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2022 (1) TMI 1362 - ITAT BANGALORE
Validity of Assessment u/s 144C - mandatory for the AO to pass Draft Assessment Order in accordance with the procedure laid down - intent of the AO while passing the draft assessment order - HELD THAT:- In the present case, the Ld.AO passed the draft assessment order u/s. 143(3) r.w.s. 144C (13) of the Act on 28.12.2018 which is accompanied with demand notice issued u/s. 156 of the Act dated 21.12.2016 and it is also noticed that in the draft assessment order itself, the AO recorded the statement as Demand notice issued accordingly. Penalty proceedings u/s. 271(1)(c) are initiated separately for the additions made.
Being so, it is observed that the draft assessment order passed by the AO is without following the due process of law as enumerated in the judgment in the case of Vijay Television [2014 (6) TMI 540 - MADRAS HIGH COURT]
Since the order passed by the AO is without following the due process of law and it cannot survive in the eyes of law, accordingly we quash the impugned assessment order before us - Decided in favour of assessee.
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2022 (1) TMI 1361 - ITAT PUNE
Income from house property - Addition on account of notional income in respect of the unsold flats - unsold 37 flats shown as stock in trade - assessee filed return showing income from such business and also engaged in the business of property development - HELD THAT:- In the present case that there is no dispute that the profits of the business of construction by the assessee are chargeable to income-tax. Therefore, in our view that the unsold 37 flats are occupied by the assessee are as owner; business of construction is carried on by the assessee; the occupation of the flats is for the purpose of business; and profits of such business are chargeable to Income-tax.
Thus, in our opinion, all the four conditions provided in exclusion clause in section 22 of the Act are to be excluded, therefore, we hold that no addition on account of deemed rent on unsold 37 flats can be made in the hands of the assessee. DR did not dispute that the assessee recognized the unsold flats as stock-in-trade but however relied on the order of CIT(A). Thus, the order of CIT(A) is not justified and it is set aside. Thus, the grounds raised by the assessee are allowed.
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2022 (1) TMI 1360 - DELHI HIGH COURT
Seeking permission for withdrawal of petition - resolution plan approved - HELD THAT:- Ms. Khair on instructions from Col. Sanjeev Dhawan reiterates the contents of the application and prayer made therein. She states that without prejudice all the petitioners, i.e., petitioner Nos.1 to 63 seeks to withdraw the writ petition. Without prejudice, the writ petition is dismissed as withdrawn.
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2022 (1) TMI 1359 - SUPREME COURT
Principles of res-judicata - Seeking partition and separate possession of one-fourth share in the suit Schedule properties - main plank of argument of the Appellant is that the suit filed by the Plaintiff-Appellant herein could not have been dismissed on the principle of res judicata by holding that in A.S. No. 37 of 1993 there was already a clear finding to the effect that there was a partition of the suit properties between the members of the joint family and hence a fresh suit for partition and separate possession vis-à-vis the same properties could not have been filed by the Plaintiff as it is not maintainable.
HELD THAT:- The award is in the form of a resolution on the strength of the statement given by Periyaiya Servai and the consent statement given by P.R. Ramaswamy and P.R. Kasilingam, the two major sons of Periyaiya Servai. There are details as to how the properties had to be dealt with. The parties had also stated that they had read the above resolution and had agreed wholeheartedly to obey the provisions thereof.
On a perusal of the award which is in the form of a resolution, it is clear that there was no right created in any specific item or asset of the joint family properties in any person but the parties resolved to take certain actions in pursuance of a family arrangement. Therefore under Annexure P-10 (Ex. B-13) there was no right created in favour of any party in any specific item of joint family property. The said document which has been styled as an award is only a memorandum of understanding/family arrangement to be acted upon in future. Hence, in our considered view, the said document did not create rights in specific properties or assets of the family, in favour of specific persons. Therefore, the same did not require registration Under Section 17(1)(e) of the Act. The said document was in the nature of a document envisaged Under Section 17(2)(v) of the Act.
It can be safely concluded that the said award was a mere arrangement to divide the properties in future by metes and bounds as distinguished from an actual deed of partition under which there is not only a severance of status but also division of joint family properties by metes and bounds in specific properties. Hence it was exempted from registration Under Section 17(2)(v) of the Act. A document of partition which provides for effectuating a division of properties in future would be exempt from registration Under Section 17(2)(v). The test in such a case is whether the document itself creates an interest in a specific immovable property or merely creates a right to obtain another document of title. If a document does not by itself create a right or interest in immovable property, but merely creates a right to obtain another document, which will, when executed create a right in the person claiming relief, the former document does not require registration and is accordingly admissible in evidence.
In the instant case exhibit B-13 award is more in the nature of a memorandum of understanding, a mere agreement of the steps to be taken in future for the division of the properties. Hence, the said document did not require registration Under Section 17(1)(b) of the Act as under the said document no creation of rights in any specific joint family property was effected.
