|
Advanced Search Options
Case Laws
Showing 261 to 280 of 1473 Records
-
2022 (1) TMI 1216
Maintainability of petition - original bail application filed by the petitioner has been withdrawn by the petitioner - HELD THAT:- Considering the fact, that the bail application has already been withdrawn, the question of considering the impugned order passed on the purshis dated 18th June 2021, filed by the petitioner, does not arise.
Petition disposed off.
-
2022 (1) TMI 1215
Seeking convention of meeting of the Creditors - placing of scheme of compromise/settlement for their consideration before the creditors - ex-Promoters/Directors held guilty for the preferential transactions under Section 43 of the IBC, 2016 - HELD THAT:- In terms of Section 29A(g) of the IBC 2016 and Regulation 2(B)(1) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, the Applicant is not eligible to file any application under Sections 230-232 of the Companies Act.
Reliance placed in the Hon'ble Supreme Court decision [2021 (3) TMI 611 - SUPREME COURT] in Civil Appeal No. 9664/2019 dated 15.03.2021, where it was held that it is clear that the Promoter, if ineligible under Section 29A Cannot make an application for Compromise and Arrangement for taking back the immovable property or actionable claims of the Corporate Debtor.
Application dismissed.
-
2022 (1) TMI 1214
Refund of the accumulated credit - rejection on the ground of time limitation - vires of Section 54 of the Central Goods and Services Tax Act, 2017 and Rajasthan Goods and Services Tax Act, 2017 - HELD THAT:- The Supreme Court in the Union of India and others Vs. VKC Footsteps India Pvt. Ltd., [2021 (9) TMI 626 - SUPREME COURT] has upheld the vires of the statutory provisions under consideration - that being the situation, the petitioner’s challenge to the statutory provisions must come to an end. However at this stage, learned counsel for the petitioner argued that the COVID related extensions would apply to time limit provisions contained in the statutes for refund also. At the stage, there is neither pleading nor corresponding prayer for declaration to this effect. We therefore refuse to go into this question in the present petition.
In view of the facts and material on record, let the assistant commissioner decide the petitioner’s refund claim bearing in mind the reply of the petitioner, copy of which is produced as annexure A/4 - petition disposed off.
-
2022 (1) TMI 1213
Levy of Interest and penalty - reversal of transitional credit - no records to show utilization of such credit - invocation of Section 74 of the TNGST Act, 2017, justified or not? - HELD THAT:- The facts on record indicates that though an improper attempt was made by the petitioner to transition the aforesaid credit. The petitioner had however not utilized the same and had also reversed the same on 10.02.2020 after a Show Cause Notice were issued within a period prescribed under Section 73 of TNGST Act, 2017 by invoking Section 74 of the TNGST Act, 2017. However, the Show Cause Notice does not invoke the ingredients to justify the invocation of Section 74 of the TNGST Act, 2017 against the petitioner.
Be that as it may, if the Show Cause Notice issued to the petitioner on 09.05.2019 is to be construed as a notice under Section 74 of the TNGST Act, 2017, the Show Cause Notice should have specifically invoked the ingredients of Section 74(1) of the TNGST Act, 2017. However, the said notice merely states that due to the unavailability of documents to prove admissibility of the ITC, Assessment under Section 74 is proceeded. Thus, the Show Cause Notice dated 31.12.2019 does not meet the requirements of Section 74(9) of the TNGST Act, 2017.
Before levying penalty or interest, a proper excise was required to be made by a proper officer under Section 74(10) after ascertaining whether the credit was wrongly availed and wrongly utilised. Though under Sections 73(1) and 74(1) of the Act, proceedings can be initiated for mere wrong availing of Input Tax Credit followed by imposition of interest penalty either under Section 73 or under Section 74 they stand attracted only where such credit was not only availed but also utilised for discharging the tax liability. The proper method would have been to levy penalty under Section 122 of TNGST Act, 2017 - the petitioner is not liable to penalty imposed. At the same time, since there was an attempt to wrongly avail credits and utilise the same as and when the tax liability would have arisen, the petitioner is held liable to a token penalty.
Petition allowed in part.
-
2022 (1) TMI 1212
Reopening of assessment u/s 147 - Scope of Section 148A as newly inserted - Comparison between old and new provisions for reassessment - Individual identity of Section 148 as prevailing prior to amendment - applicability of the newly inserted provisions of Section 148A and the amendments brought inter alia w.e.f. 1.4.2021 - identity of Section 148 as prevailing prior to amendment and insertion of section 148A - Whether after introduction of new provisions for reassessment of income by virtue of the Finance Act, 2021 with effect from 01.04.2021, substituting the then existing provisions, would the substituted provisions survive and could be used for issuing notices for reassessment for the past period? - HELD THAT:- As the first proviso to Section 149(1) provides that no notice under Section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 01.04.2021 if such notice could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub-section (1) of Section 149 as they stood immediately before the commencement of the Finance Act, 2021. As per this proviso thus no notice under Section 148 would be issued for the past assessment years by resorting to the larger period of limitation prescribed in newly substituted clause (b) of Section 149(1). This would indicate that the notice that would be issued after 01.04.2021 would be in terms of the substituted Section 149(1) but without breaching the upper time limit provided in the original Section 149(1) which stood substituted.
