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Showing 421 to 440 of 1410 Records
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2020 (12) TMI 993
Capital gain deduction - Allowable deduction u/s 48 - sale was received by the appellant and same was directly paid to the Bank by the purchaser in discharge of the mortgage - whether Tribunal was right in law in not holding that there was a diversion of the sale proceeds towards redeeming the interest of the mortgagor and therefore the amount so diverted was not liable to capital gains tax? - HELD THAT:- Hon'ble Supreme Court in RM. ARUNACHALAM VERSUS COMMISSIONER OF INCOME-TAX [1997 (7) TMI 5 - SUPREME COURT] had held that where the mortgage had been created by the owner after he had acquired the property, the clearing of the mortgage by him prior to the transfer of the property would not entitle him to claim deduction under Section 48 of the Act because, in such a case he did not acquire any interest in the property subsequent to his acquiring the same.
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2020 (12) TMI 992
Review Application - Penalty u/s 271(1)(c) imposed - non-disclosure of the capital gains - other sufficient reason which would entitle the petitioner/assessee to apply for review of the judgment passed by this Court - HELD THAT:- Unless any other sufficient reason is analogous to other two conditions, review cannot be granted. Therefore, the argument of Ms.S.Yogalakshmi, that she seeks to invoke the third limb of order 47 Rule 1(1) CPC is not acceptable, because the third limb has been explained to mean that unless any other sufficient reason is analogous to the other two conditions, viz., excusable failure to bring to the notice of the Court new and important matters or error apparent on the face of the record, a review cannot be entertained. The grounds canvassed in this review application were in fact argued in the appeal and the Court has taken into consideration the arguments and held against the assessee.
As rightly pointed out by Ms.K.G.Usha Rani, learned Standing Counsel, the finding of this Court, more particularly, in paragraphs 6 and 12 is a clear answer to the grounds canvassed before this Court in this review application. Thus, in the absence of any grounds made out to exercise review jurisdiction of this Court, this review application has to necessarily fail.
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2020 (12) TMI 991
Reopening of assessment u/s 147 - whether original assessment framed did not deal with the issue of exemption of sale of agricultural land? - as per AO as assessee had cooperated in the re-assessment proceedings and therefore, cannot object to the reopening - HELD THAT:- For validity of the reopening proceedings, we find that the reopening was made based on the facts, records and documents, which were available on the file of the Assessing Officer when the original assessment was completed. AO miserably failed to establish that the assessee had failed to disclose fully and truly all material facts necessary for the assessment for that year. The CIT(A) states that the Assessing Officer during the original assessment did not properly appreciate the documents. As held by the Hon'ble Supreme Court in Calcutta Discount Co. Ltd. [1960 (11) TMI 8 - SUPREME COURT] it is not for the assessee to tell as to how the Assessing Officer has to complete his assessment. The duty of the assessee is to disclose fully and truly all material particulars and it is not for him to advice the Assessing Officer to how he has to go about with the assessment proceedings.
Having noted that the assessee, at the first instance, sought for furnishing the reasons for reopening, would clearly show that non-furnishing of reasons has put him to prejudice. As noted above, the Revenue could not produce any evidence to show that the reasons recorded were provided to the assessee in spite of opportunity having been granted by the Tribunal. Thus, we find that the Tribunal was right in allowing the assessee's appeal and quashing the re-assessment proceedings.
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2020 (12) TMI 990
Validity of reopening of assessment - year of taxation of capital gain - change of opinion or review of the earlier order - HELD THAT:- Revenue points out that as the original processing of the ROI was only by way of intimation and no scrutiny assessment under Section 143(3) had been made, the assumption of jurisdiction under Section 147 is unassailable. It was only when the return of income for AY 2016-17 was taken up that the Officer gleaned that the appropriate year for taxing the capital gain would be 2014-15 and not 2016-17.
The question of change of opinion or review of the earlier order would not arise insofar as no opinion was formed and no order passed at the first instance.
