not permitted to invoke revisionary powers under section 263 in such circumstances. The entire action of the PCIT in directing a fresh assessment on issues already examined would amount to a mere difference of opinion, which does not fall within the permissible scope of section 263.
Thus, the impugned revisionary order passed by the PCIT u/s 263 is set aside and quashed. Decided in favour of assessee.
-
2025 (7) TMI 437
Accrual of income in India - Services receipts for rendering services to HMSI - assessee is a non-resident company and is incorporated under the laws of Thailand engaged in the business of sale of cars, spare parts etc. - taxable as “Other Income” in accordance with Article 22 of DTAA OR in absence of FTS clauses in DTAA, services receipts falls under Article 7 of DTAA “Business Profits” OR in the absence of Permanent Establishment of the appellant in India, whether chargeable to tax in the hands of appellant?
HELD THAT:- We are of the considered opinion that the Ld. DRP should revisit the issue upon examining the documents which were not placed before it as it is found to be germane to the issue involved in the matter. We, with the aforesaid observation disposing of the appeal by remitting the issue to the file of the DRP for reconsideration of the same afresh upon considering the relevant documents which are said to be missing in the papers/records filed by the assessee before it.
The appellant is directed to submit all the details as indicated hereinabove before the Ld. DRP forthwith for consideration of the same afresh.
DRP is further directed to finalise the issue within a period of eight months from the date of passing of this order by us are affording an opportunity of being heard to the appellant and upon considering the evidences as indicated hereinabove as further directed to be placed by the appellant before it and any other evidence which the appellant may choose to file at the time of hearing of the matter.
DRP is directed to pass the order strictly in accordance with law. In the result, the grounds 2 to 2.1 are allowed for statistical purposes.
-
2025 (7) TMI 436
CRS income being taxed as Royalty - Taxability of receipts from airlines in India - assessee is tax resident of Spain and has developed a fully automated Computer Information System (hereinafter referred to as CRS) which enables display and dissemination of information supplied by various Airlines, which in turn facilitates, inter alia, reservations, communications, ticketing and related functions on a worldwide basis for the travel industry -
AO held that the booking fee received by the assessee was taxable as royalty both u/s 9(1)(vi) and Article 13 of the Indo-Spain Treaty on the ground that the booking fees received by the assessee from various airlines is payment for use of process and scientific equipment - HELD THAT:- We find that this issue is squarely covered in favour of the assessee and against the Revenue by decision of the co-ordinate bench [2023 (10) TMI 1138 - ITAT DELHI] wherein it has been held that the booking fee received by the assessee is taxable as 'business income' and not as 'royalty'.
Taxing payments received in relation to the Altea System (an inventory management and hosting system developed by the assessee) as 'royalty' - HELD THAT:- We find that the co-ordinate bench in assessee’s own case for the A.Ys 2007-08 to 2021-22 under similar circumstances has held that payment received by the assessee from the airlines for the Altea system cannot be characterized as "royalty" either under the Act or under the Indo-Spain Treaty. We also find that the Revenue’s appeal with respect to question of taxability of Altea Payments was not admitted by the Hon'ble High Court and hence the order of the Tribunal attained finality. Accordingly, we hold that payment received by the assessee from the airlines for the Altea System is not ‘royalty’ either under the Act or the Treaty. Accordingly, ground 4 is allowed.
Permanent Establishment of Amadeus - AO following the orders passed in the earlier years held that the computers provided to the travel agents through which sales are conducted, constituted fixed place PE of the assessee in India under Article 5(1) of the India-Spain Tax Treaty and also held the assessee to be dependent agency PE in terms of paragraph 5(4) of the India Spain Tax Treaty - HELD THAT:- We find that the Delhi High Court in assessee’s own case for the A.Ys 1996-97 to 2019-20 [2023 (5) TMI 1249 - DELHI HIGH COURT] has upheld the orders of the Tribunal that the PE of the assessee exists in India. The issue of PE is no longer res-integra as the Hon'ble Supreme Court has decided this issue in favour of Revenue vide its order [2023 (8) TMI 165 - SC ORDER] and considered it as academic in nature. Further, the Hon'ble Supreme Court vide order dated 19.04.2023 has decided the issue of profit accruing/arising to the assessee attributable to the Permanent Establishment in India wherein it has upheld the order of the High Court on the aspect that 15% of the revenue earned by the assessee being taxable in India and that since the assessee pays 33% of the booking fees to the distributors, no income is attributable to tax in India. We therefore are of the considered view that the issue of attribution has attained finality. Ground No. 5 is accordingly dismissed.
Interest u/s 234B - assessee submitted that in the absence of any liability for payment of advance tax since tax is deductible at source on the income of the assessee held liable to tax in India, the levy of interest under section 234B of the Act is not warranted - HELD THAT:- We find that the co-ordinate bench in assessee’s own case allowed the ground of the assessee and the Hon'ble High Court of Delhi dismissed the appeals filed by the department against the findings of the Tribunal for AYs 2009-10, 2012-13 and 2013-14 to 2016- 17. [2023 (5) TMI 1249 - DELHI HIGH COURT] Thus direct the AO to delete the interest so levied u/s 234B.
