|
Advanced Search Options
Income Tax - Case Laws
Showing 81 to 100 of 163811 Records
-
2024 (5) TMI 160 - ITAT DELHI
Income deemed to accrue or arise in India - FTS/FIS - receipts pertaining to supply of software (including AMC services) - DR held software licence fee will not constitute royalty income but business income under Article 7 of India- USA DTAA which is not taxable in India in the absence of PE of the assessee.
HELD THAT:- Assessee is a tax resident of USA and has opted to be governed by the provisions of India-USA DTAA. Also, the assessee does not have a PE in India. The assessee had entered into a Software Licensing Agreement for supply and license certain Software and Service Level Agreement (forming part of Software Licence Agreement) to provide AMC services to Reliance/Jio/ RJIL.
What the assessee has supplied in the form of a Software to Reliance/ Jio is a copyrighted article not a copyright in the Software. Fact on record demonstrates that the Software is supplied by the assessee on a non-transferable, non-exclusive basis to various customers all over India. The assessee has only granted a right to use its Software to Jio in connection with its telecommunication business. The consideration received towards licensing of software is for use of a copyrighted article and therefore not taxable as royalty income under the provisions of Article 12 of the India-USA DTAA.
In our considered view, the case of the assessee is squarely covered by the decision of the Hon’ble Supreme Court in the case of Engineering Analysis Centre of Excellence P. Ltd. (2021 (3) TMI 138 - SUPREME COURT]) which has already been upheld by the DRP and the Hon’ble Delhi High Court in light of the factual matrix of the present case. We, therefore have no reason to interfere with the findings of the Ld. DRP on the impugned issue. Consequently, consideration received by the assessee from supply of software licence is not taxable in India in terms of Article 7 of the India-USA DTAA. Accordingly, ground Nos. 1 to 4 is allowed with a direction to the Ld. AO to give effect to the Ld. DRP’s findings in its directions/ order.
Remaining receipts on account of support and maintenance services rendered by the assessee - Nothing has been brought on record by the Revenue to establish that any technical knowledge has been provided to the employees of Reliance / JIO and / or human intervention is required in provision of AMC services. The observations and findings of the AO/ DRP on these aspects are based on surmises and conjectures. Imparting training or educating a person with respect to functionality and attributes of a software or application would clearly not amount to the rendering of technical service under the DTAA which view has been upheld by the Hon’ble Delhi High Court’s decision in the case SFDC Ireland vs. CIT [2024 (3) TMI 620 - DELHI HIGH COURT].
We hold that the receipts are not taxable in India as FTS/ FIS under Article 12(4) of the India-USA DTAA. It is business profits of the assessee not taxable in India in the absence of a PE of the assessee in India in terms of Article 7 of the India-USA DTAA. Accordingly, ground decided in favour of the assessee. In the nutshell, the entire receipts from the supply of software licence and maintenance and support services (AMC services) rendered by the assessee are held to be non-taxable in India.
Appeal of the assessee is allowed.
-
2024 (5) TMI 159 - ITAT NAGPUR
Deduction u/s 80P(2)(a)(i) - interest derived from deposits of SLR funds [Statutory Liquidity Ratio] - DR argued that this amount has been found as the excessive component in assessee’s deduction claim which hardly deserves to be accepted for the purpose of computing the impugned deduction - HELD THAT:- Assessee has all along been claiming the impugned sum to be representing it’s SLR i.e., Statutory Liquidity Ratio as mandatory compliance of the various banking norms applicable in case of a co-operative society.
It is in this factual backdrop that hon’ble apex court’s landmark decision CIT vs., Karnataka State Cooperative Apex Bank [2001 (8) TMI 9 - SUPREME COURT] and CIT vs. Nawanshahar Central Cooperative Bank Ltd.[2005 (8) TMI 28 - SC ORDER] have already settled the issue in assessee’s favour and against the department that such an interest derived from deposits of SLR funds duly qualifying for sec. 80P(2)(a)(i) deduction. Decided in favour of assessee.