The next question that arises for our consideration is whether, the finding of the first appellate court in A.S. No. 37 of 1993 that the suit properties were partitioned in the year 1964 is binding on the parties and hence a fresh suit filed by the Plaintiff seeking the very same relief was not maintainable - Having regard to the fact that in the instant case there has been no challenge to the finding of partition between the parties till date and the same has attained finality we do not think that the Appellant can seek to rely on the judgment in Asrar Ahmed [[1946 (7) TMI 6 - PRIVY COUNCIL]]. Hence, the partition of the ancestral/joint family properties having found to have taken place in the 1964 and the same having been acted upon, a fresh suit for partition and separate possession of the suit properties was not at all maintainable. The principle of res judicata squarely applies in the present case.
Appeal dismissed.
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2022 (1) TMI 1358 - ITAT MUMBAI
Additions u/s.68 - sale proceeds of shares unexplained - addition made as considering it Pre-arranged transactions, Sale of scares and unusual rise in the price through rigging not backed by, Failure of the assessee to discharge its onus to prove that the LTCG claimed by it is genuine - as vehemently pleaded by the DR that AO in the remand report had only stated that the evidences submitted by the assessee are proper and genuine and had not stated that the transactions carried out by the assessee are proper and genuine
HELD THAT:- As entire evidences are filed by the assessee only in support of the transactions carried out by the assessee, we are unable to persuade ourselves to accept to the narrow argument of the revenue. When the evidences are accepted as proper and genuine, that too after due enquiries and examination thereon, obviously the transactions carried out by the assessee also would be proper and genuine. Hence the only logical conclusion would be that the ld. AO had indeed accepted the entire transactions together with its evidences as proper and genuine. We deem it unnecessary to go into the merits of the addition made herein.
The entire remand report of the ld. AO had already been reproduced herein supra. We hold that when the ld. AO had given a favourable report in his remand proceedings, then fairly the Revenue ought not to have preferred any further appeal before this Tribunal as there could not be any grievance for them.
We draw support in this regard on the decision of the Hon’ble Madras High Court in the case of Smt. B.Jayalakshmi [2018 (8) TMI 208 - MADRAS HIGH COURT] as categorically held that when the Assessing Officer had accepted the contentions of the assessee in the remand report, the Revenue could not be aggrieved by filing further appeal and since this fact had not been taken cognizance by the Tribunal in that case, the Hon’ble Madras High Court had remanded the matter back to the Tribunal for fresh consideration.
Admittedly, such conclusion was drawn by the ld. AO after carrying out detailed investigations and enquiries carried out with various parties as mandated. We find that the ld. CIT(A) granted relief based on the said remand report apart from giving relief on merits. We are not giving any opinion on the merits of the case. We find that at the threshold itself, this appeal is required to be decided against the Revenue by following the decision of the Hon’ble Madras High Court referred to supra in view of the fact that the ld. AO had accepted the entire contentions of the assessee in the remand report. We also find that the Revenue had not raised any grounds before us stating that remand report of the ld. AO is incorrect. Accordingly, the grounds raised by the Revenue are dismissed.
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2022 (1) TMI 1357 - ITAT SURAT
Assessment order u/s 144 r.w.s 147 treating assessee as AOP - HELD THAT:- We find that before the ld. CIT(A), the assessee filed copy of Satakhat. On perusal of the contents of said Satakhat, we find that it has direct relevance to the grounds of appeal raised by the assessee and the same require consideration. Therefore, instead of the fact that the copy of Satakhat was filed independently on not in the record of assessment for the year under consideration before AO or not, we admit the same as relevant evidence for real determination of issue in hand and remit the issue to the file of CIT(A) to adjudicate the issue afresh by considering the Satakhat dated 04.04.2011 and pass the order in accordance with law. In the result the ground No. III is allowed for statistical purpose.
Addition is made on estimation of income/project - The issue relevant to estimation of income of AOP is interlinked and also remitted back to CIT(A) to adjudicate the same after adjudication of ground of appeal in A.Y. 2011-12. The assessee is given liberty to file evidence / additional evidence to substantiate the ground of appeal and move appropriate application in case fresh/new evidence is filed to substantiate its ground of appeal or its contention.
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2022 (1) TMI 1356 - BOMBAY HIGH COURT
Validity of Reopening of assessment u/s 147 - notice has been issued after expiry of four years from the relevant Assessment Year - penny stock transactions - Change of opinion - HELD THAT:- As held in Aroni Commercials Limited[2014 (2) TMI 659 - BOMBAY HIGH COURT] once a query is raised during assessment proceedings and the assessee has replied to it, it follows that the query raised was a subject of consideration of the Assessing Officer while completing the assessment.
It is not necessary that an assessment order should contain reference and / or discussion to disclose its satisfaction in respect of the query raised. As noted earlier, the very issue of Petitioner entering into transactions, relating to the scrip of Confidence Finance & Trading Ltd., was a subject of consideration by the AO during the original assessment proceedings. It would, therefore, follow that re-opening of the assessment by the impugned notice is merely on the basis of change of opinion of the AO from what held earlier during the course of the assessment proceedings, leading to the assessment order. This change of opinion does not constitute justification and/ or reason to believe that income chargeable to tax, has escaped assessment. Decided in favour of assessee.