-
2025 (7) TMI 435
Rejection of application for registration u/s 12AA and approval u/s 80G - CIT(E) has denied grant of registration stating that the rental activity of the assessee shows that it is commercial in nature and the assessee is engaged in commercial activities - Assessee argued is a public charitable trust duly registered under the Indian Trusts Act, 1882 and object of the trust was to promote environmental sustainability by encouraging the use of electric vehicles, reducing carbon emissions and supporting scalable and climate resilient transportation solutions as part of the CSR vision - HELD THAT:- The scope of MOU includes provision for providing access to 2 wheelers to empower youths to engage in income generating activities, enhancing their financial independence and promoting economic resilience in the targeted community.
MoU assigns the role to the assessee to identify the EV provider for the project and design the pay-per-use. On the basis of these MOU, the assessee identified various beneficiaries and entered into an agreement with them to lease the electric vehicle to the assignees for a period of 3 years for the purpose of transportation of goods/people at a monthly fees of Rs 5000/-. We find that post the 3-year term, ownership of vehicles is transferred to beneficiaries.
Considering the MoU and agreements with assignees, we are of the considered view that the projects undertaken by the assessee is of charitable nature and aligns with CSR objectives under Companies Act, 2013.
We find that there are no profit motive involved in the projects undertaken by the assessee and activity undertaken by the assessee aligns with the object of the Trust at No. 17 of the Trust Deed which is to ensure empowerment of marginalised sections of society as woman over tribal schedule caste persons etc. We are not inclined to accept the Revenue contention that the assessee’s activities are commercial in nature.
Activities of the assessee trust is charitable in nature and has been undertaken in a professional manner where each activity is governed by agreements entered into with various parties including the beneficiaries to ensure that the desired activities is performed and accomplished, right from raising funds to deployment of funds. Furthermore, at this juncture of grant of registration, the Revenue is only required to examine the genuineness of activities of the Trust and its compliance of any other law.
We find that in the case of Surat Art Silk Cloth Manufacturers Association Surat [1979 (11) TMI 1 - SUPREME COURT] has held that dominant object of the Trust is charitable and mere existence of profit cannot negate charitable status as long as the profits are applied solely for the purpose of the charitable object and not distributed among members. Assessee appeal allowed.
-
2025 (7) TMI 434
Validity of assessment order passed u/s 143(3) r/w Section 144C(13) - period of limitation - HELD THAT:- As per section 144C(13), there is clear mandate that upon receipt of the directions issued u/s 144C(5), AO shall supposed to complete the assessment inconformity with the directions of the DRP without providing any further opportunity of being heard to the assessee, within one month from the end of the month in which such directions was received and in the present case, it is factually established that the DRP, issued directions on 21.09.2021 and u/s 144C(13), AO was supposed to complete the assessment on or before 31.10.2021 but AO passed the impugned final assessment order on 18.11.2021, which is expressly time barred and as per judicial precedents mentioned hereinbefore, where the time barred final assessment passed, consequently assessment order itself reduced to be null and void and lost it’s legal value.
On the basis of foregoing fact situation and by following the principles of law laid down in the above cited judicial precedents, we find that final assessment order dated 18.11.2021 has been framed beyond the prescribed time limit u/s 144C(13) of the Act and, so, it is time barred, and accordingly, the impugned final assessment order is quashed being void ab initio. Consequently, the ground is hereby deserves to be allowed.
-
2025 (7) TMI 433
Unexplained cash credit u/s 68 r/w section 115BBE - assessee has not made sales through tax invoices - as alleged sales had abnormally increased in one particular month - CIT(A) deleted addition - HELD THAT:- The assessee has furnished before the AO the month wise details of purchases and sales made after that date and the movement in the stock position. As seen that on the 1st of October 2016, the assessee had stock worth Rs.13,08,49,603.61/- in its possession and that when viewed against the closing stock of Rs. 9,53,63,490.16/- as on 31st October, 2016, had depleted a substantial amount of that stock by way of sales. The details of stock, purchases and sales that have been submitted by the assessee before the ld. AO have not been questioned or doubted in any manner by the ld. AO.
Therefore, only because the month of October, 2016 saw a spurt in cash sales below the limit of Rs.2,00,000/-, for which the assessee was not in a position to furnish details of purchasers, the sales made by the assessee cannot be doubted unless the purchases, sales and stock depletion are also cast into doubt.
Argument that the assessee had not submitted the sales invoices to the Assessing Officer - We observe that unless there is a finding that the stocks were not available or were diverted elsewhere, sales claimed out of those stocks cannot be doubted AO has based his additions on the belief that there exists a possibility of manipulating the exact date of sale on account of the requirement of filing of VAT return for October, 2016 on 20.11.2016, but we observe that first of all, in this case, all the cash from sales was deposited on 10.11.2016 leaving lesser scope for manipulation but even if that were so, it would not take the credits on account of those sales in his books outside the purview of sales receipts, unless it could be shown that the sales had not occurred or that the assessee did not have the stock to sell that which he claimed to have sold.
