|
Advanced Search Options
Case Laws
Showing 281 to 300 of 1564 Records
-
2022 (12) TMI 1284
Validity of Order of Assessment passed u/s 143(3) r/w. Section 144B - as argued Show Cause Notice issued in terms of Section 144B sub-section (6), clause (vii) of the Act, did not provide to the petitioner a reasonable opportunity of filing a response to the said show cause notice - HELD THAT:- In our opinion, the time that was made available to the petitioner to file its response to the show cause notice was quite inadequate and illusory and therefore, the principles of natural justice can be said to have been violated in the case of the petitioner.
Be that as it may, we allow the petition and accordingly pass the following order :-
(i) Order of Assessment dated 18th September 2022, passed under Section 143(3), r/w. Section 144B, of the Income Tax Act, 1961, relevant to the Assessment Year 2020-21, is set aside and the matter is remanded back to the Assessing Officer, who shall consider the objections to the Show Cause Notice dated 13th September 2022, which shall be filed within two weeks from today, for which the system be enabled accordingly.
(ii) Petitioner be also given an opportunity of being heard in terms of Section 144(6)(vii) of the Income Tax Act, and thereafter proceed to pass appropriate orders in accordance with the law.
-
2022 (12) TMI 1283
Validity of Reopening of assessment u/s 147 - whether personal hearing a condition precedent before an order is made under Section 148 A (d)? - HELD THAT: - As in the light of the Circulars which has prescribed the procedure to be followed if a request for personal hearing is made and which expressly provides for grant of personal hearing vide Clause viii of the Department circular in F.No.299/10/2022-Dir(Inv.III)/611, dated 01.08.2022 - the above Circular is binding and it may not be open to the Revenue to contend to the contrary.
In view of the fact that the Circular which is binding has provided for personal hearing, we do not propose to examine Section 148 A to find if personal hearing is mandatory or otherwise.
Writ Petition is allowed and it is held that personal hearing is necessary in terms of the Circular.
-
2022 (12) TMI 1282
Reopening of assessment u/s 147 - Reason to believe - short disallowance u/s 14A - HELD THAT:- There shall be no gainsaying that the issue about the allowable expenditure u/s 14A was gone into by the AO at the time of scrutiny assessment on the basis of material and the information supplied and available with it. Notice u/s 148 was issued in respect of assessment year 2014-2015, after four years from the end of the year consideration. The pre-requisite was to show that there was failure on part of the petitioner assessee in fully and truly disclosing the facts as per the first proviso to section 147 of the Act.
In the facts of the case, there was full and true disclosure in the year under consideration on the part of the assessee. The submission could not be brushed aside lightly that on the said ground alone, the notice issued by the respondent under section 148 of the Act was liable to be set aside.
As could be seen AO had acted to undertake the assessment, which ended up with the assessment order under section 143(3) of the Act, in which the aspect of allowability of interest under section 14A was considered alolngwith the other aspects on the basis of the material and conscious decision was taken reflected in the assessment order. It is on the basis of the very facts that the assessing officer wanted to reopen the concluded assessment proceedings. It amounted to change of opinion.
It is well settled that mere change of opinion could not be a ground for the AO to reopen the concluded assessment. In Commissioner of Income Tax vs. Kelvinator of India Ltd. [2010 (1) TMI 11 - SUPREME COURT] the supreme court observed that concept of change of opinion was an inbuilt test and it did not stand obliterated after substitution of section 147 in the Act by the Direct Tax Laws (Amendment) Act, 1987 and 1989.
AO issued notice u/s148 only to make a roving inquiry into the facts which were already considered and which had gone into his consideration and decision. It appeared that the assessing officer wanted to re-verify the facts, which is not an acceptable ground for exercising powers to reopen the assessment. - Decided in favour of assessee.
-
2022 (12) TMI 1281
Reopening of assessment u/s 147 - transactions in question were in the nature of partners’ capital withdrawal - HELD THAT:- In response to the summons under section 131(1A) the petitioner explained that there was a development agreement entered into between M/s. Sarthak Enterprise and M/s. Savy Unispace Pvt. Ltd. M/s. Sarthak Enterprise received certain amountg as advances from M/s. Savy Unispace Pvt. Ltd. which was partially withdrawn by the petitioner who was partner in the firm M/s. Sarthak Enterprise. The petitioner produced copy of the account from M/s. Sarthak Enterprise alongwith copies of acknowledgment of the returns filed by the firm, copies of accounts of M/s. Savy Unispace Pvt. Ltd was also produced and the bank account of M/s. Savy Unispace Pvt. Ltd was also shown duly reflecting the source of M/s. Sarthak Enterprise for made to the petitioner.
