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Showing 241 to 260 of 1320 Records
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2021 (1) TMI 1082 - ITAT HYDERABAD
Agricultural income - Nature of land - income earned on leasing out agricultural land is agricultural income or not? - HELD THAT:- The undisputed facts of the case are that the assessee is the owner of agricultural land of 20 acres and 10 guntas. The Khasra Pahani also shows that these lands are agricultural lands and that the crop grown thereon is Mango. Therefore, these lands being agricultural land is not in dispute. In addition to these lands, the assessee has taken on lease agricultural lands in Ranga Reddy and Nalgonda Districts from two other persons. These lands also being agricultural lands is not in dispute
Whether the agricultural operations have been carried on by the assessee in these lands? - As regards the agricultural operations carried on by Adisa Agro (P) Ltd during the relevant period is concerned, there is no information available on record nor is there any dispute raised by the authorities below, except for a finding by the CIT (A) that there is no evidence on record to state that the company had actually utilized the land wholly and exclusively for the purpose of cultivating on its own rather than sub-leasing it to outside parties. Therefore, no presumption can be drawn about the agricultural operations being or not being carried out by the company.
Fact remains that assessee has earned lease rent income by leasing out the agricultural land. Whether such income is eligible to be taken as agricultural income is the question before the Tribunal. The term agricultural income has been defined u/s 2(1A) of the I.T Act and for the purpose of ready reference.
From the lease deed, it is seen that the assessee had carried on agricultural operations during the previous year i.e. 2013-14 relevant to the A.Y 2014-15 and thereafter, the assessee has leased out this land to Adisa Agro (P) Ltd on 30.09.2013 i.e. during the previous year 2014-15 relevant to the A.Y 2015-16. Therefore, the assessee had carried on agricultural operations during the previous year 2013-14 and subsequently such agricultural land has been given on lease to a company which is also engaged in carrying on agricultural operations.
The finding of the CIT (A) is that the crops grown are commercial in nature. The definition of ‘Agricultural Income’ does not limit its application to any particular crops/produce. The only requirement is that the basic agricultural operations are to be carried out. The nature of the crop being commercial in nature will not therefore, disentitle the assessee from claiming the income as ‘agricultural income’. Thus, the finding of the CIT (A) that the assessee’s intention of taking the agricultural lands on lease is to exploit them commercially is not sustainable to disentitle the assessee from making the claim of agricultural income.
Having gone through the decisions relied by the learned CIT (A), that they are all are distinguishable from the facts of the case before the Tribunal and therefore, are not applicable. We set aside the order of the AO and direct him to treat the lease rent received by the assessee from ‘Adisa Agro (P) Ltd’ for use of the agricultural land as agricultural income. - Decided in favour of assessee.
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2021 (1) TMI 1081 - MADRAS HIGH COURT
Deduction u/s 80IA - Treatment to carbon credit receipt - revenue or capital receipts - income from generation of electricity and the carbon credit earned by the assessee are totally separate and the source of the income is also separate - assessee is not entitled for deduction in respect of the carbon credit - HELD THAT:- Assessee while preferring appeal before the CIT(A), has specifically raised a contention that the receipts from sale of carbon credit is a capital receipt and cannot be included in the taxable income. Though this ground raised by the assessee before the CIT(A) has been recorded in the order, the CIT(A) did not take a decision on the same.
Similar ground was raised by the assessee before the Tribunal, which was not considered by the Tribunal, though the Tribunal refers to all the decisions relied on by the assessee, but would pin the assessee to his claim made under Section 80IA of the Act and accordingly, negatives it. This finding of the Tribunal is wholly erroneous and perverse.
Tribunal was expected to apply the law and take a decision in the matter and if the CIT(A) or the Assessing Officer had failed to apply the law, then the Tribunal was bound to apply the law. This is so because, in the light of the decisions referred above, the receipt by way of sale of carbon credit has been held to be capital receipt. Therefore, it is of a little consequence as to the claim made by the assessee under Section 80IA of the Act or in other words, the question of taking a decision as to whether the deduction is admissible under Section 80IA of the Act is a non-issue. If the receipt from the sale of carbon credit is a capital receipt, then it will go out of the purview of the gross total income as defined under Section 80B(5) of the Act, which expression is found in Section 80IA of the Act. Thus, if the receipts by sale of carbon credit will not fall within the definition of total income, the same cannot be included under Section 80IA of the Act. Therefore, even if the assessee has made such a claim, that cannot be a reason for the Tribunal to non-suit the assessee.
