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Income Tax - Case Laws

Showing 501 to 520 of 168845 Records

• 2024 (10) TMI 1279
  

  Levy of penalty u/s 271AAA - requirement of "substantiating the manner in which undisclosed was derived" by the Assessee Company - HELD THAT:- As we read Section 271AAA(2) of the Act, it becomes manifest that an escape from the imposition of a penalty is dependent not only on a disclosure of income having been made in the course of a statement recorded u/s 132(4) of the Act but the assessee also standing obligated to specify the manner in which that income had been derived and thereafter substantiate the said disclosures.

  As we read the order of the ITAT it is manifest that the assessee/appellant failed to meet the aforesaid requirements. We consequently find no merit in the instant appeal. Appeal dismissed.

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• 2024 (10) TMI 1278
  

  Reopening of assessment u/s 147/148A - inability and omission on the part of the petitioner to submit reply / response along with documents to the Section 148A(b) notice - HELD THAT:- Petitioner has not submitted reply / response along with documents to Section 148A(b) notice.

  In view of the specific assertion on the part of the petitioner that if one more opportunity is granted, petitioner would submit reply along with documents, deem it just and appropriate to set aside the impugned order passed u/s 148A(d) and subsequent notice / orders, etc., and remit the matter back to respondent No.1 for reconsideration afresh from the stage of submitting of reply by the petitioner to Section 148A(b) notice and to proceed further in accordance with law.

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• 2024 (10) TMI 1277
  

  Appeal challenging the determination of the ALP - substantial question of law - whether High Court is precluded from considering the determination of the ALP determined by the Tribunal, in exercise of powers u/s 260A ? - HELD THAT:- We agree with Respondent/assessee that in the case at hand while passing the order dated 14th January 2019, this Court has not refused to scrutinise the Tribunal’s findings on the ALP. This Court has considered the matter on merits and came to the conclusion that no substantial questions of law arise.

  We are also informed by respondent that the judgment in Principal Commissioner of Income Tax-2, Pune v. PTC Software (I) (P.) Ltd. [2018 (4) TMI 1002 - BOMBAY HIGH COURT] on which the Court had relied upon, has attained finality. In the case of PTC Software (Supra), the appeal that was filed by Revenue, was withdrawn.

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• 2024 (10) TMI 1276
  

  Validity of TP order due to lack of digital and physical signatures within the prescribed period - HELD THAT:- TPO order was not digitally signed on 31.07.2021 or subsequently even on 02.08.2021 when the respondent addressed an email to the petitioner and that the same was subsequently physically / manually signed on 12.08.2021 and furnished to the petitioner along with an email on 13.08.2021 is clearly borne out from the material on record. In other words, despite recognising, confirming and affirming that the TPO order was not signed either physically or digitally on 31.07.2021, the 1st respondent signed the same physically only subsequent on 12.08.2021 and it is this manually / physically signed copy that was uploaded on the ITBA portal on 16.08.2021, thereby leading to the sole inference that as on the last date of limitation i.e., 31.07.2021, a legally valid TPO order had not been passed by the 1st respondent and as such, the impugned order deserves to be quashed.

  TPO order was not passed on the last date of limitation i.e., 31.07.2021 as contended by the respondents - TPO order, even if passed, had not been digitally or physically / manually signed by 1st respondent on the last date i.e., 31.07.2021, thereby rendering the same illegal, invalid and barred by limitation - TPO order had not been uploaded on the ITBA portal on 31.07.2021, the last date of limitation.

  2nd respondent addressed an email on 02.08.2021 to the 1st respondent confirming that the TPO order had not been digitally signed and asked him to take necessary action, thereby also indicating that the TPO order had not been physically / manually signed even as on 02.08.2021.

  Petitioner received an email on 02.08.2021 enclosing a copy of the TPO order which was neither signed digitally nor manually / physically as on that day, thereby rendering the same invalid, illegal and barred by limitation. The petitioner received an email on 13.08.2021 enclosing a copy of the TPO order which was physically / manually signed only on 12.08.2021, much beyond the last date of limitation i.e., 31.07.2021.