The above facts show that the amount was received by the petitioner as partners’ capital. The amount received had a valid source. The petitioner utilised the amount for repayment of loan obtained from Munjal B. Shah. Therefore, the account reflected that there was an element of income in the transaction. The question of escapment of income chargeable to tax did not arise. The assessing officer misdirected himself in invoking powers to reopen the assessment
Undisputedly powers to reopen the assessment were exercised beyond four years from the end of the relevant assessment year. Therefore the First Proviso to section 147 of the Act would require the assessing officer to establish that the assessee had failed to fully and truly disclose all material facts.
As in the communication whereby the reasons recorded were supplied, no satisfaction was recorded by the assessing officer that the income chargeable to tax has escaped assessment. Not only the said requirement was not satisfied, but as seen above, there was no actual escapment of income as well. The formation of opinion by the assessing officer for the purpose of exercise of powers to reopen the assessment could be said to have been vitiated to be rendered bad in law. For all the aforesaid reasons, the petitioner is entitled to succeed.
-
2022 (12) TMI 1280
Revision u/s 263 - assessee had claimed exemption u/s.54F of the Act against the long term capital gain arising on sale of shares and the said claim had been accepted by the Assessing Officer - HELD THAT:- We notice that the assessee has specifically state that the sale deed is not registered and the AO was very much aware of it. From the queries and replies mentioned above, we are of the view that the AO has conducted proper enquiries and taken a decision.
Whether the decision taken by the AO can be considered as a plausible view? - As in case SURESHCHANDRA AGARWAL VERSUS INCOME-TAX OFFICER, WARD 20 (3) (3) [2011 (9) TMI 243 - ITAT MUMBAI] Tribunal has expressed the view that the requirement of registration is not there for construing the meaning of “transfer” u/s 2(47)(v) of the Act. Thus the above said decision is contrary to the view expressed by Ld PCIT in the impugned revision order, meaning thereby, the view taken by the AO should be considered as one of the possible views. In the case of Malabar Industrial Company [2000 (2) TMI 10 - SUPREME COURT] has held that, if the AO has taken one of the possible views, then the assessment order cannot be considered to be prejudicial to the interests of revenue merely for the reason that the Ld PCIT has got different view on the very same matter. Hence the impugned revision order is liable to be quashed on this ground alone. Thus we are unable to sustain the impugned revision order passed by Ld PCIT - Decided in favour of assessee.
-
2022 (12) TMI 1279
TDS Credit - AO issued notice u/s 139(2) for the reason that credit of TDS has been claimed, but the corresponding receipts/income has been omitted to be offered for taxation - HELD THAT:- If the assessee has offered income to tax in either in the current year or any earlier year and TDS has been deducted on the same in the current year at the time of execution of sale deed, credit for the TDS so deducted should be allowed to the assessee in the current year, subject to the assessee producing the necessary supporting to show that corresponding income has been offered in tax either during the current year or any of the earlier previous years.
The buyer/purchase of property deducted tax only at the time of execution of sale deed, while the corresponding income has been offered to tax by the assessee either during the current year or in any of the prior years by the assessee following the percentage completion method.
Accordingly, in the above facts, the matter is being restored to the file of AO to carry out the necessary verification in respect of income offered to tax and the corresponding TDS for which credit is being claimed and TDS credit may be allowed after carrying out the necessary verification in the year when TDS has been deducted - subject to the assessee producing the correlation that such income has been offered to tax either during the current year or any of the earlier previous years. Appeal of the assessee is allowed for statistical purposes.