Whether the assumption of jurisdiction in terms of Section 147 for AY 2012-13 is proper, particularly, seeing as the Officer only proposes a re-assessment, on protective basis? - Admittedly, there has been no scrutiny assessment for AY 2012-13 and only an intimation has been passed. The issue based on which the re-assessment has been initiated is whether the capital gains offered to tax in AY 2016-17 should have been offered in the earlier year i.e. AY 2012-13.
Ordinarily the limitation provided for the initiation of re-assessment is four years from the end of the relevant financial year, extended to six years upon satisfaction of the conditions elaborated in the proviso to Section 147, conditional upon an order under Section 143(3) having been passed at the original instance. Since only an intimation under Section 143 (1) has been passed in this case, limitation of six years is, available.
In the present case, the return of income for AY 2012-13 was not scrutinized and only the return of income of the petitioner for AY 2016-17 was taken up for scrutiny. The question of whether the capital gain is assessable in AY 2012-13 or 2016-17 is thus, a matter to be decided by the Authorities after due verification of relevant documents and in accordance with the law. Thus, while the merits of the matter relating to the year in which the instance of capital gain would fall is left entirely open for decision by the Officer, the assumption of jurisdiction is upheld.
In this case the issue that arises is whether the capital gain is taxable in one year or the other and thus, it is only if the material pertaining to both years were available before the officer that a proper decision in this regard could be arrived at.
Petitioner argument that the order of assessment for AY 2016-17 has been challenged in appeal only on the aspect of computation of the capital gain and thus as far as the year of taxability is concerned, the order has attained finality is misconceived since the very doubt entertained by the Officer turns on the question of whether the year of taxability adopted by the petitioner is correct or not. The finality attained by filing of the first appeal by the petitioner is subject to statutory processes such as 263 and 147 of the Act, if otherwise valid. This argument is thus rejected. - Decided against assessee.
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2020 (12) TMI 989
Validity of order u/s 144 - ex parte assessment order - Violation of principles of natural justice as not affording sufficient opportunity to the petitioner to raise all his contentions available to him under law - HELD THAT:- As seen from the impugned assessment order passed under Section 144 of the Income Tax Act, 1961, the petitioner has not participated in the said proceedings and the order is in the nature of ex parte assessment order.
The grounds raised by the petitioner, namely, the cash amount deposited under the Pradhan Mantri Garib Kalyan Yojana Scheme, 2016, on 31.03.2017 has not been taken into consideration under the impugned assessment order.
Contention of the petitioner that since he has has availed the benefit of Pradhan Mantri Garib Kalyan Yojana Scheme, 2016, the cash amount cannot be treated as an unexplained money under Section 69 (A) has not been considered by the respondent in accordance with law.
Similarly, the contention of the petitioner that amendment made to Section 115BBE in the year 2020, will not apply to the assessment year 2017-2018, has also not been considered by the respondent in the impugned assessment order.
The respondent has also not considered the petitioner's contention in this Writ Petition that the amendment to Section 143 (3A) of the Income Tax Act, 1961, was proposed only in the Budget 2020 to include Section 144 proceedings also under the e-proceedings and therefore, for the assessment year 2017-2018, the same is not attracted.
Though in the counter affidavit, the respondent has given reasons for each and every contention of the petitioner in this writ petition, the same is not reflected in the impugned assessment order. no personal hearing has been afforded to the petitioner. It is also not clear that whether such an opportunity was given by the respondent to the petitioner or not. All these aforementioned factors will clearly indicate that the respondent has violated the principles of natural justice while passing the impugned assessment order by not affording sufficient opportunity to the petitioner to raise all his contentions available to him under law.
Thus the impugned assessment order is hereby quashed and the matter is remanded back to the respondent for fresh consideration.
