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Showing 441 to 460 of 1466 Records
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2023 (1) TMI 1026
E-way Bill - Period of limitation for expiry of E-way Bill - Constitutional validity of rule 138(10) of the Central Goods and Services Tax Rules, 2017 / Gujarat Goods and Services Tax Rules, 2017 - restriction imposed on validity period of the e- way bill in terms of distance to be travelled in a day - HELD THAT:- The respondent had challenged the authority of the respondent demanding the tax and penalty under Section 129(3) of the Central Goods & Services Tax Act, 2017, where the goods, which were to be delivered on or before 17.10.2022, could not be delivered in time and on 19.10.2022 when inspected, some of the e-Way bill numbers had shown expired. The entire truck along with the goods had been seized on account of expiration of the e-Way bill. Therefore, the Court had, after a detailed consideration, held that e-Way bill had expired 41 hours before and the release of goods of conveyance and transit through the authority concerned.
In the instant case also, the goods of the said vehicle has been detained at 6:05 p.m. at Amirgadh on 27.9.2018, after about expiry of 48 years. This case is squarely covered by the decision of this Court which has not been further challenged and even otherwise, from the facts which are robust in nature, it can be gathered that there does not appear to be any ill-intent on the part of the petitioner to use the expired e-Way bill. The company is situated at Howrah, West Bengal and the place of delivery was Jamnagar, Gujarat and in transit, this e-Way bill has expired.
Petition allowed.
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2023 (1) TMI 1025
Refund along with interest - It is the petitioner’s case that the refund due to it has not been processed by the respondents as its GSTN registration has been incorrectly reflected as suspended - HELD THAT:- It is submitted on behalf of the respondents that the form GSTR-2A is not in the correct format. Concededly, the counter affidavit does not indicate any specific deficiency in the form as uploaded by the petitioner. Admittedly, form GSTR 2A is a system generated form. It is stated that certain columns in the form GSTR 2A are blank and therefore, the application for refund has not been processed. According to the petitioner, the form GSTR 2A, as visible at its end, reflects all relevant particulars. The learned counsel appearing for the petitioner states that the scanned copy of the said form (GSTR-2A.pdf) was uploaded along with the application.
The respondents are directed to examine whether the form GSTR 2A, as visible at the petitioner’s end, reflects all relevant details. If it does, it would be apparent that there is a technical error is in the respondents’ system.
List for compliance on 15.02.2023.
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2023 (1) TMI 1024
Unblocking of Input Tax Credit - seeking directions regarding refund claim - HELD THAT:- We have already discussed the implications of the order dated 13 September 2022 which has already been acted upon and there was no challenge to the said order, though the learned counsel for the Respondent No.1-State has sought to contend that State has not been given opportunity to contest the case, the Respondent-State has permitted to utilize the account. It is not possible for us to reverse the effect of the order dated 13 September 2022 as it has already been given effect to by the Respondents without challenging the said order.
Though Petitioner states that amount more than what was prayed was allowed to be utilized, we do not find anything on record regarding the same nor the prayer is amended.
Writ petition is disposed off.
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2023 (1) TMI 1023
Migration of TDS Credit from VAT to GST - Transitional provisions - whether the deduction is a credit of the amount of value added tax which a registered person is entitled to migrate in its electronic credit ledger? - HELD THAT:- The transitional provisions are made to make special provisions for the application of legislation to the circumstances which exist at the time when the legislation comes into force. In the case of UOI. VERSUS FILIP TIAGO DE GAMA OF VEDEM VASCO DE GAMA [1989 (11) TMI 307 - SUPREME COURT], it has been held that transitional provisions are to be purposefully construed and the paramount object in statutory interpretation is to discover what the legislature intended and this intention is primarily to be ascertained from the text of the enactment in question.
It is in the aforesaid background that the provisions of Section 140(1) of the JGST Act are required to be construed. The said provision unambiguously provides for migration of credit i.e. tax paid under the erstwhile tax regime and the words used in Section 140(1) of the JGST Act, namely, ‘credit of amount of value added tax and entry tax’ is to be understood in the context in which it has been used - Admittedly, under the JVAT Act even entry tax was levied vide Section 11 and the said levy of entry tax was available as input tax credit for adjustment against output tax liability. TDS amount was also available for adjustment against output tax liability apart from the input tax credit which was available for adjustment against output tax liability.