  The undisputed fact that the 2nd respondent noticed that the TPO order was digitally unsigned on 31.07.2021 as evident from the email addressed by him to the 1st respondent on 02.08.2021 is sufficient to come to the conclusion that digital / physical / manual signature of the TPO on the order is an essential and mandatory requirement, failing which, the TPO order would be rendered invalid, illegal, and non-est in the eye of law.

  The physically / manually signed TPO order was also uploaded in the ITBA portal only on 16.08.2021, much beyond the last date of limitation i.e., 31.07.2021. The mere generation of DIN number in the TPO order is not sufficient to cure the various inherent defects, lacunae, omissions and deficiencies in the TPO order which was barred by limitation warranting interference by this Court in the present petition.

  The impugned TP Order at Annexure-C said to have been passed on 31.07.2021 and the consequent draft assessment order at Annexure-M dated 29.09.2021 are illegal and arbitrary and deserves to be quashed. WP allowed.

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• 2024 (10) TMI 1275
  

  Revision u/s 263 - revising the assessment order passed by AO u/s 147 r.w.s. 144B accepting the assessee's claim for exemption u/s 10(23C)(iiiab) - HELD THAT:- The assessee provided detailed calculations showing that when interest income on government grants is included, the government financing exceeds 50% of the total income, thereby meeting the threshold for substantial financing.

  AO did not apply Rule 2BBB retrospectively, as the rule was introduced only from AY 2015-16. There was no legal requirement during AY 2014-15 to adhere to the 50% threshold outlined in Rule 2BBB. Moreover, the assessee relied on judicial precedents, such as Institute of Liver and Biliary Sciences and Indian Institute of Management, which support the inclusion of interest income in the calculation of Government financing.

  AO’s decision to allow the exemption based on the prevailing legal framework and facts of the case cannot be termed as erroneous. For an order to be prejudicial to the interests of revenue, it must result in a loss to the revenue.

  In this case, the AO properly accepted the assessee’s exemption claim after considering the applicable laws and facts. The assessee’s income was primarily derived from government grants and regulated fees, and the AO correctly determined that the university was substantially financed by the Government.

  CIT(E)’s conclusion that the AO’s order was prejudicial to revenue is based on the incorrect exclusion of interest income and an erroneous application of Rule 2BBB for AY 2014-15. As such, the order passed by the AO did not cause any loss to the Revenue.

  We find that the order passed by the AO was neither erroneous nor prejudicial to the interests of revenue.

  AO’s decision to allow the assessee’s exemption under Section 10(23C)(iiiab) of the Act was based on a correct appreciation of the facts and applicable law, and the principle of consistency must be upheld. CIT(E) erred in excluding interest income from the government grants and in attempting to apply Rule 2BBB retrospectively. Accordingly CIT(E)’s order invoking Section 263 of the Act is quashed - Appeal of the assessee is allowed.

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• 2024 (10) TMI 1274
  

  Validity of reopening assessment - invalid sanction obtained u/s 151 (ii) and not u/s 151(i) - HELD THAT:- We have perused the copy of the order of the Hon’ble jurisdictional High Court of Bombay in the case of the assessee [2024 (5) TMI 1479 - BOMBAY HIGH COURT] wherein the assessment has been quashed because of invalid sanction obtained u/s 151 (ii) and not u/s 151(i). Therefore, no reason to interfere in the decision of the ld.CIT(A). Accordingly, all the grounds of the Revenue are dismissed.

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• 2024 (10) TMI 1273
  

  Denial of deduction u/s 80IA - assessee is a works contractor and not developer - return filed in compliance to notice u/s 153A and not claimed the deduction in its regular return filed u/s 139 (1) - CIT(A) concluded that assessee has made a rightful claim u/s 80IA of the Act in the return filed in compliance to notice u/s 153A

  HELD THAT:- As various judgments referred mainly in case of Kirit Dahyabhai Patel [2015 (1) TMI 201 - GUJARAT HIGH COURT] where it has been held that the return filed u/s 153A of the Act will be construed to be return filed u/s 139 of the Act. We also observe that CIT (A) rightly taking note of the judicial precedents that the appellant can make or modify the claim at any time before the completion of the assessment.