Section 115BBG of the Act was introduced by Finance Act, 2017 with effect from 01.04.2018, prior to which, there was no such provision and Mr.V.S.Jayakumar, learned counsel for the assessee would submit that the assessees were under utter confusion as to under which provision of the Act, they should make a claim for deduction and having left with no other option, had been making the claim under Section 80IA of the Act and merely because the assessee due to uncertainty in the legal position, had made a claim under Section 80IA of the Act that cannot be a reason to deny a benefit granted in favour of the assessee. The submission, made by Mr.V.S.Jayakumar, learned counsel for the appellant, in this regard, is well found and accepted. - Decided in favour of assessee.
Disallowance of interest u/s 36(1)(iii) - AO held that the assessee, having provided interest free loans to subsidiary companies and obtained cash credits from two companies, had diverted the business loan for non-business purpose and proportionate disallowance of interest at 12% was calculated and added back to the income of the assessee - HELD THAT:- Tribunal had remanded the matter to the Assessing Officer for fresh consideration and on such remission, the Assessing Officer has allowed the relief on the ground that the assessee has adequate interest free funds to advance amounts to sister concerns. In the light of the same it is held that it is not necessary for the this Court to decide substantial question of law no.3, as relief has already been granted to the assessee.
Disallowance u/s 14A - assessee had invested a sum of ₹ 9 Crores in the subsidiary companies and it had not claimed any expenditure - HELD THAT:- we find that this issue has not been adjudicated in the manner, in which, it is required to be done. The Tribunal, while remanding the issue with regard to interest disallowance under Section 36(1)(iii) of the Act, ought to have remanded the issue with regard to disallowance under Section 14A of the Act as well. But, however failed to do so and therefore, we are of the view that this issue needs to be remanded back to the Assessing Officer for fresh consideration. Accordingly, the finding rendered by the Tribunal with regard to the disallowance under Section 14A of the Act is set aside and the matter is remanded to the Assessing Officer for fresh consideration.
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2021 (1) TMI 1080 - ITAT DELHI
TDS u/s 195 - foreign commission expenses - failure to deduct tax at source on remittance of commission - chargeability of Income u/s 9 of Income Tax Act, 1961 in the hands of the non- resident/foreign company - CIT-A deleted the addition while holding that service rendered by foreign company towards sales promotions, procurement of export orders etc. were not covered within the ambit of " fees for technical services" u/s 9 or 195 - HELD THAT:- As relying on case of DIT vs. Panalfa Autoelektrik Ltd. [2014 (9) TMI 706 - DELHI HIGH COURT] when none of the services have been rendered by the foreign commission agent to the assessee in India and they have received their commission for rendering services as to procuring order from the foreign buyers/exporters, getting approval of samples of the assessee from the overseas buyers, negotiating orders on behalf of the assessee with the foreign buyers including negotiating rates of the assessee, helping the buyers to receive the goods from the assessee and reconciling the quantities and rates with invoices and packing list etc. and that foreign agents who have received the commission have been working for the assessee for the past many years and if at all foreign agents are liable for making payment of income-tax, they are liable to pay the same in their own countries where they are working for gains and earned their income by way of commission from the assessee.
As relying on assessee's own case [2019 (5) TMI 1602 - ITAT DELHI] we are of the considered view that ld. CIT (A) has rightly deleted the addition made by the AO u/s 40(a)(ia) of the Act treating the same being not covered under the ambit of fee for technical services u/s 9 or 195 of the Act. - Decided in favour of assessee.
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2021 (1) TMI 1079 - ITAT BANGALORE
Unexplained jewelery - Search and seizure operations u/s 132 - gold ornaments weighing 7442.30 grams was found, which included bullion of 1500 grams - HELD THAT:- Since there was variation between the copy of stock register taken during the course of search and the copy submitted during the course of search, the AO has rejected the above said explanations. In our view, before rejecting the explanations of the assessee, the AO should have conducted necessary with regard to the veracity of the suspected entries made in the stock register. However, the AO did not conduct any enquiry to find out the veracity of alleged modifications made in the stock register. Accordingly, we are of the view that the AO was not justified in making this addition and the Ld CIT(A) was also not justified in confirming the same.