Proviso to Section 140(1) of the JGST Act provides that a registered person shall not be allowed to tax credit where the said amount of credit is not admissible as input take credit under the GST Act. It was contended by the Respondents that since TDS was in the nature of output tax, it was not admissible as input tax credit under the GST Act and, hence, cannot be allowed to be migrated.
The Petitioners at the time of filing of their returns were left with no option but to forward the unadjusted TDS amount as excess input tax credit in the succeeding months and were not required or compelled to claim refund of unadjusted TDS amount. Thus, at this stage, the Respondents cannot contend that unadjusted TDS amount cannot be allowed to be migrated in terms of Section 140(1) of the JGST Act. Even otherwise, the stand of the Respondents is self-destructive, as if the Petitioners are not allowed to migrate the unadjusted TDS amount under the GST Regime, they would have become entitled for refund of the same with effect from 1st July, 2017 and would have certainly been entitled to statutory interest @ 9% on the said amount in terms of Section 52/53 of the JVAT Act.
The action of the Respondent-authorities in passing the impugned orders denying migration of TDS amount and, consequently, levying interest and penalty thereupon is not sustainable in the eye of law and are liable to be quashed - It is declared that the Petitioners are entitled for migration of the TDS amount in terms of Section 140(1) of the JGST Act - Petition allowed.
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2023 (1) TMI 1022
Unblocking of Input Tax Credit Account - case of petitioner is that the proceedings under Section 73/74 of the Central Goods and Services Tax Act, 2017 (CGST) was the appropriate remedy and the account should not have been blocked - HELD THAT:- Since the order dated 13 September 2022 directing unblocking of the account was in the nature of final order and that thereafter the Petitioner has unblocked the account, it was put to learned counsel for the State that what is the implication thereof as to the course of action to be taken in the present petition, apart from question of law. Question would also be regarding returns for the next year to be filed. It is pointed out to us that action of blocking under Rule 86A(3) is for period of one year. As regards one of the suppliers, account was blocked on 21 October 2021 and other suppliers it was on 14 March 2022.
Stand over to 20 December 2022 under the caption “For Directions”.
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2023 (1) TMI 1021
Payment of lease amount to its holding company in respect of certain assets taken on lease - According to the Assessing Officer this was a financial transaction - The Tribunal noted that GNFC Limited had shown lease rent as income under the head “Business income” and in case of the lessor, the issue had been consistently decided that the assets were owned by the GNFC, and therefore, the lease rent received by the assessee was to be assessed as business income - HC held that Tribunal, has committed no error in allowing the appeal of the assessee - as per Revenue that the respondent being the owner shall be entitled to depreciation.
HELD THAT:- As once the lessors are held to be the owners and are entitled to depreciation, the Revenue thereafter cannot be permitted with respect to the same transaction, the Respondent being the lessee are the owners and are entitled to depreciation.
We see no reason to interfere with the impugned judgment and order passed by the High Court. The Special Leave Petition stands dismissed.
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2023 (1) TMI 1020
Deduction u/s 80HHC be allowed without reducing therefrom deduction u/s 80IB - HC held that if an assessee has claimed deduction of profit or gains under Section 80IB, deduction to that extent is not to be allowed under Section 80HHC - AO has been rightly directed to recompute the total income of the assessee keeping in view provisions of Section 80IB(13) read with Section 80IA(9) - HELD THAT:- No interference of this Court is called for in exercise of powers under Article 136 of the Constitution of India.
The Special Leave Petitions stand dismissed.
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2023 (1) TMI 1019
Disallowance of commission expenditure - Rule of consistency - HC held that method adopted by AO for completing the task, however, does not preclude in any manner the conducting of independent scrutiny of the material presented before the assessee in later years and rule of consistency in the opinion of the court does not preclude the AO from conducting inquiry which he is bound by law to do, for determining in law what are the true and correct amounts, to determine the amounts legally chargeable as tax - HELD THAT:- There are concurrent findings of fact recorded by all the authorities below under the Income Tax Act including the High Court that the petitioner has been unsuccessful in proving the commission of which the dis-allowance was claimed.
No interference of this Court is called for in exercise of powers under Article 136 of the Constitution of India.
The Special Leave Petition stands dismissed.
