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Income Tax - Case Laws
Showing 181 to 200 of 168845 Records
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2024 (11) TMI 640
Estimation of profit percentage @12.50% of gross receipts - assessment of assessee's income - CIT(A) applied estimated net profit of the assessee @ 12.5% on gross receipts assessed by the AO and consequently, restricted the additions - assessee pointed out that the advertisement business in which the assessee was engaged, operates on a wafer- thin margins and estimations @12.50% of gross receipts do not accord with ground realities - HELD THAT:- For determination of taxable income, involvement of some guesswork would be indispensable in the absence of requisite financial data.
CIT(A) has not provided reference to any material to weigh 12.50% to be a fair estimate. The assessee on the other hand has given reference to profits derived by the other party in the same business. The profits declared in the range of 1.5% to 2% is thus claimed by the assessee to be a fair estimate. However, it is the duty of the assessee to support the claim of profits in such narrow and low range. The assessee itself is to blame for not doing so. The estimation in the vicinity of such profits of 2 % or thereabout proposed on behalf of the assessee thus cannot be accepted.
Section 44AD of the Act provides for statutory presumptions whereby the sum equal to 8% of the total turnover or gross receipts of the assessee in a previous year on account of the business by the eligible assessee is deemed as profit and gains of such business chargeable to tax. Impliedly such statutory estimations at 8% of the total turnover are based on empirical studies and data gathered with the Legislature. Such statutory estimations of profits thus may serve as useful guide for the purposes of estimations. Guided by the rules of justice, equity and good conscience, we thus consider it just and expedient to adopt the rate of 8% of the gross turnover receipts as fair estimation of taxable income and more so in the light of comparable data placed for lower profit margin earned by other assessee in same business. We thus, modify the first appellate order towards estimation of profits from 12.5% to 8%. Appeal of the assessee is partly allowed.
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2024 (11) TMI 639
Disallowance of deduction claimed u/s 80IAB - appellant could not file form 10CCB in respect of deduction - HELD THAT:- As decided in Arunachalam [1994 (1) TMI 65 - MADRAS HIGH COURT] held that filing of audit report is directory in nature and if such audit report is filed on or before the AO passed the assessment order u/s 143(1) or u/s 143(3) then the AO should consider the audit report for the purpose of allowing the benefit of deduction under the provisions of the Act.
In the present case, it is not a case of the AO that the appellant has not filed the relevant audit report in Form 10CCB for claiming deduction u/s 80IA and 80IAB of the Act. In fact, the assessee has promptly filed form 10CCB on or before the due date for filing return of income in respect of deduction claimed u/s 80IA of the Act. But, could not file Form 10CCB in respect of deduction claimed u/s 80IAB of the Act, and the reasons given by the appellant for not filing said form, there is some technical glitches in the IT Portal.
In our considered view, it is a fact that in a time, there are lot of technical glitches in the IT Portal for filing return of income or any other document which has been reported to the concerned authorities by the taxpayers.
Going by the conduct of the assessee in filing audit report in respect of deduction claimed u/s 80IA of the Act, and also considering the reasons given by the assessee, that there are certain technical glitches and because of this, it could not upload 2nd audit report in Form 10CCB, in our considered view, the AO ought to have considered the audit report filed by the assessee on 25/06/2022 for claiming deduction u/s 80IA of the Act, because the said audit report was very much available to the Assessing Officer, when he passed the order u/s 143(1) of the Act.
In our considered view, as held that filing of audit report is directory in nature but not mandatory and further if such audit report is filed on or before the AO passed the assessment order, then the same needs to be considered for allowing deduction or exemption under the provisions of the Act. Since, the appellant has filed the audit report in Form 10CCB before the AO passed order u/s 143(1) of the Act, in our considered view, the claim by the assessee u/s 80IAB of the Act needs to be allowed. Thus, we set aside the order of the CIT (A) and direct the AO to allow deduction claimed u/s 80IAB of the Act. Decided in favour of assessee.
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2024 (11) TMI 638
Denial of tax relief u/s 90/90A - tax relief - procedural delay in filing of Form-67 - HELD THAT:- Filing of Form-67 is a procedural formality and could not be the basis for denial to the assessee. In the present case, we find that CIT(A) without assigning any reason has stated that he begged to differ from the above-mentioned judgment by SOBHAN LAL GANGOPADHYAY VERSUS ASSTT. DIRECTOR OF INCOME TAX, CPC, BENGALURU [2023 (5) TMI 1286 - ITAT KOLKATA]
It is important to mention here that any judgment passed by superior Court is binding in nature to the Court which are inferior to them. If the inferior Court differs, he has to discuss and assign reason of the difference. But in the present case, we find that ld. CIT(A) without assigning any reason to take a different view has only stated that he begged to differ, that is erroneous and cannot be said to be legally justifiable.