This aspect has also been highlighted in the memorandum explaining the proposed provisions in the Finance Bill. If according to the revenue for past period provisions of section 149 before amendment were applicable, this first proviso to section 149(1) was wholly unnecessary. Looked from both angles, namely, no indication of surviving the past provisions after the substitution and in fact an active indication to the contrary, inescapable conclusion that we must arrive at is that for any action of issuance of notice under Section 148 after 01.04.2021 the newly introduced provisions under the Finance Act, 2021 would apply. Mere extension of time limits for issuing notice under section 148 would not change this position that obtains in law.
Under no circumstances the extended period available in clause (b) of sub-section (1) of Section 149 which we may recall now stands at 10 years instead of 6 years previously available with the revenue, can be pressed in service for reopening assessments for the past period. This flows from the plain meaning of the first proviso to sub-section (1) of Section 149. In plain terms a notice which had become time barred prior to 01.04.2021 as per the then prevailing provisions, would not be revived by virtue of the application of Section 149(1)(b) effective from 01.04.2021. All the notices issued in the present cases are after 01.04.2021 and have been issued without following the procedure contained in Section 148A of the Act and are therefore invalid.
Whether the explanations contained in the CBDT circulars dated 31.03.2021 and 27.04.2021 are legal and valid? - Subordinate legislation does not enjoy same level of immunity as the law framed by the Parliament or the State Legislature. The law framed by the Parliament or the State Legislature can be challenged only on the grounds of being beyond the legislative competence or being contrary to the fundamental rights or any other constitutional provisions. Third ground of challenge which is now recognized in the judgment in case of Shayara Bano Vs Union of India [2017 (9) TMI 1302 - SUPREME COURT] is of legislation being manifestly arbitrary. A subordinate legislation can be challenged on all these grounds as well as on the grounds that it does not conform to the statute under which it is made or that it is inconsistent with the provisions of the Act or it is contrary to some of the statutes applicable on the subject matter.
As under sub-section (1) of Section 3 of the Relaxation Act, 2020 while extending the time limits for taking action and making compliances in the specified Acts upto 31.12.2020 the power was given to the Central Government to extend the time further by issuing a notification. This was the only power vested in the Central Government. As a piece of delegated legislation the notifications issued in exercise of such powers, had to be within the confines of such powers. In plain terms under sub-section (1) of Section 3 of the Relaxation Act, 2020 the Government of India was authorized to extend the time limits by issuing notifications in this regard. Issuing any explanation touching the provisions of the Income Tax Act was not part of this delegation at all. The CBDT while issuing the notifications dated 31.03.2021 and 27.04.2021 when introduced an explanation which provided by way of clarification that for the purposes of issuance of notice under Section 148 as per the time limits specified in Section 149 or 151, the provisions as they stood as on 31.03.2021 before commencement of the Finance Act, 2021 shall apply, plainly exceeded its jurisdiction as a subordinate legislation. The subordinate legislation could not have travelled beyond the powers vested in the Government of India by the parent Act. Even otherwise it is extremely doubtful whether the explanation in the guise of clarification can change the very basis of the statutory provisions. If the plain meaning of the statutory provision and its interpretation is clear, by adopting a position different in an explanation and describing it to be clarificatory, the subordinate legislature cannot be permitted to amend the provisions of the parent Act. Accordingly, these explanations are unconstitutional and declared as invalid.
We are unable to persuade ourselves to accept this analysis of the situation. In our understanding by virtue of notifications dated 31.03.2021 and 01.04.2021 issued by CBDT substitution of reassessment provisions framed under the Finance Act, 2021 were not deferred nor could they have been deferred. The date of such amendments coming into effect remained 01.04.2021.
In the result we find that the notices impugned in the respective petitions are invalid and bad in law. The same are quashed and set aside. The learned Single Judge committed no error in quashing these notices. All the writ petitions are allowed. Appeals of the revenue are dismissed.
-
2022 (1) TMI 1211
Addition of investments not disclosed in the books of accounts as required under section 69B - addition based on the statement recorded in the course of survey operation under section 133A at the premises of the third party - HELD THAT:- The impugned amount was offered to tax before the settlement commission which was accepted therein. In this regard, we note that the proceedings before the settlement commission were of M/s Phulchan Exports Pvt. Ltd. and M/s Advance Lifestyle Ltd and the assessee was not connected with such proceedings. Thus the decision of the Hon’ble Settlement Commission in the case of a third party cannot bind the assessee - See VINEETA GUPTA AND ANOTHER [2014 (5) TMI 543 - DELHI HIGH COURT]
In the present case, admittedly, the assessee acquired the shares of M/s Advance Life Space Pvt. Ltd from M/s Advance Lifestyle Ltd for certain value. Once the transaction on hand was not connected to M/s Phulchand Export Pvt. Ltd, then there was no reason for it (M/s Phulchand Export Pvt. Ltd.) to offer the income for the same transaction before the settlement commission for the transactions in which it was not party. Thus a doubt arises why Phulchand Export Pvt. Ltd has made a disclosure before the settlement commission in the transaction in which it was not the party even if it was the majority shareholder in the advance lifestyle Ltd. Therefore, we are not convinced with the finding of the AO.
There were certain loose papers/diary found during the survey operation containing certain date wise amount. On confrontation, one Shri Pradeep Aggarwal son of Shri Phulchand Aggarwal who was neither director in M/s Phulchand Export Pvt. Ltd or in M/s Advance Lifestyle Ltd stated that noting represent cash received from the assessee on hand against sale of the property at New Manik Mills. However, the name of the assessee, signature and address of the assessee was not appearing therein i.e. on the seized documents. Accordingly, we are of the view that such documents in the absence of other corroborative materials cannot substitute the evidence.