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2023 (1) TMI 1018
Compounding of an offence committed u/s 276B, r/w. Section 278B - Period of limitation for filing compounding application - Power of the CBDT (Board) u/s 119 r.w.s. 279(6) to restrict compounding where application is filed beyond stipulated period - company deducted income tax from the salaries of its employees, under the provisions of Section 192 but had failed to deposit the tax so deducted to the credit of the Central Government within the time prescribed under Section 200 r/w. Section 204 - As submitted petitioner no.1-company has deposited the TDS due, though beyond time-limit set down, but before any demand notice was raised
HELD THAT:- The orders, instructions or directions issued by the CBDT under Section 119 of the Act or pursuant to the power given under the Explanation will not limit the powers of the authorities specified under Section 279(2) in considering such an application, much less place fetters on the powers of such authorities in the form of a period of limitation. We are, therefore, of the opinion that the guidelines contained in the CBDT Guidelines dated 14th June 2019 could not curtail the power vested in Principal Chief Commissioner or Chief Commissioner or Principal Director General or Director General under the provisions of Section 279(2) of the Income Tax Act.
In our considered view, to the extent CBDT Guidelines dated 14th June 2019 creates a limitation on the time, within which application under Section 279(2) of the Income Tax Act is required to be filed, is of no consequence and does not take away jurisdiction of respondent no.3 or the other authorities, referred to in sub-section (2) of Section 279, from entertaining an application for compounding of offence at any time during the pendency of the proceedings, be they before the Magistrate or on conviction of the petitioners, in an appeal before the Sessions Court.
We find that this is a classic case for consideration by respondent no.3 for compounding of offence, inasmuch as petitioner no.1-company has deposited the TDS due, though beyond time-limit set down, but before any demand notice was raised or any show cause notice was issued. The Tax Deducted at Source was deposited along with penal interest thereon. A reply setting out detailed reasons for not depositing the same within the time stipulated under the law had been filed in reply to the show cause notice issued earlier.
Though the petitioners had been convicted, a proceeding in the form of an appeal is pending before the Sessions Court, which is yet to be disposed of, and in which there is an order of suspension of sentence imposed on petitioner no.2 is operating.
Under these circumstances, we are of the view that the findings arrived at by respondent no.3 in the impugned order dated 1st June 2021, that the application for compounding of offence, under Section 279 of the Income Tax Act, was filed beyond twelve months, as prescribed under the CBDT Guidelines dated 14th June 2019, are contrary to the provisions of sub-section (2) of Section 279. The respondent no.3 has failed to exercise jurisdiction vested in it while deciding the application on merits and consideration of the grounds set out when the application for compounding of offence was filed before it.
Matter restored back for consideration of application afresh.
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2023 (1) TMI 1017
Disallowance of 10% of office expenses - allowable business expenses or not? - HELD THAT:- We find that apart from claiming that the impugned expenditure has been incurred for the purpose of business, no material has been brought on record to substantiate the said claim. Thus, in absence of necessary details, we find no infirmity in the impugned order passed by the learned CIT(A) upholding the disallowance of 10% of the office expenses claimed by the assessee. As a result, ground No. 1 raised in assessee’s appeal is dismissed.
Addition of 20% of the drug analysis expenses - Vouchers are self made - HELD THAT:- From the perusal of said vouchers, we find that the said vouchers mention the volunteer centre ID, the amount paid, and the signature of the volunteer on the date of payment. AR submitted that the names of the volunteers are not mentioned to maintain anonymity regarding the identity of the volunteer and instead the ID No. is mentioned in the record -this manner also safeguards the interest of the pharmaceutical company, whose drugs are tested.
On a careful perusal of these vouchers, it is evident that the same cannot be called self-made, since these vouchers also contain the signatures of different volunteers acknowledging the receipt of payment in cash on different dates. In absence of any other allegation, we find no basis for confirming the disallowance upheld by the learned CIT(A). Accordingly, we direct the AO to delete the disallowance in respect of drug analysis expenses. - Decided in favour of assessee.