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2020 (12) TMI 988
Estimation of income - Bogus purchases - closing stock computation - claim of the assessee that when assessee has already disallowed the bogus purchases, it should also get benefit by reducing the amount in the closing stock, because of the reason that inventory is to be valued, if found in existence as the bogus purchases inventory - Double addition - HELD THAT:- It is not in existence, the consequent closing stock shown also to be reduced by the above amount. This claim of the assessee has been correctly rejected by the CIT(A) by stating that the opening stock in the subsequent year i.e. AY 2013-14, assessee has shown it to be ₹ 4,74,01,230/- and therefore, in that particular year the stock is debited to the profit and loss account. If the claim of the assessee is accepted then assessee must necessarily proved that items shown as bogus purchases were also carried on in the closing stock.
The same has not been shown by proving the quantity of such goods as well as the price on which it is carried on in the inventory. Admittedly, no inventory is furnished in the opening and closing stock by the assessee. In this view, we do not find any infirmity in the order of the Ld. CIT(A), so far as it relates to rejecting the claim of the assessee of double addition.
Alternative arguments of the Ld. AR that in the case of bogus purchases, if they are not written off or reduced from the closing stock then, necessarily in the sale price the same is included and therefore, only gross profit on the same can be added - We find that the above arguments also supported by relying on Simit P. Sheth [2013 (10) TMI 1028 - GUJARAT HIGH COURT] - The assessee has shown that in the year ending March, 2012, the gross profit ratio of the assessee is 9.25%. We direct the Ld. Assessing Officer to retain the addition @9.25% of ₹ 2.44 crores of ₹ 22,57,000/- deserve to be retained and the balance addition of ₹ 2,21,43,000/- deserve to be deleted. The reasons being that once the bogus purchases have gone into the profit and loss account, and necessary sales have not been doubted, only option left with the revenue is to make the addition of the gross profit embedded in the bogus purchases. Accordingly, the ground no. 1 of the appeal is partly allowed.
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2020 (12) TMI 987
Penalty order u/s 271(1)(c) - Defective notice - HELD THAT:- In the present case, AR demonstrated the notice, we find that the AO is not sure whether he was to proceed on the basis that the assessee has concealed the particulars of his income or furnished inaccurate particulars of income. The Hon’ble High Court in M/S MANJUNATHA COTTON AND GINNING FACTORY & OTHS., M/S. V.S. LAD & SONS, [2013 (7) TMI 620 - KARNATAKA HIGH COURT]also observed that in such a situation, the levy of penalty suffers from non-application of mind.
Considering the legal position and the action of the AO in passing the penalty order u/s 271(1)(c) shows that there is non-application of mind thereby the penalty order is not sustainable - See M/S SSA’S EMERALD MEADOWS [2015 (11) TMI 1620 - KARNATAKA HIGH COURT] - Decided in favour of assessee.
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2020 (12) TMI 986
Disallowance of expenditure of liquidated damages in relation to two parties, holding the same as penal in nature - CIT(A) has in principle agreed that expenses towards liquidated damages are not penal in nature and on production of confirmation from one party i.e. M/s IFFCL deleted the disallowance made by the Assessing Officer - HELD THAT:- CIT(A) in absence of reconciliation of amount of the liquidated damages claimed, has rejected the claim of the assessee, however, in our opinion, it is matter of verification from the third-party only and the interest of the justice, one more opportunity can be allowed to the assessee to produce confirmation of the liquidated damages charged by said company to the assessee. If the accounts of both the assessee and the said party can be reconciled, then matter ends and no disallowance would be required in the case of the assessee.
Accordingly, we feel it appropriate to restore this issue back to the file of the CIT(A) with the direction to the assessee to produce document in support of its claim of liquidated damages including confirmation of ‘Chandrapura Thermal Power Station’ and copy of ledger account of the assessee in their books of accounts specifying money withheld in the form of liquidated charges. It is needless to mention that both the assessee and the Assessing Officer shall be provided adequate opportunity of being heard.