Thus, as held that the ld. AO ought not to deny the relief u/s 90 of the Act merely for delay in filing of Form-67. Appeal filed by the assessee is allowed.
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2024 (11) TMI 637
Addition u/s. 56(2)(x) - ‘income from other sources’ on account of difference in the stamp duty value received on sale of immovable property - HELD THAT:-CIT(A), held that as the date of ‘agreement to sell’ is 09.01.2012 and the allotment letter has also been furnished to the assessee on 24.02.2012, where the assessee has also paid the full and final consideration to the developer/builder, which fact was also not disputed by the AO, the impugned addition made by the ld. A.O. on the difference in the stamp duty value, was deleted on the ground that the proviso to section 56(2)(x)(b)(B) provides that where on the date of agreement the consideration has been fixed for transfer of immovable property and when the date of agreement and date of registration are not the same, then the stamp duty value as on the date of agreement may be taken for the purpose of determination of the stamp duty value.
It is also not the case of the Revenue that the assessee has not paid the consideration or failed to establish the payment for the said property at the time of ‘agreement to sell’. Though the AR has extensively argued that it is the case of transfer of lease hold rights for which section 50C of the Act cannot be invoked, there is no specific finding on the same by the lower authorities nor was it raised as a ground of appeal. In the absence of the same, and on perusal of the relevant documentary evidence furnished by the assessee, we find no infirmity in the order of the ld. CIT(A) in deleting the impugned addition made by the ld. A.O. Ground no. 1 raised by the Revenue is hereby dismissed.
Addition as ‘income from other sources’ u/s. 56(x) on account of difference in the stamp duty value - The assessee had placed reliance on R. C. Cooper vs. Union of India [1970 (2) TMI 130 - SUPREME COURT] and the decision of Premier Automobiles [2003 (4) TMI 43 - BOMBAY HIGH COURT] which has held that the sale of the entire undertaking as a ‘going concern’ will be a ‘slum sale’ and not acquisition of individual assets. The assessee has also relied on the decision of jurisdictional co-ordinate bench in the case of DCIT vs. Sumit Securities Ltd. [2012 (3) TMI 176 - ITAT MUMBAI] wherein it was held that in a slum sale, the value of individual assets should not be considered for determining the value of consideration for such transfer. The ld. CIT(A) after duly considering the submission of the assessee has deleted the impugned addition that section 56(2)(x) will not be applicable to the said transaction.
Upon perusal of the factual aspects and considering the documentary evidence relied upon by the assessee, we find no infirmity in the other of the ld. CIT(A) in deleting the impugned addition made by the ld. A.O. Ground no. 2 raised by the Revenue is hereby dismissed.
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2024 (11) TMI 636
Addition u/s 68 - gain accrued on the sale of shares as bogus - HELD THAT:- AO and CIT(A) has applied the concept of Human probabilities and held the above said scrips to be a penny stock without bring on record how the assessee is involved in any of the scrupulous activities or directly linked to one of the person who has involved in manipulation/rigging of share prices, entry operator or exit provider as observed by the Hon’ble Bombay High Court in the case of Ziauddin A Siddique [2022 (3) TMI 1437 - BOMBAY HIGH COURT]
Therefore, there is no material with the tax authorities to substantiate their findings that the impugned transaction is non-genuine. Therefore, we are inclined to allow the ground raised by the assessee. Accordingly the grounds raised by the assessee are allowed.
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2024 (11) TMI 635
CIT(A) dismissal of appeal without giving a reasonable opportunity to the assessee to present it’s case on merits - HELD THAT:- CIT(A) erred in facts and in law in not giving opportunity to the assessee to cure the defect, if any, in the filing of appeal form and dismissing the appeal of the assessee in limine, against the principles of natural justice.
Accordingly, the appeal of the assessee is restored to the file of CIT(A) for de-novo consideration, after giving an opportunity to the assessee to cure defects in filing of appeal, if any, and thereafter, decide the appeal of the assessee on merits, in accordance with law.