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2022 (1) TMI 1355 - TRIPURA HIGH COURT
Seeking a direction of this Court to transfer the original company petition before the National Company Law Tribunal(NCLT) in view of gazette notification dated 28th May 2016 as amended as well as further amendment to The Insolvency and Bankruptcy Code (Second Amendment) Act, 2018 published in the Gazette of India on 17th August 2018 - HELD THAT:- There can be no doubt when a party applies even in a pending case seeking winding-up it is obligatory on part of the High Court or any other Courts before whom the proceedings are pending to remit the matter to the Tribunal. It would be pertinent to note herein that when the order dated 21st March 2017 was passed rejecting the application for transfer, at that stage, The Insolvency and Bankruptcy Code(second Amendment) Act, 2018 was not available for consideration. Pursuant to 2018 amendment, the present application has come to be filed by respondent-Union Bank of India.
Application allowed.
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2022 (1) TMI 1354 - ITAT DELHI
Unaccounted and unexplained of Cash deposit out of the cash withdrawals - HELD THAT:- Addition as made and confirmed by the authorities below, is not justified. No reason is assigned for not accepting the contention of the assessee that deposit was made out of cash withdrawal. AO has failed to bring any evidence suggesting that the cash so withdrawn from the account was expended for any other purpose. Therefore, in the absence of such material the findings of authorities below cannot be sustained. AO is hereby directed to delete the addition. The ground is allowed.
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2022 (1) TMI 1353 - TELANGANA HIGH COURT
Assessment u/s 144C - AO empowered u/s 144C to frame draft assessment order - depreciation claimed on goodwill disallowed - Respondent No. 1 while passing the draft assessment order had completely overlooked the decision in the petitioner's own case [2019 (11) TMI 803 - ITAT HYDERABAD] - petitioner seeks quashing of the order passed by respondent No. 1 and seeks a direction to respondent No. 1 to pass a speaking and reasoned order dealing with all the objections raised by the petitioner - HELD THAT:- Dispute Resolution Panel is a high-powered body constituted under the Act as an oversight body for the guidance of the AO. The object behind constitution of the Dispute Resolution Panel appears to be to ensure that the assessment proceedings are kept within the bounds of law while adhering to the principles of natural justice. Though the Assessing Officer has been empowered u/s 144C to frame draft assessment order, the same is however subject to confirmation by the Dispute Resolution Panel.
As already noticed that under sub-section (5), the Dispute Resolution Panel has the mandate to issue directions for guidance of the AO while framing the assessment and under sub-section (8) the Dispute Resolution Panel may confirm or reduce or enhance the variations proposed in the draft assessment order. Both sub-sections (5) and (8) have to be read together, and from a conjoint reading of the two provisions it is clearly discernible that the final say, in so far as the assessment is concerned, rests with the Dispute Resolution Panel.
The approach of the AO as manifest in clauses (a) to (d) as extracted above, to our mind is problematic. In so far as the decision of the Income-tax Appellate Tribunal, Hyderabad "A" Bench, Hyderabad in respect of petitioner's own case for the assessment year 2014-15 [2019 (11) TMI 803 - ITAT HYDERABAD], the Assessing Officer has stated that the Department has not accepted the said decision. The views of the Income-tax Appellate Tribunal is not acceptable to the Department, and therefore, it has been appealed before the High Court. As such, the issue of addition of depreciation claimed on goodwill has not attained finality.
We are afraid such a view taken by the Assessing Officer can be justified. Rather, it is highly objectionable for an Assessing Officer to say that the decision of the Income-tax Appellate Tribunal is not acceptable ; and that since it has been appealed against, the issue of allowability of depreciation on goodwill has not attained finality. Unless there is a stay, order/decision of the jurisdictional Income-tax Appellate Tribunal is binding on all Income-tax authorities within its jurisdiction.
Giving a restricted meaning to the above words would intrude into, rather curtail, the jurisdiction of the Dispute Resolution Panel which could not have been the intent of the Legislature. While the Dispute Resolution Panel shall not set aside any proposed variation, it certainly has the power and jurisdiction to reduce the variations proposed in the draft order.
Following the above decisions of the Supreme Court KRISHNA SALES (P) LTD. [1993 (9) TMI 124 - SUPREME COURT] a Division Bench of the Bombay High Court in Ganesh Benzoplast Ltd. v. Union of India [2020 (9) TMI 180 - BOMBAY HIGH COURT] held that non-compliance of orders of the appellate authority by the subordinate original authority is disturbing to say the least as it strikes at the very root of administrative discipline and may have the effect of severely undermining the efficacy of the appellate remedy provided to a litigant under the statute.
The second view expressed by the Assessing Officer vis-a-vis the decision of the Supreme Court in Smifs (2012 (8) TMI 713 - SUPREME COURT] is still more problematic. It is not open to the Assessing Officer to try to evade from the binding effect of a Supreme Court decision by trying to find out "distinguishing features". Though unnecessary, we are still compelled to refer to article 141 of the Constitution of India which says that the law declared by the Supreme Court shall be binding on all courts within the territory of India. Therefore, it is the bounden duty of all authorities whether administrative or quasi judicial or judicial to follow the law declared by the Supreme Court.
While we agree with the learned standing counsel that the draft assessment order has not yet attained finality as it still has to be placed before the Dispute Resolution Panel and therefore, in the circumstances, we feel that interfering at this stage may not be justified as it would pre-empt decision-making by the high-powered Dispute Resolution Panel. However, we hope and trust that the Dispute Resolution Panel shall look into all aspects of the matter, more particularly, the discussions made above while passing appropriate order(s) under sub-section (8) of section 144C of the Act, and if necessary further personal hearing shall be afforded to the petitioner.