Hon’ble Supreme Court in case of Common Cause (A registered society) vs. Union of India[ 2017 (1) TMI 1164 - SUPREME COURT] held that noting on loose sheet/diary does carry any evidentiary value under the provision of section 34 of the Evidence Act - Also find that Hon’ble Supreme Court in CBI vs. V.C. Shukla [1998 (3) TMI 675 - SUPREME COURT] held that entry can be made by any person against the name of any other person in any sheet, paper or computer, but the same cannot be the basis of making charges against the person whose name noted on sheet without corroborating the same. - Decided against revenue.
Addition u/s 68 - unexplained cash credit - assessee has not filed any confirmation, addresses, PAN of the debtors except a list containing the name of the debtors/members - HELD THAT:- Assessee has also furnished the booking receipts and service tax paid on such booking advance. It is also not out of place to mention that in majority of the cases the PAN of the sundry debtors representing the advance booking were available on record. As far as the details as discussed aforesaid, there is no dispute. DR at the time of hearing has also not brought anything on record contrary to the impugned details placed in the paper book. Thus, it appears that the assessee has discharged its primary onus imposed under section 68 of the Act. Thus the onus has been shifted upon the revenue to disprove the contention of the assessee and that too based on the cogent materials. It is also pertinent to note that the AO has not carried out any exercise by resorting to the provisions of section 133(6) and 131 of the Act in order to dig out the truth from the submissions filed by the assessee. As such, all the details furnished by the assessee cannot be brushed aside without assigning any reason. Accordingly, the provisions of section 68 of the Act cannot be invoked in the given facts and circumstances - Decided in favour of assessee.
Addition consequent to survey proceedings - loose sheets found - Addition to sum as admitted by the assessee during survey - HELD THAT:- We are of the view that there cannot be any addition merely on the basis of loose papers found during the survey operation until and unless there were some corroborating evidences found.
The revenue is authorized record the statement under section 133A(3)(iii) of the Act during the survey operation. There is no provision for recording the statement under section 131(1) in survey operation except the circumstances provided under subsection 6 to the section 133A of the Act - revenue can resort to the provisions of section 131 of the Act if the assessee doesn’t co-operate during the survey proceedings or tries to evade the relevant formations. However in the case on hand, we note that there is no such allegation that the assessee was not cooperating during the assessment proceedings. Thus we hold that the revenue has acted beyond the jurisdiction by recording the statement under section 131 of the Act. Accordingly, no reference can be made to such statements.
There was a loose paper containing the figure of construction cost which the assessee had made for the purpose of the bank loan. Such information was improperly written on a piece of paper which is nothing but a dumb documents. Therefore, it cannot be said that such information was furnished to the bank - we disagree with the order of the authorities below. Accordingly we set aside the finding of the Ld. CIT-A, and direct the AO to delete the addition made by him. Hence, the ground of appeal of the assessee is allowed whereas the ground of appeal of the Revenue is dismissed.
Income recognition - sales valuation - assessee has shown revenue in the financial statements based on percentage completion method - HELD THAT:- There is no reference to be made to the value of the sales - under percentage completion method, income of the assessee is computed based on cost incurred to date in proportionate with total estimated cost and total estimated revenue. This method of recognizing the profit is very well accepted by the industries engaged in the business of construction of the projects. There was no defect pointed out by the AO in the method adopted by the assessee.
The assessee has shown revenue in the financial statements based on percentage completion method despite the fact that there was no actual sales made by the assessee in the year under consideration. The question of making the sale arises when the project/the property is handed over to the prospective buyer and the conveyance deed is registered in favour of the party. But no such conveyance deed has been registered in the year under consideration. This fact was brought to the notice of the AO in response to the notice issued under section 142(1)
There is no whisper about the sales of the area as alleged by the AO. At the time of hearing, the learned DR has also not brought anything in support of the order of the AO. Accordingly we are not convinced with the finding of the AO. In view of the above and after considering the facts in totality, we set aside the finding of the authorities below and direct the AO to delete the addition made by him. Hence the ground of appeal of the assessee is allowed.
Addition of expenses incurred for getting the property vacated from the occupants/shopkeepers - AO was not satisfied with the contention of the assessee on the reasoning that as per the agreement between the assessee and the vendor, it was the duty of the vendor to incur such expenses, as proposed by the AO that the assessee has not incurred such expenses in the course of the business - HELD THAT:- From the above discussion, it also appears that the assessee was not under the obligation to incur such expenses. As such it was the duty of the other party to handover the land to the assessee free from all encumbrances. We note that the other party failed to do so. Under the situation the assessee has to incur the expenses which was supposed to be borne by the other party. Provisions of section 37 Act deals for the admissibility of the expenses which have been incurred for the purpose of the business. The expenses which are personal and capital in nature, and not incurred for the purpose of the business cannot be allowed as deduction under section 37 the Act.
In such facts and circumstances, the assessee at the best of his wisdom has decided to incur the expenses which are purely for the purpose of commercial expediency.