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2023 (1) TMI 1016
Revision u/s 263 - absence of valid certificate under Rule 11U of the IT. Rule for the share premium received during the year was liable to be treated as income from the other sources under the provisions of section 56(2)(viib) - Assessee company issuing shares at a premium rate and company has adopted fair market value/book value of shares and premium on the basis the certificate issued under Rule 11UA of the IT and further noticed that Shri Chetan Joshi is the same CA who was appointed by the company as an auditor under section 44AB of the Act, which is a violation of the sub-Rule (a)(i) of the Rule 11UA of the I.T. Rule - HELD THAT:- We have also gone through the order passed by the Ld. PCIT and noted that no inquiry was made by the Assessing Officer. We have gone through the assessment order passed by the Assessing Officer u/s 143(3) and noted that assessing officer has not discussed the issue raised by ld PCIT. It is a case of no inquiry on the part of Assessing Officer, therefore Ld. PCIT has rightly exercised his jurisdiction under section 263 of the Act.
We note that company has adopted fair market value/book value of shares and premium on the basis the certificate issued under Rule 11UA of the I.T. Rule dated 01.03.2016 by the Chartered Accountant Shri Chetan Joshi (M. No. 132207). It was further noticed that Shri Chetan Joshi is the same CA who was appointed by the company as an auditor under section 44AB of the Act, which is a violation of the sub-Rule (a)(i) of the Rule 11UA of the I.T. Rules.
Thus, in absence of valid certificate under Rule 11U of the I.T. Rules for the share premium of Rs.1,49,60,000/- received during the year should be liable to be treated as income from the other sources under the provisions of section 56(2)(viib) - Assessing Officer has not examined this issue. The expression prejudicial to the interest of the revenue is of wide import and is not confined to merely loss of tax. The term erroneous means a wrong/incorrect decision deviating from law. This expression postulates an error which makes an order unsustainable in law. Therefore, we hold that order passed by the Assessing Officer is erroneous and prejudicial to the interest of Revenue, hence we confirm the findings of ld PCIT. Appeal filed by the assessee is dismissed.
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2023 (1) TMI 1015
Revision u/s 263 - As per CIT AO wrongly allowed claim for exemption u/s.10(37) r.w. RECTLARR Act, 2013 - HELD THAT:- As the assessee had neither offered the surplus(net) on acquisition of its lands by NHAI as capital gain nor raised any claim for exemption in its return of income, therefore, there could have been no reason for the A.O to have allowed any such claim. Admittedly, it is also a fact that the assessee in the course of the assessment proceedings had sought for exemption of the surplus(net) on acquisition of its lands by NHAI u/s.10(37) r.w.s.96 of RECTLARR Act, 2013, but as stated by the Ld. AR the same was declined by A.O. Be that as it may, the assessee had neither disclosed income/surplus arising on acquisition of its lands by NHAI under the head “capital gain” or sought for any exemption of the said amount, nor any such exemption was allowed to him by the A.O vide his order passed u/s.143(3) dated 15.11.2019.
We are of the considered view that now when neither any claim for exemption u/s.10(37) r.w. RECTLARR Act, 2013 had ever been raised by the assessee nor allowed by the A.O, therefore, there could be no justification on the part of the Pr. CIT to have held the order passed by the A.O u/s.143(3) dated 15.11.2022 as erroneous in so far as it was prejudicial to the interest of the revenue u/s.263 of the Act, for the reason that he had wrongly allowed it’s claim for exemption u/s.10(37) r.w. RECTLARR Act, 2013.
Interestingly, it is a case where the order u/s.143(3) dated 15.11.2019 had been held by the Pr. CIT as erroneous on the ground that he had wrongly allowed a claim of exemption which, in fact, had never been so allowed by the A.O. We, thus, in terms of our aforesaid observations finding no justification on the part of the Pr. CIT for having revised the order passed by the A.O u/s.143(3) dated 15.11.2019, set-aside his order and restore that passed by the A.O u/s.143(3) - Appeal of the assessee is allowed.
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2023 (1) TMI 1014
Revision u/s 263 - AO had failed to enquire into the applicability of the provisions of section 56(2)(viib) - initiate penalty proceedings u/s 271F - whether the Assessing Officer had examined the applicability of provisions of section 56(2)(viib) relates to the receipt of share premium in question? - HELD THAT:- Appellant filed an explanation stating that the provisions of section 56(2)(viib) have no application to the facts of the present case, not being the company in which the public are substantially interested. Whereas the fact is that the appellant is a company in which the public are not substantially interested. Thus, it is apparent that the Assessing Officer accepted the claim, on the wrong premises. Therefore, the assessment order passed by the Assessing Officer is erroneous and prejudicial to the interests of the Revenue. To this extent, we confirm the power of revision exercised by the ld. PCIT u/s 263 of the Act.