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2024 (11) TMI 634
Exemption u/s 11 - return was filed using ITR-6 - argument of Ld. CIT(A) recording principle of consistency and applicability of res judicata - HELD THAT:- Material available on records indicate that the assessee has been granted exemption u/s 11 for immediately preceding AY-2014-15 as is evident from order u/s 143(3) dated 28.12.2016. Perusal of para-3 thereof also alludes that same situation qua filing of ITR-6 and treatment of assessee as a rested entity u/s 12AA existed in the said year as well. The perusal of order further shows that the assessee has been allowed exemption u/s 11.
The argument of Ld. CIT(A) recording principle of consistency and applicability of res judicata have been found to be correct. It is trite law that principle of res judicata do not apply to direct tax however the revenue cannot take different positions in different years if there is no change in the material facts. The assessment orders for AY’s 2014-15 & 2015-16 show that the same fact of filing of ROI in ITR 6 was existing therein. The Ld.AO in AY-2014-15 chose to grant the assessee deduction u/s 11. This decision has become final and rather accepted by the revenue as nothing has been brought on records to suggest that the same was agitated through available revisionary remedies like action u/s 263 etc. It is trite law that notwithstanding principle of res judicata not applicable to direct taxes, an AO is not permitted to take different stand on the same issue and same set of facts over different years.
DR has not been able to point out any difference in the facts of the case as they existed in comparison to AY-2014-15. Accordingly, we are of the view that the Ld. CIT(A) has taken a correct decision in granting exemption u/s 11 and no interference is required to be made to his order at this stage. - Decided against revenue.
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2024 (11) TMI 633
Revision u/s 263 - directing the AO to verify the claim of assessee to MAT credit and if found credit not available, disallow the same - HELD THAT:-As ld.counsel explained before us that if the AO give appeal effect to the order of ITAT, then the MAT credit will be available to the assessee and in term of ITAT, a consequential order giving effect to the same has to be passed.
Since in the present case, there is no error in the assessment order as per the returned income, MAT credit is available. Any adjustment arising out of assessment and appeal proceedings could be rectified while giving effect to the Appellate Order passed by ITAT or rectification order u/s. 154 of the Act can be passed. The ld.counsel for the assessee filed complete details before us but going through the fact that these needs verification, after going through the consequential order passed by AO and hence, although it cannot be a subject matter of revision u/s. 263 of the Act, there is no error in the assessment order or no prejudice is caused to the Revenue, the MAT credit can be verified by the AO and that can be done while giving appeal effect order of AO for the assessment year 2015-16 and consequent rectification can be done by the AO for assessment year 2018-19 also. Hence to that extent, we agree with the directions of PCIT but this cannot be a subject matter of revision u/s. 263 of the Act. Accordingly, this issue of assessee’s appeal is allowed subject to above observation.
PCIT directing the AO to verify the claim of deduction u/s. 36(1)(viia) of the Act on the loan advance by 11 branches, which are not classified as rural branches for the purpose of claiming deduction u/s. 36(1)(viia) - The assessee has filed complete details of 11 branches which are situated in various cities and also submitted addresses of branches in Annexure-2, which is made part of the revision order at pages 10-12. From the above, 11 branches located at various places, it is noticed that 10 branches are covered by 2011 census wherein population is less than 10,000 except one branch of Pongalur which can be excluded from rural branches since the population is more than 10,000 as per 2011 census. The claim of deduction in respect of Pongalur banch having aggregate average advanc can be excluded. We have gone through the factual details and noted that, error in the assessment order which has caused prejudice to the Revenue is only in respect of this amount of Rs. 1,25,13,362/- claimed as deduction u/s. 36(1)(viia) in regard to Pongalur branch. Hence, we direct the AO to amend the assessment order to that extent and to that extent, the assessment order is erroneous and prejudicial to the interest of Revenue. But in any case, we have adjudicated this issue on merits and directed the AO accordingly.
