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Income Tax - Case Laws
Showing 481 to 500 of 168845 Records
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2024 (10) TMI 1415
Validity of Revision u/s 263 - substantial question of law or fact - there were discrepancies in the figure with regard to value of current assets and current liabilities shown in the balance sheet as on 31.03.2008 vis-à-vis the cash flow statement filed before the AO - as decided by HC [2023 (12) TMI 1364 - ORISSA HIGH COURT] CIT(A) has dismissed the appeal exparte. Appeal had been filed before the Tribunal and the Tribunal had exparte restored the issue back to the file of CIT(A). CIT(A) also dismissed the appeal for non-compliance. Tribunal in the interest of natural justice had restored the issue to the file of the CIT(A) so that the, assessee could be granted the opportunity to substantiate its case. This clearly shows that the assessee is not interested in showing the reconciliation but is attempting to use technical reasons to avoid the responsibility. This scathing remark from the ITAT showcases the triviality of the matter at hand.
Additionally, the submissions made with regard to the section 255 showcases the intention of the petitioner to delay the case.
HELD THAT:- Delay condoned. No case for interference is made out in exercise of our jurisdiction under Article 136 of the Constitution of India. The Special Leave Petition is accordingly dismissed.
Pending application, if any, also stands disposed of.
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2024 (10) TMI 1414
Recovery proceedings - Suo motu revision u/s 263 - Tribunal directed to make inquiries as directed by the Principal Commissioner of Income Tax regarding the correctness of the valuation report of the accountant - petitioner’s primary contention is that the directions of the Tribunal were not carried out in the order of assessment passed on remand; nor were the directions issued in the order u/s 263 complied with.
HELD THAT:- We are of the opinion that the recovery should await the disposal of the appeal especially since the demand raised is based on an assessment order, which was passed prior to the Tribunal’s order. As submitted that 20% of the amounts have already been recovered and hence, there would be no recovery carried out based on the assessment order at Annexure-3.
The appeal filed as submitted by petitioner. It is submitted by the learned counsel for the petitioner that amounts were recovered from the cash credit account and this created huge liability on the petitioner especially since the interest would run on the debit made. The petitioner, hence, seeks refund of the amounts already attached and recovered from the petitioner’s account. The petitioner also relies on judgment at Annexure-9 of another Division Bench of this Court.
Annexure-9 decision was in a batch of three writ petitions where attachment of the bank accounts of the assesses were made, when the assessment orders which created the demand were challenged in appeal after depositing 20% of the disputed tax amount under the Value Added Tax Act.
Identical to the case herein, the attachment order was made of a cash credit account, which is a credit facility offered to the customer by the bank subject to a limit; which even if not overdrawn to the limit, would still not have any money belonging to the assessee as distinguished from a credit balance in a current account. But therein the demand was not met, which was met in the present case; which detains us from directing a refund.
We make it clear that if the assessment is set aside, the assessee would be entitled to the refund along with interest payable as per the statute or that paid by the assessee in the cash credit account; whichever is higher and if not, the assessee would be saved from the interest on the amount recovered in the intervening period. There is no requirement to direct the assessee to be refunded the 20% already recovered. There shall be no further recovery based on the impugned assessment till the appeal is disposed of
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2024 (10) TMI 1375
Validity of assessment order passed u/s 143(3) r.w.s. 144B - disallowance u/s 40(a)(ia) - no notice of an intent of the AO to reject the books of account and to make additions referable to section 40(a)(ia) - As decided by HC [2024 (5) TMI 1480 - DELHI HIGH COURT] from show-cause notice, AO had in clear and unequivocal terms placed the petitioner- assessee on notice with respect to the doubts harboured by it relating to the correctness and completeness of the accounts of the assessee.
AO had further observed that since the expenditure claimed is not verifiable, income was proposed to be assessed at 12 per cent. of the total disclosed revenue after rejecting the books of account. And no specific disallowance u/s 40(a)(ia) has been made nor have any additions consequentially factored in.