-
2022 (12) TMI 1278
TDS credit treated as income of the assessee - Nature of income - Jaypee Associates Limited (‘JAL’) liability to withhold taxes in respect of payment made to the Appellant - assessee is the commercial rights holder of Formula One World Championship as exclusively entitled to award event promoters with the right to host, stage and promote Grand Prix on various Circuits worldwide and in that capacity entered into a Race Promotion Contract (RPC) with Jaypee Sports International Ltd. [now merged with Jaiprakash Associates Limited (JAL)] granting right to host the Indian Grand Prix - TDS credit claimed by the assessee is over and above the actual RPC fee paid to the assessee by JAL -TDS u/s 195 - existence of fixed place PE and liability of JAL to deduct tax at source on the RPC fee paid to the assessee - while computing the tax demand AO did not grant credit for TDS by JAL, though, the TDS amounts were reflected in Form 26AS of the assessee - In the final assessment orders the Assessing Officer held that the consideration received by the assessee with the Indian Grand Prix represented its profit with 56% of the said profit being attributable to the PE in India
HELD THAT:- Credit/actual payment of RPC fee to the assessee, JAL had not deducted any amount of tax at source in terms of section 195 of the Act. This is, probably by entertaining a view that RPC fee is not taxable in India. However, on an application filed by the assessee before the AAR, a Ruling was delivered holding that RPC fee is in the nature of royalty in terms of Article 13 of India – UK Tax Treaty. Thus, AAR held that JAL was obliged to deduct tax at source on the RPC fee paid to the assessee. Being aggrieved with the AAR Ruling, both the assessee and JAL filed Writ Application before the Hon’ble Delhi High Court. In their judgment, the Hon’ble Delhi High Court overruled the decision of AAR by holding that RPC fee is not in the nature of royalty. However, the Hon’ble High Court held that the assessee had a fixed placed PE in India; hence, the RPC fee is taxable in India. Thus, the Hon’ble High Court held that the JAL was bound to make appropriate deduction under section 195 of the Act from the RPC fee paid to the assessee. Admittedly, by the time, the decision of the Hon’ble Delhi High Court came, which ultimately got confirmed by Hon’ble Supreme Court, JAL has paid the RPC fee to the assessee without withholding tax under section 195 of the Act. Thus, it is a fact on record that the RPC fee received by the assessee was the full amount without suffering any withholding of tax at source.
This is the reason, why the assessee did not claim credit for TDS in return of income. Subsequently, as a consequence of the judgment of the Hon’ble Delhi High Court, proceedings under section 201 of the Act was initiated against JAL on account of failure to deduct tax at source under section 195 of the Act and basis demand raised under section 201(1) and 201(1A) of the Act, JAL deposited the amount of tax which should have been withheld under section 195 of the Act while paying RPC fee to the assessee. Of course, it is a fact on record that TDS credit of Rs.35.68 crores appears in favour of assessee in Form 26AS. Subsequently, JAL has also issued TDS certificates in Form 16A in favour of the assessee in respect of TDS deposits. However, it is a fact on record that the TDS credit claimed by the assessee is not a part of the income offered to tax in the returns of income. The TDS credit claimed by the assessee is over and above the actual RPC fee paid to the assessee by JAL.
Thus, essentially the TDS credit now claimed by the assessee is in the nature of an additional income over and above the RPC fee the assessee was entitled to receive under the contract. Thus, it is an additional item of income which has not suffered tax at the hands of the assessee. Therefore, the issue arising for consideration is, what is the nature of such income at the hands of the assessee. In this regard, we accept the submission of learned counsel for the assessee that the TDS credit partakes the character of original income, i.e., the RPC fee and has to be taxed in the same manner in which the Assessing Officer taxed the RPC fee.
We direct the AO to factually verify the actual amount of TDS credit by matching figures in Form 26AS and TDS certificates issued in Form 16A and thereafter treat the TDS credit as income of the assessee partaking the character of RPC fee and tax it in the same manner in which RPC fee was brought to tax in the final assessment order. At this stage, we make it clear that the mandate given to the Assessing Officer in this order is only for taxation of the TDS credit and no other item of income. Needless to mention, before deciding the issue, the Assessing Officer must provide a reasonable opportunity of being heard to the assessee.
-
2022 (12) TMI 1277
Addition on account of creditors - assessee had failed to establish the genuineness of the creditors - AO made the addition against 13 creditors only by taking view that either they have no response or the notices under section 133(6) were not complied - CIT-A deleted the addition - HELD THAT:- AO has not segregated the parties who have not complied with or the notice of which parties were returned back with the remarks of Postal Authorities “incomplete addresses, or not found”. AO made addition by taking view that assessee has not furnished complete details. We find that the AO added the addition of sundry creditors under section 68 instead of section 69C - As noted above, before the Ld. CIT(A) assessee filed detailed written submission. The submission of assessee also consider by Ld. CIT(A) that assessee have shown WIP of Rs. 9.31 Crore.
CIT(A) further noted that the assessee claimed that all the details of creditors were furnished before assessing officer and that in subsequent year all most of the payments were made, which is not doubted by the assessing officer. We find that once the payment in subsequent assessment year has been accepted in the scrutiny assessment as genuine, the same cannot he left as treated in-genuine. Moreover, the assessee has made TDS against such payment of labour contractors wherever applicable. In view of the aforesaid discussion, we do not find any reason to devoid the findings of Ld. CIT(A). This ground of Revenue’s appeal is dismissed.