If the stock register of M/s B & B Jewellers and Finance Ltd has been accepted in its assessment by the concerned assessing officer and further, in the absence of any other credible material to support the view of the AO, we are of the opinion that there is no reason to take a different view in the hands of the assessee.
Since this fact requires verification, we restore this issue to the file of the AO for the limited purpose of examining the view taken by the AO in the hands of M/s B & B Jewellers and Finance Ltd. If the AO of the above said company has accepted the stock register, then we direct that the present addition should be deleted.
Addition relating to 2668.390 grams of jewellery found during the course of search - assessee explained that they belong to his wife Smt. Teena Bethala and they were purchased in 2004 - HELD THAT:- In the instant case, the jewelleries have been found during the course of search. Hence it cannot be considered as a case of accommodation entry, as presumed by the AO. In any case, as rightly pointed out by Ld A.R, the AO has entertained this presumption only on surmises and conjectures. The evidence furnished by the assessee proves the factum of purchase of jewellery.
Absence of description of jewelleries, in our view, cannot be ground to suspect the nature of transaction, since the bill could have been prepared on the basis of understanding of the parties and further other factors support the genuineness of the transactions. We notice that the AO has not conducted any enquiry with Smt Teena Bethala and hence he could not have drawn any conclusion on the basis of return of income filed by her.
AO has not brought on record any credible material to disprove the explanations of the assessee and accordingly we are of the view that this addition could not be made in the hands of the assessee. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and direct the AO to delete this addition
Addition relating to 2308 grams relating to undisclosed investment in jewellery - assessee submitted that these jewelleries belong to various members of the family - HELD THAT:- When the assessee, his parents and brother are living in joint family, in our view, the credit should be given for all the members of the joint family. CIT(A) should have given credit for all the family members (including parents and brother’s family) as per the CBDT instructions. Accordingly, we direct the AO to give credit for the parents and family members of assessee’s brother also. In case, any jewellery still remains, the AO may consider giving further credit on the basis of family status of the assessee. With these directions, we modify the order passed by Ld CIT(A) on this issue and restore the same to the file of the AO to follow the discussions made supra.
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2021 (1) TMI 1078 - ITAT KOLKATA
Addition u/s 68 - share premium received - HELD THAT:- The assessee justified the share premium by referring to the turnover of the assessee company and the profit declared. The AO has not stated the reason as to why he is of the opinion that the share premium charge is excessive.
We are of the considered opinion that the assessee has proved the identity and creditworthiness of the creditors as well as the genuineness of the transaction. Moreover, the Tribunal has held that no addition can be made of share premium only, in the case of M/s. Gateway Enclave Pvt. Ltd. [2019 (5) TMI 419 - ITAT KOLKATA] and in the case of M/s. Savera Towers Pvt. Ltd. [2019 (5) TMI 419 - ITAT KOLKATA]. Consistent with the view taken therein, we delete the addition u/s 68 of the Act and allow the appeal of the assessee.
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2021 (1) TMI 1077 - ITAT COCHIN
Entitled to deduction u/s 80P - Denial of deduction as assessee had not fulfilled the primary object of a Primary Agricultural Credit Society in so far as it was not providing financial accommodation to its members for agricultural purposes or for purposes connected with agricultural activities - HELD THAT:- A perusal of the decision of the Hon'ble Supreme Court in the case of The Mavilayi Service Co-operative Bank Ltd. [2021 (1) TMI 488 - SUPREME COURT] clearly shows that the Hon'ble Supreme Court has set aside the decision of the Full Bench of the Hon'ble Kerala High Court in the case of The Mavilayi Service Co-operative Bank Ltd. [2019 (3) TMI 1580 - KERALA HIGH COURT].