HELD THAT:- We are not inclined to interfere with the impugned judgment and, hence, the special leave petition is dismissed.
We clarify that in the event the petitioner files a statutory appeal, the appellate forum, that is, the Commissioner of Income Tax (Appeals), shall examine all issue and contentions on merits without being influenced by any of the observations made by the High Court.
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2024 (10) TMI 1374
Revision u/s 263 - TDS u/s 195 - disallowance of expenditure u/s 40(a)(ia) - HC [2022 (11) TMI 1526 - ORISSA HIGH COURT] held that conclusion reached by the ITAT that the CIT could not have unilaterally directed the AO to add back the aforementioned sum by holding that it was disallowable as expenditure could not have been issued u/s 263 of the Act without the AO again examining the issue. To that extent, the said direction was indeed beyond the jurisdiction of the CIT u/s 263 - HELD THAT:- We have heard learned senior counsel for the petitioner and for the respondent/Assessee. We are not inclined to interfere in the matter.
Special Leave Petition is hence dismissed. Pending application(s) shall stand disposed of.
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2024 (10) TMI 1373
Assessment u/s 153A - incriminating material" found in search or not? - addition made as entire payment through paper/ shell companies for purchase of land measuring 430 acres at Manger, Gurugram and it was assessee who is the ultimate beneficiary of such transactions - as per ITAT additions could not have been made in the hands of the assessee, as such additions had already been made in the hands of bogus entry provider [M/s Peakwood Reality Private Limited] -
Whether warrants of authorization issued u/s 132? - HELD THAT:- The original file containing satisfaction note for issue of consequential warrant of authorization and the satisfaction note prepared after search was also perused. It is noticed that there were two warrants of authorization issued u/s 132 by the Principal Director of Income Tax (Inv.), Chandigarh. The name of the firm assessee is mentioned in the warrants at (Global 3rd Floor) 106-A, Tower-1, DLF Aralias, DLF Golflinks, Gurugram, which is not the registered office of the assessee.
The other warrant which does not contain name of the assessee but contains name of M/s M3M India Holdings Private Limited and registered office of the assessee i.e. C-13, Sushant Lok, Phase-1, Gurgaon. However, the name of the partners of the firm are mentioned. We find ourselves in agreement with learned counsel for the Revenue that mentioning M/s M3M India Holdings Private Limited for the addressee C13, Sushant Lok, Phase-1, Gurgaon would not be a reason to hold that no search operation was conducted at the premises of the assessee because even if the name of other private limited company is mentioned in the warrant, the fact remains that the registered address of the respondent firm was searched and the names of their partners were mentioned. The findings of the ITAT that there was no search conducted at the premises of the respondent-firm is, therefore, found to be erroneous and perverse.
Further contention of the appellant with regard to assertion of incriminating material being found in the premises of the respondent, however, is without any basis. We have carefully gone through the Satisfaction Report and found that only incriminating material which has been made the basis for initiating proceedings u/s 153-A of the Act is the so called laptop of one Bina Shah recovered from Mumbai. We also noticed that recovery of the said Laptop is not from the office belonging to the assessee.
The search operation in which the laptop was recovered was of different firm and it was not during the course of search operation conducted against the respondent-firm or its partners that incriminating material was recovered. If there was any indication of violation of provisions of the Act or suppression of income or any other incriminating material, which may have been recovered from the premises, the proceedings u/s 153-A of the Act can be said to be justified and legal. However, since no such material was collected or found from the premises of the respondent-assessee, we are unable to sustain the proceedings initiated u/s 153-A of the Act.
Substantial question of law to be examined by this Court. All the pleas raised are purely factual.