  CIT (A) has also rightly observed that apart from the fact that the assessee failed to make claim of deduction u/s 80IA of the Act in its regular / original return filed u/s 139(1) of the Act, the Revenue authorities/ ld. DR failed to bring on record any concrete evidence which could negate the rightful claim made by the assessee u/s 80IA of the Act which is duly supported by the documents demonstrating that the assessee is a developer and has carried out the business of designing, constructing, testing, commissioning, operating and maintenance of water works for Bihar Rajya Jal Parisad (unit of state Government of Bihar) therefore, under the given facts and circumstances of the case the settled judicial precedents, we fail to find any infirmity in the finding of the ld. CIT (A) allowing the claim of deduction u/s 80IA - Decided in favour of assessee.

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• 2024 (10) TMI 1272
  

  Deduction claimed u/s 80P(2)(a)(i) - interest income earned out of surplus fund invested with a Co-operative Banks in the form of fixed deposits - HELD THAT:- As respectfully following the decision of The Ismailia Urban Co–operative Society [2024 (6) TMI 1404 - ITAT NAGPUR] we set aside the impugned order passed by the learned CIT(A) and hold that the assessee is eligible to claim deduction u/s 80P(2)(a)(i) of the Act. Thus, grounds no.1 and 2 are allowed.

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• 2024 (10) TMI 1271
  

  Addition u/s 68 - cash deposit during demonetization period as unexplained cash credit assessee’s claim of having introduced cash in form of capital with his proprietary concern - HELD THAT:-Although the assessee in his statement recorded u/s. 131 had claimed to have introduced cash amounting to Rs. 21.70 lacs by way of capital addition (out of personal funds available with him) in his proprietary concern, but I am afraid that the same in absence of any material which would irrefutably evidence availability of the aforesaid substantial amount of cash with him to source the capital introduction on the respective dates, cannot be summarily accepted.

  AO’s conviction that now when the assessee during the pre-demonetization period was already having substantial amount of cash available with him, i.e. sourced out of opening CIH and cash withdrawn from bank accounts of the proprietary concern therefore, it was beyond comprehension and against the principle of preponderance of human probabilities that he would be in possession of substantial amount of cash-in-hand (in his personal account) carries substance.

  If the assessee during the pre-demonetization period was in possession of substantial amount of cash in hand (personal account), then neither there would have been any need for him to have made heavy cash withdrawals from the bank accounts of his proprietary concern nor made cash withdrawals from his bank accounts for incurring business expenses. Accordingly, the assessee’s claim of having introduced cash in form of capital in his proprietary concern, viz. M/s. CP Coal Company in absence of any supporting material, and being beyond human probabilities cannot be accepted.

  Based on my aforesaid observations, the cash in hand available with the assessee in the “books of account” of his proprietary concern, i.e. on the date on which he had made a cash deposit of Rs. 33 lacs in Allahabad Bank stand reduced by an amount of Rs. 21.70 lacs, i.e. the capital (in cash) allegedly claimed to have been introduced by him during the period 13.10.2016 to 02.11.2016 out of cash in hand (from personal account). As the “cash book” of the assessee reveals availability of the CIH as on 22.11.2016 of Rs. 33,14,870.58, therefore, after reducing the same by an amount of Rs. 21.70 lacs (supra) the balance remains at Rs. 11,44,870.58.

  Thus cash in hand available with the assessee to source the cash deposit of Rs. 33 lacs on 22.11.2016 is explained only to the extent of Rs. 11,44,870.58 - Appeal of the assessee is partly allowed

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• 2024 (10) TMI 1270
  

  Excess exemption claimed u/s.54EC - AO restricting the exemption u/s.50EC of the Act to Rs.50 Lakhs only - DR said limit of Rs.50 Lakhs in the investment of bonds as stipulated u/s.54EC of the Act was cumulative investment in respect of each transaction of transfer of long term capital asset and that the law doesn’t envisage differential treatment on the basis of date of transfer

  HELD THAT:- The decision in the case of M/s. Areva T & D India Limited [2008 (9) TMI 510 - MADRAS HIGH COURT] was considered in the subsequent decision in the case of Coromandel Industries Ltd. [2014 (12) TMI 852 - MADRAS HIGH COURT] and the Hon’ble High Court had held that exemption of Rs.50 Lakhs each claimed in two financial years, within six months period from the date of transfer of capital asset, was eligible for exemption u/s 54EC

  Co-ordinate Bench of this Tribunal in the case of Shri Atushbhai B. Amin [2017 (3) TMI 890 - ITAT AHMEDABAD] held that the investment of Rs.1 Crore claimed in two financial years was allowable as deduction.