DRP shall look into and consider the objections raised by the petitioner more particularly, about the decision of the Income-tax Appellate Tribunal in its own case for the assessment year 2014-15 and the judgment of the Supreme Court in Smifs (supra) keeping in mind the discussions made above.
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2022 (1) TMI 1352 - SUPREME COURT
Seeking disposal of appeal - Resolution Plan approved by the Committee of Creditors has been finally upheld by this Court - it was brought to the notice of the Court that the appellant had preferred some appeal before the National Company Law Appellate Tribunal (NCLAT) and it was still pending at the relevant time - HELD THAT:- This Court directed that the said appeal shall proceed on merits. Pursuant to that liberty, the concerned appeal has now been decided by the NCLAT vide impugned judgment. In our opinion, it was sufficient for the NCLAT to dispose of the appeal before it by restating the factual position noted while considering the Plan submitted for approval before the Committee of Creditors.
The appeal needs to be disposed of by restating the said fact with liberty to the parties to pursue all contentions available to them in the proceedings pending at the relevant time, if any - It is stated that some arbitration proceedings were pending between the parties. If so, all contentions available to both sides be decided in the said proceedings on its own merits in accordance with law.
Appeal disposed off.
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2022 (1) TMI 1351 - ITAT COCHIN
Assessment u/s 153A - Undisclosed income - Credits Transferred from Nagaland based entities - sufficient incriminating material found n search or not? - HELD THAT:- As AR submitted that in the absence of any incriminating material on record, no such additions could have been made by AO. This plea could not be accepted since this is not a case wherein no incriminating material has been found. Rather, it is the finding of CIT(A) that several incriminating materials were seized which include blank letter head of Nagaland based persons / entities, blank cheques, notes / diaries containing details of payments received and transferred. The evidence relating to unexplained investment made in cash towards purchase of immoveable properties was also seized. Thus, this is a case where sufficient incriminating material has been found by investigation team which indicates undisclosed income of the assessee - Decided against assessee.
Best judgement basis u/s 144 - As alleged by assessee no notice u/s 143(2) was issued - Assessment Proceedings for AY 2018-19 - HELD THAT:- As it was to be held that none of the conditions for invoking jurisdiction u/s 144 was satisfied by Ld. AO which would vitiate the assessment proceedings. Further, the assessee has filed valid return of income and no notice u/s 143(2) has ever been issued before making assessment. The non-issuance of notice u/s 143(2), in non-curable defect and therefore, assumption of jurisdiction and subsequent order passed u/s 144 becomes bad-in-law. The case laws as cited above clearly support the legal ground raised by the assessee. Therefore, we hold that the assessment order passed for this year fails on legal grounds and the consequential additions made therein become unsustainable. We order so. This being so, no further adjudication is required in the appeal for AY 2018-19. The assessee’s appeal stand allowed on this ground alone.
Addition based on statements recorded by investigation wing during the course of search operations from various persons - HELD THAT:- The pre-existing statements recorded by the Investigation Wing could not form the sole basis of assessment. It could also be seen that Shri G.K. Rengma retracted the statement vide affidavit dated 01.04.2019 wherein he clarified that the statement was recorded incorrectly. The said retraction was supported by the audited financial statements of Shri G.K. Rengma as placed on record. The total turnover of Shri G.K. Rengma as reflected in these financial statements is much higher than the figures recorded in the statement. Under these circumstances, the third-party statements recorded from Shri G.K. Rengma as well as from other persons would lose evidentiary value. The statements of remaining persons i.e., land owners / various other contractors have never been independently examined by Ld. AO. The copies of statement were never confronted to the assessee and no opportunity of cross-examination was ever provided to the assessee. Accordingly, the ratio of decision of Hon’ble Apex Court in Andaman Timber Industries [2015 (10) TMI 442 - SUPREME COURT] would apply to the facts of the case and support the case of the assessee. Considering the same, no much weightage could be given to such statements and the same, on standalone basis, would not be sufficient to support the impugned additions.
Addition under provisions of Sec.68 or 69 or 69A to 69D - as argued additions have been made merely on the basis of surmises, conjectures and on borrowed satisfaction without specifying the relevant sections under which additions have been made - HELD THAT:- The onus of the assessee has to remain confine to the extent of credits received by the assessee in his own books of accounts and not any further. To hold any contrary position, Ld. AO must establish this fact otherwise no such debits / credits appearing in bank accounts of other parties could be deemed to be the income of the assessee. The assessee’s onus u/s 68 in respect of entries in books / bank accounts of other persons is only secondary i.e., consequential upon the successful discharge of the primary onus by the A.O of establishing the assessee to be the actual owner of the books of account / bank accounts held in the names of other persons. This position has been held by Hon’ble Supreme Court in the case of CIT Vs. Daulat Ram Rawatmull [1972 (9) TMI 9 - SUPREME COURT].Therefore, the credits appearing in the other bank accounts could not be held to be income of the assessee.