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2024 (10) TMI 1372
Faceless assessment of income escaping assessment - assessment order was made u/s 143 (3) r.w.s. 260 - as argued assessment order made manually under provisions in section 143 (3) though the assessment was to be done in a faceless manner as per scheme notified on 29th March, 2022 - HELD THAT:- Petitioner seeks interference on strength of notification dated 29th March, 2022. The notification says, it was made in exercise of powers conferred by sub-sections (1) and (2) of section 151-A. The section provides for faceless assessment of income escaping assessment. Accordingly, scope of the scheme, under section 3 thereof is, inter alia, assessment, reassessment or re-computation under section 147. We find from assessment order dated 31st July, 2024, it was made under section 143 (3) read with section 260, pertaining to assessment year, 2021-22. The scheme has no application to the assessment.
Violation of principles of natural justice - Section 144-B appears to be a complete code providing for faceless assessment. We have already noted before that impugned assessment order was made under section 143 (3) read with section 260. Sub-section (1) in section 144-B (1), without the clauses thereunder.
It is clear that the Assessing Officer (AO) found purchases made from suppliers were doubtful. Questions of fact will arise in event petitioner’s contentions are to be gone into. As such, even otherwise we are not inclined to interfere.
Writ petition is dismissed.
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2024 (10) TMI 1371
Seeking release of cash seized illegally - scope of second proviso to Section 132B - amount was seized by the respondent from the bank locker belonging to the petitioners - mandate to return the assets to the assessee - HELD THAT:- Once AO has arrived at a satisfaction with regard to the existing liability and with regard to the return of the assets, then the second proviso would apply and the assets or part of the assets as the case may be shall be released within a period of 120 days. Thus, the second proviso is mandatory and the same would come into play only after the satisfaction of the AO and the determination by him and after approval of the appropriate authorities.
In the present case in hand, the application was filed within thirty days before the AO, but the AO has not passed any order with regard to the liability or with regard to the return of the assets. Thus, the second proviso would not come into play. The first proviso does not give any time line and the second proviso is applicable only when there is an assessment by the AO.
As far as factual aspects of the case are concerned, it is not disputed that the seizure was made on 21.09.2023 and an application for release of the cash seized from the lockers of the petitioners was made on 09.10.2023 and 06.11.2023, which have not been decided by the respondent. Thereafter, prior to the seizure by the respondent, the petitioners vide letters dated 17.01.2023 & 23.08.2023 had disclosed that their bank lockers were having cash to the tune of around Rs. 37 lac.
We are of the considered view that second proviso to Section 132B would apply only after the AOhas determined the liability and has come to the conclusion that the nature and source of acquisiton has been explained by the person concerned. In the present case, since the AO has not decided the application, the second proviso to Section 132B would not come into play.The second proviso is mandatory, however, this will come into play only when the AO has determined the liability. The purpose behind the proviso was that after determination of the liability, the assets and goods should not be retained by the department.
We are of the considered view that the judgment of the Allahabad High Court in Dipak Kumar Agarwal [2024 (3) TMI 1081 - ALLAHABAD HIGH COURT] has dealt with Section 132B(4)(a) & (b) of the Act and has rightly come to the conclusion that the second proviso to Section 132B of the Act does not contemplate automatic release on expiry of 120 days.
The prayer of the petitioners for refund of the amount cannot be granted. However, since cash has been recovered from Bank locker and even prior to recovery, petitioners have informed the income tax authorities about cash lying in locker, we deem it proper to direct the authorities to decide the application of the petitioners within four weeks from the date of receipt of this order by a reasoned and speaking order after hearing the petitioners. It goes without saying that if the petitioners are able to satisfy their source, the amount has to be refunded with interest as provided under Section 132B(4)(a)& (b) of the Act.
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2024 (10) TMI 1370
Reopening of assessment u/s 147 - notice was not received by the petitioner and the petitioner was not provided sufficient and reasonable opportunity to submit his response/reply along with the documents to the aforesaid notice u/s 148A(b) - HELD THAT:- A perusal of the impugned order indicates that except stating that the notice u/s 148A(b) had been issued, the respondents has neither stated nor given the details/particulars regarding service of notice upon the petitioner nor any opportunity has been provided to the petitioner to submit his response/reply to the said notice.