We are inclined to hold that the expenses incurred by the assessee are in course of the business and therefore the same are eligible for deduction under section 37 of the Act. Hence, we set aside the finding of the learned CIT-A, and direct the AO to delete the addition made by him. Hence the ground of appeal raised by the assessee is allowed.
Addition u/s 68 of the Act on account of low creditworthiness of the loan parties - HELD THAT:- The assessee has discharged its onus by furnishing the necessary details such as a copy of PAN, bank details, and ITR etc. in support of identity of the parties, genuineness of transaction and creditworthiness of the parties. Admittedly the learned CIT-A has not doubted on the identity and genuineness of transaction but doubted the credit worthiness of the all parties. Hence the learned CIT(A) sustained the addition made by the AO by holding that the assessee has not discharged the primary onus cast under section 68 .
Now coming to the third condition, i.e. creditworthiness of the parties, regarding this we note that the assessee has submitted that the fund was received through the through banking channel from all the parties. In support, the assessee has submitted their bank accounts, copy of retunred and annual accounts.
Once the assessee has filed primary details evidecing the identity of the party, genuineness of transaction and credit worthiness of the party, the authorities should have made enquiry from the parties who have advanced the loan to find out the sources of funds in their respective hands. As such, the assessee has explained the sources of fund in its hands by producing the identity and bank statement demonstrating that the funds were received through banking channel, which means that at the time of advancing the the laon there was suffient amount in their banks accounts. If the revenue authorities have doubt with respect to the capacity of lender then it should have carried out necessary investigation as provided under the provision of the Act. The assessee on hand is only libale to explain the sources of credit in its hand only but not labile to explain the sources of source. Therefore in our considered view, the assessee has discharged its onus imposed under section 68 - Decided in favour of assessee.
-
2022 (1) TMI 1210
Validity of Reopening of assessment u/s 147 - jurisdictional notice u/s. 148 as issued to a dead person - addition of Long Term Capital Gain [LTCG] in as much as the fair market value as on 01-04-1981 should have been adopted as per Registered Valuer Report - HELD THAT:- In the present case the defect in not confined to notice not being issued in the name of the legal heirs only but has also not been served or received by them. The legal heirs are in fact not even aware of the proceedings being undertaken on them. The question of waiver of notice u/s 148 therefore cannot arise where the person concerned has no knowledge of the proceeding initiated. Being a jurisdictional notice, these defects cannot be termed as mere irregularities which can be cured by participation of the assesses/legal heirs,.
The Hon’ble jurisdictional High Court in the case of P.V Doshi vs Commissioner of Income Tax [1977 (8) TMI 29 - GUJARAT HIGH COURT] has held that provisions conferring jurisdiction cannot be conferred on the authority by mere consent.
The jurisdictional notice u/s 148 of the Act having been issued to a dead assessee and the defect therein being not curable by waiver or consent of the legal heirs, the said notice is an invalid notice and the proceedings conducted in pursuance thereof are not sustainable in the eyes of law. The assessment order passed therefore, we hold, is null and void and thus set aside. - Decided in favour of assessee.
-
2022 (1) TMI 1209
Addition u/s 68 - unexplained Cash Credit - CIT- A deleted the addition - HELD THAT:- With respect to the identity of the party, we find that the AO in his order has given categorical finding that the assessee has furnished the details such as copy of ledger account, bank statements, income tax return, balance sheet etc. It is also pertinent to note that based on such information notice under Section 133(6) of the Act was issued to the above parties which was duly responded by them. From the above, there remains no doubt that the identity of the loan parties is not in disputed, as it has been proved beyond doubt.
With respect to the genuineness of transaction, we note that the assessee has submitted that all the transaction are carried out through banking channel and in support has furnished the copy of bank statement showing the transaction and the same were transferred out of fund received by those company as share capital. However, it is important to highlight that in the assessment of the loan parties, genuineness of the fund received by them were not established. As such these companies were acting as a conduit to convert the unaccounted money into accounting form. In the given facts and circumstances the genuineness of the transactions is not free from doubts.
Once the genuineness of the transaction is not free from doubt, it is implied that the creditworthiness of the parties was not satisfactory so as to advance the loan to the assessee.
The undisputed fact that the amount of loan received by the assessee was refunded to the loan parties. It implies that the assessee was not the beneficiary of the loan received by it as alleged by the AO. Though the loan has been repaid by the assessee in the subsequent year, but it is difficult to hold that the assessee was the ultimate beneficiary of the impugned amount. Thus, we can assume that the impugned transaction was the business transactions between the assessee and the loan parties.
There was a response from the loan parties in response to the notice issued under Section 133(6) of the Act wherein it was confirmed that these companies have advanced loan to the assessee. This reply of the loan parties cannot be brushed aside merely on the ground that the directors were not produced by the assessee during the assessment proceedings. It was the revenue which wanted to verify the directors of the loan companies. For this purpose, lot of powers were available with the revenue such as issuing notice under Section 131 of the Act for inviting the personal attendance of the directors. But the AO has not exercised such power in the given facts and circumstances.
Though the transactions of the loan received by the assessee are not free from any doubt but in either of the case, once repayment of the loan has been established based on the documentary evidence, the credit entries cannot be looked into isolation after ignoring the debit entries despite the debit entries were carried out in the later years. Thus, in the given facts and circumstances, we hold that there is no infirmity in the order of the Ld. CIT-A. Hence, the ground of appeal of the revenue is hereby dismissed. - Decided in favour of assessee.