-
2024 (5) TMI 158 - ITAT AHMEDABAD
Disallowance of raw material consumption - scope of rejecting the books of account - adopting method of estimation to make an addition due to increase in raw material consumption - as per DR there is corelated increase in sales as compared to increase in raw material consumption and the onus to give reason was on assessee - HELD THAT:- When the AO is resorting to any ad hoc disallowance on the basis of some estimation, he is rejecting the books of accounts without recording the specific reasons. Mere deviation in percentage of consumption of raw materials cannot be a ground for rejecting the books of account and entering in the realm and guesswork of estimation without inquiring into the genuineness of the purchases.
The Hon'ble Gujarat High Court in the case of CIT Vs. Dhiraj R. Rungta [2014 (4) TMI 711 - GUJARAT HIGH COURT] held that once rejection of books of account is justified under section 145 of the Act, no other addition can be made referring the same set of books to the income of the assessee. In the present case, the AO used the same set of books of accounts to estimate the disallowance which is not justifiable. CIT (A) also adopted the same method of AO accepting the books of accounts on one hand and making ad hoc addition on other hand but at lower percentage of disallowance.
When the books of accounts are regularly maintained and are duly audited without any adverse opinion or comments of an auditor, they are to be taken as correct unless there are adequate reasons to indicate that they are incorrect or unreliable. Thus, the onus is upon Revenue to show that either the books of accounts maintained by assessee are incorrect or incomplete or that the method of accounting adopted by him was such that true profits of the assessee cannot be deduced therefrom.
Neither AO nor Ld. CIT(A) has demonstrated specific defects in the books of accounts, therefore adopting method of estimation to make an addition due to increase in raw material consumption is not justifiable. Accordingly we delete the addition made by Ld. CIT(A) restricting the disallowance to 15% only. This ground of the assessee is allowed.
-
2024 (5) TMI 157 - ITAT DELHI
Disallowance u/s 14A r.w.r. 8D - no proper recording of satisfaction by the AO for rejecting the suomoto disallowance - HELD THAT:- We find that the Tribunal in assessee’s own case [2024 (2) TMI 1043 - ITAT DELHI] held that there is no proper satisfaction recorded on the suo moto disallowance made by the assessee and, therefore, there cannot be any disallowance under Rule 8D r.w.s. 14A of the Act.
There is no proper recording of satisfaction by the AO for rejecting the suomoto disallowance made by the AO. Thus, respectfully following the order of the Tribunal, we allow the grounds raised by the assessee.
Disallowance under 14A of the Act while computing the provisions u/s 115JB - The issue is covered by the decision of Vireet Investments [2017 (6) TMI 1124 - ITAT DELHI] as held that there cannot be any disallowance under Rule 8D read with 14A of the Act in terms of clause (f) of Explanation 1 to section 115JB of the Act. Thus, respectfully following the said decision, we hold that the disallowance made under Rule 8D read with section 14A of the Act while computing book profits cannot be sustained. In any case since the assessee itself made suo moto disallowance there cannot be any further disallowance u/s 14A read with Rule 8D of IT Rules while computing the book profits u/s 115JB of the Act. Ground raised by the Revenue is rejected.
-
2024 (5) TMI 156 - ITAT DELHI
Validity of reopening of assessment - Valid approval granted by PCIT u/s 151 or not? - HELD THAT:- We observed from the record that AO has received the approval from the PCIT-7 for reopening of the assessment and Ld. PCIT in point No.13 mentioned that it is a fit case for issue of notice u/s 148 by observing that “Yes I am satisfied”.
As in the case of Safonia Tradelinks (P.) Ltd. 2021 (3) TMI 1177 - DELHI HIGH COURT wherein the approval u/s 151 was granted simply and endorsing as approved. Even in this case the issue was decided in favour of the assessee. Further, it is brought to our notice in the case of VCR Township Pvt. Ltd. 2020 (10) TMI 1223 - ITAT DELHI wherein similar approval was granted for reopening of the assessment by approving authority as “Yes, I am satisfied” and the Co-ordinate Bench has decided the similar issue in favor of the assessee.
Respectfully following the above decision, the facts in the present case are also exactly similar to the above facts on record. Accordingly, ground No.3 raised by the assessee is allowed.