Nature of expenses - Loan Processing Charges - CIT-A deleted the addition - HELD THAT:- CIT(A) accepted the contention that such expenses were revenue in nature and allowable under section 37(1) of the Act. Such expenditure was paid through account payee cheque and expenditure were incurred for the purpose of assessees good business. We find that the contention of assessee throughout the proceedings that loan processing charges were borne by assessee to attract the buyers book flats and Assessing Officer has not investigated the fact either bank or financial institutions or from the buyers whether the loan processing charges borne by assessee. The details fact alleged buyers and bank may have been available with the AO. No investigation is made either from the buyer or from other bank or financial institute by assessing officer. AO made addition / disallowance without making thorough investigation of fact and disbelieve the contention of assessee. CIT(A) granted relief on appreciation of fact that loan processing charges were born by assessee-firm to attract the buyers for booking flats of assessee as in the nature of revenue expenditure allowable under section 37(1) of the Act. Such view of Ld. CIT(A) does not warrant any inference.
Appeal of the Revenue is dismissed.
-
2022 (12) TMI 1276
Revision u/s 263 by CIT - assessee company has not made any submission to substantiate that it had submitted complete details pertaining to the expenses charged to the P&L account under the head “other advertisement and sales promotion expenses” - HELD THAT:- A perusal of the assessment order clearly shows that the AO during the course of assessment proceedings had called for the details of advertisement and sales promotion expenses.
As held in various decisions that for invoking jurisdiction u/s 263 of the I.T. Act, the twin conditions namely, (a) the order is erroneous and (b) the order is prejudicial to the interest of the Revenue must be satisfied. However, in the instant case, the order may be prejudicial to the interest of the Revenue, but it cannot be said to be erroneous since the AO after conducting necessary inquiries by calling for information and having gone through the details furnished by the assessee has taken a possible view. Merely because the learned PCIT does not agree with the view taken by the Assessing Officer, the order cannot be said to be erroneous or not a possible one. Under these circumstances, since one of the twin conditions i.e. the order is not erroneous is not satisfied, therefore, we hold that the learned PCIT is not justified in invoking jurisdiction u/s 263 - Accordingly, the order of the PCIT passed u/s 263 of the I.T. Act is set aside and the grounds raised by the assessee are allowed.
-
2022 (12) TMI 1275
Levy of penalty u/s. 271(1)(c) - transfer pricing adjustment that were initially suggested by TPO but were subsequently enhanced by Ld. CIT(A) - HELD THAT:- We find that the enhancement to transfer pricing adjustments directed by Ld. CIT(A), was challenged by the assessee before the Tribunal. The co-ordinate Bench of Tribunal vide order [2019 (8) TMI 184 - ITAT DELHI] had directed the inclusion/exclusion of certain comparables.
Assessee has also made correspondence with the A.O. wherein assessee has inter alia requested him to carry out the appeal effect consequent to the directions of Tribunal, which is yet to be carried out by the A.O. It is the contention of the assessee that if the directions of the Tribunal for inclusion/exclusion of comparables are carried out by the A.O. then there would remain no basis for making any TPA. The aforesaid factual contention of the Ld.AR has not been controverted by the Revenue. In such a situation, considering the totality of the aforesaid facts we find force in the contentions of the Ld.AR that no adjustment on transfer pricing issue would subsist and therefore there is no question of penalty u/s. 271(1)(c) on such addition. We therefore direct the deletion of penalty u/s. 271(1)(c) - grounds of assessee are allowed.
-
2022 (12) TMI 1274
Reopening of assessment u/s 147 - Reason to believe - as argued CIT had granted his approval u/s.151 of the Act in a mechanical manner i.e., without any application of mind - validity of the jurisdiction that was assumed by the A.O for initiating proceedings u/s 147 and framing the consequential assessment - validity of the addition made by the A.O u/s 68 of the Act of the simpliciter cash deposits in the assessee’s bank accounts - sustainability of the addition made by the A.O in the backdrop of the merits of the case - HELD THAT:- We are unable to find favor with the same. On a perusal of the approval/sanction granted by the Pr. CIT, Raipur, find that the latter after duly recording his satisfaction had granted the sanction to the A.O for issuing notice u/s.148 of the Act to the assessee - the challenge thrown by the Ld. AR to the validity of jurisdiction assumed by the A.O on the basis of his multi-facet contentions being grossly misconceived and misplaced cannot be accepted and are accordingly rejected.