-
2022 (1) TMI 1208
Penalty u/s. 271(1)(c) - disallowance of expenses - Proof of bonafied error - as per DR non-striking off the irrelevant portion in the notice u/s. 274 r.w.s. 271(1)(c) of the Act dated 03.03.2015 does not create any ambiguity as the assessee was well aware that the proceedings have been initiated for furnishing inaccurate particulars of income - HELD THAT:- It is not disputed that the assessee is eligible for the claim of the expenses but it was disallowed to the extent of ₹ 91,96,966/- out of the total claim of the assessee. We have also considered that the Ld. CIT(A) has observed that the assessee realized the mistake and filed revised statement of income at para 5.2 in quantum appeal. Therefore, the claim made by the assessee was not wrongfully but was on account of bona fide error to the extent for which the amount is added in the total income. This error in making the claim of expenses cannot be equated with the furnishing of inaccurate particular of income.
Considering, the above finding and observations made by the lower authorities and following the decision of Hon’ble Supreme Court in the case of CIT Vs. Reliance Petro Products Ltd. [2010 (3) TMI 80 - SUPREME COURT] - thus we hold that there cannot be a penalty where there was bond fide error in the claim.
We hold that there was wrong claim in the return of income filed by the assessee which cannot partake the characteristics of furnishing in-accurate particular of income. Therefore, we delete the levy of penalty considering it as bona fide error. Hence, the ground of appeal of the assessee is allowed.
-
2022 (1) TMI 1207
Revision u/s 263 by CIT - As per CIT AO has neither questioned nor examined nor verified qua the issue of depreciation claim made by the assessee on spectrum fee and as such depreciation claim allowed by the AO is incorrect being not examined in accordance with provisions contained under section 35ABB - PCIT sought to amortize spectrum fee on pro-rata basis over the period of license under section 35AB of the Act and held the assessment order erroneous insofar as prejudicial to the interest of the revenue - HELD THAT:- AO has allowed the depreciation @ 25% claimed by the assessee company on spectrum fees by treating the same as ‘intangible assets’ under section 32 of the Act by making a discreet enquiry and as such it is neither a case of non application of mind on the part of the AO nor a case of inadequate enquiry. Hence, invoking revisionary jurisdiction by the Ld. PCIT under section 263 of the Act is not sustainable in the eyes of law and the question No.I framed in the preceding para is answered in favour of the assessee, that the assessment order passed by the AO under section 143(3) of the Act allowing depreciation claimed by the assessee @ 25% on “spectrum fee” under section 32 of the Act was not erroneous in so far as prejudicial to the interest of revenue
the issue as to the allowability of depreciation on spectrum fee as claimed by the assessee under section 32 of the Act and the provisions contained under section 35ABB are not applicable has already been decided in favour of the assessee by the Tribunal, the order of the Tribunal cannot be allowed to be disobeyed by Ld. PCIT merely on the pretext that the department has not accepted the said decision and appeal has already been filed before the Hon’ble High Court. In order to maintain judicial discipline Ld. PCIT had no option but to follow the order.
Even on merits the assessee’s claim for depreciation on “spectrum fee” is allowable under section 32 of the Act as the provisions contained under section 35ABB of the Act being not applicable to the issue at hand. Hence, the order passed by the AO is not erroneous. So we are of the considered view that the AO has rightly allowed the claim by virtue of the assessment order framed under section 143 of the Act. So the question No.II framed is also decided in favour of the assessee and against the Revenue.
Impugned order passed by the Ld. PCIT under section 263 of the Act by invoking revisionary jurisdiction is not sustainable in the eyes of law, hence hereby quashed. Resultantly, appeal filed by the assessee is allowed.
-
2022 (1) TMI 1206
Income from house property - deduction under section 24 denied - HELD THAT:- We note that the learned CIT (A) had confirmed the order of the AO denying the deduction under section 24 of the Act after placing reliance on the order of Chennai tribunal in case of of Anjuman-E Himayath- E-Islam [2021 (4) TMI 1176 - MADRAS HIGH COURT] for A.Y.2009-10. However we find that the order which has been relied upon by the learned CIT (A) has been challenged before the Hon’ble Madras High Court, [2021 (4) TMI 1176 - MADRAS HIGH COURT]where Hon’ble bench reversed the order of the Tribunal.
Thus deduction u/s 24(a) is allowable to the assessee. Hence, the ground of appeal of the assessee is allowed.
-
2022 (1) TMI 1205
Reopening of assessment u/s 147 - taxability of transfer of immovable property - HELD THAT:- The provisions of Section 50 C of the income tax act clearly provides that fair market value of the property is required to be substituted as consideration received or accruing as a result of the transfer of a capital asset by the assessee where the actual sale consideration received or accruing is less than the value adopted or assessed by an authority of state government for the purpose of payment of stamp duty in respect of such transfer. The value so adopted or assessed shall be deemed to be the full value of the consideration received or accruing as a result of such transfer for the purposes of computation of capital gain u/s 48. Accordingly for computation of capital gain according to the provisions of Section 48 of the income tax act which is chargeable according to the provisions of Section 45 of the act, the difference between the actual sale consideration and fair market value of the property as described u/s 50C of the income tax act is required to be used.
In the present case for assessment year 2005 - 06 there is no transfer of asset, and therefore, there is no chargeability of capital gain u/s 45 of the act. Thus the provisions of Section 48 are also not triggered for this year. Therefore for assessment year 2005 – 06 there is no implication of provisions of Section 50C.