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2020 (12) TMI 985
Reopening of assessment u/s 147 - HELD THAT:- AO has completely ignored the reassessment order dated 11.3.2015 passed u/s. 148/143(3) of the Act in which he has accepted the cash credit in dispute in the form of share capital from these 5 entities and again reopened the case of the assessee for the same assessment year on the same ground by recording the almost same reasons and made the same addition which is in dispute while completing the assessment in dispute u/s. 147/143(3) of the Act vide order dated 30.12.2017, which is not permissible as per law as well as in view of the aforesaid judgment of ADITYA KHANNA [2017 (12) TMI 64 - DELHI HIGH COURT]
Considering the documentary evidences filed by the assessee in the shape of paper book and the written submissions alongwith various case law Aditya Khanna, as reproduced above, the addition in dispute is deleted and the appeal filed by the assessee is allowed.
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2020 (12) TMI 984
Unexplained cash credit u/s. 68 - HELD THAT:- Assessee has filed all the necessary documents as required for substantiating its claim u/s. 68 - Assessee has discharged its initial onus which lay upon it by proving the identity and capacity of the share applicants and the genuineness of the transactions. It cannot be said that such a conclusion was unreasonable or perverse or passed on no evidence. Ld. CIT(A) has also relied upon the decision of the Hon’ble Supreme Court of India in the case of CIT vs. Orissa Corporation Pvt. Ltd. [1986 (3) TMI 3 - SUPREME COURT].
CIT(A) has deleted the addition in dispute, therefore, we are of the view that no interference is called for in the well reasoned order passed in the case of the assessee, accordingly the same is upheld and the appeal filed by the Revenue is dismissed.
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2020 (12) TMI 983
TP Adjustment - Working capital adjustment - HELD THAT:- AO/TPO has to consider the assessee’s case as entitled for working capital adjustment as in earlier year, while determining the ALP. Accordingly, we direct the A.O. to determine the appropriate rate of working capital risk adjustment after going through the relevant records of the assessee.
Comparable selection - Mubea Suspension (India) Ltd. rejected by the TPO on the reason that this comparable is having loss for 2 years out of 3 years - It is not disputed that there is only one-year profit out of 3 successive financial years. Being so, there is a profit in 1 year out of consecutive 3 financial years, Mubea Suspension (India) Ltd. to be considered as a comparable to determine the ALP of the transactions in assessee’s case as held in the case of KBACE Technologies Pvt. Ltd. [2020 (2) TMI 78 - ITAT BANGALORE].
TP adjustment should be restricted to international transaction with the Associated Enterprises - contention of the assessee is that as the quantum of sales made to the A.E. vis-à-vis total sales is 52.16%, it is stated that if the TP adjustment is to be restricted only to the quantum of manufacturing sales pertaining to A.Es i.e. 52.16% and it cannot be extended to other than international transactions to A.E. - HELD THAT:- As gone through the orders of the authorities below. Admittedly, this issue came for consideration in assessee’s own case in the assessment year 2010-11. The Tribunal on this issue observed in para 23 [2016 (7) TMI 1281 - ITAT BANGALORE]that TPO was confined to the adjustment to the value of international transactions only as the section 92 of the Act applies with reference to computation of income from international transactions having regard to ALP in this AY 2013-14 and other domestic transactions cannot be considered for determining ALP in this A.Y. Being so, we direct the AO/TPO to confine the TPO adjustment only on international transaction in manufacturing segment only.
Benefit of +/- 3% as applicable under proviso to section 92C(2) - HELD THAT:- We observe that while computing the ALP if the profit margin is within the range of +/- 3% in terms of section 92C(2) of the Act there it cannot be any TP adjustment with regard to the international transactions. The AO/TPO to take note of provision of section 92C(2) of the Act and decide accordingly. Ordered accordingly.
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2020 (12) TMI 982
Exemption u/s 54 - Assessee has not invested an amount which should have been invested in capital gain account scheme - HELD THAT:- In the present case, the assessee filed the return of income for the assessment year 2014-15 on 13.6.2014 before the due date of filing return u/s 139(1) of the Act. However, by that time, he has not utilized the amount of ₹ 2,59,03,849/- in construction of new residential house or deposited the same in capital gain account scheme as notified by the Central Government. In other words, unutilized capital gain should have been deposited in capital gain account before due date of filing of return u/s 139(1) of the Act. Now the contention of the Ld. A.R. is that even if the assessee deposited unutilized portion of capital gain after the due date provided u/s 139(1) of the Act, assessee is entitled for deduction u/s 54 of the Act. This argument cannot be upheld.