Addition of simplicitor cash deposits in his bank accounts as unexplained cash credit u/s.68 - We find substance in the contentions advanced by the Ld. AR. As stated by the Ld. AR, and, rightly so, as the bank account statement/bank passbook cannot be treated as books of accounts of the assessee, hence, no addition in respect of the cash deposits could be validly made u/s.68.
As the bank accounts of the assessee could not have been held to be the “books of account” of the assessee maintained for any business or profession, therefore, no addition u/s.68 of the Act could have been made in respect of the simplictor cash deposits made in the said bank accounts.
Disallowance made u/s.14A - Both the lower authorities had grossly erred in law and the facts of the case in disallowing/sustaining the disallowance of the interest expenditure u/s.14A of the Act. As held in the case of CIT Vs. Sociedade De Fomento Industrial (P). Ltd. [2020 (11) TMI 277 - BOMBAY HIGH COURT] the A.O before rejecting the disallowance offered by the assessee remains under a statutory obligation to give a clear finding with reference to the accounts of the assessee that the other expenditure which were being claimed to have been incurred in respect of the non-exempt income, were in fact related to its exempt income.
As in the case of the present assessee neither of the lower authorities had demonstrated that as to how any part of the interest expenditure as was claimed by the assessee as a deduction, was not relatable to any part of its taxable income - disallowance made by the A.O u/s.14A cannot be sustained and is accordingly vacated.
-
2022 (12) TMI 1273
Revision u/s 263 - As per CIT, AO has not examined corpus donations and AO has wrongly allowed exemption u/s 11 / 12 despite the fact that the assessee was not registered u/s 12AA and hence not eligible for exemption - HELD THAT:- We find that during the course of assessment-proceeding, there were specific queries raised by Ld. AO with regard to the corpus donation and the assessee too made detailed replies / submissions. To this extent, there is no dispute or rebuttal by revenue. Clearly, therefore, it is discernible that the Ld. AO has considered those replies / submissions. Regarding non-registration of assessee u/s 12A, we are convinced with the legal provisions of section 12A(2) as well as CBDT Circular according to which the Ld. AO has rightly allowed the exemption u/s 11 / 12 to assessee.
Regarding introduction of Explanation 2 to section 263, as claimed by Ld. PCIT in his order, we only need to state that it is by now well-settled in several decisions that the said Explanation does not give unfettered power to the PCIT to assume revisional-jurisdiction to revise every order of the AO to re-examine the issues already examined during assessment-proceeding. It is judicially interpreted in several decisions that the intention of legislature behind introduction of Explanation 2 could not have been to enable the PCIT to find fault with each and every assessment-order in unlimited terms, since such an interpretation would lead to unending litigation and there would not be any point of finality of assessment-proceeding done by Ld. AO.
Hon’ble ITAT, Rajkot in M/s Pramukh Realty, Junagadh [2022 (7) TMI 384 - ITAT RAJKOT] has extensively dealt a case where the AO raised queries during assessment-proceeding and the assessee filed details / documents. After a thorough analysis, the Hon’ble Bench has held that in such circumstances, revision u/s 263 cannot be done.
Thus we are persuaded to hold that the facts of the present case do not warrant application of section 263. - Decided in favour of assessee.
-
2022 (12) TMI 1272
LTCG - year of assessment - as argued by assessee that once the amount is brought to tax in A.Y 2014-15, therefore, the addition of the same in this year amounts to double addition of the same amount - whether the income on sale of 23 flats has been brought to tax during the A.Y 2015-16 correctly or not? - HELD THAT:- The various other decisions relied on by assessee support the arguments of assessee that the same amount cannot be taxed twice in two different A.Ys. Under these circumstances, we deem it proper to restore the issue to the file of the AO with a direction to verify the record and if the amount of Rs.2,91,07,000/- has been brought to tax in A.Y 2014-15, then the same should be deleted from A.Y 2015-16. We hold and direct accordingly. Needless to say, the AO shall give due opportunity of being heard to the assessee while deciding the issue. The first issue raised by the assessee in the grounds of appeal are accordingly allowed for statistical purposes.
