|
Advanced Search Options
Income Tax - Case Laws
Showing 21 to 40 of 164338 Records
-
2024 (5) TMI 1413 - ITAT DELHI
Unexplained cash deposited in bank u/s 68 - Assessee explained that the deposits were from cash withdrawals and opening cash in hand - HELD THAT:- On reading of the assessment order, it is observed that the AO has only took note of the fact that the withdrawals made by the assessee from the bank accounts to co- relate with the deposits made with the bank accounts completely ignoring the cash balances stood as on the first day of last month. Therefore, the entire exercise made by the AO appears to be futile. It is not in dispute that the cash book filed before the AO and the AO failed to examine the entries thoroughly and co-relate the deposits made into bank accounts vis-à-vis the cash balances as on first day of every month in the cash book. It appears that AO not even examined detailed submissions made by the assessee. Therefore, as the AO did not consider the cash balances and the realization of debtors and has simply gone by the just withdrawals, the addition cannot be sustained merely on that basis when the assessee had clearly demonstrated that the cash deposits were all made out of withdrawals, opening cash balance and realization of debtors. Thus, we direct the AO to delete the addition made u/s 68. Decided in favour of assessee.
Disallowance of interest paid u/s 36(1)(iii) - contention of the assessee is that the interest paid on bank loans is business expenditure and is deriving income from business on account of real estate and finance business was not accepted by the AO as the assessee has not sold any property or built/purchased any property during the current assessment year - HELD THAT:- Incomes/loss returned by the assessee under the head “income from business” have been accepted for the assessment years 2017-18 to 2022-23 by the Revenue and in none of these years, the incomes/losses shown by the assessee were disturbed. It is the submission that the decision of the Tribunal for the assessment year 2009-10 affirming the order of the learned Commissioner of Income-Tax (Appeals) in holding that the assessee is into real estate business has became final and this was accepted by the Revenue for assessment year 2009-10.
We are of the view that simply because the assessee has not shown any business income during the current assessment year, it cannot be held that the assessee is not carrying on the real estate business. Thus, following the order of the Tribunal for the assessment year 2009-10, we hold that the assessee is into the business of real estate and finance the interest expenditure incurred by the assessee is an allowable deduction. Accordingly, we delete the disallowance made by the AO. Ground no.1 of grounds of appeal raised by the assessee is allowed.
-
2024 (5) TMI 1412 - ITAT JAIPUR
Unexplained money u/s 69A - Unexplained cash deposits more than turnover - deposit of cash sourced from the sales proceeds or not is in combination of loan and turnover made by the assessee from his medical retail store - assessee derived income from retail store of medicines, managed/controlled by the assessee herself, after the death of her husband with the assistance of employees of the shop even though she was suffering from Neuro disease
HELD THAT:- Assessee is earning income from this only source of income and fighting for survival even though she has medical challenges for her health. We are aware that the assessee has not sincerely filed the return of income and has solely relied upon the accountant who has declared the turnover incorrectly. Though it was not correct state of affairs of the assessee and was wrongly declared by her accountant as confirmed by the assessee in her affidavit and supporting evidence. Even the assessee is dependent on the employee due to her neuron disease.
Based on those facts we are of the considered view that the turnover of the assessee reflected in the bank account cannot be considered partly loan amount and partly turnover. Therefore, considering that fact placed before us by the assessee in person as well as duly supported by an affidavit filed by her along with related corroborative evidence like ledger for purchase sales and CA certificate, we admit those additional evidences based on the contention raised by the assessee, though the contention of the assessee contradict with that of placed before the ld. AO but considering the peculiar aspect of the matter we admit those additional evidence. AO shall compute the total credit of cash deposited into the bank account of the assessee viz a viz with the turnover with the evidence.
Turnover declared by the assessee needs to be examined based on the corroborative evidence we direct the assessing officer to tax profit / income @ 8% of the total turnover under the provision of section 44AD of the act in the absence of any comparative chart, presently available by both the parties and law provide 8 % for retail trade. Therefore, we direct the assessing officer to verify the correct turnover based on the bank statement and other supporting evidence and at the same time assessee is directed to supply the related ledger for purchase, sale and CA certificate to assist the assessing officer. Accordingly, the appeal of the assessee is allowed.
-
2024 (5) TMI 1410 - ITAT SURAT
LTCG - deduction u/s 54F - assessee failed to fulfill the conditions as prescribed in the Income-tax Act - Payments made to parties before the transfer of the asset AND Payments made to parties after the date of filing return of income u/s. 139 WITH No evidences such as bills / vouchers produced by the assessee for payments made to different parties
HELD THAT:- Primary goal of exemption provisions of sections 54 / 54F of the Act, are to promote housing. The procedural and enabling provisions of sub section (4) cannot be strictly construed to impose strict limitations on the assessee and in default thereof to deny him the benefit of exemption provisions.