Under these circumstances coupled with the specific assertion on the part of the petitioner that his inability and omission to submit his reply to the notice under Section 148A(b) was due to bona fide reasons, unavoidable circumstances and sufficient cause, adopting a justice oriented approach, we deem it just and appropriate to set aside the impugned order and remit the matter back to the respondents for reconsideration afresh in accordance with law from the stage of notice u/s 142A(b) of the IT Act.
The matter is remitted back to the respondents for reconsideration afresh in accordance with law from the stage of issuance of notice u/s 148 A(b).
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2024 (10) TMI 1369
Penalty u/s 271AAC(1) - no notice u/s 142[1] issued - HELD THAT:- Notice u/s 142[1] of the Act was issued to the petitioner, the first respondent has not stated as to when the said notice was delivered/served upon the petitioner.
The impugned notice, proceedings culminating in the impugned order cannot be said to have been done after providing sufficient and reasonable opportunity to the petitioner thereby violating principles of natural justice and consequently the impugned order deserves to be set aside by adopting justice oriented approach and to provide one more opportunity to the petitioner to submit his reply to the said notice u/s 142 of the Act and with the direction to the respondents to proceed further in accordance with law.
It is to be stated that since indulgence is being shown in favour of the petitioner after a lapse of almost four years from the date of the impugned order, in the event, the first respondent passes an order against the petitioner after remand by virtue of this order, the first respondent would be entitled to claim interest on the amount in terms of the Notice of Demand.
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2024 (10) TMI 1290
Penalty imposed u/s 271G - default of the notice requiring the petitioner/assessee to produce the relevant documents u/s 92D(3) - Whether TPO did not possess the requisite jurisdiction to initiate penalty proceedings and its imposition subsequently on 16.01.2015? - as decided by HC [2018 (10) TMI 298 - DELHI HIGH COURT] since “event of default” occurred in March, 2014 i.e. well prior to the date of coming into force the amendment (i.e. 01.10.2014), the impugned order was wholly without jurisdiction.
HELD THAT:- This petition is covered by a decision of this Court in the case of Virkey Chacko [1993 (8) TMI 1 - Supreme Court] held that the event of default defines the jurisdiction of the concerned authority, who may proceed to initiate the penalty proceedings.When the Income-tax Officer reached the satisfaction that the assessee had concealed his income and made the assessment order on March 27, 1972, the amended provisions of section 274 (2) were in operation and they entitled the Income-tax Officer to impose penalty in cases where the amount of income in respect of which particulars had been concealed were, as here, less than Rs. 25,000. Hence, the Special Leave Petition is dismissed.
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2024 (10) TMI 1289
Disallowance in respect of future expenses claimed as deduction - Delay filling SLP - Issue involved in this appeal is holding the questions of law in Assessee’s favour
HELD THAT:- There is absolutely no reason to condone the delay of 289 days in filing the petition. Hence, the application for condonation of delay is dismissed. Accordingly, the Special Leave Petition also stands dismissed.
Pending application, if any, also stands disposed of.
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2024 (10) TMI 1288
Addition in the hands of syndicate v/s assessee - appellant's share of profit derived by various syndicates maintaining that share of profit is taxable in the hands of syndicate or in the hands of the assessee - ITAT deleted addition - Whether, such syndicate did not have any PAN and that they were not filing statutory tax returns, fully establishing mens rea on the part of the assessee and taxing share of profits of such colourable devices (syndicates) in the hands of the assessee in all practicality is in the spirit of the 'Doctrine of lifting of corporate veil' in larger public interest?
HELD THAT:- As per the findings given by the CIT (A) and reproduced by the ITAT which remained uncontroverted by the Revenue, even in respect of some of the syndicates, separate assessments have already been framed by the various AO u/s. 144/153C r.w.s. 153A of the Act and while making assessments in the hands of such syndicates, the amount of undisclosed income earned by these syndicates, have already been determined.
It is also pertinent to mention that it is a well settled legal position that as per clause (a) of proviso to section 86 of the Act r.w.s 67A of the Act, if the assessee is a member in AOP/BOI and income earned from such AOP/BOI have been offered to tax, then, the share received by the assessee from such AOP/BOI after payment of due taxes cannot be taxed again in the hands of the recipient assessee.