-
2024 (5) TMI 155 - ITAT DELHI
Validity of assessment proceedings initiated u/s 153A - unabated assessment - purchase of agri-land by the assessee - Addition u/s 69 - HELD THAT:- As held in the case of Abhisar Buildwell P Ltd (2023 (4) TMI 1056 - SUPREME COURT] no addition can be made in the case of unabated assessment which are not part of incriminating materials found during the search. In the present case, it is clearly established that assessee has made several payments to the farmers which lead to the finding that the assessee has purchased several immovable properties. Therefore, we are not inclined to accept the submissions of the assessee on the issue of purchase of agri-land by the assessee that there is no incriminating material found during the search. Accordingly, the ground nos.1 and 2 are are partly allowed because in the other additions, there are no incriminating material, the same was discussed somewhere in this order.
Addition u/s 69 - Payment to farmers and purchase of agriland - We observed from the record that AO acknowledged that assessee has paid cash payment to the farmers to the extent of money withdrawn from the bank. These findings clearly shows that there is a direct link with the information collected from the assessee and substantiates that the assessee has capacity to make payments to farmers. We also observed from the record that the AO has made addition based on the presumption that the assessee has no source and also the difference between the investment made as per registered documents and circle rates as per the respective lands.
The assessee has demonstrated that she has sources to make the investment and she is eligible to get the investment made in the agricultural land to the extent of declared sources. It is fact on record that the assessee has withdrawn the cash and made the payment to the farmers, to the extent of cash withdrawn by her from the bank for which she has sufficient fund available in the bank. Therefore, we are directing the AO to adjust the payments made from withdrawing from the bank account. The other part of the addition after making the addition may be sustained. In this regard, we are inclined to partly allow the ground no 3 raised by the assessee.
Coming to the other additions made by the Assessing Officer, we observed that all these information collected in post search proceedings and there is no evidence to show that the additions made by the assessing officer has bearing from the material found during the search - we are inclined to direct the Assessing Officer to delete above mentioned additions made by him in the assessment order. Accordingly, ground Nos 4 to 7 raised by the assessee are allowed.
-
2024 (5) TMI 154 - ITAT HYDERABAD
Denial of TDS credit - employer of the assessee has not deposited TDS after deducting the same from the salary paid to the assessee - Liability to deduct TDS - in the absence of TDS getting reflected in form 26AS, the CPC denied granting TDS credit - HELD THAT:- We find that the issue in this appeal is similar to the issue decided by the Hon'ble Delhi High Court in the case of Harshdip Singh Dhillon vs. Union of India [2024 (1) TMI 275 - DELHI HIGH COURT] since the petitioner accepted the salary after deduction of Income-tax at source, it is his employer who is liable to deposit the same with the Revenue authorities and on this count, the petitioner cannot be burdened. We find no substantial question of law to be considered by us in this appeal. Therefore, the petition is allowed and consequently the impugned demand notice is set aside and the respondent-Revenue is directed to allow credit of tax at source deducted by his employer - Appeal of the assessee is allowed.
-
2024 (5) TMI 153 - ITAT CHENNAI
Levy of penalty u/s. 271(1)(c) - disallowance made u/s. 35(2AB) - assessee argued that claim was made by the assessee as per DSIR guidelines and duly certified by a Chartered Accountant and DSIR does not communicate the grounds or items on which, it has restricted the claim of weighted deduction towards capital expenditure and revenue expenditure - Whether the DSIR approval or certificate restricting the claim of deduction u/s. 35(2AB) and particularly, when certificate comes after filing of return of income, restricting the deduction by the AO based on DSIR approval can amount to concealment of particulars of income or not ?
HELD THAT:- The issue answered in the case of CIT vs. Balaji Distilleries Ltd. [2012 (10) TMI 514 - MADRAS HIGH COURT], wherein it is held that in the absence of due care, it did not mean that the assessee was guilty of either furnishing inaccurate particulars or attempting to conceal its income and hence, the imposition of penalty for furnishing of inaccurate particulars of income on assessee’s held not justified. The Hon’ble Madras High Court applied the decision of Price Waterhouse Coopers Pvt. Ltd. [2012 (9) TMI 775 - SUPREME COURT]
Also decided in Reliance Petroproducts Ltd. [2010 (3) TMI 80 - SUPREME COURT] wherein as propounded “the meaning of the term ‘particulars’ used in section 271(1)(c) would embrace the details of the claim made. Where no information given in the return is found to be incorrect or inaccurate, the assessee cannot be held guilty of furnishing inaccurate ‘particulars’. In order to expose the assessee to penalty, unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By no stretch of imagination can making an incorrect claim tantamount to furnishing inaccurate ‘particulars’”
Thus at the time of filing of return of income, the DSIR approval was not available with the assessee restricting the claim of deduction will not tantamount to furnishing of inaccurate particulars of income in the return of income filed by the assessee. Hence, we delete the penalty and allow the appeal of assessee.