Deduction of indexed cost of acquisition wherein the assessee has challenged the order of the Assessing Officer in not granting indexed cost of acquisition - DRP has directed the AO to reduce the indexed cost of acquisition from the sale consideration and arrive at the correct LTCG. A perusal of the assessment order shows that the Assessing Officer has not granted the benefit of indexed cost of acquisition from the sale consideration to arrive at the correct LTCG. We, therefore, direct the Assessing Officer to follow the direction of the DRP and allow indexed cost of acquisition from the sale consideration. Ground raised by the assessee on this issue is accordingly allowed.
Reversing 54F deduction granted in A.Y 2012-13 - HELD THAT:- A perusal of the order of the DRP at para 2.4.5 shows that the Assessing Officer in the draft order for A.Y 2014-15 has already brought to tax the amount of Rs.6,77,04,992/- as LTCG which was allowed u/s 54F in A.Y 2012-13. However, the DRP at Para 2.4.6 of the order sustained the addition made by the Assessing Officer on the ground that the same is made on protective basis. Since in the instant case, the flats were allotted to the assessee as per the JDA on 13.01.2012 and the flats were sold on 24.3.2015, therefore, the new asset was sold after a period of 3 years and therefore, the provisions of section 54F(3), in our opinion, shall not apply. Further, when the entire sum of Rs.6,77,04,992/- was reversed in A.Y 2014-15, therefore, again addition of the same, under protective basis, in A.Y 2015-16, in our opinion, is also not justified. We, therefore, direct the AO to verify the record and if the amount of Rs.2,99,46,438/- has already been brought to tax in A.Y 2014-15 or the transactions for the year under consideration is beyond a period of 3 years, then not to make any addition by reversing the deduction already allowed u/s 54F in A.Y 2012-13. Needless to say, that the AO while verifying the record shall give due opportunity of being heard to the assessee and decide the issue as per fact and law. We hold and direct accordingly. Grounds of appeal are accordingly allowed for statistical purposes.
Credit of tax paid in A.Y 2016-17 to A.Y 2015-16 - HELD THAT:- Respectfully following the decision of M/S. INTERGLOBE ENTREPRISES PVT. LTD. [2022 (8) TMI 98 - ITAT DELHI] we restore the issue to the file of the Assessing Officer with a direction to verify the record and if any other benefit is not claimed by the assessee in respect of the amount of tax of Rs.1,00,07,393/- paid in A.Y 2016-17, in respect of the income then allow the credit of the same for the A.Y 2015-16. Ground of appeal No.4 raised by the assessee is accordingly allowed for statistical purposes.
-
2022 (12) TMI 1271
Penalty u/s. 271(1)(c) - disallowance of depreciation on land, disallowance u/s. 14A r.w.r 8D and addition on account of income from house property shown under the head income from other sources - HELD THAT:- The issue in the present appeal is with respect to levy of penalty u/s. 271(1)(c) - We find that identical issue of levy of penalty was before the coordinate bench of Tribunal for A.Y. 2015-16 in assessee’s own case [2022 (10) TMI 1137 - ITAT DELHI] - no penalty u/s. 271(1)(c) of the Act, is leviable in the present case. Thus the ground of assessee is allowed.
-
2022 (12) TMI 1270
Levy of penalty u/s 271(1)(c) - addition on account of short term capital gains on sale of Helicopter - addition made u/s 50 - Disallowance of excess depreciation and disallowance of Helicopter expenses - HELD THAT:- The addition was made based on the information provided by the appellant during the course of assessment proceedings and on the basis of information contained in the Return of Income. Therefore, the appellant cannot be held guilty of furnishing of inaccurate particulars of income nor concealing of particulars of income. Since the information filed along with return of income, unequivocally stated that the Helicopter was sold for a consideration but, the appellant had failed to reduce the entire consideration received on sale of Helicopter from opening WDV of the block of assets under which the Helicopter falls and offered to tax the excess of sale consideration over opening value WDV of block of the assets.
It is not even a case of wrong claim made by the assessee in the return of income. The fact that the entire information regarding the sale of the Helicopter was available in the return of income, an accompanied document, would go to show that it is bona-fide inadvertent error and the ratio of the decision of Price Waterhouse Coopers (P.) Ltd [2012 (9) TMI 775 - SUPREME COURT] is squarely applicable. The mere fact that the assessee had chosen not to contest the addition in the appellate forum, cannot automatically entail levy of penalty as held by the Hon’ble Supreme Court in the case of Sir Shadi Lal Sugar & General Mills Ltd.[1987 (7) TMI 3 - SUPREME COURT]
The appellant cannot be held guilty of furnishing inaccurate particulars of income or concealing the particulars of income and it is not a fit case for levy of penalty u/s 271(1)(c) of the Act. Hence, we reverse the orders passed by the lower authorities and quash the penalty order. Thus, the grounds of appeal filed by the assessee stand allowed.