CIT (A) as well as the ITAT referred to the legal position rendered in the case of ITO vs. Ch. Achatalya [1995 (12) TMI 1 - SUPREME COURT] and took the view that the income derived by various syndicates in which the assessee was found one of the members, was required to be assessed in the hands of such syndicates only and a direct assessment in the hands of the assessee could not have been made in respect of such income derived by the syndicates.
Thus, as per the scheme of the Act, the issue is covered in favour of the assessee as per clause (a) of the first proviso to section 86 r.w.s. 67A of the Act.
We are totally in agreement with the conclusion reached by both the lower appellate authority i.e. CIT (A) as well as the ITAT holding that, the assessee was a member of an association of persons or body individuals, share of members of such association of persons or body individuals were determinate and known. Such association of persons or body individuals were chargeable to tax on their total at the maximum marginal rate or any higher rate.
In such a factual position and circumstances, the share of profit/income received by the assessee from association of persons or body individuals/syndicates fall under the clause (a) of the first proviso to section 86 r.w.s 67A of the Act and, thus, the AO was not justified in making the addition in the hands of the assessee on account of his share in profits of syndicates and on account of his share of inadmissible expenses incurred by the syndicates.
Therefore, we are in agreement that, CIT (A) was right in deleting the addition in the hands of the assessee and, consequently, the sole ground of the Revenue being devoid of merits is not sustainable.
Thus, when tested on the anvil of the afore-noted legal principles, we are of the opinion that in these appeals no substantial question of law arises from the order of the Tribunal. This Court refrains from entertaining these appeals as there is no perversity in the order passed by the ITAT since the ITAT has dealt with all the grounds raised by the appellant in the order impugned and has passed a well reasoned and speaking order taking into consideration all the material available on record.
Tribunal being a final fact finding authority, in the absence of demonstrated perversity in its finding, interference with the concurrent findings of the CIT (A) as well as the ITAT therewith by this Court is not warranted.
No hesitation in holding that no question of law, more so a substantial one, arises from the order of the Tribunal requiring consideration of this court. There is no merit in these appeals as the Tribunal has not committed any error in deleting the additions which was made by the AO as the same cannot be said to be erroneous and prejudicial to the interest of revenue. Thus, present set of cases does not involve any substantial question of law so as to meet the provisions of Section 260-A of the Act for admitting these appeals.
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2024 (10) TMI 1287
Revision u/s 263 - case was selected for scrutiny through CASS, and AO passed an order of assessment u/s 143(3) - income recognition - Treatment of income received from an arbitral award in the assessment year - HELD THAT:- ITAT has recorded the finding that the statutory notice was issued u/s 142(1) of the Income Tax Act by the AO with a specific query about the Nardana Claim - 1 & Nardana Claim - 2. In response to the said notice, the assessee filed a cogent reply.
AO's approach in accepting the explanation furnished by the assessee to him was not found unsustainable view as the liability of Nardana Claim - I & Nardana Claim - 2 could have been recognized as income in the AY 2018 -19.
The amount was paid to the assessee in the Assessment Year - 2018 - 19 after furnishing 100% bank guarantee on 100% margin, therefore, same was rightly shown as liability in the balance-sheet. It is not a case that the assessee has concealed the income of receipt by way of award. After the order passed by the Dhule Court in favour of the assessee on 15.10.2018, the income was shown in the next assessment year i.e. 2019 - 20.
ITAT did not find any fault in the approach of assessee, in view of the law laid down in the case of Hindustan Housing & Land Development Trust Limited [1986 (7) TMI 10 - SUPREME COURT] in which as held that as long as there remains a dispute / litigation, the income cannot be said to have 'accrued' or 'arisen' to the assessee. Approach of the assessee as well as the view taken by the AO is his favour cannot be termed as erroneous-cum-prejudicial to the interest of revenue. No substantial question of law.