-
2024 (5) TMI 152 - ITAT CHENNAI
Computation of deduction u/s 10AA - excluding expenses incurred in foreign currency from export turnover for the purpose of computation - HELD THAT:- As referring to High Court of Madras [2020 (8) TMI 19 - MADRAS HIGH COURT] against [2016 (11) TMI 1670 - ITAT CHENNAI] order dated 16.11.2016 in ITA No. 1009/Mds/2014 hold that the order of the ld. CIT(A) is not justified in confirming the order of the Assessing Officer in excluding foreign currency expenditure from the export turnover for the computation of deduction under section 10AA of the Act.
Double addition of interest from fixed deposits in the computation of income - HELD THAT:- On perusal of the computation of total income in giving effect proceedings in pursuance to the directions of the ITAT, AO again added sum which is clear from appeal memo. In this regard, we find that the assessee filed rectification application under section 154 and it was submitted by the ld. AR that no decision whatsoever passed by the Assessing Officer as on today. CIT did not dispute the same, but, however, prayed to give direction to the Assessing Officer to pass orders in this regard. Accordingly, ground No. 4 raised by the assessee is allowed for statistical purposes.
Short grant of TDS credit - HELD THAT:- DR prayed to give a direction to the Assessing Officer to give full TDS credit as was given in the original assessment proceedings order dated 20.03.2015. We order accordingly. Thus, the ground No. 5 raised by the assessee is allowed for statistical purposes.
-
2024 (5) TMI 151 - ITAT MUMBAI
Time limit to pass assessment u/s. 92CA(3) - time line for passing of the order u/s. 92CA(3) of the Act for the purpose of reckoning the time period for completion of the assessment - HELD THAT:- The assessee has relied on the said decision of the Hon'ble High Court of Madras which has held that the time period prescribed under the said provision is mandatory and not discretionary though the word used in the statute is “may”.
The assessee has also placed reliance on the decision of Saint Gobain India (P) Ltd. [2022 (4) TMI 808 - MADRAS HIGH COURT]which has again reiterated that on identical facts, TPO should have passed the order on or before 31.10.2019 and any order passed beyond this would be barred by limitation, holding the ld.TPO's order to be nonest in the eyes of law, consequently the draft assessment order is also held to be invalid. In the case of an invalid transfer pricing order and the draft assessment order, the ld. A.O. has no jurisdiction to assess u/s. 144C of the Act holding the assessee to be not an ‘eligible assessee’ as per section 144C(15)(b)(i) of the Act.
On the above observation, where this issue has been dealt with extensively by the Hon'ble High Court, we are inclined to hold the ld. TPO's order dated 01.11.2019, draft assessment order and the final assessment order dated 27.03.2021 is barred by limitation as per the provision of section 92CA(3) and, hence, the subsequent draft assessment order and the final assessment order is, therefore, liable to be quashed on this ground. Hence, the additional ground raised by the assessee are hereby allowed.
-
2024 (5) TMI 150 - ITAT JAIPUR
Validity of reopening of assessment - reason to believe - HELD THAT:- Though the assessee has raised the legal ground challenging the validity of reopening proceeding but in the course of hearing failed to bring any substantial information to rebut the legality of reassessment proceeding. Therefore, considering that Ld. AO having relevant information indicating escapement of income, was well within his jurisdiction to issue notice u/s. 148 of the Act and carry out the reassessment proceedings.