The learned dispute resolution panel in paragraph number 2.5 has noted that assessee has failed to provide evidence to substantiate its claim of transfer of possession and final receipt of money in assessment year 2004 – 05 and as the property was registered on 23/4/2000 for i.e. during assessment year 2005 – 06, therefore, it confirmed the action of the learned assessing officer to tax capital gain in the assessment year 2005 – 06.
DRP ignored the agreement to sell entered into by the assessee. Further if the learned DRP was of the view that capital gain is chargeable to tax in assessment year 2005 – 06, they should have directed the learned assessing officer to make the total addition of the capital gain in assessment year 2005 – 06. Even for ld AO and ld DRP it cannot act as deterring fact that capital gain is offered by assessee in AY 2004-05, those authorities are required to tax correct income in right hands for right assessment year. Therefore, there is a contradiction in the direction of the learned dispute resolution panel.
No reason to uphold the reopening of the assessment as well as addition on merits for the reason that:-
i. there was no transfer of any capital asset during assessment year 2005 – 06 but in assessment year 2004 – 05.
j. The capital gain has already been charged to tax by the learned assessing officer by passing an order u/s 143 (3) of the act for assessment year 2004 – 05.
k. The provisions of Section 50 C can be applied in the year in which provisions of Section 45, 48 read with Section 2 (47) of the act are triggered. In this case the provisions of Section 45, 48 and 2 (47) of the act are triggered in assessment year 2004 – 05 whereas the learned assessing officer has invoked the provisions of Section 50 C of the act for assessment year 2005 – 06.
l. There was no failure on part of the assessee at least for AY 2005-06, in disclosing fully and truly all material facts, as there was no Transfer u/s 2 (47), nothing was chargeable u/s 45 and therefore no computation was to be made u/s 48 and therefore there is no applicability of section 50C in the year which is reopened by AO.
-
2022 (1) TMI 1204
Revision u/s 263 by CIT - Reopening of assessment u/s 147 - assessment order being held erroneous for non-initiation of penalty proceedings u/s. 271(1)(c) - HELD THAT:- It is clear that post amendment to section 271(1)(c) w.e.f. 1-4-2002 authorizing the commissioner also initiate penalty u/s 271(1)(c), the CIT still cannot direct the Assessing Officer to initiate penalty proceedings while exercising his revisionary power u/s. 263 of the act. The decision of the Jurisdictional High Court in the case of CIT vs. Parmanand M. Patel [2005 (7) TMI 72 - GUJARAT HIGH COURT] still holds fort. The order of the PCIT exercising revisionary powers for directing initiation of penalty proceedings is therefore held to be not in accordance with law and is accordingly set aside.
In view of the above, the exercise of revisionary powers by the Ld. PCIT on account of non-inquiry of the cash deposits in the bank account of the assessee and the interest income earned by the assessee is upheld, while on the aspect of initiation of penalty proceedings is set aside.
The exercise of revisionary powers by the Ld. PCIT on account of non-inquiry of the cash deposits in the bank account of the assessee and the interest income earned by the assessee is upheld, while on the aspect of initiation of penalty proceedings is set aside.- Decided in favour of assessee.
-
2022 (1) TMI 1203
Levy of penalty u/s.271(1)(b) - assessee did not comply to the notice u/s.142(1) and 143(2) and apart from filing the bank details did not appear - HELD THAT:- We find the assessment in the instant case was completed u/s.143(3)/153A - find an identical issue had come up before the Tribunal in the case of Odimco Technologies Pvt. Ltd. [2018 (5) TMI 2108 - ITAT DLEHI] wherein deleted the penalty levied u/s.271(1)(b) wherein do not find cogent reason to observe any willful default on the part of the assessee or non co-operative attitude with the department. Therefore, we find no justification to sustain the penalty imposed u/s. 271(l)(c) - Decided in favour of assessee.
-
2022 (1) TMI 1202
Penalty u/s. 271(1)(c) - Bar of limitation for imposing penalties - HELD THAT:- Proviso in section 275(1)(a) of the Act was inserted in the statute by the Finance Act 2003 w.e.f. 01.06.2003, meaning thereby, the same would be applicable for all penalties levied on or after 01.06.2003. In the instant case, the order of ld. CIT(A) in quantum proceedings was passed on 19.01.2010 and hence the maximum time limit for passing the penalty order would expire by 31.3.2011 in normal course and by 31.03.2012 in abnormal course of delay in receipt of order of ld. CIT(A) by the ld. AO.
Hence either way, the penalty order passed on 30.08.2012 would be squarely barred by limitation. Decisions relied supra by the ld. DR are factually distinguishable as they were rendered for the Asst Years 2001-02 and 2000-01. Admittedly the law prevailing for the Asst Years 2000-01 and 2001-02 for levy of penalty would be governed by section 275(1)(a) of the Act, where the ld. AO could keep the penalty proceedings in abeyance till the order of tribunal was received. But due to insertion of proviso with effect from 01.06.2003, the ld. AO would be entitled to keep the penalty proceedings in abeyance only till the disposal of the first appeal by the ld. CIT(A).