-
2022 (12) TMI 1269
TDS u/s 195 - Scope of “make available” - payment made by the assessee to its non-resident group company as Fees for Technical Services [FTS] by concluding that services “make available”, technology, knowledge, skill, know-how or processes to the assessee as per Article 13 of India-UK DTAA [DTAA] - AO noticed that the assessee has paid an amount to its holding company CPP Limited, UK but has not deducted tax at source claiming that Information Support System Services availed by the assessee company do not fall under the definition of FTS under Article 13 of the DTAA - HELD THAT:- As in order to invoke make available clauses, technical knowledge and skill must remain with the person receiving the services even after the particular contract comes to an end and the technical knowledge or skills of the provider should be imparted to and absorbed by the receiver so that the receiver can deploy similar technology or techniques in the future without depending upon the provider.
Intellectual property is with the supplier [UK based company]. Facts of the case in hand clearly show that there is no transfer of skill or technical services. The recipient [assessee] has not been enriched by receiving the services and making it capable to face similar challenges in future on its own and acquiring skills to deal with the issues. Rendition of these services by the UK company does not enable the recipient [assessee] to provide similar services without recourse to the service provider in future. Merely incidental benefit or enrichment is not sufficient.
Assessee is unable to make use of the said technology only by itself in its business or for its own benefit without recourse to the UK company.
We find that neither the AO nor the ld. CIT(A) has made any attempt to discuss the judicial decisions relied upon by the assessee but has only referred to a single decision of the co-ordinate bench in the case of HJ Heinz [supra] wherein the assessee was availing support services from group company in the area of human resources, strategic planning and marketing, finance and information systems.
The concept of make available which requires that fruits of services should remain unavailable to the service recipients in some concrete shape such as technical knowledge, experience, skill, etc and service recipient has to make use of such technical knowledge, skill, etc by himself in his business and for his own benefit.
Whereas the facts of the case in hand show that the assessee does not gain any technical knowledge, experience or skill as it is not involved in the process that service provider is following while rendering the services. The IT support services are rendered by CPP UK from UK itself and these services are rendered for the entire group and not just for CPP India.
The agreement between CPP group services and the assessee is perpetual and such services are provided by CPP group on recurring basis to the assessee and if the technical knowledge, skill etc. is being made available to the assessee, then there would be no need for the assessee to take recourse to the CPP UK for these services.
Thus IT support services do not satisfy the make available test as no technical know-how, skill etc were transferred to the assessee. Considering the facts of the case in totality, in light of judicial decisions discussed hereinabove, we direct the Assessing Officer to delete the disallowance - Appeal of assessee allowed.
-
2022 (12) TMI 1268
Unsecured loans - assessee is not able to prove loans taken from certain persons and thus, out of unsecured loans - HELD THAT:- Assessee has satisfactorily explained the identity, genuineness of transaction and creditworthiness of loan creditors. AO without appreciating the fact simply made additions to part of loan taken from creditors, even though, he has accepted the fact that the assessee has filed all evidences to prove identity of the creditors. It is a well settled principle of law by the decision of various courts, including the decision in the case of CIT v. Lovely Exports Pvt. Ltd. [2008 (1) TMI 575 - SC ORDER] that once name and address of creditors are furnished to the AO, then, it for the AO to proceed in accordance with law to re-open the assessment of creditors, but sum received from creditors cannot be regarded as unexplained credit/ income of the assessee. In this case, the assessee has furnished all evidences to prove the identity of creditors and also satisfactorily explained the genuineness of transactions and creditworthiness of creditors. Therefore, we are of the considered view that the AO is erred in making additions towards unsecured loans from ‘7’ parties and thus, we direct the AO to delete the additions made towards loans.Appeal filed by the assessee is allowed.
-
2022 (12) TMI 1267
Revision u/s 263 - AO in the instant case rejected the claim of exemption u/s. 11 and 12 on the ground that assessee trust has advanced loan to trustees in violation of provisions of section 13(1)(c) - as per CIT AO has not taken into consideration the income from business and income from other sources to arrive at the income to be assessed, the order has become erroneous as well as prejudicial to the interest of the revenue - HELD THAT:- As undisputed fact that the AO while completing the assessment did not consider the income form business and income from other sources to arrive at the income to be assessed. It is not the case of the assessee that the assessee trust has not earned the business income and income from other sources - Thus, the AO while completing the assessment u/s. 143(3) and denying the exemption u/s. 11 of the I.T.Act has failed to consider the above two items to arrive at the correct income to be assessed and taxed at Maximum Marginal Rate. Under these circumstances, the order passed by the AO in our opinion has become erroneous as well as prejudicial to the interest of the revenue and therefore, the ld.CIT(E), in our opinion was fully justified in invoking the provisions of section 263 of the I.T.Act. Accordingly, the order passed by the ld.CIT(E) is upheld and the grounds raised by the assessee are dismissed.