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2024 (10) TMI 1286
Ex-parte order of assessment by Income tax Department concluding a recovery amount - HELD THAT:- As submitted the order in original passed by the AO is already under challenge u/s 264 in a revision petition, which is still pending and the order impugned in the present writ petition is appealable by filing an appeal under Section 253 of the Act, 1961 before the Appellate Tribunal. The petitioner has wrongly chosen the Forum of the writ petition for challenging the said order. He may very well maintain an appeal before the Appellate Tribunal.
Petitioner admitted this legal position. Accordingly, the writ petition is dismissed in-limine. However, the petitioner is given a liberty to file an appeal before the Appellate Tribunal against the order dated 23.08.2023.
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2024 (10) TMI 1285
Validity of assessment proceedings initiated u/s 147 - as per CIT(A) no income had been brought to tax on the grounds set out in the notice issued u/s 148 - HELD THAT:- Undisputedly, the controversy involved in the present case – whether any addition can be made by the AO pursuant to initiation of re-assessment proceedings, notwithstanding that no addition is made on the grounds on the basis of which the assessment was reopened is covered by an earlier decision of this Court in Ranbaxy Laboratories Ltd. [2011 (6) TMI 4 - DELHI HIGH COURT].
The said issue was also considered by this Court in the recent decision of ATS Infrastructure [2024 (7) TMI 1441 - DELHI HIGH COURT] - It is not disputed that the questions of law, as projected, are covered in favour of the assessee.
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2024 (10) TMI 1284
Condonation of delay of 860 days in re-filing the present appeal - HELD THAT:- A bare perusal of the application indicates that the only ground for delay in re-filing is that there were a large number of appeals, which were filed between the period March, 2020 to March, 2022. And, the said appeals could not have been pursued on account of outbreak of the COVID-19 pandemic.
It is clear that there is an inordinate delay of 880 days in re-filing the appeal. We do not find that there are sufficient grounds to justify such an inordinate delay. The application is, accordingly, dismissed.
Assessment u/s 153A - addition u/s 68 treating certain balances, as available in the books of accounts, as unexplained - CIT (A) allowed assessee appeal and the addition made by the AO was deleted on the ground that since no incriminating material was found during the search conducted, the re-assessment could not be sustained as relied on the earlier decision of Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT] also confirmed by ITAT
HELD THAT:- Concededly, the said issue is covered by the earlier decision of this Court in Commissioner of Income Tax v. Kabul Chawla (supra) which has been recently cited with approval by the Supreme Court in Principal Commissioner of Income Tax, Central-3 v. Abhisar Buildwell Pvt. Ltd [2023 (4) TMI 1056 - SUPREME COURT] stating since no incriminating material was found during the search conducted, the re-assessment could not be sustained. Decided in favour of assessee.
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2024 (10) TMI 1283
TP Adjustment - MAM determination - TNMM v/s Berry ratio - decision of the TPO to reject the TNMM with Berry ratio (GP/VAE – gross profit/value added expenses) as the most appropriate method for determining the ALP - HELD THAT:- A change in the approach of assessment of tax, absent any statutory change, leads to uncertainty as to the cash flow/fund flow, which are the lifelines of commercial enterprises. Thus, unless there are cogent reasons to discard the method for transfer pricing adopted in the earlier assessment years, the TPO was required to follow the method consistently adopted for determining the ALP in prior years. We find no infirmity with the decision of the Tribunal in faulting the TPO for discarding the TNMM for determining the ALP as consistently followed in the past six assessment years (AYs 2009-10 to 2014-15), without sufficient reason.
We concur with the Tribunal’s view that the DRP had erred in finding that the TPO had provided justification for rejection of the TNMM. Thus, the Tribunal has rightly concluded that the TPO’s decision to reject TNMM as the most appropriate method was without reasons.