  CIT(A) was not correct in holding that the assessee was eligible for deduction of Rs.50 Lakhs only u/s. 54EC of the Act. As the assessee had fulfilled all the necessary conditions as stipulated in Section 54EC of the Act at the relevant point of time, he was eligible for deduction of Rs. 1 Crore as claimed u/s.54EC of the Act. Accordingly, the addition of Rs.50 Lakhs on account of excess exemption u/s.54EC of the Act is deleted. Appeal of the assessee is allowed.

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• 2024 (10) TMI 1269
  

  Deduction u/s 80P(2) - interest received on investment held by the assessee with other co-operative societies and bank - HELD THAT:- The chief determinant factor entitling a claim of deduction u/s 80P(2)(d) in the hands of assessee society is that, interest income should have been earned by it from an investment made with any other cooperative society registered under the provisions of law, irrespective of its nomenclature.

  Thus, in substance, the Hon'ble High Court of AP &TS [2017 (4) TMI 663 - ANDHRA PRADESH HIGH COURT] held that interest income derived on investment with banks is earned / derived from by a co-operative society in the course of its regular business of accepting deposit & providing credit facilities to its members hence eligible for deduction u/s 80P(2)(a) of the Act.

  Revenue could place no contrary decision of Hon'ble Jurisdictional High Court. Therefore, without multiplying judicial precedents on the aforestated issue in view of the ratio laid down in ‘Smt. Godavari devi Saraf [1977 (9) TMI 24 - BOMBAY HIGH COURT] we adjudicate the issue in favour of assessee following the decision of ‘Vavveru Co-operative Rural Bank Ltd.’ [2017 (4) TMI 663 - ANDHRA PRADESH HIGH COURT] by holding that, the interest income earned by the appellant from its investment held with co-operative & other banks qualifies for deductions u/s 80P(2)(a)(i) of the Act since arisen in the course of regular business - Decided in favour of assessee.

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• 2024 (10) TMI 1268
  

  Rejection of application for grant of regular 80G as time barred - Need to file regular 80G registration within a period of six months therefrom provisional registration granted - HELD THAT:- The appellant assessee was granted a provisional registration u/c (iv) of s/s (5) of section 80G of the Act by an order u/c (vi) of s/s (5) of section 80G of the Act by the Ld. CIT(E). Therefore, there remains no reason to draw out appellant’s case from claiming benefit of extended period for filing application for regular registration.

  The circular 08/2023 also clarified that the extended period upto 30/09/2023 shall apply even in cases, (i) where the application was rejected by the CIT(E) on or before issuance of this circular dated 24/05/2023 (ii) where due date for making/filing application has expired, on or before 30/09/2023.

  In addition to above, in reply to a specific query, the appellant spelt out the reasons beyond delayed filing of application, which in our considered view also formed sufficient & reasonable ground to condone the delay. We find in similar facts & circumstance, the co-ordinate benches allowed benefit of extended time period in ‘Rotary Club of Akurdi Charitable Trust’[2024 (10) TMI 1246 - ITAT PUNE], ‘Shashvat Paediatric Care Foundation’[2024 (3) TMI 1365 - ITAT PUNE], ‘Sarathi Youth Foundation’ [2024 (6) TMI 798 - ITAT PUNE], ‘Birmani Charitable Foundation’ [2024 (4) TMI 89 - ITAT PUNE], ‘Swachh Vapi Mission Trust [2024 (3) TMI 614 - ITAT SURAT], ‘TB Lulla Charitable Foundation [2024 (6) TMI 798 - ITAT PUNE] and ‘Gujarat Hira Bourse & Ors’ [2024 (1) TMI 946 - ITAT SURAT],‘Bhamashah Sundarlal Daga Charitable Trust’ [2023 (11) TMI 1210 - ITAT JODHPUR].