Assessee presented the cash book before the ld. AO and the ld. AO could not find any discrepancy in the same. Therefore, the credits made in the said cash book on account of cash sales, remain uncontroverted.
As assessee has presented evidence of available stock and depletion of the said stock on account of sales and AO has not carried out any enquiry to show that any portion of the receipts on account of the sale of that stock are unexplained by such sales, no case for addition u/s 68 is made out. We are therefore, in agreement with the CIT(A) and uphold his decision to delete the addition on this account. Assessee appeal allowed.
-
2025 (7) TMI 432
Addition of cash deposits during demonetisation period - CIT(A) enhanced the addition - NP determination - Applying the doctrine of consistency, the net profit on the gross turnover may be directed to be estimated at 0.47% - HELD THAT:- Since neither the return of income was filed nor the details were furnished to the Ld. AO, the Ld. AO was justified in making the assessment to the best of his judgement u/s 144 of the Act. However, there is no justification for the Ld. CIT(A) to enhance the addition more so when no show cause notice in this regard was issued. Hence, the order of the Ld. CIT(A) is hereby set aside.
AO has also not given any basis for applying the net profit rate of 3% on the turnover estimated. It has been held in the case of Kachwala Gems 2006 (12) TMI 83 - SUPREME COURT that it is well-settled that in a best judgment assessment, there is always a certain degree of guess work. No doubt, the authorities concerned should try to make an honest and fair estimate of the income even in a best judgment assessment, and should not act totally arbitrarily, but there is necessarily some amount of guess work involved in a best judgment assessment, and it is the assessee himself who is to blame as he did not submit proper accounts. There was no arbitrariness in the instant case on the part of the authorities. Thus, there was no force in the instant appeal and the same was to be dismissed accordingly.
Therefore, considering past history of the assessee’s own case, we are of the view that the net profit rate of 0.5% on the total turnover may be applied. AO is directed to apply the net profit rate of 0.5% on the total turnover for the entire financial year estimated by him and delete the rest of the addition with consequential relief to the assessee. Appeal of the assessee is partly allowed.
-
2025 (7) TMI 431
Disallowance of excess interest claimed u/s 24(b) - whether interest claimed was not exclusively linked to the loan utilized for the acquisition of the 19th-floor property, which is let out? - AO noticed that the assessee has let out its house property at 19th Floor in Lodha Costeria, Mumbai and property was bought out of the borrowed funds and the interest paid thereon has been claimed as deduction u/s 24(b)
HELD THAT:- The undisputed fact is that the assessee has borrowed loan from SBI, UBI & Bank of Baroda. The loans taken from SBI & UBI are coming from earlier years and fresh loan is from Bank of Baroda. It is also not in dispute that the loan taken from Bank of Baroda has been utilised for the purchase of Flat at 18th Floor of Lodha Costerja. It is also not in dispute that the assessee has shown rental income of Rs. 33,00,000/- for the period January, 2014 to March, 2014. Since the assessee has shown rental income, then the assessee is very much entitled for the claim of deduction of interest u/s 24(b) of the Act. We, therefore, do not find any reason to interfere with the findings of the ld. CIT(A). This ground is accordingly dismissed.
Addition u/s 56(2)(vii)(ii) - difference between the agreement value and stamp value - HELD THAT:- As difference between the agreement value and stamp value is much less than 10%, the decision of Joseph Mudaliar [2021 (9) TMI 701 - ITAT MUMBAI] squarely applies wherein as held wherever the statute provides for adoption of the value determined by the stamp valuation authority as the deemed sale consideration, in case, it exceeds declared sale consideration, exceptions have also been provided not to adopt the market value if the difference between the value declared by the assessee and determined by the stamp duty authority is within a permissible limit.
The reason for not providing such an exception in section 56(2)(vii)(b)(ii) is patent and obvious. As could be seen, the amendments to sections 50C, 56(2)(x) and 43CA providing for exception in case of marginal difference between the declared sale consideration and value determined by the stamp valuation authority were introduced to the statute by Finance Act, 2018 with effect from 1-4-2019. Meaning thereby, the legislature did not felt the necessity of introducing such an exception to section 56(2)(vii)(b)(ii) simply for the reason that such provision was applicable for a period between 1st October, 2009 to 1st April, 2017. Therefore, non-introduction of similar exception to section 56(2)(vii(b)(ii) cannot be held against the assessee. Rather, section 56(2)(vii)(b)(ii) has to be harmoniously construed along with sections 50C, 56(2)(x) and 43CA and the exceptions provided in the later three provisions have to be read into section 56(2)(vii)(b)(ii) to provide true meaning to the intention of the legislature. This, according to us, clearly answers submissions of learned departmental representative regarding absence of a provision identical to third proviso to section 50C(1) in section 56(2)(vii)(b)(ii).
Thus, in our considered opinion, the assessee would be eligible to get the benefit of ten per cent margin difference in the valuation between the value determined by the stamp duty authority and the declared sale consideration. Thus, if the variation between the aforesaid two values falls within the range of ten per cent, no addition can be made.
Revenue appeal dismissed.
........
|
9911796707