The Hon'ble Supreme Court has also further explained the decision in the case of Citizen Co-operative Society Ltd. [2017 (8) TMI 536 - SUPREME COURT] in so far as the deduction that is given without any reference to any restriction or limitation cannot be restricted or limited by implication. In the circumstances in respectful obedience to the principles laid down by the Hon'ble Supreme Court in the case of The Mavilayi Service Co-operative Bank Ltd.[2021 (1) TMI 488 - SUPREME COURT] the AO is directed to grant the assessee the benefit of deduction under Section 80P as claimed. Appeal filed by the assessee is allowed.
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2021 (1) TMI 1076 - ITAT VISAKHAPATNAM
Exemption u/s 11 - Registration u/s.12AA denied - registration granted already earlier was cancelled by order dated 04.05.2012 and the same is pending before ITAT and also the commercial receipts of the assessee for this period exceeding 25% of the total receipts of the said period and the activity of the assessee is of not charitable activity - HELD THAT:- We find that the cancellation order passed by the Ld. CCIT(OSD) has been cancelled by Hon'ble ITAT [2020 (3) TMI 1018 - ITAT VISAKHAPATNAM] wherein the Hon'ble ITAT categorically gave a finding that there is no material to say that the assessee is carrying the activities not in accordance with the objects or the activities of the assessee are not genuine. The Ld. CCIT has cancelled the registration on presumptions and assumptions without having proper material.
The objects of the assessee are one and the same and there is no material before us to say that the assessee is carrying on its activities contrary to the objects and the activities are not genuine. The Department has not placed any material before us that the objects and activities are not genuine. Therefore, we are of the opinion that the Ld. CIT(Exemptions) is not correct in rejecting the registration applied by the assessee u/s. 12AA of the Act. Thus, we are of the considered opinion that the assessee is entitled for registration u/s. 12AA of the Act. Accordingly, we grant the registration to the assessee u/s. 12AA of the Act - Decided in favour of assessee.
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2021 (1) TMI 1075 - ITAT BANGALORE
Transfer pricing adjustment made in respect of back office support services (ITES services) - Comparable selection - HELD THAT:- We direct exclusion of M/s. E-Clerx Services Ltd., ICRA online Ltd. and Infosys BPO Ltd. as functionally dissimilar with that of assessee. The ALP of the international transactions shall be computed afresh accordingly
TP adjustment made in respect of distribution segment - Selection of MAM - HELD THAT:- As neither the TPO nor the Ld DRP has examined the T.P study of the assessee made by adopting Resale Price Method. Further, as noticed earlier, the TPO was under erroneous belief that the assessee has adopted TNM method for its distribution segment also, which is patently wrong. It is well settled principle that the TPO has to give cogent reason as to why the method selected by the assessee is not an appropriate method in the facts and circumstances of the case, before discarding it.
Since the TPO had misdirected himself, there was no occasion for him to examine the Resale price method adopted by the assessee - entire issue relating to Transfer pricing adjustment made in respect of Distribution Segment needs to be examined afresh by duly considering the Transfer Pricing study conducted by the assessee.
Computation of deduction u/s 10A - Assessee claimed deduction u/s 10A of the Act without adjusting loss from other units - AO adjusted business losses of other units against the profits of Coimbatore unit and accordingly allowed deduction u/s 10A - HELD THAT:- We set aside the order passed by the AO on this issue and direct him to compute the deduction u/s 10A without adjusting losses as held in M/S YOKOGAWA INDIA LTD. [2016 (12) TMI 881 - SUPREME COURT].
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2021 (1) TMI 1074 - ITAT DELHI
Assessment u/s 153C or u/s 143(3) - HELD THAT:- When revenue has not challenged the order of the learned CIT – A on identical facts and circumstances in case of other assessee of the same group, the revenue cannot say that the order of the learned CIT – A is incorrect as it has already accepted by the revenue is correct by not filing an appeal before the coordinate bench. See PRAKASH SACHDEVA [2014 (9) TMI 1224 - ITAT DELHI]
Ground of the appeal of the assessee contesting that the assessment order made by the assessing officer was bad in law and void ab initio on the ground that it was to have been made u/s 153C of the income tax act and not, as was u/s 143 (3)/147 of the income tax act 1961 is allowed.