In the present case it was decided mutually by both the parties i.e. the buyer and seller that the final sale deed will be executed on making full payment of the sale consideration. However, since the assessee had consciously decided to sell the land and since the buyer was also certain to purchase the land, it was decided by the assessee to apply the funds of advance consideration towards the advance payments for construction of residential bungalow for timely compliance of provisions of section 54F. The assessee had already agreed to sell the property for certain amount and had decided to utilize the sale consideration for construction of new residential house on the land already owned by him, assessee had started all preliminary activities like finalization of design of a new bungalow, preparation of plan through architect, preparation of drawings and other preliminary requirements for approval of plan etc
The assessee had assigned the composite contract for construction of a residential house to M/s United One Infra Pvt. Ltd. The said contract was given for RCC construction and masonry work inclusive of supply of basic raw material for construction as well as labour charges. Since the assessee had already received the permission for construction of a residential house as per the approved plan and since the construction was to be started, the said contractor had asked for advance payment for procurement of necessary raw material as well as for other construction activities to be carried out by it. Therefore, the assessee had made above stated payments to the said M/s. United One Infra Pvt. Ltd. Similarly, advance payment was made to Ashok Timber Trading Co. for procurement of round logs of teak wood so that sizing and cutting work can be started on procurement of goods as per the designs provided by the Architect. Moreover, the advantage of bulk purchases in a lot could also be taken by the assessee. Therefore, the deduction claimed by the assessee ought to have been allowed by the assessing officer considering that the provisions of section 54/54F are benevolent provisions with the object of promoting housing facilities.
As decided in M. George Jeoseph [2021 (7) TMI 914 - KARNATAKA HIGH COURT] wherein it was held that if the amount is spent for construction for a new residential house out of advance payments received, the assessee is entitled to claim exemption u/s 54F - we note that the payment made by the assessee before the sale of property should be allowable and addition was rightly deleted by ld CIT(A), hence we confirm the findings of ld CIT(A).
Payments made to party after the date of filing of return - We note that assessing officer`s action in rejecting the claim of expenditure of Rs. 3,30,04,128/- is not justifiable in as much as the assessing officer made wrong inquiry regarding purchase from A-Class Marble Pvt. Ltd. for A.Y. 2019-20 whereas the assessee had incurred expenditure in F.Y. 2020-21 and hence the said reply has no relevance with the facts of the case of the assessee.
ITAT Chennai Bench in the case of ITO Vs. Rekha Shetty [2020 (8) TMI 312 - ITAT CHENNAI] held that “Mere non-compliance of a procedural requirement under section 54(2) itself cannot stand in the way of the assessee in getting the benefit under section 54, if he is, otherwise, in a position to satisfy that the mandatory requirement under section 54(1) is fully complied with within the time limit prescribed therein. “We note that based on the above facts, the assessee is able to prove that the transaction does exist.
Having regard to above judicial pronouncements and submission of the assessee, CIT(A) held that the utilization of capital gain has been done in the right spirit of the law and therefore merely for not depositing money in capital gain account and that too during Covid 19 pandemic, shall be held reason for non-granting deduction, was not justifiable on the part of the AO. Therefore, ld CIT(A) allowed as deduction - We have gone through the above findings of ld CIT(A) and noted that there is no infirmity in the conclusion reached by ld CIT(A), hence we approve and confirm the findings of ld CIT(A).
Payments made to different parties - During the course of assessment proceedings, the assessee had submitted all the details and the said party had also responded to notice u/s 133(6) of the Act and submitted its confirmation letter, cross copy of ledger account from his books of accounts and copies of all invoices along with copy of relevant bank statement reflecting the payments given by the assessee. A copy of the said confirmation letter is enclosed - assessee had already incurred the expenses for construction of a residential house and the assessee had also established the genuineness of expenses. Therefore, we note that assessee has provided bank statements confirming payments made to the sellers. The assessing officer has also received confirmation from each of the sellers, confirming the transaction. The residential house was completed within the time period of three years as per the requirement of section 54F of the Act. Based on these facts, ld CIT(A) held that the transaction has been established genuine and that the amount has actually spent in construction of house.
Appeal filed by the Revenue is dismissed.
-
2024 (5) TMI 1409 - ITAT BANGALORE
Unexplained cash deposits u/s 69A - Credibility of earlier withdrawals as a source for redeposits - Examination of fund flow and cash flow statements - Presumption of cash availability for redeposit - assessee had deposited a sum during the demonetization period - HELD THAT:- The assessee has filed the details bank accounts, showing the cash deposit and withdrawals and details of rent agreements and rental income earned by the assessee and also confirmation from certain tenants. Regarding receipt of rent by cash, confirmation is kept on record - According to the assessee, he has deposited earlier withdrawals made by assessee and amount received by the tenants into assessee’s bank accounts during the demonetization period. The assessee submitted that assessee has been regularly withdrawing the cash from the bank account on abundant caution to meet unforeseen expenses relating to the maintenance of assessee’s house properties. This practice has been accepted by the ld. AO by giving credit towards opening balance.
As held in the case of S.R. Venkataratnam [1980 (8) TMI 73 - KARNATAKA HIGH COURT] if assessee states that earlier withdrawal is available to the assessee to redeposit the same into bank account, the credit to that amount cannot be denied without bringing any material on record to suggest that, that earlier withdrawal has been spent by the assessee for some other purpose.