TPO’s decision to adopt the residual method – “any other method” under Rule 10B (1) (f) of the Rules - Undeniably, Rule 10AB of the Rules does permit determination of the ALP by simulating the price that would have been charged in similar uncontrolled transactions under similar circumstances having regard to all relevant facts. However, the recourse to this method would be available only if none of the other methods are considered as the most appropriate method. However, as noted above, the TPO had provided no reasons for rejecting TNMM, which had been used in earlier years. The TPO had also not discussed the applicability of any other methods.
Tribunal had referred to the Guidelines issued by the Institute of Chartered Accountants of India (hereafter the Guidelines) in regard to use of “Other method” under Rule 10AB of the Rules.
Guidelines rightly observe that the Rule 10AB of the Rules does not describe any methodology but provides flexibility to determine the price in complex transactions where third party comparable prices/transactions may not exist. The said method would be most appropriate in cases where the other methods are found to be inapposite on account of difficulties in obtaining comparable data on account of uniqueness of the transactions, which are to be benchmarked.
It is difficult to accept that a business model that entails providing marketing support on commission basis is not unique or one that would warrant rejecting the TNMM.
Objection to the comparables used by the TPO for determining the ALP - A Non-Compete Arrangement is clearly not similar to the transaction of purchase of hardware, which is the international transaction to be benchmarked. It is also noticed that the transaction at Serial no.3 is in relation to educational services, which admittedly is not similar to the international transactions being benchmarked. In the circumstances, this Court had called upon Revenue to explain the similarity between the transactions used as comparables and those that were to be benchmarked. However, the counsel fairly stated that he could not.
Assessee had selected a set of four comparable transactions and used the TNMM with OP/VAE (Operating Profit / Value Added Expenses) as well as Berry ratio (gross profit / value added expenses) as PLI’s. The computation of the assessee’s PLI is significantly higher than the mean PLI of the comparable entities. In addition, the assessee had also furnished benchmarking studies of other entities engaged in trading by deleting the value of stocks and working capital to corroborate that the international transactions were at ALP.
No substantial question of law arises in the present appeal.
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2024 (10) TMI 1282
Reopening of assessment u/s 147 - non compliance with the faceless assessment scheme u/s 151A - mandation of recording of satisfaction by the Jurisdictional Assessing Officer - Valid Jurisdiction of the Jurisdictional Assessing Officer (JAO) in issuing the notice - HELD THAT:- By reading all the relevant provisions of the Income Tax Act' 1961 as also the notification dated 29.03.2022 issued by the Central Government framing scheme for "E-Assessment of Income Escaping Assessment" under sub-sections (1) and (2) of Section 151A of the Act' 1961, we reach at an irresistible conclusion that the challenge to the notice under Section 148 dated 22.03.2024 for A.Y. 2021-2022 on the sole premise that the said notice could have been issued only through automated allocation in faceless manner and not by Jurisdictional Assessing Officer (JAO), cannot be sustained.
The submission of petitioner that the Jurisdictional Assessing Officer (JAO) was not competent to issue the impugned notice u/s 148 in a case of Search and Seizure u/s 132are not convincing.
\Section 151A contemplates framing of the scheme by the Central Government by notification in the official Gazette, even for the purpose of issuance of notice under Section 148 in the case of re-assessment or sanction for issue of such notice under Section 151, with the aim to impart greater efficiency, transparency and accountability by eliminating the interface between the income tax authority and the assessee or any other person to the extent technologically feasible.
The challenge to the impugned notice on the ground of lack of jurisdiction of the Jurisdictional Assessing Authority is, accordingly, turned down.
Two Satisfaction Notes have been supplied to the petitioner in the compilation submitted on behalf of the revenue. It was also placed before us by revenue that after issuance of the impugned notice u/s 148 the instant case has proceeded to the stage of issuance of the notice under Section 142 (1). The said notice is also part of the record and has been issued by the Verification Unit of the Faceless Assessment Centre.
We, therefore, find it fit and proper to dispose of the present petitions with the observation that the petitioners may pursue his remedy matters before the Competent Authority and may ask for virtual hearing, if the need be, to participate in the proceedings, which have to be brought to their logical end, strictly in accordance with law.