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2021 (1) TMI 1073 - ITAT DELHI
Deduction u/s. 80IAB - assessee has claimed the said deduction on the rental income shown under the head “income from house property - claim of deduction u/s. 80 IAB should not be denied as the claim is made on the rental income and not from any profits and gains of business - assessee strongly contended that the relevant factor is profit and gain should be derived from the eligible business irrespective of the head of the income - HELD THAT:- As per the scheme of the Income Tax Act the assessee has shown the rental income derived from its SEZ projects under the head “income from other sources”.
Scheme of SEZ is governed by the provision of law contained under the SEZ 2005. Section 51 of the SEZ Act 2005 provides that the SEZ Act shall have overriding effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act. In our considered opinion developing SEZ by itself is the business contemplated u/s. 80 IAB of the Act and the SEZ itself provides that the lease rental income generated in the hands of a developer engaged in setting up of the SEZ, is the profits and gains derived from the business of developing a SEZ. - Decided against revenue.
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2021 (1) TMI 1072 - ITAT DELHI
Revision u/s 263 - deemed dividend u/s 2(22) - HELD THAT:- Provisions of section 2(22)(e) of the Act apply on the date of taking the loan and as mentioned elsewhere, on the date of acceptance of ICD of ₹ 50 lakhs from Eicher Ltd. Eicher Ltd was a listed company at BSE and NSE. Therefore, it can safely be concluded that on the date of the said loan, the lender company was a company in which public were substantially interested which make the transaction outside the purview of section 2(22)(e).
Assessing Officer, while framing assessment u/s 143(3) of the Act has taken a possible view. Therefore, the ld. CIT cannot impose his view upon the Assessing Officer on wrong appreciation of facts.
It is a settled position of law that powers u/s 263 of the Act can be exercised by the Commissioner on satisfaction of twin conditions, i.e., the assessment order should be erroneous and prejudicial to the interest of the Revenue. By 'erroneous' is meant contrary to law. Thus, this power cannot be exercised unless the Commissioner is able to establish that the order of the AO is erroneous and prejudicial to the interest of the Revenue. Thus, where there are two possible views and the Assessing Officer has taken one of the possible views, no action to exercise powers of revision can arise, nor can revisional power be exercised for directing a fuller enquiry to find out if the view taken is erroneous. This power of revision can be exercised only where no enquiry, as required under the law, is done. It is not open to enquire in case of inadequate inquiry.
We find the Hon'ble Delhi High Court in the case of CIT Vs. Anil Kumar [2010 (2) TMI 75 - DELHI HIGH COURT] has held that where it was discernible from record that the A.O has applied his mind to the issue in question, the ld. CIT cannot invoke section 263 of the Act merely because he has different opinion. - Decided in favour of assessee.
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2021 (1) TMI 1071 - ITAT DELHI
Depreciation on exchange fluctuation - assets acquired in India from the funds raised through Foreign Currency Convertible Bonds (FCCBs) in terms of section 43 (1) of the Act read with explanation 8 thereto and section 43A of the Act and section 36 (1)(iii) - HELD THAT:- Depreciation on exchange fluctuation on the assets acquired in India from the funds raised through Foreign Currency Convertible Bonds (FCCBs) in terms of section 43 (1) of the Act, in assessee’s own case for the assessment years 2009-10 and 2012-13 [2020 (12) TMI 1190 - ITAT DELHI] and batch of appeals clearly shows that this aspect was considered in the assessment year 2009-10 and such a view was followed in the subsequent assessment years.
The view taken by the Tribunal is followed in assessee’s case for the assessment year 2012-13. It is, therefore, clear that the consistent view taken by the Tribunal in assessee’s own case for the assessment years 2009-10 and 2012-13 goes in favour of the assessee and in the absence of any change is in the facts are in law, we find it difficult to deviate from the same or to take a different view, more particularly in view of the decision of Radhasoami Satsang [1991 (11) TMI 2 - SUPREME COURT] and Excel industries Ltd [2013 (10) TMI 324 - SUPREME COURT] in respect of taking consistent view on the same set of facts in the case of the same assessee. We hold grounds in favour of the assessee and direct the authorities to delete the addition.