Assessee has to get due credit towards the cash withdrawals made by assessee and also rental income collected by assessee in the form of cash to deposit the said amount to assessee’s bank account. Accordingly, we delete the addition made towards unexplained cash deposit made into assessee’s bank account on various dates during the demonetization period. This ground of assessee is allowed.
-
2024 (5) TMI 1408 - DELHI HIGH COURT
Addition u/s 68 - Evidentiary value of statements recorded u/s 132(4) - as per ITAT no assessment could have been made on mere presumption of existence of incriminating material - Rectification of mistake u/s 292B or not, when no notice u/s 153C was issued - HELD THAT:-Statement recorded under Section 132 (4) of the Act has better evidentiary value but it is also a settled position of law that addition cannot be sustained merely on the basis of the statement. There has to be some material corroborating the content of the statements.
Act does not contemplate computing of undisclosed income solely on the basis of statements made during a search. However, these statements do constitute information, and if they relate to the evidence or material found during the search, they can be used in proceedings under the Act, as specified under Section 132 (4) of the Act. Nonetheless, such statements alone, without any other material discovered during the search which would corroborate said statements, do not grant the AO the authority to make an assessment.
Rectification of mistake u/s 292B or not, when no notice u/s 153C was issued - HELD THAT:- Reliance can also be placed upon the decision in the case of CIT v. Micron Steels P. Ltd. 2015 [2015 (2) TMI 589 - DELHI HIGH COURT] whereby, it was held that the jurisdictional defects cannot be cured under Section 292B of the Act and they render the entire proceedings null and void.
In the present case, it is seen that the Revenue has failed to allude to any steps which were taken to determine that the seized material belonged to the respondent-assessee group. Notably, the satisfaction note has also been prepared in a mechanical format and it does not provide any details about the incriminating material. Therefore, a failure on the part of the Revenue to manifest as to how the material gathered from the search of Jain group of companies belonged to the respondent-assessee group and the same is incriminating, vitiates the entire assessment proceedings.
Accordingly, we find no reason to intermeddle with the order of the ITAT which has rightly set aside the assessment order and deleted the additions made therein. Decided in favour of assessee.
-
2024 (5) TMI 1405 - DELHI HIGH COURT
Taxability in India - interest received by the Indian PE on deposit maintained with Head Office/Overseas Branch - scope of India-US DTAA - HELD THAT:- As decided in Credit Agricole [2015 (6) TMI 974 - BOMBAY HIGH COURT] had taken note of the indubitable and well settled position of branch offices not being separate personalities or juridical entities and that one person cannot thus profit from itself. Since the receipt of interest was from the Head Office of the respondent-assessee, it was according to Mr. Pardiwalla, the aforesaid principles which would govern.
Explanation to Section 9 (1) (v) of the Act is principally concerned with entities engaged in the business of banking and a PE in India once remitting payments to its Head Office, the statute giving rise to a legal fiction of such remittances being deemed to have accrued or arisen in India.
Explanation to Section 9 (1) (v) provision which introduces a statutory fiction by ordaining that a PE of a banking enterprise in India would be deemed to be a person separate and independent of the non-resident person of which it is a PE. However, it was the undisputed position before us that the said Explanation would have no application since it came into effect only from 01 April 2016 and by virtue of Finance Act, 2015.
That only leaves us to examine the challenge that stands raised based on the well settled position of the law clearly not contemplating a person profiting out of itself. Once we come to the firm conclusion that the branch office would not partake the character or attribute of a separate legal personality, the view as taken by the Tribunal is clearly rendered unexceptional. In any event, it would be the exception carved out in the DTAA with respect to banking enterprises which would govern.
As decided in Kikabhai Premchand KT [1953 (10) TMI 5 - SUPREME COURT] it is wholly unreal and artificial to separate the business from its owner and treat them as if they were separate entities trading with each other and then by means of a fictional sale introduce a fictional profit which in truth and in fact is non-existent. Cut away the fictions and you reach the position that the man is supposed to be selling to himself and thereby making a profit out of himself which on the face of it is not only absurd but against all canons of mercantile and income tax law.
-
2024 (5) TMI 1398 - KERALA HIGH COURT
Territorial jurisdiction of the court in a Writ Petition - Kerala HC or Madras HC - seeking a direction to lift the Attachment of a bank account by the assessing authority under the Income Tax Act - Single Judge found that the attachment of the bank account of the appellant in Wayanad was consequent to the exercise of power by the assessing authority under the Income Tax Act who was situated in Ooty, in Nilgiris District, which comes within the jurisdiction of the Madras High Court and could not be maintained before this Court[Kerala High Court] for lack of territorial jurisdiction
HELD THAT:- On a consideration of the rival submissions, we are of the view that the impugned judgment of the learned Single Judge requires no interference. It is well settled through the decision of the Supreme Court in M/S. Ambica Industries v. Commissioner Of Central Excise 2007 (5) TMI 21 - SUPREME COURT] and the later decisions including the decision of this Court in Aparna Balan and Another v. Union of India and Others [2018 (7) TMI 2347 - KERALA HIGH COURT] as also V. Viswanathan v. State of Kerala [2014 (10) TMI 1074 - KERALA HIGH COURT] and the judgment in K S Jamestin v. The Ministry of Petroleum and Natural Gas Shastri Bhavan, New Delhi and Another [2022 (11) TMI 1486 - KERALA HIGH COURT], that merely because the appellant has a bank account within the State of Kerala, he cannot maintain a Writ Petition challenging the orders passed by an assessing authority who is situated in Tamilnadu, more so when the orders in question are issued in connection with the business carried out by the appellant in Tamilnadu. The Writ Appeal, therefore, fails and is accordingly dismissed.