As regards to the direction of the PCIT to the AO to initiate the penalty proceedings u/s 271F of the Act, it is settled position of law that the penalty proceedings should be initiated based on the satisfaction reached by the Assessing Officer and the penalty proceedings cannot be initiated at the instance of the higher authorities. Moreover, we find that the penalty proceedings u/s 271F is independent of the assessment proceedings. Therefore, the ld. PCIT in exercise the power of revision vested with him u/s 263 cannot direct the Assessing Officer to initiate the penalty proceedings u/s 271F of the Act. On this score, the order of revision passed by the ld. PCIT is quashed. Appeal filed by the assessee is partly allowed.
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2023 (1) TMI 1013
Penalty u/s 271(1)(c) - Disallowance of interest, Addition u/s 56(2)(viib) and Interest on late deposit of TDS wrongly claimed - HELD THAT:- On the perusal of the submissions made by the CIT(A), it is noted that the assessee has failed to place cogent evidence that interest incurred on loan and advances given to its sister concern were incurred for the business purposes. The loan and allowances were given without charging any interest which has resulted in incurring burden on account of advances given to sister concern in violation of Section 36(1)(iii) of the Act. Likewise, before the CIT(A), the assessee has failed to defend inapplicability of Section 56(2)(viib) of the Act. It is not borne out from the records as to why Section 56(2)(viib) is not applicable or the alternative provisions of Section 271(1)(b) is not attracted in the facts of the case. Same is a case in respect of late deposit on TDS. Thus, in the absence of any material on record, it is difficult to conceive plausibility in the action of the assessee. We thus decline to interfere.
As per its grounds, the assessee has also alleged that notice issued for imposition of penalty does not specify the nature of default and thus entire penalty proceedings is required to be quashed at the threshold. No penalty notice is available on record. No such objection was raised before lower authorities either. We thus are in no position to express our view on such contentions - Appeal of the assessee is dismissed exparte.
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2023 (1) TMI 1012
Rejection of books of accounts - estimation of profits consequent upon rejection of books - HELD THAT:- It is the case of the Revenue that the assessee has failed to produce original invoices/vouchers to prove the completeness of the books of account and therefore, books of account have been rightly rejected u/s 145(3) - In the factual set up, we straightaway take note of the assertions made on behalf of the assessee that net profit rate declared by the assessee is 6.15% as compared to 6.52% in the earlier year. Thus, there is no striking discrepancy in the net profit ratio. Incidentally, it is the case of the assessee that the gross profit declared during the year compares higher than the gross profit in the earlier year whereas some marginal drop in the net profit has happened on account of higher depreciation and interest on loan for acquisition of fixed assets.
Hon’ble Delhi High Court in the case of Paradise Holidays [2010 (4) TMI 111 - DELHI HIGH COURT] has enunciated the circumstances where invocation of Section 145(3) would not be justified. AO in the present case has not shown as to how audited the books of account maintained by the assessee are incorrect or otherwise incomplete which is likely to vitiate the true profits of the assessee. It is also not the case of the AO that entries in respect of certain transaction are altogether omitted or found incorrect. No inherent lacuna in the system of accounting is shown either.
AO in our view is not justified in taking drastic action of rejection of books of account which are audited and are without any qualification solely on the basis of general remarks that photocopy of the bills have been produced instead of original bills. No specific instance has been provided in the order to appreciate as to how such delinquency on the part of the assessee has resulted in unreliability of books per se. Admittedly, the photocopies of bills and vouchers were duly produced, AO has not made any independent inquiry on the correctness of the bills from third parties. The profits declared in the instant case being in the vicinity of the profits declared in the earlier years, we see no apparent justification whatsoever in the action of the Revenue.
We find traction in the plea of the assessee that no justifiable reasons are available to reject the books and embark upon estimations. We thus set aside the action of the CIT(A) and direct the AO to restore the position taken by the assessee in this regard. Appeal of the assessee is allowed.
