2019 (12) TMI 1281 - AT - Income Tax

Not carrying forward the Long Term Capital Loss - HELD THAT - A.O. may consult the files of the previous years and if the amount is due and unclaimed the same may be allowed - We find no infirmity in these directions of the ld. CIT(A). The Assessing Officer is directed to verify the claim of the assessee and allow the same in accordance with law. Hence we dismiss this ground of revenue. Addition u/s 14A - absence of any satisfaction note recorded by the ld. A.O. - HELD THAT - D/R could not demonstrate that the Assessing Officer has recorded satisfaction as required under law prior to invoking Rule 8D of the Income Tax Rules 1962 ( Rules ). Thus this issue is covered in favour of the asses see by the order of this Bench of the Tribunal in the case of REI Agro Ltd. vs. DCIT 2013 (9) TMI 156 - ITAT KOLKATA - Decided against revenue. Disallowance made u/s 40(a)(ia) - HELD THAT - Revenue accepted the claim of the assessee that payment made to parties to the tune of 30, 000/- were not a single transaction and hence Section 194C of the Act does not apply. As regards payments to Vyapar Bharati Press he accepted the submission that TDS @ 1% was deducted on the payments and hence Section 40(a)(ia) of the Act is not applicable. In case of payments to NG Gosai Printing Pvt. Ltd. as it was purchase of goods he held that the provisions of Section 194C of the Act does not apply. Regarding the payment to Jivan Ratan Chatterjee Legal he submitted that the payment of 31517/- was towards advocate fees and service tax and as the advocate fees was less than 30, 000/- Section 194J of the Act does not apply. Similarly he has analysed each and every payment and came to a conclusion that provision of tax deduction at source do not apply. D/R could not contradict these factual findings of the ld. CIT(A). Addition made on account of sale of rights in property and carry forward of loss to future years - HELD THAT - The assessee has sold the rights in property in the Assessment Year 2013-14 and 2014-15. The assessee declared the same as income from capital gain in its return of income for these Assessment Years. Assessing Officer has accepted this claim of the assessee and assessed the income under the head capital gains. During the current Assessment Year 2015-16 the Assessing Officer treated the income from sale of right in property as income from business. The assessee disputed the same before the ld. CIT(A). Its case is that the income in question is assessable under the head capital gains and not under the head income from business of profession. He relies on the decision of the Hon ble Supreme Court in the case of Radhasoami Satsang vs. CIT 1991 (11) TMI 2 - SUPREME COURT for the proposition that consistency should be followed by the Assessing Officer when the facts permeating over the years are the same. - Decided against revenue Allowance of deduction of CSR expenses - HELD THAT - Revenue does not dispute the finding of the ld. CIT(A) that the expenditure is in question is allowable u/s 80G of the Act. The ld. CIT(A) has not held that the expenditure is allowable u/s 36 /37 of the Act. It is not the case of the ld. CIT(A) that Explanation 2 to Section 37 of the Act does not come into play. He was of the view that deduction in question is allowable under chapter VIA and not under chapter IV. As this finding has not been challenged in this ground we dismiss the same. Allowance of deduction of education cess u/s 37(1) - HELD THAT - As decided in ITC LTD. VERSUS ACIT RANGE-8 KOLKAKTA 2019 (4) TMI 1574 - ITAT KOLKATA section 40a(ii) applies only on taxes such than earn cess(es). We therefore reject the Revenue s contentions supporting the impugned disallowance. The assessee s instant substantive ground is accepted. The Assessing Officer is direction to verify all the relevant facts and allow the impugned cess (es) as deduction u/ s 37.

Summary

Issues Involved:
- Appeal against orders of the Learned Commissioner of Income Tax (Appeals) for the Assessment Years 2013-14 and 2015-16.
- Delay in filing appeals by the revenue.
- Disallowance under section 14A r.w.r. 8D of the Income Tax Act.
- Deletion of disallowance made u/s 40(a)(ia) of the Act.
- Treatment of income from sale of rights in property.
- Allowance of deduction of CSR expenses.
- Allowance of deduction of education cess u/s 37(1) of the Act.

Analysis:

1. Delay in Filing Appeals: The Appellate Tribunal condoned the delay of five days in filing the appeals by the revenue, noting that the department had sufficient cause for the delay, thus admitting the appeals.

2. Disallowance under Section 14A r.w.r. 8D: The Tribunal upheld the order of the Learned Commissioner of Income Tax (Appeals) regarding disallowance under section 14A r.w.r. 8D, as the Assessing Officer did not record satisfaction before invoking Rule 8D, in line with previous judgments supporting the same.

3. Deletion of Disallowance u/s 40(a)(ia) of the Act: The Tribunal upheld the decision of the Commissioner that no TDS was required to be deducted in certain cases, as per the submissions made by the assessee, dismissing the ground of the revenue.

4. Treatment of Income from Sale of Rights in Property: The Tribunal dismissed the revenue's grounds against the treatment of income from the sale of rights in property, citing consistency in approach and reliance on legal precedents to support the decision.

5. Allowance of Deduction of CSR Expenses: The Tribunal upheld the allowance of CSR expenses as a deduction under section 80G of the Act, as the expenditure was incurred for eligible CSR activities, in line with statutory provisions.

6. Allowance of Deduction of Education Cess: The Tribunal supported the allowance of education cess u/s 37(1) of the Act, based on a higher judicial forum's decision and upheld the Commissioner's findings, dismissing the revenue's ground.

7. Conclusion: Both appeals of the revenue for the Assessment Years 2013-14 and 2015-16 were dismissed by the Appellate Tribunal, affirming the decisions of the Commissioner on various grounds and issues raised in the appeals.