-
2024 (5) TMI 1397 - ITAT AHMEDABAD
Best judgment assessment - Validity of assessment order u/s 144 without issuing notice u/s 143(2) - HELD THAT:- When assessee has filed the return of income and responded to the notice of the AO, the conditions for invoking Section 144 are not met. Therefore, the assessment made by the AO u/s. 144, would not sustain. Various judicial decisions have held that invoking Section 144 is improper, if the assessee has filed a return of income and complied with the notices.
The courts have quashed such assessments, emphasizing that best judgment assessments are intended only for cases where the assessee fails to file returns or comply with statutory notices.
Addition u/s 69A as unexplained Money - In the present case, the assessee has furnished the details of cash deposits, during the course of the appellate proceedings. The Affidavits of relatives confirming that the cash deposited in the bank account of the assessee belongs to them were also produced before the CIT(A). Assessee also produced the return of income of the relatives.
As observed that the deposits is not relating to cash deposit and it is related to the maturity proceeds of the fixed deposits.
As noted that there is an addition on substantive basis in the hands of Shabbir Kantawala, brother of the assessee and the said Rs. 10,00,000/- is the same amount deposited in the joint bank account held by the assessee.
CIT(A) was not correct in upholding the half of the assessment in the hands of assessee u/s. 69A Affidavits, if credible and corroborated by other evidences, can be sufficient to explain the source of cash deposits. Neither the AO nor the CIT(A) has provided concrete reasons or evidences to reject the Affidavits and the explanation provided by the assessee. Mere suspicion or conjecture is not sufficient to sustain an addition u/s 69A - We, therefore, set aside the order of CIT(A) and delete the entire addition made u/s. 69A r.w.s 115BBE in the hands of the assessee by the AO.
Initiation of penalty proceedings u/s 271AAC(1) & 271F - Proceedings for initiation of penalty proceedings u/s. 271AAC(1) & 271F of the Act be dropped. Appeal of assessee is allowed.
-
2024 (5) TMI 1396 - ITAT MUMBAI
Penalty levied u/s 271(1)(c) - addition made of bogus purchases - CIT (A) restricted addition to 12.5% of bogus purchase - Information received from Maharashtra Sales Tax Department by DGIT investigation Mumbai which was in turn forwarded to the AO wherein five parties were found to be hawala parties providing accommodation bills.
HELD THAT:- As it is apparent that the addition made in the hands of the assessee remains on estimated basis. Though it cannot be the case that whenever addition is made on the estimate basis penalty cannot be levied. However, when the assessee has furnished all the relevant information, what is the information that the assessee has furnished inaccurately is the question. It cannot be said that assessee was in known of things at the time of recording of these purchase that same are bogus and furnished these information which was inaccurate to the AO - The several decision of the co-ordinate Bench in this case clearly shows that in such case the penalty u/s 271(1)(c) of the Act could not have been levied.
Thus as relying on Krishi Tyre Retreading and Rubber Industries [2014 (2) TMI 21 - RAJASTHAN HIGH COURT] the appellate orders of the ld. CIT (A) deleting the penalty u/s 271 (1) (c) of The Act , are confirmed. - Decided in favour of assessee.
-
2024 (5) TMI 1395 - ITAT VISAKHAPATNAM
Exemption from tax as the appellant is an ‘instrument of state’ as per Article 12 of the Constitution - as per assessee it is not liable to tax, as being a State under Article 289 of the Constitution of India engaged in public utility services - AO was of the view that the assessee is a partnership firm, having perpetual succession - HELD THAT:- We find that in the instant case, Assessee/APSCHE is incorporated under Special Legislation i.e. APSCHE Act, 1988. As per the said Act, the State Government is only having power to appoint Chairman and other members in the Government Council, i.e. full control of the State Government on the policy decisions as well as management. The Hon’ble Supreme Court has therefore held that the autonomous bodies like State Transportation Corporation or Warehousing Corporation, where there is full control by the Government either State or Central, theseare instrumentalities of State only. Further perusal of Article 12 shows that the definition of ‘the State’ given in Article is inclusive and not exhaustive.
The expression ‘other authorities’ used in Article 12 is neither defined in the Constitution of India nor in any other statute. Therefore, the Hon’ble Supreme Court of India and the Hon’ble High Court have interpreted this expression in various judgements. The Hon’ble Supreme Court of India while interpreting the expression “other authorities” in the case of Som Prakash Rekhi v. Union of India [1980 (11) TMI 113 - SUPREME COURT] have culled out certain tests to determine as to when a Corporation should be said to be an instrumentality or Agency of the Government.