Disallowance of expenses relatable to exempt income u/s. 14A r.w.rule 8D(2) -We noted from the facts of the case that the assessee has earned exempt income to the extent of Rs. 136 crores and the assessee suo-moto made disallowance of Rs. 2,56,403/-, the expenses incurred to earning exempt income by going through the provisions of section 14A of the Act. Now the PCIT want to invoke the prescribed formula as prescribed under Rule 8D(2)(ii) of the Rules and disallowance according to PCIT has to be worked out at 1% of the average value of investment on income earned or capable of earning exempt income which works out to Rs. 1.36 crore. We noted that the AO as well as PCIT during revision proceedings u/s. 263 of the Act noted that investments are treated by assessee bank as stock-in-trade and this issue is squarely covered by the decision of Hon’ble Supreme Court in the case of South Indian Bank Ltd [2021 (9) TMI 566 - SUPREME COURT] and hence, no disallowance can be resorted by invoking the provisions of section 14A of the Act r.w.rule 8D(2) of the Rules, wherever the investments are treated by bank as stock-in-trade.
We find no error in the order of AO which is causing prejudice to the Revenue rather the AO has rightly not disallowed any expenses relatable to exempt income in respect of investments held by assessee bank as stock-in-trade. Hence, we find no error in the assessment order and hence on this issue, on merits, the order of PCIT is reversed.
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2024 (11) TMI 632
Addition u/s 68 - unsecured loan/unexplained cash credits - HELD THAT:- All the companies have responded to the notices issued u/s 133 (6) of the Act before the Assessing Officer and substantiated before him that they are earning substantial interest on loan which is evident from the audited profit & loss account submitted before the AO.
Assessee also recorded the abovesaid unsecured loan in its books of account and paid interest by duly deducting TDS as applicable on the payment of interest.
CIT(A) observed that the above terms of lending unsecured loan to the assessee is real business transactions and cannot be treated as accommodation entries. Further, he observed that assessee also submitted year-wise profit & loss account of the of the abovesaid companies i.e. lender companies before the authorities and further assessee has demonstrated that assessee has paid the relevant interest on the borrowed money which is close to the market rate and also duly deducted TDS.
It is also observed by the CIT (A) that the assessee has repaid abovesaid borrowed loan in subsequent years. AO has conveniently ignored all these facts. It is also brought to our notice that all the above transactions were duly recorded in the books of account and there is no undisclosed cash credit involved in these transactions even though AO proceeded to disallow the same u/s 68 of the Act. After considering the overall facts on record, we do not see any reason to disturb the finding of the ld. CIT (A). Accordingly, ground no.1 raised by the Revenue is dismissed.
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2024 (11) TMI 631
CIT(A)-NFAC dismissed the appeal for default and not adjudicated or decided merits of the case - HELD THAT:- After going through the provisions of the Act particularly provision of section 250 we are of the view that the CIT(A) is a quasi judicial authority and in the statute of Income Tax Act, CIT(A) cannot dismiss the appeal for default expressly or by inevitable implication, but the appellate authority has to decide the appeal on merits.
The appellate authority has no jurisdiction to dismiss the appeal for default but he is bound to decide the appeal on merits even in the absence of the assessee. We further noted that, this view has been taken in the case of Southern Steel Industries [1995 (10) TMI 209 - MADRAS HIGH COURT] Hence, dismissal for default by CIT(A) is bad in law and accordingly, we set aside the order of CIT(A).
The order of CIT(A) is set aside and matter remanded back to his file for fresh adjudication. Needles to say that CIT(A), after allowing reasonable opportunity of being heard to the assessee, will decide the issue of delay first and in case delay is condoned, he will decide merits of appeals.
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2024 (11) TMI 630
Taxability of Income in India - royalty or FTS - payments made by GIL and other Indian customers to the assessee - Equalization levy provisions enacted in the Finance Act, 2016 - exemption under section 10(50) - HELD THAT:- This issue was considered by the coordinate Bench of the Tribunal in assessee’s own case for AY 2007-08 [2023 (3) TMI 1304 - ITAT BENGALURU] and it was held that the payment made by the payer (GIPL) to the assessee (GIL) is not in the nature of royalty or FTS and consequently it cannot be brought to tax in the hands of the assessee. The relevant portion of the order is extracted in the order of the CIT(Appeals), hence we are not reproducing the same again.
We hold that the payments made by GIL and other Indian customers to the assessee cannot be taxed in the hands of the assessee and find no infirmity in the order of the ld. CIT(Appeals). The grounds by the revenue in this regard are dismissed.
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2024 (11) TMI 629
Addition of unsecured loans u/sec. 68 and interest component - as argued A.O has ignored the information, evidences and audited financial statements and unilaterally made addition u/sec 68 - HELD THAT:- AR demonstrated the copy of bank statements reflecting the repayment of unsecured loans in the paper book which is not disputed by the revenue.