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2023 (1) TMI 1011
Revision u/s 263 - benefits of Section 54/54F - PCIT was of the view that assessee has made a wrong calculation of the capital gains primarily for reason that he considered property to be not held for 36 months, accordingly, had directed Ld. AO to examine the issue afresh and withdraw the deduction claimed and granted to the assessee u/s 54F - HELD THAT:- It can be observed that the order u/s 263 dated 05.03.2018 was directory in nature and Ld. AO had complied the same and in this appeal the revenue cannot agitate that there was not substantial compliances of the order u/s 263. Remedy may be some where else. So, the ground no. 1 to 5 are superfluous and also as nothing specific were argued in regard to them they are decided against Revenue.
Acquisition of the three properties by the assessee, otherwise then by the registered sale deeds fall in the ambit of word ‘purchase’ used u/s 54/54F of the Act - The ‘purchase’ of immovable property involves acquiring all those interests in the property. Same may be by some inchoate instruments in favour of the purchaser. Non execution of a registered document of transfer of title may have civil consequences in regard to his title, qua rights between the seller and purchaser but for the purpose of benefits of Section 54/54F, the assessee shall be deemed to have ‘purchased’ the properties. As for the purpose of Section 54/54F of the Act, the important question is that money out of LTCG should be paid/spent by the assessee, before the end of statutory period, for claiming exemption. When the Ld. AO had not doubted the payments out of LTCG made by assessee for purchase of three properties with inchoate documents executed in favour of the assessee. Then for not having the sale deed executed in his favour, assessee cannot be said to have not ‘Purchased’ the properties as a statutory compliance. Thus, the findings of Ld. CIT(A) in this regard require no interference.
Residential nature of these three properties Ld. CIT(A) has thoroughly examined the issue. The 1st property situated lies in Tehsil Mehrauli, New Delhi. It is claimed by the assessee to be farm house and the house tax receipt issued by South Delhi Municipal Corporation mentioning that property is used for ‘residential purpose’ was rightly relied by Ld. CIT(A) to hold that property purchased was residential property. Ld. CIT(A) has also examine expenditures made in cash and supported with cash withdrawals from the bank for the construction to make the property habitable.
As with regard to 2nd property situated village Atmalpur in Haridwar. Ld. CIT(A) had rightly examined the fact of expenditure of Rs. 2,23,500/- on the construction raised for using it as a residence.
As with regard to 3rd property at Atmal in Haridwar. Ld. CIT(A) has considered the fact that it is admitted to have a construction cottage.
The bench is of considered opinion that the nature and extent of construction or nomenclature like house, plot, cottage, farm house or villa are only indicative of the fact that property purchased is not a commercial property and is not an agricultural property. They all convey residential house property. How it is inhabited should not interest the revenue. Ld. AR has also impressed this by citing a judgment of Om Prakash Gyal [2012 (8) TMI 547 - ITAT JAIPUR] where it has been held that only requirement for claiming exemption under Section 54F is construction of residential house and it does not matter that house constructed is on agricultural land. Thus Ld. CIT(A) has rightly taken into consideration all the aspects of the matter while partly allowing the appeal of assessee and no interference is called for in the same. The remaining grounds no. 6 to 13 are also decided against the revenue on the basis of aforesaid findings.
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2023 (1) TMI 1010
Unexplained cash deposits - cash deposited in the saving bank account by an agriculturist, without establishing any other source of Income - HELD THAT:- We concur with the view taken by the A.O that it is beyond preponderance of human probability that the assessee would have withdrawn cash from his bank account with Jila Sahakari Kendriya Bank, Baradwar Branch from 06.01.2010 onwards and thereafter, kept the same with him till 20.05.2011 i.e. for a period of more than 1 year and redeposited the said sum at the time of sale of agricultural land - as the aforesaid explanation of the assessee is nothing but a concocted story hatched by him to justify the source of cash deposits, thus, the same cannot be accepted and had rightly been rejected by the A.O.
Cash deposits were sourced from his agriculture income - We find that as observed by the A.O, and, rightly so, as the assessee was in receipt of sale proceeds of agricultural produce i.e. paddy vide cheques from the samiti to whom the same were sold, therefore, his aforesaid explanation in absence of any supporting material does not merit acceptance. In case, the assessee would have sold any intermittent crop, then, the onus was cast upon him to establish the said fact by placing on record supporting documentary evidence, which,we find had not been done by him. On the basis of aforesaid observations, find no infirmity in the view taken by the A.O that the assessee’s claim that cash deposits in his bank account was partly sourced out of his agriculture income did not merit acceptance.