Adjustment to the book profits on section 115 JB on Addition made u/s 14A of the Act read with Rule 8D of the Rules - HELD THAT:- Assessee is placing reliance on the decision of the special Bench of the Tribunal in the case of ACIT vs. Vireet investments private Ltd [2017 (6) TMI 1124 - ITAT DELHI] which in fact was relied upon by the Tribunal in assessee’s own case for the earlier assessment years to hold that the computation under clause (f) of explanation 1 to section 115 JB (2) of the Act has to be made without resorting to the computation as contemplated under section 14A of the Act read with Rule 8D of the Rules. In view of this settled legal position, as has been followed by the Tribunal in assessee’s own case for the earlier assessment years, we are of the considered opinion that the adjustment to the book profits under section 115 JB of the Act is not sustainable and the same has to be deleted. Decided in favour of the assessee.
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2021 (1) TMI 1070 - ITAT KOLKATA
Unexplained Income - addition u/s 68 - Receipt of share application money from group companies - group companies invest in each other - Double additions - non compliance to Summons u/s 131 issued by the AO the directors of the assessee company and directors of all the investor companies - HELD THAT:- CIT(A) states that the directors of the appellate company complied with the summons issued u/s 131 of the Act by filling of letter dated 09.03.2015 along with details. He also records finding of facts that there are common directors and common shareholders and hence these are group companies which have invested - Assessing Officer has not considered any of these documents and that there is no adverse material with the AO, to controvert the information or document filed by the assessee. Under such circumstances, he held that money received from the shareholder companies cannot be considered as unexplained income.
Most important finding of the Ld. CIT(A) is that scrutiny assessment order were passed u/s 143(3) of the Act, in respect of all the three share allottee companies. Copies of these assessment order filed before the Assessing Officer. This bench of the Tribunal as in the following cases held that no addition can be sustained u/s 68 of the Act where the assessment of the share allottee companies is completed u/s 143(3) See M/S. GOODPOINT COMMODEAL PVT. LTD. [2019 (6) TMI 600 - ITAT KOLKATA] and M/S. SANMIN TRADING AND HOLDING PVT. LTD. [2020 (11) TMI 606 - ITAT KOLKATA]
In this case huge additions were made in the hands of the share allottee companies in their scrutiny assessment u/s 143(3) of the Act. Again making the addition in the case of the assessee company would tantamount to double addition.
CIT(A) relied on the judgement of Gyscoal Alloys Ltd. [2018 (10) TMI 1725 - GUJARAT HIGH COURT] for the proposition that addition cannot be made of share capital received from group companies. We find no infirmity in the finding of the Ld. CIT(A). The Ld. DR could not point out any factual inefficiency in the order of the Ld. CIT(A). The order of the Ld. CIT(A) is in accordance with law - Decided against revenue.
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2021 (1) TMI 1069 - ITAT MUMBAI
Long term capital loss/gain - loss on cancellation of flat booked - extinguishment of assessee’s right in flat - treating the compensation received as income from other sources as against the same having been treated as part of the sales consideration by the assessee - HELD THAT:- Provisions of MOFA can not regulate the taxability of any income in the form of long term capital gain/loss which may raise from the cancellation of any letter of intent/agreement which is not registered. Therefore, we are inclined to hold that the assessee has rightly calculated the long term capital loss upon the cancellation of letter of intent dated 09.02.2010. We have also perused the provisions of section 2(47) clause (vi) and observed that transfer of capital asset includes transferring or enabling the enjoyment of any immovable property by way of becoming a member of or acquiring a share in a company or by way of any agreement or arrangement or in any other manner whatsoever.
The case of the assessee is also squarely covered by the decision of Tribunal in the case of ACIT vs. Ashwin S. Bhalekar [2018 (5) TMI 1887 - ITAT MUMBAI] wherein has held that the extinguishment of assessee’s right in flat in a proposed building is actually extinguishment of any right in relation to capital assets and accordingly held that the compensation receipt upon extinguishment of right which was held for more than 3 years falls under the head “Capital gain” under section 45 - direct the AO to allow the claim of the assessee on account of long term capital loss. - Decided in favour of assessee.
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2021 (1) TMI 1068 - ITAT CHENNAI
Assessment u/s 153A - ad-hoc disallowance of various expenses - HELD THAT:- It is well settled principle of law that unless Assessing Officer makes out a case that expenditure debited to profit & loss account is not genuine and which are not supported by necessary evidences, he cannot make ad-hoc disallowance on the ground that assessee has not produced necessary details and vouchers for verification.