A.O has failed to make further enquiries and relied on the statement recorded, overlooking the factual aspects that the assessee has discharged the initial burden placed by furnishing the details.
AR referred to the copy of details of unsecured loans provided by the lenders and subsequent repayment of loans along with the financial statements, confirmations and bank statements filed by the two unsecured loans creditors directly with the assessing officer in lieu of notice issued u/sec 133(6) of the Act in the assessment proceedings placed.
Whereas the A.O has ignored the information, evidences and audited financial statements and unilaterally made addition u/sec 68 of the Act only on the basis of statement provided by third party without any iota of evidences discrediting the evidence furnished by the assessee and the statement of Shri Vipul Vidur Bhatt has been retreated which cannot use as reliable evidence.
The information submitted by the assessee satisfied the three ingredients of provisions of Sec. 68 - loan transactions are not believed and alleged as non genuine and treated as unexplained cash credit u/sec 68 of the Act and these unsecured loans were repaid through account payee / banking channels in the subsequent years which is not disputed.
AR submitted that the assessee has substantiated the stand by submitting the details before the A.O. and CIT(A) and discharged the burden. We considering the facts, circumstances and ratio of judicial decisions referred above, set-aside the order of the CIT(A) and direct the Assessing officer to delete the addition of unsecured loans and disallowance of interest - Decided in favour of assessee.
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2024 (11) TMI 628
Addition u/s 69A - increase of the cash sale during the year under consideration - assessee is engaged in the business of trading of gold, silver and diamond jewelry - HELD THAT:- The cash sales made has been included in the sales in the month of October and first week of November was that, Dussehra and Diwali festivals which were celebrated from 30-10-2016 to 10.11.2016. Accordingly in the month of October, 2016 there was substantial increase in sales with regard to increase in sale during the above said period after the announcement of the demonetization on 08.11.2016 at 8 pm shutters of the jewellers were opened and during the period 8.30 pm to 12.00 am substantial sales were made by the jewellers.
We find that during the assessment proceedings, copy of the purchase register and sale register item wise and value wise was filed. Further copy of the complete item wise and value wise stock summary of the FY 2016-17 was also filed before the AO and the assessee also filed the copy of the returns. Even the book of accounts has not been rejected by the AO.
We observed that in support of the above, the assessee has filed the paper book in which he has filed details of the sale and purchase of the jewellery and the same was increased due to the festival occasion because the people may have chosen to purchase the jewellery in cash. Therefore, the assessee has explained the reason of the increase of the cash sale during the year under consideration. We observed that the assessee has deposited during the demonetization period in the bank account and explained the reason of the cash deposit, hence he has discharged the onus and prove the genuineness of the transaction. In view of the above, there is no justification for sustaining addition u/s. 69A - Decided in favour of assessee.
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2024 (11) TMI 627
Reopening of assessment u/s 147 - unexplained investment in purchase of property and assessee has also not filed her return of income - Eligibility of reasons to believe - HELD THAT:- The procedures and way of approval and satisfaction is not proper. Here, the AO initiated proceedings under section 147 read with section 148 on basis of borrowed information received from the Sub Registrar for valuation of the immovable property, without verifying the correctness of the information and CIT gave approval without applying his mind in slipshod manner.
As approval/sanction given by CIT was without recording his own independent satisfaction as noted above, therefore, the reopening was not sustainable as per above judicial pronouncements and irregularities noted.
Thus, in that eventuality, issuance of notice under section 148 of the IT Act and all the consequent proceedings and assessment order passed was not in accordance with law. Thus, quash the proceedings under section 147 of the Act.
Procedural irregularities by the CIT(A) regarding the Vivad Se Vishwas Scheme - Order of the ld. CIT (A) is also dismissed as he has passed a wrong order in quantum appeal because the assessee has not applied for any immunity under “Vivad Se Vishwas Scheme/Act, 2020” in quantum appeal - HELD THAT:- From the order of the ld. CIT (A), it is clear that the order relates to penalty under section 271(1)(b) and 271F. Therefore, the order passed by ld. CIT (A) is quashed.
AO while making the addition has not invoked or applied any provisions of law. AO has not stated under what provision of law he has made the addition and under what head whether, under business or trading income, agriculture income, capital gain or under section 48, 56 or under section 68 or 69. Thus the addition so made without any provision of Act is also against the law and liable to be deleted on this ground alone. Without invoking the provision of Act/law, the AO cannot make the addition. For each and every offence, specific provisions are given in the law/Act to hold any person as victim defaulter, therefore, without applying any provision for that a person cannot be taxed and penalized. As the AO himself has not stated under what provision the assessee is liable to be taxed or penalized or under that provision his offence falls, therefore, addition cannot be made against the assessee.