Claim of the assessee that the cash deposits in question were sourced out of his past savings - Though he had failed to place on record any material which would have evidenced the availability of any amount of cash in hand out of his past savings, but the A.O in all fairness had accepted his claim to the extent of Rs.1 lac, which thereafter had been raised by the CIT(Appeals) to an amount of Rs.3 lac. Considering the aforesaid fact, find no infirmity in the view taken by the A.O that the assessee had failed to substantiate his claim that the entire amount of cash deposits in his bank account were sourced out of his past savings.
Invocation of section 69A - As the assessee at the time of making the cash deposits in the bank account i.e. on 20/25.05.2011 was the owner of cash i.e. money, and had failed to come forth with any explanation about the nature and source of the acquisition of the same, therefore, no infirmity can be attributed to the invocation of the provisions of Section 69A of the Act by the A.O. Thus, finding no merit in the claim of the Ld. AR that the A.O had wrongly triggered the provisions of Section 69A of the Act for making the addition in the hands of the assessee, reject the same.
As the assessee in the course of the assessment proceedings had not come forward with any such explanation about the nature and source of the cash deposits, therefore, the A.O was constrained to make an addition of the said amount u/s.69A of the Act. My aforesaid view is fortified by the fact that an addition under section 69A in itself pre-supposes a condition that the assessee had either failed to offer any explanation; or the explanation offered by him is not, in the opinion of the A.O found to be satisfactory. Admittedly, in the present case, as the assessee had never come forth with any explanation that the cash deposit in question was the “on money” that was received by him on sale of agriculture land, therefore, the provisions of Section 69A in my considered view were rightly triggered by the A.O. - Decided against assessee.
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2023 (1) TMI 1009
Capital gain computation - assessee is seeking reduction of sale consideration by amount paid to Rajesh K Mehta as occupying the said land and to remove the encumbrances three acres of land was given to him to remove all his encumbrances - HELD THAT:- On careful perusal of bank statement of Rajesh K Mehta, find cheque drawn on Dena Bank was never encashed or realised either from bank account of Rajesh K Mehta or in the account of assessee. Thus, consideration shown in the sale deed was never passed/received by assessee. Shri Rajesh K Mehta has confirmed his fact in his affidavit. Thus, the said amount was not received by the assessee. It is settled position under law that income which has earned or accrued can only be taxed. In my considered view, once it is shown and proved on record that Rs. 9.00 lacs is not received by the assessee, so such income cannot be considered for taxation in the hands of assessee. So the assessee get relief to that extent.
Amount as allegedly incurred by assessee for purchasing of land in the name of Nani Navla Patel as per the direction of Collector, Dadra & Nagar Haveli, we are fully convinced with the order of ld. CIT(A) that there is no condition precedent in the sale deed dated 12/08/2011. Moreover, such condition was on the seller of land to maintain minimum standard of area of land to safeguard their interest. Therefore, no justification for allowing such expenses while calculation capital gain. Accordingly, we uphold the order of ld. CIT(A) qua this issue. In the result, grounds of appeal raised by assessee is partly allowed.
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2023 (1) TMI 1008
Premium paid in respect of hedging contracts - interest cost on ECBs - speculative transaction covered under Section 43(5) - amount paid to BTMU under currency swap contracts - HELD THAT:- As in so far as the assessee is concerned, the amount paid to BTMU under currency swap contracts is nothing but interest cost on foreign currency loans. Further, as discussed earlier, the underlying transactions in relation to the currency swap contracts are the loans availed from MELCO. It is a fact on record that on repayment of loan to MELCO after the expiry of three years, the currency swap contracts with BTMU were also terminated. Therefore, in our considered opinion, the currency swap contracts are nothing but to hedge the fluctuation in foreign currency rates for protecting the assessee from the risk of paying more interest on the foreign currency loans due to exchange rate fluctuations. Therefore, in our view, the transactions relating to currency swap contracts entered by the assessee with BTMU cannot be considered to be in the nature of speculative transaction covered under Section 43(5) of the Act. In that view of the matter, the deduction claimed by the assessee is allowable under Section 36(1)(iii) of the Act.