In this case, on perusal of assessment order passed by Assessing Officer, we find that Assessing Officer has failed to make out a case for ad-hoc disallowance of expenses, that too in the assessment framed u/s.153A -Considering facts and circumstances of this case and by following the decision of ITAT., Chennai in the case of M/s. Susi Auto Plaza Pvt.Ltd [2010 (1) TMI 975 - ITAT CHENNAI], we are of the considered view that learned CIT(A) was right in deleting additions made towards ad-hoc disallowance of various expenses, hence we are inclined to uphold findings of learned CIT(A) and reject ground taken by Revenue
Addition u/s. 40A(3) - cash payment made to M/s. Kokilam Foundations Pvt.Ltd. with whom assessee entered joint venture - HELD THAT:- We are of the considered view that transactions of investment in joint venture cannot be brought into ambit of provisions of section 40A(3) - CIT(A), after considering relevant facts and by following decision of ITAT., Chennai in the case of M/s. R.K.Powergen Pvt.Ltd.[2016 (6) TMI 1410 - ITAT CHENNAI] has rightly deleted additions made by AO towards disallowance of cash payment u/s. 40A(3) - No error or infirmity in the order of learned CIT(A) and hence, we are inclined to uphold the findings recorded by learned CIT(A) and reject ground taken by Revenue
Addition towards profit and gains from business or profession - admission of revised statement of total income in absence of revised return - HELD THAT:- We find that restriction imposed by Hon’ble Supreme Court in the case of M/s Goetz (India) Ltd. [2006 (3) TMI 75 - SUPREME COURT] is only on the Assessing Officer but not on the appellate authorities.
Appellate authorities are empowered to admit any additional claim or ground, even if, such claim was not before Assessing Officer, but fact relating to such claim should be on record. In this case, facts with regard to claim of loss from business or profession was already on record and no new facts are required to be verified and hence, we are of the considered view that there is no merit in the ground taken by Revenue in light of Hon’ble Supreme Court judgement in the case of M/s Goetz (India) Ltd. Vs. CIT (supra) and hence, the same is rejected.
Declaration of loss from business or profession as against profit in the original return filed for relevant assessment year - CIT(A) has recorded categorical finding in light of revised profit & loss account filed by assessee that after exclusion of purchase of land and stock in trade from books of account, the net profit from business or profession resulted into net loss. The facts of finding recorded by learned CIT(A) has not been controverted by Revenue with any evidences - assessee has filed necessary evidences to prove that transactions between the assessee and M/s. Kokilam Foundations Pvt. Ltd. was an investment transaction which has been regarded as purchase of land and stock in trade by inadvertent error and the same has been rectified by passing necessary entries in books of account.
CIT(A) after considering relevant facts has rightly directed the Assessing Officer to consider revised statement of total income filed by assessee. No infirmity in the findings recorded by learned CIT(A) and hence, we are inclined to uphold the findings of learned CIT(A) and reject ground taken by Revenue.
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2021 (1) TMI 1067 - ITAT MUMBAI
Estimation of income - bogus purchases - CIT-A restricted the addition to 17% of the bogus purchases - HELD THAT:- CIT(A) has based his findings on the decision of the coordinate Bench, rendered in the case of M/s. Hotel Mayfair Pvt. Ltd.,[2015 (7) TMI 1365 - ITAT MUMBAI] a group company of the present assessee in appeal filed by the assessee against the order passed by the Ld. CIT u/s. 263 of the Act, in which the AO had made addition of 17% of the total amount of bogus purchases. Thus we do not find any reason to interfere with the findings of the Ld. CIT(A). - Decided against revenue.
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2021 (1) TMI 1066 - ITAT DELHI
Addition under section 36(1)(va) - delay in deposit of employee’s contribution to provident fund - Assessee argued the same amount was duly paid before filing of income tax return and within the time limit specified u/s 139(1) - HELD THAT:- We find that the Ld. CIT(A) following the decision of the Hon’ble Delhi High Court in the case of CIT Vs AIMIL Ltd [2009 (12) TMI 38 - DELHI HIGH COURT] has accepted the claim of the deduction for payments of employees contribution to ESI/PF and accordingly restricted the disallowance for payments made after the date of the filing of the return of income.