Addition u/s. 56(2)(viib) - transaction of sale of agricultural land - difference between the consideration as per the stamp value authority and the sale consideration disclosed by the assessee - HELD THAT:- Examining the definition of agricultural land mentioned in the above section 2(14) of the Act in light of the certificates of the Municipal Board, certificate of distance from land to Municipal Board and certificate of population by Gram Panchayat office, we find that agricultural land in question do not fall in the category of capital asset. These additional evidence were also made available to the Ld. DR and she also failed to point out any specific discrepancies in the said documents which have been filed under the certificate of assessee. We are, thus, of the considered view that agricultural land in question is not a capital asset and is not falling under the provisions of section 2(14) of the Act.
Whether if an asset is not falling in the category of capital asset then the provisions of section 56(2)(viib) of the Act are not attracted because the property defined in clause (d) to explanation refers to only capital asset? - As relying on SHRI TRILOK CHAND SAIN [2019 (2) TMI 277 - ITAT JAIPUR] the asset in question is an agricultural land not falling in the category of capital asset defined in clause (d) to Explanation to sec. 56(2)(viib) of the Act and, therefore, section 56(2)(viib) of the Act cannot be invoked.
Assessee appeal is partly allowed.
-
2024 (5) TMI 149 - ITAT DELHI
Addition u/s 68 OR 41(1) - unexplained cash credit - assessee has not given satisfactory explanation with regard to identity of parties, genuineness of transaction and capacity of creditors - Contrary to this, CIT(A) sustained the addition by invoking the provisions of section 41(1) of the Act holding that these credits have been outstanding since long time - HELD THAT:- As rightly pointed out by the ld. A.R., the authorities have not brought anything on record to prove that the liability is ceased to exist and neither of the parties has written off the same in their books of accounts. Further, balance sheet of this assessment year has been duly signed by the assessee itself thereby acknowledged the debt and in such circumstances, the lower authority is precluded in applying the provisions of section 41(1) - More so, lower authority was not sure whether section 68 of the Act to be applied or section 41(1) - In such dichotomy neither provisions of section 68 nor 41(1) of the Act could be applied by the Revenue Authorities. Accordingly, we delete this addition made in respect of S.K. Enterprises.
With regard to Amitabh Enterprises when the inspector has visited the premises, it was reported that the firm was not operative from that address in the year 2015. Transaction took place prior to 01.04.2009 and the non-existence of this firm in 2015 cannot be reason to sustain addition and the report of the inspector cannot be relied in its entirety since there was no basis for such information so recorded by him by following the due procedure as stipulated in Code of Civil Procedure. Hence, unless and until there is an evidence to show that these credits are ceased to exist, there cannot be any addition u/s 41(1) of the Act, accordingly we delete the addition.
With regard to Shiv Shakti Card there was no cessation of credits in the assessment year under consideration. Full payment has been made in the assessment year 2013-14 and the purchase has been accepted in assessment year 2012-13. Being so, it cannot be added u/s 143(3) of the Act as discussed in earlier para 7 above and for the reasons mentioned thereon, we delete the addition.
With regard to Renuka Enterprises the said outstanding was of prior to 01.04.2009. Complete payment has been made in assessment year 2013-14 and no assessment was made u/s 143(3) on the same in the assessment year 2013-14. Only intimation u/s 143(1) of the Act was made. Hence, as discussed in earlier para 7 above and for the reasons mentioned thereon, we delete the addition.
With regard to Sikka Paper Pvt. Ltd. it is not possible to hold that debt ceased to exist. Accordingly, by placing reliance on the Judgment of Hon’ble Supreme Court in the case of CIT Vs. Balkrishna Industries Ltd reported in 300 CTR 29, wherein held that “if there is no remission or cessation of liability, amount in question cannot be treated as income u/s 41(1) of the Act”. In the case of CIT Vs. SI Group India Ltd. [2014 (12) TMI 267 - BOMBAY HIGH COURT] held that “since record before authorities did not disclose that, there was no remission or cessation of liability, one of the requirements spelt out for applicability of section 41(1) of the Act had not been fulfilled in facts of present case. Addition is deleted”. Accordingly, in our opinion, in all these cases mentioned above, it cannot be held that there is cessation of liability.