Adjudication on Merits - Credit Entries Received from Nagaland bases entities / individual - HELD THAT:- As we find that the debit / transfer entries aggregating to Rs.243.19 Crores have been treated to be the assessee’s income on the allegation that assessee’s unaccounted income has been routed through these accounts for the benefit of group as a whole. However, in para 7.10, we have already taken a position that the credit transfer received by the other family members and group concerns could not be assumed to be assessee’s undisclosed income since it is nowhere been established by the lower authorities that the assessee was de-facto owner of either Nagaland based bank accounts or the owner of bank accounts of various recipients. The other family members and group concerns of the assessee were separate Income Tax assessee and subjected to separate assessment. Therefore, the credit received in those accounts could not be held to be the assessee’s income. Under these circumstances, the assessee’s onus would remain confine to explain the credit received by it in his own bank accounts. Further, the assessment proceedings for AY 2018-19 have already been quashed by us on legal grounds. Therefore, at the outset, the addition, to that extent, could not be sustained in the hands of the assessee.
Assessee’s onus to prove the ingredients of Sec.68 with respect to unsecured loan received from Shri G.K. Rengma and M/s Excellence Associates - Undisputedly the transactions have taken place through banking channels. On the basis of all these documentary evidences, it could be said that the requisite onus as required to be discharged u/s 68 was duly discharged by the assessee and it was the onus of the revenue to dislodge the same - upon perusal of orders of lower authorities, we find that no cogent material or evidences are on record to dislodge the claim of the assessee rather the additions are based more on allegations, surmises, conjectures and mere suspicion. In such a case, these amounts could not be considered to be the assessee’s undisclosed income. We order so. In the result, the addition to the extent of Rs.5,44,90,000/- is sustained under this head and the balance additions stand deleted. The corresponding grounds raised by the assessee in all the years stands partly allowed.
Cash deposit in the bank accounts of the assessee - Since the assessee group has incorporated the alleged cash payment of Rs.16.10 Crores for purchase of immoveable properties in these cash flow statements, the separate addition made to that extent would also not be sustainable. Even otherwise, the properties have not been purchased by the assessee rather this addition is subject matter of consideration in other family members / entities which are separate taxable entities and therefore, the addition for those entities would not be sustainable in the hands of the assessee.
Other Credit Entries in Bank Account of the assessee and other family members / entities - Since the assessment for AY 2018-19 has been quashed by us, the additions to that extent are otherwise not sustainable. The remaining credit entries for Rs.353.64 Lacs pertain to AYs 2012-13 & 2017-18. Out of this amount, the assessee has identified amount of Rs.88.50 Lacs being the entries which are lacking complete details / supporting evidences. The remaining entries are either not in the nature of income and a part of these entries has already been disclosed under IDS 2016. Few of the entries have already been disclosed in the Income Tax Returns of the assessee. The complete details of these entries have been placed by the assessee on page numbers 58 and 59 of Paper Book No.3A. We have perused the same. We find that all the other credit entries are in the nature of maturity proceeds of LIC, Chit money received by the assessee, directors loan withdrawn, mutual funds proceeds from UTI, refunds etc. These entries are not in the nature of assessee’s income. Therefore, the additional amount of Rs.88.50 Lacs as worked out by the assessee is found to be correct and therefore, sustained in the hands of the assessee. The remaining addition stands deleted since the same is not the in nature of income.
Credit for income disclosed under IDS 2016 has not been given to the assessee - We find that this credit was not given in the absence of requisite declarations / certificates forthcoming form the assessee. The assessee has now placed all these documents in the paper book which has been detailed in Table 35 of written submissions. Further, the assessee has already considered such declaration while working out additional income which has also been accepted by us. Therefore, the assessee is left with no grievance on this account.
Non consideration of additional evidences / documents as filed by the assessee before Ld. CIT(A) on 15.03.2021 and 16.09.2021 - Since, we have substantially accepted the working of the assessee which has been considered after incorporating all these evidences, the assessee is left with no grievance on this issue. The remaining grounds are either general or consequential in nature which does not require any specific adjudication on our part.
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2022 (1) TMI 1350 - CALCUTTA HIGH COURT
Eligibility of the respondent assessee to be entitled for being considered under the Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019 - only reason for rejection of the application of the appellant was that wrong particulars in respect of the order-in-original were uploaded while applying under the said scheme but the fact remains that the appellant furnished the necessary documents including the order-in-appeal as well as the order in original before the Designated Committee well before the last date for applying under the said scheme.
HELD THAT:- In the facts of the instant case it was incumbent upon the Designated Committee to offer an opportunity to the appellant to rectify such technical error within a stipulated time. Since admittedly the order of rejection was communicated to the appellant after expiry of the last date stipulated under the said scheme for submission of the application and also that the relevant materials are available with the Designated Committee, this Court is of the considered view that the Designated Committee should be directed to consider the claim of the appellant as to the entitlement of the appellant to the benefits of the said scheme.
In the case of M/s. Sobha Limited vs. Union of India & Anr. [2020 (10) TMI 208 - PUNJAB AND HARYANA HIGH COURT] the Hon'ble Division Bench of Punjab and Haryana High Court at Chandigarh had considered an identical issue and the order of rejection of the declaration filed in Form SVLDRS-1 was set aside and direction was issued to the designated authority to decide the application afresh. Identical direction was issued in the case of Vaishali Sharma vs. UOI & Anr. reported in [2020 (8) TMI 81 - DELHI HIGH COURT]. In the said decision the Court went a step further to observe that an opportunity of hearing must have been given to the assessee before rejecting the declaration.