If the body is found to be an instrumentality of the agency of the Government, it would be an authority included in term ‘State’ under Article 12 of the Constitution of India. However, the tests indicated by the Hon’ble Apex Court in the case of Som Prakash Rekhi [Supra] are merely indicative and not absolute and thus, have to be applied discretely. If any Body or organisation falls within the criteria as laid down by the Hon’ble Apex Court it can be considered that it falls within the term “State”.
we observe that the assessee has satisfied majority of the conditions. We also further note that the assessee’s Govt. Counsel has made an application, both for cancellation of PAN, which was issued wrongly as a partnership firm and also an application under 10(46) of the Act for exemption of specified income to the assessee. Considering the arguments of the Ld.AR that the assessee is under bonafide mistaken belief as being instrument of state is exempt from filing the return of income, the assessee has not filed the return of income for the impugned year under consideration. Therefore, considering the facts and circumstances of the instant case that the assessee is completely under the superintendence and control of the State Government, financially and administratively, the assessee falls under the definition of ‘State’ as per Article 12 of the Constitution of India and in our view, the assessee is entitled for immunity from taxation of it’s income under the provisions of Income Tax Act., We are therefore, inclined to allow Ground raised by the assessee. Further, we are also of the opinion that since the assessee is fully exempt from tax, there cannot be taxation on the income of the assessee or the receipts collected by the assessee. Assessee appeal allowed.
-
2024 (5) TMI 1394 - ITAT MUMBAI
Levy of penalty u/s 271(1)(c) - bogus LTCG - exemption of Long Term Capital Gain u/s 10(38) of the Act on sale of shares denied - revised income declaration was not voluntary but a response to the notice issued u/s 148 -
HELD THAT:- We find that in MAK Data (P.) Ltd. [2013 (11) TMI 14 - SUPREME COURT] held that voluntary disclosure does not release the assessee from the mischief of penal proceedings. Further, it is evident from the record that though the assessee claimed the transaction of shares of M/s. Action Financial Services (India) Ltd to be genuine, however, did not bring any material of record to support its contention and straight away upon receipt of notice u/s 148 offered to tax the LTCG on the sale of shares of M/s. Action Financial Services (India) Ltd.
There is also no material on record to show that the assessee subsequently again claimed the Long Term Capital Gain to be exempt. Since the additional income on account of the aforesaid Long Term Capital Gain was offered to tax only in response to the notice issued u/s 148 we agree with the findings of the lower authorities that the same is not voluntary but is consequential to the issuance of notice u/s 148 of the Act.
In view of the above, we also do not find any merits in the submissions of the assessee that no penalty can be levied in the present case since the returned income and assessed income are same, as the only basis of issuance of notice u/s 148 was the alleged bogus LTCG claimed as exempt by the assessee in the original return of income and which was subsequently offered to tax by the assessee in response to notice issued u/s 148 - we find no infirmity in the impugned order in upholding the levy of penalty u/s 271(1)(c) of the Act, and therefore, the same is upheld. As a result, the grounds raised by the assessee are dismissed.
-
2024 (5) TMI 1393 - ITAT DELHI
Penalty u/s 271(1)(c) - Defective notice u/s 274 - non specification of clear charge - whether the assessee has concealed its particulars of income or furnished inaccurate particulars of such income? - HELD THAT:- AO has not struck off the inappropriate portion therein. The notice, so issued, does not mention the specific charge i.e. whether the assessee has concealed particulars of its income or furnished inaccurate particulars of such income. Hence, the show cause notice issued u/s 274 read with Section 271(1)(c) of the Act dated 08.03.2016 becomes defective and bad in law, therefore, no penalty u/s 271(1)(c) can be levied in such case. The issue is squarely covered by the ratio of decision of M/s Sahara India Life Insurance Company Ltd.. [2019 (8) TMI 409 - DELHI HIGH COURT]
As Revenue could not bring any contrary material on record to demonstrate that the notice so issued contained specific charge, grounds raised by the Revenue are rejected.
-
2024 (5) TMI 1392 - ITAT INDORE
Unexplained investment in the form of cash for the purpose of purchasing immovable property - Search and seizure operation carried upon - Confirmation of Addition Without Cross-Examination - Burden to prove - HELD THAT:- We fail to find any merit in such observation of the lower authorities for the reasons that the search and seizure action have been conducted by the Income Tax Department on person to whom cash was given [Mr. Nilesh Ajmera] and certain documents and diaries were seized. Based on such documents and also taking basis of statements given by Mr. Nilesh Ajmera, reassessment proceedings have been carried out in the case of the assessee.
Admittedly, search action was conducted on the assessee and the alleged addition is merely on the basis of third parties’ information. So, when the additions have been made on the basis of documents found from the possession of Mr. Nilesh Ajmera and the search operations have been carried out in the case of Nilesh Ajmera, then as per the direction of this Tribunal, it was the responsibility and duty of the AO to bring Mr. Nilesh Ajmera for cross examination before the assessee and give him the opportunity to assessee to cross examine Mr. Nilesh Ajmera so as to adhere to the principles of natural justice, since the additions have been made based on third parties’ statement. The burden to discharge the onus as directed by this Tribunal was purely on the AO and he could not absolve from his duty by mentioning that summons were sent twice to Mr. Nilesh Ajmera.