Addition for Cardline Products - Cessation of liability - The complete payment has been made in the assessment year 2013-14 to the tune of Rs. 33,41,957/- and the return has been filed by the assessee and accepted for the assessment year 2013-14 while processing the return u/s 143(1) of the Act and there is no evidence brought on record by ld. AO to show that this credit has ceased to exist in assessment year 2012-13.
-
2024 (5) TMI 148 - ITAT KOLKATA
Addition of employees’ contribution towards PF - delayed contribution - HELD THAT:- This issue is no longer res integra and the issue has been decided in the case of Checkmate Services Pvt. Ltd. [2022 (10) TMI 617 - SUPREME COURT] wherein it has been held that “deduction u/s 36(1)(va) in respect of delayed deposit of amount collected towards employees’ contribution to PF cannot be claimed when deposited within the due date of filing of return even when read with Section 43B of the Income-tax Act,1961. Decided against assessee.
Disallowance of interest paid on TDS u/s. 201(1A) - assessee reiterated as had paid interest u/s 201(1A) for delayed payment of TDS before filing of the income tax return - as urged that the said payment is not in the nature of penalty but it is the amount of interest which is not penal in nature, therefore, it should be allowed u/s. 37(1) - HELD THAT:- As relying on M/S PREMIER IRRIGATION ADRITEC (P) LTD case [2023 (1) TMI 1124 - ITAT KOLKATA] interest on late deposit of TDS is not an allowable expenditure and this ground of appeal is dismissed.
-
2024 (5) TMI 147 - ITAT MUMBAI
Estimation of income - bogus purchases - GP estimation - HELD THAT:- The assessee submitted books of account, purchase bills, sale bills, transaction through banking channels and the sale was totally declared in MVAT returns which were filed before the ld. Assessing Officer and the ld. CIT(A). The GP of the genuine purchase is @5.66% and GP of bogus purchase is @3.10%. So, the balance@ 2.56% of bogus purchases is only to be added and is restricted for addition. In our considered view, we set aside the appeal order and the addition is restricted to gross profit @2.56% on the bogus purchase.
-
2024 (5) TMI 146 - ITAT MUMBAI
Condonation of delay in filling appeal before CIT(A) - CIT(A) dismissing the appeal of the assessee in-limine - non condoning the delay in filing the appeal - AO has served all the notices to the old address of the assessee - HELD THAT:- It is stated that the assessee came to know of the assessment order, only when he came to know about the lien marked in his bank account. Thereafter, the assessee could file before CIT(A), even though the covid pandemic was continuing. In view of the above explanations given by the assessee, we are of the view that there was reasonable cause for the assessee in filing the appeal belatedly before CIT(A). Accordingly, we are of the view that the Ld CIT(A) was not justified in not condoning the delay. Considering the explanations given by the assessee, we condone the delay in filing the appeal before Ld CIT(A).
Assessment of property purchased - percentage of assessee share - Since the ld CIT(A) has not adjudicated the appeal of the assessee on merits, normally, all the issues need to be restored to his file for adjudicating them on merits. However, it is submitted that the share of the assessee in the property purchased was only 20%, while the entire value of property has been assessed in his hands by the AO. Further, it is the submission of the assessee that he has paid only a sum of Rs. 40.00 lakhs during the year under consideration.
Thus, we notice the facts relating the addition also require detailed examination. Hence, we find merit in the prayer of Ld A.R. Accordingly, we restore all the issues to the file of the AO for examining them afresh, after affording adequate opportunity of being heard.Appeal of the assessee is allowed.
-
2024 (5) TMI 110 - SC ORDER
Maintainability of appeal before SC on tax effect - income qualification for deduction u/s 80HHC of the Act - excluding the net profit or gross profit - Benefit of netting - HELD THAT:- As petitioner states that there is no reason to dispute the tax effect calculation submitted by the learned counsel appearing for the respondent. The tax effect is below the threshold limits. Therefore, the Special Leave Petition is disposed of.
However, question of law, if any, is kept open.
-
2024 (5) TMI 109 - SC ORDER
Validity of Revision u/s 263 - ITAT has set aside the said order of the Principal CIT as noted “this is not a case of inadequacy of enquiry. It is a case of absence of enquiry” - HC confirmed that ITAT appears to be a plausible one and not erroneous in law - HELD THAT:- We are not inclined to interfere with the impugned judgment and hence, the special leave petition is dismissed.