The sole issue before us is only of verification whether all the payments of ESI/PF contribution of the employees were made before the date of the filing of the return of income or not. We feel it appropriate to restore this issue to the file of the Ld. CIT(A) for verification of the claim of the assessee and decide accordingly. Appeal of the assessee are accordingly allowed for statistical purposes.
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2021 (1) TMI 1065 - ITAT DELHI
Rectification of mistake - in Para 8 of the order the Tribunal inadvertently typed that the Assessing Officer disregarded application for admission for additional evidence submitted by the assessee, and there is no specific comment in the remand report filed by the Assessing Officer before the CIT(A) - HELD THAT:- There is inadvertent mistake in the Para 7 that of typographical and in Para 8 that of mistake regarding the facts of the case. Hence, the present misc. application is allowed and we modify both the paras as follows and the same should be read in the original order dated 23.10.2020 as under:-
“7. We have heard both the parties and perused all the relevant material available on record. During the hearing the Ld. AR submitted that application under Rule 27 filed by the assessee has to be withdrawn. Therefore, we are dismissing the application under Rule 27 as withdrawn by the assessee”
Miscellaneous Application filed by the assessee is allowed.
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2021 (1) TMI 1064 - ITAT MUMBAI
Addition u/s 68 / 69A - While deleting the addition u/s 68 CIT(A) enhanced the resultant assessment by retaining the addition made by the assessing officer u/s 69A - HELD THAT:- CIT(A) has erred in deleting the addition of section 68 of the Act but enhancing the resultant assessment by retaining the addition made by the assessing officer under section 69A of the Act and that also without any notice to the assessee in clear contravention of provisions of section 251(2) of the Act.
Assessee having filed the return of income pursuant to the notice issued to the assessee has discharged the onus. The assessment made by the assessing officer by not commenting anything of the return of income filed but adding the random figure out of the bank deposit under section 68 is not sustainable.
It is settled law that when assessing officer is rejecting the books of account and return of income filed by the assessee the best judgement assessment has to be based upon some reasonable criteria. The same has to be on the basis of rates applicable for earlier income shown by the assessee in the past or that operating in the concerned business. By not adopting any fair rate or estimate of income and adding the bank deposits partly only as undisclosed income or investment is not at all sustainable.
CIT(A) has further erred in making the addition u/s 69A of the Act without giving the assessee any opportunity being heard.
CIT(A) has also quoted a random figure of ₹ 24,38,819/- and held that the same should be treated as undisclosed investment. From the figures of deposits noted by the assessing officer hereinabove it is not discernible as to how this figure has arisen. This shows that authorities below have not applied their mind and considered random figures for addition. CIT(A) has erred in considering the entire submissions of the assessee as an afterthought and summarily rejecting the same.
Thus we set aside the orders of authorities below and delete the addition. - Decided in favour of assessee.
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2021 (1) TMI 1063 - ITAT MUMBAI
Estimation of income - Bogus purchases - assessee has failed to furnish stock register for the relevant period and the assessee has failed to produce the supplier before the AO - CIT-A sustained addition to 25% - HELD THAT:- Hon’ble Gujarat High Court in the case of CIT vs. Simit P. Sheth [2013 (10) TMI 1028 - GUJARAT HIGH COURT] has upheld the addition of 12.5% of the total amount of bogus purchases sustained by the ITAT, holding that, only profit element embedded in such purchases could be added to the income of the assessee.In the present case, the Ld. CIT (A) has sustained the addition of 25%, which is not in consonance with the judgment of the Hon’ble Gujarat High Court.
No merit in the contention of the revenue that the Ld. CIT (A) ought to have sustained the addition made by the AO. The cases relied upon by the Ld. AR are distinguishable on facts and the ratio laid down in the said cases are not applicable to the present case. Hence, in our considered view, the addition of 12.5% is reasonable to meet the ends of justice. We therefore, modify the findings of the Ld. CIT (A) and restrict the addition to 12.5% of the total amount of bogus purchases determined by the AO.
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