-
2022 (12) TMI 1266
Revision u/s 263 - CIT setting aside the assessment framed u/s 143(3) read with 153A of the Act in which the AO has not made any addition because there was no incriminating evidences found during the course of search - claim of deduction u/s 35(2AB) of the Act and also in respect of excess allowance of unabsorbed depreciation - HELD THAT:- Undisputedly the instant year is an unabated assessment year and there was no incriminating documents/ materials found during search with respect to claim of deduction u/s 35(2AB) of the Act and also in respect of excess allowance of unabsorbed depreciation. As on date that in an unabated year the addition can only be made on the basis of incriminating material. Therefore having regards to the legal position, the AO framed the assessment u/s 143(3) r.w.s. 153A of the Act without making any addition in respect of claim u/s 35(2AB) of the Act or with regard to the unabsorbed depreciation in consonance with provisions of the Act as interpreted by various judicial forums discussed hereunder.
The case of the assessee is squarely covered by the decision of Continental Warehousing Corporation (Nhava Sheva) Ltd.[2015 (5) TMI 656 - BOMBAY HIGH COURT] and in the case of CIT vs. Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT] wherein it has been held that in case of unabated assessment year on the date of search the addition can only be made on the basis of search material and not otherwise.
Therefore the order passed by the AO u/s 143(3) r.w.s. 153A of the Act is neither erroneous nor prejudicial to the interest of the revenue and therefore jurisdiction invoked by the ld. PCIT as not in consonance with the provisions of section 263 - Before exercise of jurisdiction u/s263 of the Act the AO has to satisfy the twin conditions as provided in section 263 of the Act .i.e. the order purported to be revised has to erroneous as well as prejudicial to the interest of the revenue and even if first conditions is satisfied or vice versa , the jurisdiction is not available to the ld PCIT as has been held in the case of Malabar Industrial Co. Ltd. [2000 (2) TMI 10 - SUPREME COURT] - Accordingly, we quash the order passed u/s 263 of the Act by the Ld. PCIT. The appeal of the assessee is allowed on legal issue.
-
2022 (12) TMI 1265
Amortization of leasehold land and land development expenses - On the lands taken on lease are ranging for periods from 21 years to 99 years AO was of the view that the purpose of the expenditure made by the assessee does not satisfy the conditions laid down under the provisions of the act - HELD THAT:- From perusal of the above finding of this Tribunal in case of Greenply Industries Limited [2022 (7) TMI 1045 - ITAT GUWAHATI] we find that the same is squarely applicable on the issue raised before us in the instant appeal and therefore, taking a consistent view, the expenditure claimed by the assessee on account of amortization of leasehold land and land development charges deserves to be allowed. Therefore, ground no. 1 raised by the assessee is allowed.
MAT computation u/s 115JB - excise duty exemptions as capital receipt - whether they are to be excluded for the purpose of computing book profit u/s 115JB? - HELD THAT:- Decision of this Tribunal in assessee’s parent company case of Greenply Industries Limited [2022 (7) TMI 1045 - ITAT GUWAHATI] we find that they are squarely applicable on the issues raised in the instant appeal and there remains no dispute that the alleged sum of excise duty exemption received by the assessee is a capital receipt not chargeable to tax and it is to be excluded for the purpose of computing book profit u/s 115JB - We also find that this Tribunal after considering the settled judicial pronouncements has clearly held that the excise duty exemption received by the assessee during the course of running manufacturing units in the backward areas, notified by the Ministry of Commerce and Industry are to be considered as capital receipt not chargeable to tax and they also need to be excluded from the book profit for the purpose of computing MAT u/s 115JB of the Act.
We, therefore, are of the considered view that the alleged sum of excise duty exemption is a capital receipt not chargeable to tax and even for the purpose of computing MAT u/s 115JB the said sum needs to be reduced from the net profit shown in the audited profit and loss account. Therefore, ground nos. 2 & 3 raised by the assessee are allowed.
............
|
9911796707