To avail benefit u/s 54 of the Act, unutilized portion of capital gains shall be deposited by assessee in capital gain account scheme before due date of filing of return of income u/s 139(1) of the Act as prescribed u/s 54(2) of the Act.
We are of the view that in the case of assessee the deduction claimed should be examined in the parameters of section 54F - We make it clear that assessee shall furnish necessary evidences of construction or purchase of new residential property in Chicago, USA. A.O. has to examine the same and decide the issue in the light of the order cited - We are of the opinion that it is appropriate to remit the issue to examine the claim of the assessee and decide in accordance with law. Appeal of the assessee is partly allowed for statistical purposes.
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2020 (12) TMI 981
Capital gain computation - ascertain the date of applicability of the beneficial proviso to section 50C(1) which gives a breathing space to all such assessee who enter into agreement for transfer of property on a date anterior to the date of actual registration and also receive full or part of the consideration for such transfer - HELD THAT:- When we examine the content of the two provisos to section 50C(1) in juxtaposition to the language of sub-section (1), it gets graphically clear that the beneficial proviso has been inserted in order to benefit some assesses who enter into agreement prior to the date of registration and also simultaneously receive full or a part of consideration. Such beneficial provision does not inflict a corresponding detriment to other assessees or the public generally. Since object of the first proviso to section 50C(1) is to confer a benefit to certain class of assesses in the given situation, going by the ratio laid down in Vatika Township [2014 (9) TMI 576 - SUPREME COURT] this proviso will have to be held as retrospective applicable from the date of insertion of section 50C w.e.f. 01-04-2003. Our view is fortified by a recent judgment rendered by the Hon’ble Madras High Court in CIT Vs. Vummidi Amarendra [2020 (6) TMI 74 - ITAT CHENNAI] - It is, therefore, held that the alternate plea raised by the ld. AR for adopting stamp value on the date of agreement in the year 2000 instead of the date of registration in 2006 is hereby countenanced, in principle.
Transfer of asset u/s 2(47) - transfer took place on 06.05.2000, being the date of agreement or contradicted by the Revenue by making out a case that the date of registration, being, 03-08-2006 is the real date of transfer attracting section 45 - assessee handed over possession of the property to M/s. V.S. Kolbhor & Associates in the year 2000 on receiving substantial part of consideration. This, in our opinion, constituted transfer u/s. 2(47)(v) of the Act read with section 53A of the TPA attracting taxability of capital gain in the A.Y. 2001-02. As the `transfer’ took place in the said earlier year, it cannot once again take place in the assessment year 2007-08 attracting taxation. Setting aside the impugned order, we hold that the transfer took place in the A.Y. 2001-2002 and not 2007-08, leading to taxation of capital gain only in the earlier year and not the latter. As the ld. CIT(A) has upheld taxability of the capital gain in the A.Y. 2007-08, we hereby overturn the same. The Revenue is at liberty to examine the taxability of the capital gain, if any, arising from the transaction in the earlier year, subject to the relevant provisions. In view of our favorable decision on the main argument of the ld. AR, the alternate claim of the assessee and the discussion made has been rendered academic - Decided in favour of assessee.
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2020 (12) TMI 980
Validity of reopening of assessment u/s 147 - reason to believe v/s suspicious - notice beyond jurisdiction being without any 'reason to believe' and ' satisfaction' of AO or of the superior authority who accorded approval in a mechanical manner - HELD THAT:- It is evident from the reasons recorded that at the stage of issue notice under section 148 Assessing Officer was suspicious on the source of the cash deposits and, therefore, he wanted to investigate further to find out the actual source of the cash deposits. At the stage of issue of notice, the Assessing Officer was not sure whether income had escaped to tax or not. No notice under section 148 can be issued merely on such suspicion. There has to be a reasonable material before the Assessing Officer on the basis of which a reasonable person can make requisite belief. In the instant case, there is lack of reasonable material to form a reasonable belief that income has escaped tax. Under the circumstances, the action of the AO of reopening assessment in exercise of the power under section 148 of the Act cannot be sustained. Accordingly, we quash the re-assessment proceeding initiated in the case of the assessee.