Hon’ble Supreme Court in the case of Oryx Fisheries Pvt. Ltd. Vs. UOI [2010 (10) TMI 660 - SUPREME COURT] as observed that the show cause notice should give the noticee a reasonable opportunity of making objections against proposed charges indicated in the notice and the person proceeded against must be told the charges against him so that he can make his defense and prove his innocence. In the entire course of the proceeding, at no stage the Petitioner is made aware of the provisions of law which have been contravened and/or under which the additions are sought to be made which is in gross violation of the principles of natural justice and the procedure adopted by the Department is not fair or proper.
In the case of New Delhi Television Ltd. [2020 (4) TMI 133 - SUPREME COURT] it is held by the Hon'ble Apex Court that the Assessee must be put to notice of all the provisions on which the Department relies.
As the recorded reason/impugned assessment order is silent under which provision of the Act the addition is sought to be made. It is well settled that the reasons cannot be supplemented by assessment order or affidavit. Unless the assessee is put to the notice as to the exact contravention or provisions of law under which assessment or additions are sought to be made, the assessee cannot defend his case.
We, set aside the findings of the revenue authorities and the addition made and sustained by the lower authorities deserves to be deleted. Therefore, allow the present appeal.
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2024 (11) TMI 626
Failure to submit the form 15G/H to the Commissioner for TDS u/s 194A - Addition u/s 40(a)(ia) - branches had obtained Forms 15G/15H as applicable but assessee had not delivered the same to the prescribed authority under section 197A(2) - HELD THAT:- We find that it is not in dispute that the assessee has collected the Forms 15G/15H from the depositors, to whom it has paid interest. However, on account of the fact that the assessee had not deposited the same before the concerned CIT, AO and the ld. CIT(A) have refused to consider this and the ld. CIT(A) has gone on to hold that these forms may be manipulated.
It is observed that the AO has not examined or verified any of the Forms 15G/15H and therefore, such a conclusion, without examination, is not warranted.
In the case of The Karur Vysya Bank Limited, Bellary [2017 (9) TMI 829 - ITAT BANGALORE] referred to various judgments wherein it had been held that wherever there is any irregularity in the submission of forms for non-deduction of tax at source, the proper course of action is for the ld. Assessing Officer to verify the correctness of the forms and if the forms are found to be correct, the assessee cannot be held to be in default and no demand can be raised under section 201(1) and 201(1A).
Thus we feel the failure to submit the form 15G/H to the Commissioner is a technical breach and the assessee cannot be saddled with a tax liability, only on this account. We observe that the basic purpose of submission of these forms to the Commissioner, is to enable verification of the same.
Thus, we deem it appropriate, that the ld. Assessing Officer should verify the correctness of the Forms 15G/15H and if the forms are found to be correct, the assessee should be granted the relief under section 197A - restore the matter back to the file of the ld. Assessing Officer. Appeal of assessee is allowed for statistical purposes.
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2024 (11) TMI 597
Exemption u/s 11 - object is about the kuri and finance business in order to enhance the finance of the trust - as per revenue activities of the appellant is coming under residual entry of sec 2(15) are hit by the provisions of sec 13(8) - HELD THAT:- As perused the financial statement filed by the assessee and in nowhere it is mentioned that the income earned through kuri and finance business is utilized for the welfare of the trustees and infactthe amounts were spent towards achieving the objects mentioned in the byelaws of the trust.
Further, by way of conducting kuri and finance business, the assessee is receiving a small amount and that amounts were utilized by the assessee for conducting various charitable activities. We find that the assessee is not doing the kuri and finance business solely for the purpose of earning income like various other corporate entities doing. In order to do various charitable activities, the assessee is also doing small kuri and finance business and rightly spent the amount to achieve the objects mentioned in the byelaws.
A.O. as well as the CIT(A) has misconstrued the provisions of sec.2(15) of the Act and denied the exemption claimed u/s.11 of the Act.
Conducting of kuri and finance business itself came up for consideration before the case of Bharthashemam [2020 (11) TMI 1125 - KERALA HIGH COURT] considered kuri and finance business carried out by the trust and held that the trust is eligible for deduction u/s.11 of the Act since they are doing charitable activities out of the incomes received through kuri and finance business.