The action of the AO seems like that there is a witness from the side of the Revenue and on his statement, the addition has been made in the hands of the affected party but when the opportunity of giving cross examination is to be given, then rather than the Revenue to bring its witness for cross examination the affected party is held responsible for bringing such witness. Similar approach of the Ld. AO in the instant case cannot be held to be justified. For the inability of the AO to comply with the directions of this Tribunal by not providing the opportunity to the assessee to cross- examine to Mr. Nilesh Ajmera leaves us with no option except to delete alleged addition for unexplained investment of cash given by the assessee.
Even DR could not place on record any other material in support of revenue to prove that any such investment was made in Dubai flat and also failed to controvert the findings of this Tribunal given in the case of Pukhraj Soni [2016 (9) TMI 1489 - ITAT INDORE], wherein also under similar set of facts and circumstances, relief was given to the assessee, since no corroborative and concrete evidence was found, which could prove that Mr. Pukhraj Soni has advanced money to Mr. Nilesh Ajmera. Decided in favour of assessee.
-
2024 (5) TMI 1391 - ITAT KOLKATA
Unexplained cash credit u/s 68 - Bogus share capital/share premium - HELD THAT:- AO issued notices u/s 133(6) of the Act to all the subscribers and were duly replied by furnishing all the details/evidences as called for. Besides the AO also issued summons u/s 131 of the Act to all the parties, which were duly replied by the share subscribers copies of which are filed in the paper book as stated above. In our opinion, the assessee has duly discharged its onus by filing evidences before the ld. AO and AO has acted on the ground that the subscribers have no creditworthiness to invest in the assessee company as they were not having sufficient income either in the current year or in the preceding years.
AO ignored the fact that these subscribers were having huge networth and have made investments out of that. The ld. AR stated that where the AO has any doubt about the lenders where the assessee has furnished all the evidences before the AO, then the matter should be looked into the hands of the creditors and not the assessee when all the subscribers are duly assessed to tax and even the assessment orders u/s 143(3) of u/s 143()1) of the Act are placed on records.
Thus as the share subscribers have even replied to the notices issued u/s. 133(6) of the Act and also to the summons issued u/s. 131, we are inclined to hold that assessee has proved all the ingredients of section 68 of the Act by filing all the evidences and the authorities have failed to any substantive evidence or material to the contrary .Accordingly, we set aside the order of ld. CIT(Appeals) and direct the ld. Assessing Officer to delete the addition - Decided in favour of assessee.
-
2024 (5) TMI 1390 - ITAT DELHI
Levy of penalty u/s 271AAB - Defective Notice for Penalty Proceedings - show cause only mentioned the offence committed by the assessee by mentioning that assessee has concealed the particulars of income or furnished inaccurate particulars of income show cause notice is meant for initiating penalty proceedings u/s 271(1)(c) as AO has used the same show cause notice in the same format for initiating penalty proceedings u/s 271AA - whether the assessee has concealed the particulars of income or had furnished inaccurate particulars of income?
HELD THAT:- There is a greater onus casted on the Revenue to specifically mention in the show cause notice itself as to what offence the assessee has committed and also to mention the rate of penalty that is sought to be levied by the AO on the assessee i.e., 10% or 20% or 30% or 60% of undisclosed income, as the case may be. If none of these preliminary informations are mentioned in the show cause notice, then the show cause notice issued by the Ld. AO becomes completely defective and consequentially fatal and would vitiate the entire penalty proceedings.
This issue, in any case, is no longer res integra in view of the decision of Kolkata Tribunal in the case of Sushil Kumar Paul [2022 (12) TMI 1008 - ITAT KOLKATA] wherein as held there is no mention about various conditions provided u/s 271AAB - AO has very casually used the proforma used for issuing notice before levying penalty u/s 271(1)(c) of the Act for the concealment of income or furnishing of inaccurate particulars of income. Except mentioning the section 271AAB of the Act in the notice, it does not talk anything about the provisions of section 271AAB. Therefore, certainly such notice has a fatal error and technically is not a correct notice - Decided in favour of assessee.
-
2024 (5) TMI 1368 - ITAT AMRITSAR
Appeal before CIT(A) u/s 249 - Non admission of appeal for non-payment of advance tax as per provisions of section 249(4)(b) - obligation to make payment of advance tax u/s 208 or not? - determination of documentary evidences filed by the assessee
HELD THAT:- We find that the assessee has taken a stance from the very first stage itself , before the AO that he has no taxable income for the year under appeal and his income is only agricultural income which is exempted income under the Act 61 and the gift received from relative ( within the meaning of explanation (e) of clause (vii) of sec 56 of the Act ) is also non-taxable, and has filed documentary evidence of the same before the AO , as evident from the assessment order, and in the computation of income filed by the assessee before the Tribunal, he has declared NIL taxable income , thereby indicating that he is not liable to pay any advance tax as per provisions of section 207 of the Act 61 because he has no total income which would be chargeable to tax and computation of advance tax , as per sec 209 of the Act is NIL, and according to the assessee the payment of advance tax u/s 210 of the Act , of his own accord , does not arise in this case. We also note that the assessee has filed a reply before the first appellate authority to the deficiency letter, dated 03/01/2024, stating that he has no taxable income.