Hence the reliance placed on the decisions by the ld DR would not advance the case of the revenue. Accordingly, as rightly pointed out by the ld. AR before us, the time limit for passing the penalty order would expire by 31.03.2011 i.e one year from the end of the financial year in which the order of ld. CIT(A) is passed is received by the ld. Administrative Commissioner having jurisdiction over the assessee - we hold that the penalty order passed by the ld. AO on 30.08.2012 is squarely barred by limitation in view of proviso to section 275(1)(a) of the Act. Hence levy of penalty is hereby cancelled. - Decided in favour of assessee.
-
2022 (1) TMI 1201
Revision u/s 263 - Disallowance u/s 14A r.w.r. 8D - HELD THAT:- No addition has been made on account of reverse merger which would support the argument of Ld. AR that original assessment order would could not be termed as erroneous and prejudicial to the interest of the revenue on this count. We concur with these arguments and would accordingly, hold that revision u/s. 263 was not justified on this issue.
So far as the disallowance u/s. 14A is concerned, it is quite discernible that this disallowance was subject matter of original assessment proceedings and Ld. CIT(A) had already deleted the disallowance vide order dated 30.01.2019. The revenue's ground of appeal, on this issue, stood dismissed by Tribunal vide order dated 08.09.2021. Nevertheless, it could not be said that Ld. AO failed to make proper enquiries as to disallowance u/s. 14A as alleged by Ld. Pr. CIT. As on the date of revisions, the issue of disallowance u/s. 14A was already adjudicated by learned first appellate authority and the order of Ld. AO stood merged with the appellate order on that date. Therefore, revision of order, on this issue, would have no legs to stand and are liable to be quashed.
-
2022 (1) TMI 1200
TP adjustment made to the international transaction relating to purchase of medical equipments - assessee entered into international transaction with its overseas Associated Enterprise (AE) of providing business support services and marketing support services - HELD THAT:- As decided in own case [2021 (11) TMI 401 - ITAT DELHI] equipment would not have been -/imported at NIL price even in an independent scenario. Moreover, we do not find that the TPO has applied any method to benchmark the said transaction, which action of the TPO is in violation of Rule 10B of the Income Tax Rules. We find that while treating the purchase of capital goods as NIL, the TPO failed to provide any comparable data which would have suggested that the arm's length price for the purchase of capital goods can be NIL. In our understanding, no third party would have sold such goods free of cost. In our considered opinion, arm's length price could be lower or higher but cannot be NIL, as the goods have been imported.
Incidentally, the same products purchased from the same AE, for the same price, in the same year, cannot be held to be at arm's length for trading goods and not at arm's length for capitalised goods at the same time and in the same breath. Considering the facts of the case in totality, we direct the Assessing Officer to allow the claim of depreciation on the purchase of fixed sub grounds is, accordingly, allowed.
Adjustment towards interest on outstanding receivables - delay in receivables from the AE - HELD THAT:- The reason for delay in receiving outstanding invoices has to be looked into. Further, it has been submitted before us that as a matter of principle, the assessee has not charged interest on outstanding receivables, either from AE or non AE. This fact has not been factually examined, either by the TPO or learned DRP. It has to be ascertained, what is the average delay in case of AE and non AE transactions. Similarly, assessee's contention that on outstanding payables to the AE no interest has been charged, requires to be considered and, in case, there are outstanding payables, it has to be set off against outstanding receivables and interest has to be charged on net receivables. As regards, the contention of the assessee that working capital adjustment subsumes outstanding receivables, in our view, this may be correct in so far as receivables remaining outstanding at the end of the year. However, the invoices raised and realized during the year, but, beyond the credit period cannot get subsumed in the working capital adjustment. Since, all these factors have not been considered by the Departmental Authorities, we are inclined to restore this issue to the Assessing Officer for fresh adjudication.
As far as the rate of interest is concerned, it is open to the assessee to furnish material before the Assessing Officer to demonstrate that the rate of interest, if any, chargeable on the outstanding receivables, would be less than, what has been determined by learned DRP.
Addition of mark-up of 5% on recovery of expenses from AE - HELD THAT:- We find that certain expenses incurred by the assessee on behalf of the AE have been reimbursed on cost to cost basis. Similarly, certain expenses incurred by the AE on behalf of the assessee, have also been reimbursed on cost to cost basis. Learned counsel for the assessee has demonstrated before us that invoices towards the cost incurred have been raised on back to back basis on the AE. Thus, in our view, there is no need to charge any mark-up on such reimbursement of expenses, more so, when the AE is not charging any mark-up on the cost incurred by it on behalf of the assessee. In view of the aforesaid, we delete the adjustment.
Non-grant of set-off of brought forward unabsorbed depreciation against the addition made to the total income on account of transfer pricing adjustment - HELD THAT:- We direct the Assessing Officer to grant set-off of brought forward unabsorbed depreciation after the issue is crystallized in the preceding assessment years. This ground is allowed for statistical purposes.
-
2022 (1) TMI 1199
Penalty u/s. 271(1)(c) - assessee stated to have been admitted additional income in survey conducted u/s. 133A - CIT-A deleted the addition - HELD THAT:- As relying on S.S.M. AHMED HUSSAIN [2017 (8) TMI 929 - MADRAS HIGH COURT], VIPUL LIFE SCIENCES LTD. MUMBAI [2015 (2) TMI 941 - ITAT MUMBAI] and VASAVI SHELTERS [2013 (4) TMI 485 - ITAT BANGALORE] when assessment is completed on the basis of income declared which is inclusive of additional income declared in the course of survey without making any addition thereon, the penalty u/s. 271(1)(c) of the Act for concealment of income is not warranted. The ld. DR did not dispute that the AO completed assessment on the basis of return of income which is inclusive of the additional income said to have been offered to tax during the course of survey u/s. 133A of the Act. Therefore, we do not find any infirmity in the order of CIT(A) and it is justified. - Decided against revenue.