It is evidently clear that Central Board is alive of the situations faced by the assessee. Hence there would be no difficulty in extending relief to the assessee. In any event the correction to be made is trivial in nature, hence, technicalities should not come in the way of the assessee being disentitled for his declaration to be considered on merits.
It is safely observed that several High Courts in the country have been issuing directions and the bottom line of all the directions and observations is that the spirit of the scheme should not be defeated on account of technicalities - the order of rejection dated 05.02.2020 requires to be set aside.
Application disposed off.
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2022 (1) TMI 1349 - KARNATAKA HIGH COURT
Allowable deduction u/s 37 - donation given to Bellary DC for construction of ring road - assessee is a company engaged in the business of extraction of minerals such as bauxite and limestone etc. - HELD THAT:- The substantial questions of law involved in this appeal have already been answered in favour of the assessee by Supreme Court in 'SRI.VENKATA SATYANARAYANA RICE MILL CONTRACTORS CO. VS. COMMISSIONER OF INCOME TAX' [1996 (10) TMI 2 - SUPREME COURT]mere fact that making of a donation for charitable or public cause or in public interest results in the government giving patronage or benefit can be no ground to deny the assessee a deduction of that amount u/s 37(1) of the Act when such payment had been made for the purpose of assessee's business - Also see KARNATAKA STATE INDUSTRIAL INFRASTRUCTURE DEVELOPMENT CORPORATION LTD., [2021 (3) TMI 1343 - KARNATAKA HIGH COURT] - Decided in favour of assessee.
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2022 (1) TMI 1348 - CALCUTTA HIGH COURT
Unexplained credits - reliance on statement recorded from the CFO - HELD THAT:- From the statement recorded from the CFO the tribunal found on facts that the reconciliation and the explanation was duly supported by evidence which were on record. That apart, the assessee was called upon to explain various details which formed part of the addition made u/s 68 by AO and the Tribunal has recorded that the assessee has explained before it in entirety the reconciliation and also explained all the discrepancies.
Tribunal said that the AO ought to have asked to produce the bills and evidence of delivery of materials such as road challan and accepted challan copy etc. and no enquiry was made by the assessing officer in this regard and he has been swayed entirely by the statement of the CFO who was not allowed to be cross-examined.
Tribunal on facts, concluded that the reconciliation is supported by evidence which is on record and there is no difference in the balance sheet and in the books of accounts of the assessee and accordingly dismissed the appeal filed by the revenue.
The above factual discussion has been set out by us in the preceding paragraphs to demonstrate that the case on hand involves adjudication and re-adjudication into facts. This exercise has been done by the CIT(A) as well as the tribunal and we are precluded from doing such an exercise in an appeal filed u/s 260A of the Act where we are required to decide the question of law which in our considered opinion does arise in the instant case. Appeal filed by the revenue is dismissed.
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2022 (1) TMI 1347 - SUPREME COURT
Complicity of charges - Failure to discharge the duty to maintain the subsidy register - depositing subsidy in the account of twelve fictitious beneficiaries - Misappropriation of the entire loan and subsidy amount in connivance with Sri Subhendu Kumar Das and Sri Madan Mohan Saha - Charge relating to removal of documents - Transferring amounts through three demand drafts from the account of Sri Madan Mohan Saha to Joint S.S. Account of Sri Haradhan Bera on 28.06.94 - It is argued on behalf of the bank that the High Court re-appreciated the evidence and altered the finding on facts of the disciplinary authority on the ground of insufficiency of evidence.
Failure to discharge the duty to maintain the subsidy register - HELD THAT:- MW 1, the management witness, who deposed about the procedure in the bank, for recording entries in the subsidy register, clearly stated that at the relevant time, some entries were made by the Respondent, and some by Sri Madan Mohan Saha, who "used to maintain the subsidy register on most occasions." He also deposed that it was Sri Madan Mohan Saha's duty as the cashier to maintain the subsidy register. Saha failed to discharge that duty. In view of this evidence, and no contrary documentary evidence casting the primary responsibility to maintain the subsidy register on the Respondent, the impugned judgment, in this Court's opinion, cannot be faulted with in concluding that there was no material to prove the first charge against the employee.
Depositing subsidy in the account of twelve fictitious beneficiaries - HELD RHAT:- The enquiry officer did not Rule on this. The impugned judgment concluded that in the absence of proof of Sri Haradhan Bera's identity, and any independent material, with respect to the seven alleged beneficiaries, their identity was not independently proved. Additionally, there had to be some material, linking the employee (Respondent) with the applications, introducing the borrowers, etc. MW-1, the subsequent manager, clearly deposed in reply to a query (question No. 8) as to who used to "identify the borrowers" before sanction and disbursement of IRDP loans, that the "Pradhan/Member of Gram Panchayat" used to identify the beneficiaries. Such being the case, the involvement of the Respondent employee had to be shown by more definitive evidence. It is again a matter of record, that the then Pradhan of the Gram Panchayat, Sri Subhendu Kumar Das, identified the borrowers. In these circumstances, even in departmental proceedings, there had to be some overt evidence, and not mere suspicion, to support a valid finding of complicity of the Respondent. In these circumstances, the impugned judgment cannot be faulted with in its findings on the second charge.