The assessee is also entitled for exemption u/s.11 of the Act in respect of the incomes earned from the kuri and finance business. Further, all along the department had accepted the claim of the assessee and granted exemption but only for the above mentioned assessment years a different view has been taken which in our opinion is not correct.
As decided in Navodaya Gramin Vikas Charitable Trust [2023 (9) TMI 256 - ITAT BANGALORE] the money lending business carried out by the trust in order to do the various charitable activities would not be a reason for denying the deduction u/s.11. Decided in favour of assessee.
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2024 (11) TMI 574
Depreciation @ 50% on a building claiming it to be a temporary structure -Nature of expenditure - HC [2023 (7) TMI 1490 - PATNA HIGH COURT] held that as only 10% depreciation for buildings other than used for residential purpose and not covered by subitems 1 and 3 there is absolutely no valid claim for the assessee to obtain a 50% depreciation.
HELD THAT:- There is gross delay of 344 days in filing this Special Leave Petition. The reasons assigned are neither satisfactory nor sufficient in law to be condoned.
Hence, the application seeking condonation of delay is dismissed. Consequently, the Special Leave Petition also stands dismissed.
Petitioner submitted that the petitioner has also filed a statutory appeal in the year 2018. It is needless to say that the petitioner is at liberty to prosecute the said appeal in accordance with law and on its own merits.
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2024 (11) TMI 573
Revision u/s 263 - Taxability of capital gain - nature of land sold - scope of ‘erroneous orders’ - Whether asset sold by the assessee was the agricultural land situated 5 kms / 8 kms beyond the boundary limits of the municipal corporation? - HELD THAT:- In the present case, while invoking the provisions of Section 263 of the Act against the order passed by the AO u/s 143 (3) PCIT emphasized that the AO did not scrutinize the critical documents, particularly those concerned with the claim of the assessee with respect to the land being agricultural in nature and its sale being exempt from capital gains tax. Specifically, the PCIT noted that the AO relied on a certificate issued by the Tehsildar, but failed to obtain corroborative evidence from other important and necessary authorities like the DTP, Gurugram. The AO, according to the PCIT, accepted the assessee’s claim without proper verification, which amounted to no-inquiry.
Ultimately, the PCIT took a view that the land sold by the assessee was not agricultural land, and thus, the assessee was not entitled for long-term capital gains tax exemption. However, the learned ITAT in the impugned order opined in the present case that the AO had considered the issue of capital gains taxability and had accepted the submissions of the assessee.
The critical issue remains whether the inquiry made by the AO in this case can be actually considered as an inquiry required to be conducted by the AO. The fact that the AO neither read the contents of the certificate issued by the Tehsildar, which is discernible from the fact that the certificate did not even mention the distance of the land from the municipal limits which is a criteria for determining the agricultural status of land under the Act, nor sought any additional evidence or document from the relevant authorities like the DTP, Gurugram, undoubtedly, suggests that the AO failed to undertake any inquiry or even apply his mind to the documents submitted by the assessee to arrive at the conclusion regarding the long-term capital gains exemption.
There is no cavil that the PCIT would not have jurisdiction to pass an order under Section 263 of the Act solely for the reason that he held a different opinion with the AO. If the AO has applied his mind and had arrived at a plausible view, the same would not be amenable to a revision under Section 263 of the Act.
Similarly in the case of Tara Devi Aggarwal [1972 (11) TMI 2 - SUPREME COURT] upheld the finding of the CIT that the assessments made by the ITO “were made in post haste without making any enquiry or investigation into the antecedents of the assessee”
In the present case, the AO had issued a questionnaire to the assessee on 19.08.2015. The assessee responded to the said questionnaire by claiming that she had earned long term capital gains which was not chargeable to tax as the agricultural land was beyond the prescribed distance from the municipal limits of Sohna district. She also enclosed therewith a document described as a certificate issued by Tehsildar, Sohna to the aforesaid effect.
A plain reading of the said document indicates that it did not certify that the land in question was beyond the prescribed distance from the municipal limits as claimed by the assessee. Notwithstanding the same, the AO passed the assessment order on the same date. It is thus apparent that the AO had not applied his mind to the relevant point whether the asset sold by the assessee was the agricultural land situated 5 kms / 8 kms beyond the boundary limits of the municipal corporation. The noting made by the Tehsildar on 24.04.2012, which the assessee claims to be a certificate, merely stated that the land in question was “outside the border of Sohna Municipal Corporation”.