-
2022 (1) TMI 1198
Revision u/s 263 - as per CIT neither the TPO, nor the Assessing Officer had made any inquiry in respect of various models of earth moving equipments, except 3DX model - CIT was of the view that the orders passed by the TPO and the Assessing Officer are erroneous and prejudicial to the interest of Revenue - TPO determined the ALP of royalty to the AE at 2% in respect of 3DX model, however, he has not suggested any adjustment on other models, like 2DX, excavators, JCB Earth Movers, JCB Heavy Wheel loader etc - HELD THAT:- Notice issued under Section 263 of the Act as well as the order passed under the said provision would make it clear that learned PCIT has considered the assessment order to be erroneous and prejudicial to the interest of revenue, since, the TPO has not examined the arm's length nature of royalty paid to the AE in respect of other models of earth moving equipment.
The show-cause notice issued under Section 263 of the Act and the order passed there under would leave no room for doubt that the shortcoming, according to the PCIT, is in the order passed by the TPO under section 92CA(3) of the Act due to non-inquiry/non-examination of certain transaction. However, section 263(1) empowers the Revisionary Authority to revise any order passed by the Assessing Officer, if in his opinion, such order is erroneous and prejudicial to the interest of Revenue. Thus, due to restriction imposed under section 263(1) of the Act, learned PCIT has no administrative power to revise the order passed by the TPO under section 92CA(3) of the Act. Therefore, the question arising for consideration is, when the PCIT has no power to revise the order passed by the TPO under section 92CA(3) of the Act, can he revise the assessment order which has been passed in conformity with the order of the TPO, as mandated under Section 92CA(4) of the Act? Our answer to the question is in the negative.
When the provision contained under Section 92CA(4) of the Act makes it mandatory upon the Assessing Officer to compute the total income of the assessee in conformity with the order of the TPO and the Assessing Officer has computed the total income following the statutory mandate, the assessment order cannot be considered to be erroneous. Even, assuming that some prejudice might have been caused to the Revenue, nevertheless the twin conditions of 'erroneous' and 'prejudicial' to the interest of the revenue as provided under section 263(1) of the Act have to be fulfilled to enable the Revisionary Authority to assume jurisdiction under the said provision. Thus, once learned PCIT has no administrative power under Section 263(1) of the Act to revise the order of the TPO, he cannot revise the assessment order passed thereafter in compliance to the provision contained under Section 92CA(4) - See ESSAR STEEL LIMITED VERSUS ADDL. COMMISSIONER OF INCOME TAX, MUMBAI [2014 (4) TMI 809 - ITAT MUMBAI]
Non-examination of royalty payment on other models of earth moving equipment - Facts on record clearly reveal that every details relating to the royalty paid on all models, including 3DX model was furnished before the TPO and were examined by him. The reason for him to accept the royalty paid on other models is, similar payments were accepted consistently in the preceding assessment years. Therefore, the view of the TPO in accepting the royalty paid in respect of other models is a possible view considering the past history of such payment. That being the case, the orders passed by the TPO and thereafter by the Assessing Officer in conformity thereof, cannot be considered to be erroneous and prejudicial to the interest of the Revenue. In any case of the matter, neither in the show-cause notice, nor in the order passed under Section 263 of the Act, learned PCIT has provided any valid reason to demonstrate the prejudice caused to the Revenue. He has not pointed out even a single reason how the royalty paid on other models is not at arm's length, except, saying that the TPO has not inquired into and examined the royalty paid on other models.
Thus as a natural corollary, the impugned order passed under Section 263 of the Act has to be declared as invalid and quashed. Accordingly, we do so. Resultantly, assessment order is restored.- Decided in favour of assessee.
-
2022 (1) TMI 1197
Short term capital gain on transfer of shares - taxable event arose in the year under appeal or not? - Transfer of capital assets during the financial year in terms of the provisions of section 2(47) - transfer of shares is complete between transferor and the transferee in terms of amended provisions of section 2(47) - CIT(A) held that the transfer is not complete in the year under appeal and gain arising out transfer of shares can be subjected to tax - whether the capital gain arising out of transfer of shares in question cannot be taxed in the year under appeal? - HELD THAT:- Agreement between the parties did not attain finality during the year under consideration hence, the impugned transaction in part ought not to have been taxed in the year under consideration. In our considered view, the Agreement is to be a read as a whole, the transfer of shares under dispute cannot be read into isolation. Moreover, one of the challenge before the Hon'ble High Court [2018 (4) TMI 549 - DELHI HIGH COURT] was regarding legality of MOU dated 03.03.2008. It was categorically prayed that MOU was void being contrary to the provisions of section 297 of the Companies Act, 1956. Therefore, under the peculiarity of the facts where the legality and validity of Agreement was under challenge, we do not see any infirmity into the order of Ld. CIT(A) to the extent it is held that the transfer of shares cannot be subjected to capital gain tax in the year under consideration on the ground that the entire transaction has not fructified - Decided against revenue.
............
|
9911796707
Advanced Search 