  Thus, we hold the application of the appellant was filed well within the extended time limit and in consequence we set-aside the impugned order of rejection for remand with a direction to treat appellant’s application dt. 22/08/2023 as filed within the time limit prescribed u/c (iii) to first proviso to section 80G(5) of the Act r.w.c. 06/2023 (supra) and adjudicate the same on merits in accordance with law.

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• 2024 (10) TMI 1267
  

  Assessment u/s 153A - addition on account of undisclosed foreign asset in the form of foreign bank account and interest income earned on the deposits in the said undisclosed foreign bank account - incriminating material found in search or not? - HELD THAT:- We observe that the AO, in the first round of proceedings, confronted the assessee information/documents in the form of client profiles of HSBC Bank also showing unique code assigned to the assessee for operation of the bank account maintained with HSBC Bank. The profile of the assessee was found to be linked to 5 client profiles. Thus, evidently, the Revenue was in possession of definite material claimed to be obtained under DTAA/DTAC with foreign countries which seeks to indicate holding of foreign bank account by the assessee with HSBC Bank, Switzerland. The particulars available with the Revenue were thus overwhelming and specific in nature. With a view to verify the credibility and precision of such information on purported foreign bank account, a reference was sent to competent authorities in Switzerland and other countries by the Indian Revenue Authorities.

  The confirmatory verification report in respect of the foreign bank accounts allegedly maintained by the assessee could not however be obtained by the Revenue Authorities owing to the conditional handicap namely ‘Consent Waiver Form’ which is required to be necessarily signed by the account holder. The Swiss authorities would, otherwise, in the absence of consent from the account holder would not officially part with the information of the customer to authorities of other sovereign state.

  The Revenue is in possession of cogent material which indicated the details of bank account maintained in the name of the assessee including the date of opening of bank account (06.10.1998) and date of closure (25.01.2006). The authenticated copy of such bank account could be obtained only with the consent and concurrence of the assessee, i.e., bank account holder, owing to limitations fastened by the stated policy, protocols and regulations of Swiss Govt.

  The question of self incrimination by signing the consent waiver form would arise only in the case of a finding of any offence committed. Where the assessee has not maintained any bank account, the existence of ‘offence’ would not arise. Besides, a person who is called upon to assist the deptt. in the course of enquiry and investigation of facts is not an ‘accused’ per se. Hence self incrimination plea is a damp squib. This view is supported by the judgment rendered in the case of Ramesh Chandra Mehta vs. State of West Bengal [1968 (10) TMI 50 - SUPREME COURT]

  Therefore, in the context of income tax proceedings, providing consent waiver form on non existent bank account, in our view , would not tantamount to testamentary compulsion violative of Article 20(3) of the Constitution. We thus see no substance in justification advanced for refusal to provide consent waiver form.

  Hon’ble Bombay High Court in the case of Soignee R Kothari vs. DCIT [2016 (12) TMI 59 - BOMBAY HIGH COURT] in identical facts, observed that the conduct of the assessee is not forthcoming and opposed to normal human conduct. The Hon’ble Court declined to turn a blind eye to the fact of refusal to sign consent waiver form to support absence of any undisclosed foreign bank account. The remedy sought by way of Writ challenging reopening action was thus not entertained.

  Notwithstanding, an undertaking of voluntary nature by the assessee addressed to DDIT (Inv.) post search filed by the assessee is entitled to due weight. Such undertaking, in the light of specific bank particulars of overseas bank confronted to the assessee, is a good evidence to draw adverse inference even if not conclusive. Decided against assessee.

  Addition of imputed interest income attributable to amount deposited with HSBC Geneva Switzerland - As purported bank account maintained by the assessee in HSBC bank is shown to be closed on 25.01.2006 and thus where the deposit itself is not available with the bank, the question of notional interest on deposits in the subsequent financial years is incomprehensible. The imputed interest @ 4% in the deposits kept with HSBC bank as a secondary adjustment cannot be countenanced on such facts. The grievance of the Revenue on account of imputed interest on deposits with HSBC bank in the respective appeals captioned above thus stands dismissed. Additions on account of notional interest attributable to undisclosed bank account in HSBC Bank is not permissible owing to closure of the bank account itself.