In any case of the matter, even for the sake of argument assuming that the premium paid to BTMU in respect of currency swap contracts cannot be termed as interest covered under Section 36(1)(iii) of the Act, however, there cannot be any dispute that this is an expenditure incurred by the assessee wholly and exclusively for the purpose of its business, as, such expenditure is having a direct nexus with the finance cost on external borrowings. That being the case, it is otherwise allowable as deduction under Section 37(1) of the Act. Accordingly, we delete the disallowance.
TDS u/s 195 - Disallowance u/s 40(i)(a) - amount paid towards installation charges - as per AO travelling and hotel expenses, since, are in connection with rendering of technical services, they also have to be regarded as fee for technical services (FTS) - HELD THAT:- From the sample copies of the bills/invoices raised on the assessee, it is observed that in so far as air-tickets and hotel bills are concerned, the payee has raised separate invoices which do not comprise of any amount charged towards installation of equipments. The perusal of invoices clearly indicates that they are towards reimbursement of cost on actual basis without any profit element embedded therein. Therefore, in our view, no part of such expenditure/cost incurred can be apportioned towards technical services. Therefore, in our view, the assessee was not required to withhold tax under Section 195 of the Act on such expenditure. Even otherwise also, the amount in dispute was not claimed as revenue expenditure by the assessee. Rather, the assessee had capitalized the amount in its accounts and has claimed depreciation. In such a scenario, the issue arising for consideration is whether section 40(a)(i) of the Act would be applicable.
As we find from the decisions cited before us in this regard by learned counsel appearing for the assessee, the ratio laid down clearly says that section 40(a)(i) of the Act provides for disallowance only in respect of expenditure which are revenue in nature. Therefore, the provision does not apply to a case of the assessee whose claim is for depreciation. In this regard, we may specifically refer to the decision of Hon’ble Karnataka High Court in PCIT vs. Tally Solution Pvt. Ltd. [2020 (12) TMI 1160 - KARNATAKA HIGH COURT] - we delete the disallowance.
Disallowance on account of difference in rent cost incurred by the assessee for providing accommodation to its employees and the respective perquisite value of such residential accommodation determined in the hands of the employees - HELD THAT:- There is no dispute that the assessee had actually incurred the expenditure. In fact, the Assessing Officer has allowed the deduction to the extent of the amount treated as perquisite value at the hands of the employees. He has disallowed the excess amount. This, in our view, is unjustified. The perquisite value to be taxed at the hands of the employees is determined by applying the methodology prescribed under the rules. Therefore, it has no relation to the actual cost incurred by the assessee. In any case of the matter, if the assessee has incurred certain expenditure for welfare of the employees to keep a contended and dedicated work force, keeping in view the commercial expediency, the expenditure can be allowed under Section 37(1) of the Act - we delete the disallowance made by the assessee.
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2023 (1) TMI 1007
Revision u/s 263 by CIT - cash deposits in saving bank account - as per CIT A.O. also has not made any enquiry as to how such huge amount of Rs. 12,00,000/- is deposited in the bank account of the assessee - HELD THAT:- It is seen from the assessment order passed by the Assessing Officer is without any details and no information about the claim of agricultural land. When the sale of two lands amounting to Rs. 31,55,000/- and Rs. 30,27,000/- respectively. The Assessing Officer has not raised any question about agricultural income derived from the above lands by the assessee. The assessing officer has also not verified the nature of cultivation from the above lands in the previous assessment years, population of the village and distance from the nearest Municipality. Thus in our considered opinion, the Assessing Officer has not made necessary enquiries before allowing the claim u/s. 2(14) of the Act. Similarly the cash deposits in Bank accounts is not verified by the A.O. with proper enquiry.
PCIT has rightly invoked the provision of Section 263, wherein the assessment order passed by the Assessing Officer is on account of inadequate enquiry and non-application of mind to the facts of the case presented by the assessee. Therefore the Ld. PCIT set aside the erroneous assessment order passed by the Assessing Officer, with a direction to examine the issues afresh and determine the appropriate tax liability by giving adequate opportunity to the assessee. We do not find any infirmity in the order passed by the Ld. PCIT. - Decided against assessee.
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