-
2024 (5) TMI 108 - ALLAHABAD HIGH COURT
Revision u/s 263 - as per CIT AO failed to enquire the deduction claimed u/s 54 - ITAT justification in holding that the order passed u/s 263 suffered from "hypertechnical approach" in following the provision of Section 54(2) - HELD THAT:- Tribunal has opined that the order may not have been prejudicial to the interest of revenue. Though not worded as such that appears to be the real finding of the Tribunal inasmuch as the Tribunal has observed that the revisional authority has not expressed any doubt regarding the quantum of capital gain arising at the hands of the assessee and that it was invested in purchase/construction of residential house.
We find, there is no material to doubt the correctness of the findings recorded by the Tribunal. While procedural lapse may have been caused by the assessee in observing the provision of Section 54 of the Act, in absence of real prejudice having arisen to the revenue, upon claim capital gain having been allowed by the Assessing Officer the Tribunal may have rightly allowed the assessee's appeal.
Seen in the context of an assessee with modest means, we find, the CIT had unnecessarily drawn up revision proceedings upon a procedural lapse as no real prejudice may have ever arisen to the revenue authorities in the context of petty amount involved. No substantial question of law arises.
-
2024 (5) TMI 107 - ALLAHABAD HIGH COURT
Reference to Departmental valuation officer[DVO] without first rejecting the books of accounts - HELD THAT:- Provision of law empowers the assessing officer to make a reference, however, the stage for making the reference being after rejection of books of account, the decision in Sargam Cinema [2009 (10) TMI 569 - SC ORDER] holds the field.
Since the essential facts with respect to making of reference have not been dealt by the Tribunal, we would not like to allow that discussion to arise before us. Accordingly, the order of the Tribunal is set aside and the matter remitted to the Tribunal to pass a fresh order keeping in mind the observations made above. Thus the Tribunal may first determine if the books of account of the assessee had been rejected before reference was made to the DVO. Only in the event the books are found to have been rejected before the reference order was made, the further issue of a edition may survive for consideration.
-
2024 (5) TMI 106 - BOMBAY HIGH COURT
Validity of reopening of assessment - Validity of grant the approval by the PCIT - relevancy of information reported by Insight portal - reason to believe - AO proceeds on the basis that on a search conducted under Section 132 on one Prathamesh Constructions,as subcontracting its jobs to various subcontractors and Petitioner was one of such sub-contractors - as submitted AO is a mere post office, who finds materials and then forwards it to the Faceless Assessing Officer (“FAO”) and the FAO will go into the details to decide whether there is any escapement of income -
HELD THAT:- Admittedly, in the notice issued under Section 148A (b) of the Act, certain allegations have been made to which reply has been filed and the AO has accepted that the information is accounted for by the assessee. AO, wanted to verify the genuineness of the contract work done by Petitioner or whether any accommodation entry was provided to Prathamesh Constructions. It is necessary to note that, first of all, in re-assessment proceedings, the law is clear. An Assessing Officer cannot indulge in a fishing enquiry.
In this case, the AO has accepted the contention of the assessee and held that the information report by the Insight portal is accounted for by the assessee in his books and income arising out of those transactions is duly offered for taxation. Therefore, the impugned order dated 21st April 2023 under Section 148A (d) of the Act cannot be sustained. At the same time if the AO wishes to, he could issue a fresh notice under Section 148A (b) of the Act if, that is permitted in law. We are expressing no opinion.
In the circumstances, the AO having accepted the explanation of Petitioner, he could not have gone ahead and recommended that it was a fit case where income chargeable to tax has escaped assessment. We would add that the approval granted by the PCIT is also without application of mind. In the approval, it is stated “I have perused the facts of the case vis-a-vis information/material available on record and found the case to be fit case for issue of notice u/s 148 of the I.T. Act, 1961. Accordingly, the draft order u/s 148A (d) of the I.T. Act submitted by the AO is approved.” If only the PCIT had read the impugned order and the notice issued under Section 148A (b) of the Act, he would have refused to grant the approval. The PCIT seems to have done nothing and it is clear that he has mechanically signed the approval. Decided in favour of assessee.
........
|