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2024 (10) TMI 1281
Order passed by the Income Tax Settlement Commission to charge the interest @ 50% u/s 234A and interest u/s 234B and interest u/s 234C -
Maintainability of writ petition against the order of the Income Tax Settlement - HELD THAT:- The petitioners had filed the applications for settlement of their income-tax and wealth tax u/s 245-C of the Act, and after considering all the aspects, the Settlement Commission passed the orders.
It also granted immunity for the prosecution and at the same time, it reduced the interest chargeable under Section 234A by 50%, while interests in terms of Section 234B and C of the Act were directed to be charged from all the five applicants. However, interest u/s 220 (2) was waived.
The question regarding maintainability of the present writ petition against the order of the Income Tax Settlement Commission is no more res integra, in view of the law as settled in the case of Jyotendrasinhji v. S.I. Tripathi and others[1993 (4) TMI 1 - SUPREME COURT] wherein Hon’ble the Supreme Court while following its earlier judgement rendered in the case of R.B. Shreeram Durga Prasad and Fatechand Nursing Das [1989 (1) TMI 4 - SUPREME COURT] thus objection raised by learned counsel for the respondents regarding non-maintainability of the present writ petition, is rejected.
Whether the discretion exercised by the Settlement Commission of reducing the interest by 50% in terms of the interest chargeable u/s 234A? - We would have to examine the provisions of Section 234A of the Act for the purpose, which provides for charging of interest for defaults in furnishing return of income, interest for defaults in payment of advance tax and for interest for deferment of the advance tax, respectively.
The provisions of imposing the interest is automatic, and if there is a default, interest is liable to be paid. However, by the various judgments passed Courts have taken a view that in circumstances which are beyond the control of the assessee in filing of the return in time, the interest can be waived.
In the present case, the Income Tax Settlement Commission accepted the version of the petitioners that the returns for the Assessment Year 1989-90 could not been filed in time, and were delayed on account of the fact that the seized papers were not available with them, and were lying with the Department. The Settlement Commission has also noticed that the letters and requests were made by the applicants/petitioners to the Department and looking into the said circumstances, interest had been reduced.
We find that while exercising the discretion by the Settlement Commission, no reasons have been assigned as to why the interest has been reduced by 50% only, and as to why the complete interest has not been waived off for the assessment year 1989-90.We, accordingly, accept the present writ petition, and waive the interest charged, in terms of Section 234-A of the Act.
Interest chargeable under Section 234B and 234C - Keeping in view that the advance tax was required to be paid, wherein there has been a default, in terms of the judgment passed in the case of Gulraj Engineering Construction Co [1995 (3) TMI 428 - INCOME TAX SETTLEMENT COMMISSION] we do not propose to waive the interest under Section 234B and 234C of the Act.
We are also not impressed by the arguments raised by learned counsel for the petitioners in terms of the circular on waiver of interest (Annexure P-6) that the interest under Section 234B and 234C should be waived, as depositing of advance tax has nothing to do with the seizure of the books of accounts or during the course of proceedings for search, or seizure of cash.
As decided in Shelly Mehta [2024 (9) TMI 220 - PUNJAB AND HARYANA HIGH COURT] this Court has taken a view that the cash seized during the seizure cannot be a ground for waiver of advance tax or payment of tax for the subsequent year. In view thereto, we do not accept the contentions made by counsel for the petitioners and the present writ petition is allowed in part.
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2024 (10) TMI 1280
Validity of Faceless assessment of income escaping assessment - Challenge to notice u/s 148 as non-compliance with Section 151A - notices issued by JAO instead of FAO - HELD THAT:- As decided in Jasjit Singh Vs. Union of India and Others [2024 (8) TMI 228 - PUNJAB AND HARYANA HIGH COURT] notice u/s 148 after introduction of Finance Act, 2021, cannot be issued by Jurisdictional Assessing Officer. The object of introduction of faceless assessment would be defeated if show cause notice u/s 148 is issued by Jurisdictional AO. Decided in favour of assessee.
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