Thus we are of the opinion, that the assessee has presented a prima facie case, of no obligation, to make payment of advance tax u/s 208 of the Act 61, for the year under appeal, and we hold that the CIT(A) should have admitted the appeal for adjudication on merits, and the amount of advance tax payable by the assessee, for the purpose of presenting the appeal, as per provisions of section 249(4)(b), should be taken as NIL.
We set aside the order of the CIT(A) and restore the same to his file for adjudication on merits, after causing all necessary verification of all documentary evidences he deems fit and proper, as per procedure of law, (un influenced by any observation we might have made in the above paragraphs), and after allowing proper opportunity to the assessee of being heard. Appeals of the assessee is allowed for statistical purposes.
-
2024 (5) TMI 1367 - DELHI HIGH COURT
Delayed payment of PF & ESI before filing return of income as prescribed in law - Whether the Ld. ITAT is justified in law and fact and circumstances of the case in making disallowance of payment of ESI & PF before filing Return which was duly covered u/s 43B of the Income Tax Act?
HELD THAT:- Dealing with the impact of a delayed deposit and the ambit of Section 43B Supreme Court in Checkmate Services [2022 (10) TMI 617 - SUPREME COURT] held that non obstante clause has to be understood in the context of the entire provision of Section 43-B which is to ensure timely payment before the returns are filed, of certain liabilities which are to be borne by the assessee in the form of tax, interest payment and other statutory liability. In the case of these liabilities, what constitutes the due date is defined by the statute. Nevertheless, the assessees are given some leeway in that as long as deposits are made beyond the due date, but before the date of filing the return, the deduction is allowed. That, however, cannot apply in the case of amounts which are held in trust, as it is in the case of employees' contributions— which are deducted from their income. They are not part of the assessee employer's income, nor are they heads of deduction per se in the form of statutory payout. They are others' income, monies, only deemed to be income, with the object of ensuring that they are paid within the due date specified in the particular law. They have to be deposited in terms of such welfare enactments. It is upon deposit, in terms of those enactments and on or before the due dates mandated by such concerned law, that the amount which is otherwise retained, and deemed an income, is treated as a deduction.
Thus, it is an essential condition for the deduction that such amounts are deposited on or before the due date. If such interpretation were to be adopted, the non obstante clause under Section 43-B or anything contained in that provision would not absolve the assessee from its liability to deposit the employee's contribution on or before the due date as a condition for deduction.
Thus we find no justification to interfere with the view as expressed. Decided against assessee.
-
2024 (5) TMI 1366 - KERALA HIGH COURT
Method of valuation of closing stock - adoption of a uniform method of valuation of closing and opening stock - FIFO Method - valuation of inventories at lower of actual cost or net realisable value computed in accordance with the Income Computation and Disclosure Standards (ICDS) notified under sub-section (2) of Section 145 - arbitrariness in making it mandatory to value the stock by applying the FIFO or weighted average cost method - writ petition in challenging the amendment in Section 145A, making it mandatory for adoption of Clause 16 of ICDS (II) for applying FIFO or weighted average cost method across the Board for all assessee for valuing the closing and opening stock.
HELD THAT:- It is no matter of doubt that an assessee is entitled to adopt one or the other method of computation of its income if a particular method has not been made mandatory. The petitioner was applying the LIFO method of accounting as the standard for valuing the closing and opening stock up to 01.04.2017. Before 01.04.2017, there was no mandatory provision for adopting one or another method of Accounting Standards. The Statute also did not mandate only one method of valuing the closing and opening stock. The petitioners were free to adopt any one of the Accounting Standards as notified by the ICAI.
The Parliament, after a wide range of consultation from all stakeholders and based on the recommendations of the Committee to maintain uniformity in accounting the income and valuing the stock, has made Clause 16 of ICDS (II) mandatory for the adoption of FIFO or weighted average cost method. This mandatory provision applies to all assessees, and, therefore, find no substance in the submission of the learned Senior Counsel for the petitioners that making Clause 16 of ICDS (II) mandatory for adopting FIFO or weighted average cost method as the only method valuing the stock/inventory suffers from any vires of unreasonable classification or manifest arbitrariness as violative of Article 14 of the Constitution of India.
In the present case, the petitioners had been following the LIFO method to value its closing and opening stock and the same had been accepted by the Revenue up to 01.04.2017. It is also a well-settled law that the closing and opening stock are to be valued by applying the same method of valuation. In the case of Ramswarup Bengalimal (1953 (9) TMI 22 - ALLAHABAD HIGH COURT], K.G Khosla [1973 (11) TMI 37 - DELHI HIGH COURT], Doom Dooma India Ltd [1992 (12) TMI 41 - GAUHATI HIGH COURT], & Mahavir Aluminum Ltd . [2007 (11) TMI 41 - HIGH COURT OF DELHI] held that opening and closing of stock of a year have to be necessarily valued on the same basis. The opening stock cannot be valued in a manner different from the valuation of closing stock.