  Unexplained investment in jewellery found during the search - For gifts received on wedding, name and address of the persons, relationship and the description of item of jewellery is mentioned along with the corresponding serial number of the valuation report prepared during search matching the respective jewellery item. The total value of jewellery received on the occasion of the wedding comes to Rs. 25,36,118/-. The appellant has also filed hand written "Aashirvad Patras" in substantiation of the above.

  In view of the same, there is enough evidence and material in support of the appellant's contention that the said jewellery items were received on its wedding. AO in case he disbelieved the version of the appellant could have conducted inquiries from the persons gifting jewellery items for which names and addresses are available in the details filed by the appellant. AO failed examine the issues and disprove the contention of the appellant. In view of the same, addition to the extent of Rs. 25,36,118/-, out of total addition of Rs. 29,02,002/- is directed to be deleted.

  As regards the balance amount it is seen from the above table that the same is claimed to have been received as small jewellery items on the occasion of children's birthdays from friends and relatives. However, the names and addresses of friends and relatives have not been furnished. Even the description of certain items of jewellery reveals that expensive items such as 1 pair of Kara, aggregating Rs. 1,60,000/- has been received on birthday which is highly unlikely even for a person of the status of the appellant. Thus, addition is hereby confirmed due to lack of proper details and substantiating documents filed by the appellant.

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• 2024 (10) TMI 1246
  

  Rejection of application for grant of regular 80G as time barred -Need to file regular 80G registration within a period of six months therefrom provisional registration granted - HELD THAT:- As reading from para 7 of impugned order it as an undisputed fact that the appellant assessee was granted a provisional registration u/c (iv) of s/s (5) of section 80G of the Act by an order u/c (vi) of s/s (5) of section 80G of the Act by the CIT(E) on 16/02/2022. Therefore, there remains no reason to draw out appellant’s case from claiming benefit of extended period for filing application for regular registration.

  The circular 08/2023 also clarified that the extended period upto 30/09/2023 shall apply even in cases, (i) where the application was rejected by the CIT(E) on or before issuance of this circular dated 24/05/2023 (ii) where due date for making/filing application has expired, on or before 30/09/2023.

  We find in similar facts & circumstance in ‘Shashvat Paediatric Care Foundation[2024 (3) TMI 1365 - ITAT PUNE], Swachh Vapi Mission Trust [2024 (3) TMI 614 - ITAT SURAT] , TB Lulla Charitable Foundation[2024 (6) TMI 798 - ITAT PUNE] and ‘Gujarat Hira Bourse[2024 (1) TMI 946 - ITAT SURAT] and ‘Bhamashah Sundarlal Daga Charitable Trust’ [2023 (11) TMI 1210 - ITAT JODHPUR]

  Rejection of appellant’s application on the ground of limitation in our considered view is without appreciating the facts in its entirety and devoid of subsisting circular (supra), hence deserves to be set-aside, ergo ordered accordingly.

  Non-compliance of notice seeking rectification of discrepancies and submission of copy of certificate granted u/s 12AB r.w.s. 12(1)(ac)(iii) of the Act - As we note that such notices were sent to email [email protected] belonging to a tax consultant who failed to intimate the same to the assessee for due compliance. Thus, the said non-compliance by the assessee was purely accidental & undeliberate, which better can be complied only if the matter is restored back. In view hereof, without commenting on merits, we remand the matter back to the file of Ld. CIT(E) with a direction to treat appellant’s application dt. 30/09/2023 as filed within the time limit prescribed u/c (iii) to first proviso to section 80G(5) of the Act r.w.c. 06/2023 (supra) and adjudicate the same on merits in accordance with law after according two effective opportunities.

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• 2024 (10) TMI 1212
  

  Inadvertent error on the part of the bank officials ignoring restraint orders - FIR registered for the offences punishable under the different provisions of the IPC on certain officials of the appellant-bank - continuation of the criminal proceedings against the appellant-bank - mens rea of the officials of the appellant-bank or failure to disclose the commission of any offence - restraint order was imposed in respect of Bank Lockers, Bank Accounts and Fixed Deposits - As submitted that access of the bank locker given is in violation of Section 132(2) of the IT Act would attract the offence under Section 409 read with Section 405 of the IPC

  HELD THAT:- In the present case, the FIR does not show that the appellant-bank had induced anyone since inception.