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2020 (12) TMI 979
Rectification of mistake u/s 254 - present Misc. Application is filed in respect of the order passed in Misc. Application which Tribunal dismissed the same as barred by limitation - HELD THAT:- Tribunal may after giving opportunity to both the parties to the appeal rectify the order, but the order was passed in Misc. application and the same is a speaking order which cannot be reviewed by us at this juncture. The case laws submitted by the Ld. AR cannot be dealt in the present Misc. Application as the same are related to the merit of limitation period of filing of earlier Misc. Application and not the present Misc. Application and the earlier Misc. Application is already decided with the detailed order regarding the issue of limitation which we cannot review in the present Misc. Application. The preposition of the Ld. AR amounts to review of its own order dated 07.02.2018 by the Tribunal which is not permissible in law, the remedy in our opinion lies elsewhere, but not before the Tribunal at this juncture. Hence, the present Misc. Application filed by the assessee is dismissed.
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2020 (12) TMI 978
Addition u/s 68 - unexplained cash deposits - agricultural income as not genuine - AR emphasized that the A.O and CIT(A) have erred in denying the sources of agricultural income generated out of the agriculture activities - HELD THAT:- There is no doubt on the genuineness of purchase of agricultural lands but the only doubt the A.O has raised in the assessment proceedings that the assessee could not substantiate the agricultural activities with evidences. The Ld. AR reiterated the submissions made before the lower authorities and explained that the assessee has acquired the agricultural lands in April 2007 and constructed polyhouse by obtaining loan from Syndicate Bank.
Information submitted by the assessee cannot be disbelieved. But the fact remains though the assessee has filed the details, there are no observations of the A.O nor the assessee could explain that the expenses and income allocated to the assessee share are not considered in the M/s Sankalp farm. Further, the assessment records of M/s Sankalp farms are not available with the A.O. Therefore, to meet the ends of justice, We provide one more opportunity to the assessee to establish and clarify the income generated in agricultural activities and the expenses incurred Accordingly, we set aside the order of the CIT(A) and remit the entire disputed issues to the file of assessing officer for limited purpose to verify and examine the claims. Appeal of the assessee for statistical purposes.
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2020 (12) TMI 977
Higher depreciation claim - Receipt from business of hiring of plant and machinery - AO to restrict depreciation on plant and machinery @ 15% as against the claim @ 30% by assessee - HELD THAT:- Assessee in this assessment year has received total receipt and from which the assessee has received from hiring which is more than 66% of the total receipt. The assessee’s claim is that since the substantial income i.e. 2/3rd of its income is from hiring business, it qualifies for higher depreciation @ 30%.
For that the Ld. A.R has relied on the decision of Hon’ble Rajasthan High Court in Bansiwala Iron & Steels Ltd. [2003 (9) TMI 813 - RAJASTHAN HIGH COURT] find that assessee’s income from hiring constitutes more than 2/3rd of its total income therefore since the assessee’s substantial income is from hiring business, relying on the ratio laid (supra), the assessee’s claim for higher depreciation should be allowed @ 30% instead of 15% allowed by the AO. Therefore, the assessee’s claim of allowing higher depreciation @ 30% is directed to be allowed.
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2020 (12) TMI 976
Addition u/s 68 - Bogus LTCG on shares - Application for Vivad se Vishwas Scheme - HELD THAT:- On the merits case of the assessee is covered against him by the judgment of Udit Kalra vs. ITO [2019 (4) TMI 834 - DELHI HIGH COURT] wherein has declared M/s Kappac Pharma as bogus company who made only accommodation entries in which the assessee is a beneficiary. This is also followed by many decisions of coordinate benches holding against assessee.