Misappropriation of the entire loan and subsidy amount in connivance with Sri Subhendu Kumar Das and Sri Madan Mohan Saha - HELD THAT:- In the present case, the confessional statement was not by the Respondent. Those who authored the confession, did not depose in the enquiry. Furthermore, no witness who heard the authors of the confession, deposed to it. At best then, that document bound the authors, not third parties, like the Respondent. The enquiry officer clearly erred by relying on such extraneous matters, as the Respondent could not be made a scapegoat for the confession of others, especially with regard to his role. The bank's charge about his complicity had to be proved by evidence. This document, containing others' confession, could not have been used against him.
Charge relating to removal of documents - HELD THAT:- There was no evidence to show that the Respondent had removed the documents, from the bank. Importantly, he was charged seven years after the alleged incident; by that time other managers had taken over the branch.
Transferring amounts through three demand drafts from the account of Sri Madan Mohan Saha to Joint S.S. Account of Sri Haradhan Bera on 28.06.94 - HELD THAT:- The enquiry officer noted that, "Sri Haradhan Bera in his evidence avoided the matter for some reasons best known to him." In the absence of any other material, the finding that the amounts had been misappropriated by the Respondent, who in connivance with Sri Madan Mohan Saha, and Sri Subhendu Kumar Das, ensured that the loan component was returned to the bank, cannot be said to have been established.
An interesting side is this-Sri Madan Mohan Saha, who confessed to the misconduct, was charged and proceeded with departmentally. The confession of guilt, which he owned up to, nevertheless resulted in a mild penalty of withholding of increments. However, the Respondent, who did not admit his guilt, or confess to it, and in respect of whom there was no credible evidence, even going by the lower standards of acceptable proof in departmental inquires, was held to be guilty and visited with the penalty of dismissal. A reading of the disciplinary authority's order reveals that his past record of minor misconduct played a major role in determining his guilt, despite lack of evidence, and the extreme penalty of dismissal.
The impugned judgment cannot be faulted with. The appeal is unmerited.
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2022 (1) TMI 1346 - GUJARAT HIGH COURT
Reopening of assessment u/s 147 - notice issued to a dead assessee - HELD THAT:- The issue raised in the present writ application is no longer res integra in view of the decision of this High Court in the case of Bhupendra Bhikhalal Desai Vs. Income Tax Officer [2021 (3) TMI 892 - GUJARAT HIGH COURT] - We are informed that the aforesaid decision of this Court has been affirmed by the Hon’ble Supreme Court with the dismissal of Special Leave Petition filed by the Revenue [2021 (9) TMI 1474 - SC ORDER]
This writ application succeeds and is hereby allowed. The impugned notice is hereby quashed and set aside. Decided in favour of assessee.
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2022 (1) TMI 1345 - ITAT BANGALORE
Eligibility of exemption as per section 10(2A) - share of profit received from the partnership firm - assessee (LLP) is deriving income from business in the form of running of plant and machineries and share of profit from partnership firm - HELD THAT:- Assessee (LLP) is a partner in M/s. M.S. Enterprises and assessee has claimed exemption u/s 10(2A) of the Act on the share of profit received from M/s. M.S. Enterprises. The section 10(2A) of the Act grants exemption to a person being a partner of firm which is separately assessed as such, his share in the total income of the firm. The firm has been defined in section 2(23) of the Act, which includes LLP also. The Act is very clear that the LLP is to be treated as a firm. A firm can be a partner in other partnership firms. There is no restriction in the income tax Act for becoming partner by firm in other partnership firms. The assessee is a LLP and has received share of profit from other partnership firm which has been claimed as exempt income.
As relying on case of Radha Krishna Jalan [2007 (8) TMI 42 - HIGH COURT , GAUHATI] we hold that the assessee is eligible for exemption u/s 10(2A) of the Act from the share of profit received from the partnership firm. No much weightage on the case law relied by the ld. DR. Accordingly, allow the appeal of the assessee.
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2022 (1) TMI 1344 - CUSTOMS AUTHORITY FOR ADVANCE RULINGS, NEW DELHI
Classification of imported goods - parts of electronic toy cars” i.e. battery driven motor, on-off switch, small speakers for sound, LED indicator lights with its PCB, garari (pulley i.e. small plastic wheel with grooved rim) and plastic base - classifiable as “Parts of electronic Toy cars” under Customs Tariff Head 9503 or under Schedule I to the Customs Tariff Act, 1975 - benefit of concessional rate of 5% provided under Serial Number 592 of Notification No. 50/2017-Cus. (Tariff), dated 30-6-2017 - Whether such “parts of electronic Toy cars” as described above, imported in a single consignment would be eligible to be constituted or having the essential character of a complete or finished article as an “Electronic Toy Car” to fall under the category of “Electronic Toy Cars” instead of its “parts” under Customs Tariff Head 9503 attracting a higher rate or duty?