  For bringing out the offence under the ambit of Section 420 IPC, the FIR must disclose the following ingredients:

  (a) That the appellant-bank had induced anyone since inception;

  (b) That the said inducement was fraudulent or dishonest; and

  (c) That mens rea existed at the time of such inducement.

  The appellant-bank is a juristic person and as such, a question of mens rea does not arise. However, even reading the FIR and the complaint at their face value, there is nothing to show that the appellant-bank or its staff members had dishonestly induced someone deceived to deliver any property to any person, and that the mens rea existed at the time of such inducement. As such, the ingredients to attract the offence under Section 420 IPC would not be available.

  For bringing out the case under criminal breach of trust, it will have to be pointed out that a person, with whom entrustment of a property is made, has dishonestly misappropriated it, or converted it to his own use, or dishonestly used it, or disposed of that property.

  In the present case, there is not even an allegation of entrustment of the property which the appellant-bank has misappropriated or converted for its own use to the detriment of the respondent No.5. As such, the provisions of Section 406 and 409 IPC would also not be applicable.

  Since there was no entrustment of any property with the appellant-bank, the ingredients of Section 462 IPC are also not applicable.

  Likewise, since the offences under Section 206, 217 and 201 of the IPC requires mens rea, the ingredients of the said Sections also would not be available against the appellant-bank.

  FIR/complaint also does not show that the appellant-bank and its officers acted with any common intention or intentionally cooperated in the commission of any alleged offences. As such, the provisions of section 34, 37 and 120B of the IPC would also not be applicable.

  We find that the present case would squarely fall within categories (2) and (3) of the law laid down by this Court in the case of Bhajan Lal and others [1990 (11) TMI 386 - SUPREME COURT]

  The continuation of the criminal proceedings against the appellant-bank would cause undue hardship to the appellant-bank.

  The impugned judgment and order passed by the learned Single Bench of the High Court of Judicature at Patna is quashed and set aside.

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• 2024 (10) TMI 1211
  

  Maintainability of appeal in High Court - substantial question of law or not? - income tax officer disallowing expenses and determining income at a higher amount - as decided by HC [2024 (1) TMI 1336 - BOMBAY HIGH COURT] a reasoned order has been passed for allowing or disallowing the claim of the appellant. There is no question of substantial question of law when all the facts have been considered - HELD THAT:- Delay in refiling the special leave petition is 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.

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• 2024 (10) TMI 1210
  

  TP Adjustment - comparable selection - M/s TCS E-Serve International Ltd., M/s TCS E-Serve Ltd. and M/s Infosys BPO Limited - inclusion of 3 comparables was essentially raised on the ground of the huge expenditure incurred by those entities in brand building and advertisement as also on account of the reputed brand value and profile of those entities which clearly resulted in higher profitability.

  HELD THAT:- We find that insofar as TCS E-Serve and Infosys BPO Limited are concerned, the Tribunal had in the appellant’s own case pertaining to AY 2011-12 excluded those two entities from the list of comparables following the decision rendered by this Court in BC Management Services Pvt. Ltd. [2017 (12) TMI 255 - DELHI HIGH COURT] In AY 2011-12, TCS E-Serve International had been excluded from consideration by the TPO itself.

  The exclusion of the three comparables in question would clearly merit acceptance bearing in mind a subsequent decision rendered by this Court in PCIT v. Evalueserve Sez (Gurgaon) Pvt. Ltd [2018 (2) TMI 1750 - DELHI HIGH COURT]

  The appeal shall consequently stand allowed. The question as framed is answered in the affirmative and in favour of the appellant assessee.

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• 2024 (10) TMI 1209
  

  Correct head of income - rent income derived from properties - ‘Income from house property’ or ‘Income from Profits and Gains of Profession or Business’ - HELD THAT:- In the present case, it appears to be not in dispute that the only source of income for the assessee was the income derived from rent or amounts as received by the assessee from letting out its properties. The record indicates that the AO in the present case has not disputed the nature of the business of the assessee and more importantly, the income offered to tax in respect of all the relevant assessment years, (subject matter of different appeals) is derived from letting out various properties, and which is the business activity of the assessee, to earn such income, through its business, as seen from the main objectives, outlined in the memorandum of association.