Whether the land in question was outside the municipal limits but whether it was an agricultural land that was located 5 kms. / 8 kms. beyond the municipal limits? - The Tehsildar’s noting is clearly not to the aforesaid effect. It is thus clear that this is not a case where the enquiries conducted by the AO were inadequate; this is a case of lack of enquiry as the AO had not conducted any enquiry to verify whether the land sold by the assessee was beyond the prescribed distance from the boundary of Sohna Municipal Corporation. It is apparent that no enquiry to the said effect was conducted by the AO and there is no material before the AO, other than the self-serving statement of the assessee, to corroborate the same.
The assessment order passed by the AO under Section 143 (3) of the Act even records no reasons for accepting the version of the assessee that the land was agricultural land, and not capital asset, and thus exempt from capital gain. In fact, there is no mention of this aspect at all in the order passed by the AO under Section 143 (3) of the Act. Thus, it is not clear as to what had weighed in the mind of the AO since the order passed by the AO is totally silent on this aspect.
Therefore, the present case would be one where the absence of any effective inquiry and a total non-application of mind by the AO is evident, and thus, the order passed by the AO would clearly fall within the meaning of an ‘erroneous order’. The order is also, undisputedly, prejudicial to the interests of the Revenue inasmuch as it results in loss of the Revenue in the form of tax.
PCIT had exercised the jurisdiction under Section 263 of the Act correctly and legally, in view of the fact that the order passed by the AO was erroneous and prejudicial to the interest of the Revenue since the same was passed without conducting any enquiries and applying mind to the claims of the assessee. We are also of the view that the ITAT erred in setting aside the order passed by the PCIT u/s 263 of the Act on the ground that the PCIT had wrongly exercised jurisdiction u/s 263 of the Act. Decided in favour of assessee.
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2024 (11) TMI 572
Nature of gifts received - Commissioner of Gift Tax has held that the cash gifts were made out of Privy Purse - Since the appellant-Assessee did not produce the proof relating to the source of cash and cheques having come from Privy Purse, the ITAT cannot be said to be committed any illegality in not treating the same to be from the Privy Purse - HELD THAT:- The statement of account of the Privy Purse of a particular Bank Account No.956 of State Bank of India, Patiala was available before the concerned Commissioner Gift Tax and it clearly reflected that from the account relating to Mohinder Kaur Trust Privy Purse, cheques and cash were released in favour of the said Trust amounting to Rs. 6,00,000/- and to Amarinder Singh Trust of Rs. 4,00,000/- in all on various dates which would further require adjudication.
We, therefore, find that the order passed by the ITAT hinges on perversity and does not take into account the record which was available with them as the case had been travelled from the Commissioner Gift Tax. The answer to question No.(a) is, therefore, accordingly found to be in favour of the appellant-Assessee and it is held that the gift amount was made out of Privy Purse.
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2024 (11) TMI 571
Rectification u/s 254(2) - recalling order disposing of the appeal ex-parte - By the application sufficient cause was shown but the Tribunal arbitrarily dismissed the same - adjournments obtained by petitioner - HELD THAT:- Tribunal considered the appeal disposal order, wherein it had been specifically recorded that what had not been collected in the last five years would obviously not be possible (to be collected) in 20 days and, therefore, the adjournment sought was nothing but challenge to functioning of the Bench. It was said to be not an error made by the Tribunal.
This reason though is on the question of rectification, the contention on adjournment was also thereby dealt with. However, the Tribunal failed to see that it was to obtain satisfaction from the application, on causes shown for not appearing on the date of hearing. Cause alleged was indisposition of the learned advocate.
We find from the application, that apart from annexing therewith medical certificate, also annexed were additional grounds of appeal etc., filed therewith for kind consideration of the Bench. The miscellaneous application therefore disclosed documents, which the disposal order had said as could not be disclosed in twenty days. We are persuaded to interfere with impugned order.
We may add that Rabindra Kumar Mohanty [2020 (3) TMI 1326 - ORISSA HIGH COURT] is of no assistance to petitioner because view taken was on requirement of the Tribunal to deal with an appeal on merits where appellant was absent but respondent had appeared and urged its contention(s).
Impugned order is set aside and quashed. The miscellaneous application is allowed and the appeal restored.
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