In Chainrup Sampathram [1953 (10) TMI 2 - SUPREME COURT], P.M Mohd. Meerakhan [1969 (2) TMI 4 - SUPREME COURT], Sanjeev Woolen Mills [2005 (11) TMI 26 - SUPREME COURT], ALA firm [1991 (2) TMI 1 - SUPREME COURT] it has been held that the valuation of closing and unsold stock is not the source of income in the hands of the assessee. However, by applying the method of FIFO with effect from 01.04.2017, the income of the petitioner has increased to the tune of Rs.51.07 Crores without any real income.
As substitution of Section 145A with retrospective effect from 01.04.2017 by the Finance Act, 2018 is to give relief to those assessees who had adopted the FIFO to value their stock in the Assessment Year 2017-18 and to save their returns from being declared as incorrect/invalid. This retrospective operation is with said purpose and objective. However, if an assessee did not apply the FIFO to value its opening and closing stock as it was not mandatory, requiring such an assesses to apply FIFO to value their stocks for the Assessment Year 2017-18 would result in an uncalled-for outcome. Therefore, retrospective amendment in substituting Section 145A would not apply to those assessees who had not applied FIFO for valuing their stock in the Assessment Year 2017-18, as these assesses have been following LIFO consistently and had filed their returns before the Finance Act 2018 was enacted.
Therefore, in the case of the petitioners, the stipulation under Clause 16 of the ICDS (II) for the adoption of FIFO or weighted average cost for valuation of the stock/inventory cannot be applied in the Assessment Year 2017-2018 for the valuation of the opening stock, as the opening and closing stock of the year is to be valued by applying the same methodology.
Thus all the writ petitions are partly allowed, and the impugned notices in all the writ petitions are quashed. The respondents are directed to either accept the valuation of both opening and closing stock, for the Assessment Year 2017-2018, based on the LIFO method or permit the petitioners to value their stocks by applying the FIFO or weighted average cost method.
-
2024 (5) TMI 1365 - ITAT VISAKHAPATNAM
Penalty u/s. 271D - receipt of cash in relation to transfer of immovable property by the assessee attracting the provisions of section 269SS - case was selected for scrutiny under CASS for the reason “whether the cash deposits have been made from disclosed sources”- HELD THAT:- The admitted facts are that the assessee has received cash for the sale of immovable property from the buyer to the extent of 15,41,000/-. Section 269SS of the Act as amended by Finance Act, 2015 w.e.f. 1/6/2015 stipulates that no person shall take or accept from any other person, any loan or deposit or any specified sum, otherwise than by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account.
From the plain reading of the above section, it is noted that any person is barred from receiving from any amount otherwise by cheque or through banking channels in relation to transfer of the immovable property. Section 269SS of the Act prohibits receipt of any amount by way of cash in relation to the transfer of any immovable property. On this aspect the Memorandum explaining the provisions of Finance Bill 2015 with respect to amendment proposed w.e.f 1/6/2015 in section 269SS.
The objective of the amendment proposed in 269SS of the Act is to curb generation of black money. In the instant case the fact is that cash received by the assessee has been deposited by the assessee into the bank account, hence does not attract the provisions of section 269SS of the Act since there is no suppression of cash receipts by the assessee.
The assessee has also offered the capital gains to tax. The explanation given by the assessee for receipt of sale consideration constitutes a “reasonable cause” as contemplated in section 273B of the Act and the assessee has accepted the cash under inevitably unavoidable circumstances as explained by the Ld. AR in his arguments and immediately on receipt of the cash, the assessee deposited the same in the bank account which contemplates the genuineness of the transaction and moreover the assessee has paid the tax on capital gains thereon.
We are of the considered view that the penalty levied by the Ld. AO-NFAC u/s. 271D and confirmed by Ld. CIT(A)-NFAC is unsustainable in law and accordingly the orders of the Ld. AO-NFAC and Ld. CIT(A)-NFAC are set aside and thereby we delete the penalty. Assessee appeal allowed.
-
2024 (5) TMI 1364 - ITAT MUMBAI
Application of application u/s 80G - application u/s 80G(5) in form no. 10AB was rejected on the ground that the appellant selected a wrong section code (13-clause (ii) instead of 14 - clause (iii)) - HELD THAT:-During arguments the DR on behalf of the revenue did not oppose the application for withdrawal of the present appeal. We have considered the rival submissions and also gone through the contents of the withdrawal application.
It is evident that the said withdrawal application has been filed on the basis of circular dated 25.04.2024 issued by the CBDT bearing circular no. 7/2024 extending the due date for filing of Form 10A/10AB under Income Tax Act, 1961. Withdrawal application, the application for withdrawal of the appeal is allowed and the present appeal is accordingly dismissed as withdrawn. Appeal filed by the assessee is dismissed.
........
|