  It is hence, not the case that the business of the assessee is of a nature that the income from house property is required to be treated as an incidental income not derived from its main business, when it is derived from its main business of letting out its properties. In our opinion, there is certainly a difference between the two situations, firstly where the main object of the assessee is to earn income from letting out properties, and secondly, where the assessee incidentally earns income apart from its main business i.e. from letting out its house properties, both these situations are totally distinct.

  Adverting to the law as laid down in Chennai Properties & Investments Ltd. [2015 (5) TMI 46 - SUPREME COURT] it is clear that what must be borne in mind for the Court is to consider the main objective of the assessee as contained in the Memorandum of Association, and that the deciding factor, is not the ownership of land or leases but the nature of the activity of the assessee and the nature of the operations in relation to them. It is the main objective of the company which needs to be the focal point, to consider the business of the assessees in considering whether any income derived from such properties is the “income from profits and gains of business or profession” or the same would be required to be regarded as “income from house property”.

  In the present case, the income of the assessee is derived from letting out of the properties, which in fact, is the principal business of the assessee as seen from its main objectives of the assessee as contained in its memorandum of association, therefore, the assessee was correct in accounting such income under the head ‘income from profits and gains of business’, and not as ‘income from house property’. For such reasons, there was an apparent error of law in the Tribunal holding that the assessee’s income is required to be treated as “income from house property” and not the “income from profits and gains of business”.

  The appeals need to succeed. Rent income derived by the assessee from lease of its properties was assessable as income from profits and gains of business. The questions of law as framed by this Court are answered in favour of the assessee and against the revenue.

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• 2024 (10) TMI 1208
  

  Non-deposit of the TDS amounts - according to the petitioners, such amounts were shown to have been deducted from the salary slips as issued to the petitioners - petitioners contend that it was not permissible for respondent No. 1 to issue such demand notices against the petitioners in view of clear provisions of Section 205 of the Income Tax Act, which bars any demand against the assessees - HELD THAT:- The mandate of Section 205 is absolutely clear that the assessee shall not be called upon to pay taxes himself to the extent to which tax has been deducted from the asessee’s income. The object and purpose behind the provision is to the effect that when an obligation to deposit the tax as in the present case, is on the employer and if the employer has defaulted, the liability to pay such tax cannot be shifted so as to be foisted on the employee, who is in fact the beneficiary of the payment to be received from the employer and who would also become the beneficiary of the tax being deposited at source on his behalf.

  Such is the object of the provision. However, what the department has done is that without a warrant in law, the liability to pay such tax is being foisted on the petitioners, which is clearly in the teeth of Section 205 of the Income Tax Act. Thus, looked from any angle, it was not permissible for respondent No. 2 to raise any such demand against the petitioners. WP allowed.

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• 2024 (10) TMI 1207
  

  Disallowance u/s 14A - if no exempt income is earned by the Assessee - HELD THAT:- Clearly, there could be no disallowance of any expenditure u/s 14A of the Act if the assessee’s income for the relevant assessment year did not include any income that was exempt from the limited tax. This issue is covered by the decision of this Court in Cheminvest Limited [2015 (9) TMI 238 - DELHI HIGH COURT] as well as the recent decision in Alchemist Ltd. [2024 (8) TMI 1371 - DELHI HIGH COURT]

  Concededly, the said explanation is applicable prospectively and thus, would be inapplicable to the assessment year in question (AY 2016-17). It is relevant to note that this Court had in Era Infrastucture (India) Ltd. [2022 (7) TMI 1093 - DELHI HIGH COURT] held that the explanation would be applicable only prospectively and would have no retrospective operation.

  In the given facts of this case, where the assessee does not have any exempt income in the relevant assessment year, there is no allegation that any expenditure has been incurred on account of exempt income that would accrue or arise in future years. Thus, even if we accept – which we do not – that the explanation to Section 14A of the Act as introduced by the Finance Act, 2022 was applicable retrospectively, the same would have no application in the given facts. Decided in favour of assessee.

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