HELD THAT:- Chapter 95 of Schedule I to the Customs Tariff Act covers Toys, Games and Sports Requisites; Parts and Accessories thereof; and Heading 9503 covers Tricycles, scooters, pedal cars and similar wheeled toys; dolls’ carriages; dolls; other toys .. Further, it is observed that Chapter Note 3 of Chapter 95 provides that subject to Note 1 of Chapter 95, parts and accessories which are suitable for use solely or principally with articles of the Chapter are to be classified with those articles. The goods under reference (as depicted by IMAGE ‘A’ and IMAGE ‘B’, above), are parts of electronic toy cars in semi-assembled condition. Though they have not reached the stage of completion to be considered as electronic toy cars, these parts, in the assembled stage that have been presented, have acquired the essential characteristics of electronic toy car.
However, at this intermediate stage, the semi-assembled unit, as presented, have acquired a new character distinct of the various parts namely, battery driven motor, on-off switch, small speakers for sound, LED indicator lights with its PCB, garari (pulley i.e., small plastic wheel with grooved rim) and plastic base, which have gone into the making of the semi-assembled unit. This semi-assembled unit has acquired sufficient features to be considered as “parts of electronic toy car”. Therefore, the item under import should appropriately be considered as part of a toy, and the same is classifiable under Heading 9503 in terms of Chapter Note 3 of Chapter 95.
Eligibility of the said “parts of electronic toy car” for benefit under Notification No. 50/2017-Cus., dated 30-6-2017 - HELD THAT:- Serial Number 591 of the said notification provides for concessional rate of duty to “parts of electronic toys for manufacture of electronic toys falling under Heading 9503, subject to condition No. 9, viz. if the importer follows the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017. Therefore, having concluded that the “parts of electronic toy car” as presented are classifiable under Heading 9503, it follows that the said goods would be eligible for concessional rate of duty prescribed under S. No. 591 of Notification No. 50/2017-Cus., dated 30-6-2017, subject to the condition prescribed therein.
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2022 (1) TMI 1343 - SUPREME COURT
Unfair trade practice - physical possession of the flat or an alternative flat of the same size and dimension - seeking to restrain the developer from alienating flat - whether the developer had indulged in unfair trade practice, whether they were prejudicial to the interest of the complainant and / or the public in general? - HELD THAT:- From the impugned order, it is evident that the Tribunal accepted the explanation of Citibank that since the Pay Order in question had become stale, its proceeds / funds were moved to its ‘Unclaimed Sundry Account’, and did not attract any interest in terms of the RBI directions. The bank had also deposed that the Pay Order was cancelled on the request of the developer through its letter dated 26th May 2016 and that the funds were credited back to the account of the developer on 16th June 2016. It was further noticed that the amount for issuing the Pay Order was deducted from the current account of the developer. After noticing these facts, the Tribunal appears to have been swayed by the circumstance that the developer was held liable for unfair trade practice, and directed to pay compensation (in terms of the previous orders of the COMPAT) affirmed by this court, i.e., 15% compound interest on ₹ 4,53,750/-.
The impugned order has not rested its findings on any principle of law, much less any statutory provision. The Tribunal appears to have been completely swayed by the complainant's plight. In doing so, it did not give due consideration to the fact that ₹ 4,53,750/- was debited from the account of the developer. The complainant, for reasons best known to her, filed the original Pay Order due to perhaps lack of proper advice or instruction. Apparently, no order contemporaneously was sought from the MRTP Commission, which would have protected the interests of the complainant with respect to the money received even while ensuring that her contentions on the merits with respect to entitlement towards the flat were preserved. Many avenues / alternatives were available.
The provisions of Order XXI are applicable to decrees of civil court. However, they embody a sound policy principle, that if the amount is deposited, or paid to the decree holder or person entitled to it, the person entitled to the amount cannot later seek interest on it. This is a rule of prudence, inasmuch as the debtor, or person required to pay or refund the amount, is under an obligation to ensure that the amount payable is placed at the disposal of the person entitled to receive it. Once that is complete (in the form of payment, through different modes, including tendering a Banker’s Cheque, or Pay Order or Demand Draft, all of which require the account holder / debtor to pay the bank, which would then issue the instrument) the tender, or ‘payment’ is complete.
In the present case, the complainant was aware that the Pay Order had been tendered by the developer to her; nevertheless she filed the original Pay Order with her complaint, and did not seek any order from the MRTP Commission at the relevant time. The pleadings in the complaint did not disclose that the Pay Order was filed in the Commission, to enable the developer to respond appropriately. In these circumstances, the developer’s argument that the rule embodied in Order XXI, Rule 4 CPC, is applicable, is merited. The developer cannot be fastened with any legal liability to pay interest on the sum of ₹ 4,53,750/- after 30th April 2005.
This court is of the opinion that all courts and judicial forums should frame guidelines in cases where amounts are deposited with the office / registry of the court / tribunal, that such amounts should mandatorily be deposited in a bank or some financial institution, to ensure that no loss is caused in the future. Such guidelines should also cover situations where the concerned litigant merely files the instrument (Pay Order, Demand Draft, Banker’s Cheque, etc.) without seeking any order, so as to avoid situations like the present case. These guidelines should be embodied in the form of appropriate rules, or regulations of each court, tribunal, commission, authority, agency, etc. exercising adjudicatory power.
Appeal allowed.
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