As assessee has submitted a letter dated 12th March, 2020 under the signature of his Chartered Accountant Mr. Vikas Gupta that assessee is contemplating the option of Vivad se Vishwas Scheme. It was stated that at that particular time when this letter was given the Scheme was yet to be announced. Now despite notices the assessee is not appearing. The assessee has also disclosed his intention through his CA to settle the dispute under Vivad se Vishwas Scheme. As the assessee would like to opt for the above Scheme and to settle the impugned dispute, the appeal of the assessee is technically treated as withdrawn and dismissed.
Appeal of the assessee is treated as dismissed as withdrawn with a liberty to the assessee that in case assessee is not granted Form No.3 under the above Scheme for settlement of the above dispute, he may file an application for recall of the above order. Meanwhile, the appeal filed by the assessee is dismissed as withdrawn.
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2020 (12) TMI 975
Reopening of assessment u/s 147 - assessee did not produce any evidence to claimed expenses towards the production cost incurred during the years under consideration and failed to substantiate the difference in the production cost adopted in the return of income filed and Form 52A filed in spite of opportunity of being heard granted to assessee - HELD THAT:- We note that section 285B requires any person carrying on production of cinematographic film during the whole or any part of the financial year to file the statement before Ld. AO within 30 days from the end of such financial year or within 30 days from the date of completion of the production of the film whichever is earlier.
The statement is necessarily to contain the payments that exceeds ₹ 50,000/- in the aggregate made by such person to eat such person engaged by him in such production.
Form 52 relevant for financial year 2005-06 and 2006-07 relevant to assessment year under consideration was filed by assessee before Ld. AO on 09/01/2008 being the year in which the production of the film was completed. We therefore, do not find any infirmity in the observations of Ld. CIT(A), as the reassessment was initiated based on change of opinion.
On merits we note that, there is no dispute regarding compliance under section 285B, within the relevant period. It is an admitted position that, production cost claimed by assessee for assessment year 2006-07 is remanded by this Tribunal to Ld. AO for fresh consideration. Assessee placed the copy of the order passed by this Tribunal for assessment year 2006-07 - For assessment year 2007-08, we note that, assessee has not claimed production cost as expenditure which is clear from page 82 of paper book. We note that production cost has been considered as work in progress. - Decided against revenue.
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2020 (12) TMI 974
Disallowance of expenditure on account of professional charges and security services - no business during the year - As per AO assessee does not have any income during the year and consequently no premises were available with the assessee - HELD THAT:- With respect to security services it was stated that the assessee has not paid any rent but has moved into basement of Thapar House being the premise of its group company. The assessee carried out its work from that premises and therefore, security personal continued to be deployed. For the above proposition the assessee has only produced the copies of the bills and ledger account of the expenditure.
With respect to the legal expenditure as not known that what for the above legal expenditure were paid by the assessee. The narration of the bills speaks that it is professional fees for providing legal opinion and drafting of various legal documents for the clients of the assessee ₹ 10 lakhs are charged. With respect to ₹ 20,000/- the same were paid for the certification related to the companies law filing with MCA. Therefore out of professional fees ₹ 1020,000/- disallowance of ₹ 20,000/- requires to be deleted.
But for the legal fees/professional charges, assessee needs to show that whether these expenditure are wholly and exclusively incurred for the purposes of business. Assessee also needs to elaborate the facts about the fact business of the assessee has not ceased to exist. Further, with respect to the security charges a sum of ₹ 60450/- per month were paid to one agency for providing security charges, but assessee needs to establish that those premises are used for the purposes of the business of the assessee. Assessee must show that it operates from that premises and why it bears whole of the security charges. In view of this, we set aside issue back to the file of the ld AO with respect to legal fees of ₹ 10 Lakhs and Security charges with direction to the assessee to prove that same - Decided partly in favour of assessee.
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9911796707
