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Showing 441 to 460 of 1203 Records
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2021 (11) TMI 763
Revision u/s 263 by CIT - valid scheme of amalgamation - merger or amalgamation - CIT alleged that depreciation on goodwill generated in the scheme of amalgamation is not allowable under the provision of the Act - HELD THAT:- In the case on hand, the M/s SSL taken over the business of M/s SGSL with all the assets, liabilities and reserve. However all the assets of transferee company i.e. M/s SGSL were taken at fair market value which was valued by independent valuer namely ‘Duff and Phelps’. The M/s SSL discharged purchase consideration by cancelling investment in the books of account instead of issuing equity share capital. Thus condition specified under sub clause (iii) and (iv) of para 3(e) of AS-14 did not comply with. Hence the scheme of amalgamation in the case on hand is in the nature of purchase method which recognizes goodwill where the purchase consideration surpasses the net assets value taken over.
Admittedly the assessee paid purchase consideration by cancelling the investment of ₹ 2699.72 against net assets value acquired of ₹ 1271.90 crores. Accordingly excess amount recorded as goodwill. Admittedly all these information was part of scheme of amalgamation which was approved the jurisdictional High Court as discussed above. Thus the finding of the learned principal CIT to this extent that the scheme of amalgamation is in the nature of merger is based on wrong assumption of facts.
Depreciation on goodwill generated in the scheme of amalgamation is not allowable under the provision of the Act - Section 32 of the Act requires allowing the depreciation to the amalgamated company in the same manner which would have been allowed to the amalgamating company in the event had there not been any amalgamation.Similarly, the actual cost of the assets acquired in the scheme of amalgamation in the hands of the amalgamated company will continue to be the same as it would have been in the hands of the amalgamating company in the event, had there not been any amalgamation.
WDV of the assets acquired in the scheme of amalgamation in the hands of the amalgamated company will remain to be the same as it would have been in the hands of the amalgamating company in the event, had there not been any amalgamation. The relevant extract of the explanation 2 to section 43(6)(c).
The assets which have been acquired by the assessee in the scheme of amalgamation would continue at the book value in the books of the amalgamated company. As such, these provision are not related to the goodwill arising in the hands of amalgamated company in the scheme of amalgamation which rises due to the difference between the purchase consideration and the NAV acquired by it. Thus the provisions of the Act i.e. 6 proviso to section 32, explanation 7 to section 43(1), explanation 2 to section 43(6)(c)of the Act cannot be applied to the goodwill emerged in the scheme of amalgamation approved by the Jurisdictional High Court.
Whether such goodwill acquired by the assessee is eligible for depreciation under the provisions of section 32 ? - As goodwill created in the scheme of amalgamation is acquired by the assessee. Thus, in our considered view the assessee has complied all the conditions provided under section 32 of the Act. Accordingly, we hold that the order passed by the ld. CIT under section 263 of the Act is not sustainable and therefore we quash the same. Hence, the ground of the assessee is allowed.
Revision u/s 263 - disallowing depreciation on goodwill arising on amalgamation - additional issue arises for our consideration is that whether the depreciation can be disallowed/disturbed claimed on the opening written down value of the intangible assets being goodwill - AY2017-18 - HELD THAT:- We note that the assessee has claimed depreciation on the goodwill which was brought forward from the immediate preceding assessment years. Thus the depreciation on the goodwill originated in the earlier year cannot be disturbed in the year under consideration without disturbing the year in which it was instigated. In fact, the claim of the assessee for the amount of depreciation on the goodwill should be allowed based on consistency in the given facts and circumstances. Thus we hold that the order passed by the ld. CIT under section 263 of the Act is not sustainable and therefore we quash the same. Hence, the ground of the assessee is allowed.
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2021 (11) TMI 762
Assessment u/s 153A - additions based on the seized documents apart from the addition made for surrendered made u/s 132(4) - HELD THAT:- Addition deserves to be deleted, as it is based only on the statement recorded u/s 132(4) having no nexus whatsoever with any incriminating/seized material found during the course of search carried out u/s 132 of the Act at the premises of the assessee. Accordingly sole ground raised by the assessee is allowed.
Addition u/s 69 - Addition for alleged pawning business and the addition for money-lending business calculated as per ceased diary BS-4 - HELD THAT:- The alleged pawning business was not carried out by the assessee firm and it was carried out by the family members of the partners and the income from pawning business have been shown in the income tax return filed by them. This fact is supported by copy of income tax return computation of income and balance sheet placed in the paper book. Thus no addition was called for u/s 69 and has been rightly deleted by the Ld. CIT(A).
Addition for money lending business - We find that this was also carried out by the partners of the firm and they have already surrendered income of ₹ 15,33,000/- for the alleged money lending business in their individual hands. Since the alleged seized documents referred for making alleged addition are not connected to the assessee firm, no addition was called for u/s 69 of the Act. We find no infirmity in the finding of Ld. CIT(A) and the same is confirmed. Accordingly ground no.1 & 2 of revenue’s appeal for A.Y. 2016-17 stands dismissed.
Unexplained cash found during the course of search - CIT-A deleted the addition - HELD THAT:- Opening balance of cash in hands as on 01.04.2015 in the audited books of accounts was ₹ 76,16,708/- but in the manual cash book the balance as on 01.04.2015 was taken at ₹ 26,13,010/- which was marked in pencil. Since the audit for F.Y. 2014-15 was undergoing when the search took place on 21.08.2015, the assessee subsequently completed books of account, got them audited and produced such audited books before Ld. AO. During the course of assessment proceedings no additions have been made during A.Y. 2015-16 for the alleged cash in hands shown as on 31.03.2015. Thus Ld. AO has neither brought on record any deficiency in the books produced nor has rejected books of account. AO should have considered the opening balance of cash in hands as on 01.04.2015 of ₹ 76,16,708.71/-. On considering the opening balance as on 01.04.2015 at ₹ 76,16,708/- the alleged unexplained cash stands explained. Thus, no interference is called for in the finding of Ld. CIT(A) deleting the addition of ₹ 60,00,000/- ground no.3 raised by the revenue stands dismissed.
Addition made u/s 69 based on the seized diary BS44 page 11 for the alleged money-lending business - HELD THAT:- We observe that in seized diary BS-44 list of name amount and dates were appearing. Before Ld. AO it was submitted that the same is a list of debtors. Ld. AO refused to accept. The assessee filed audited balance sheet and the entries relating to debtors - the contentions made by the assessee before lower authorities and before us are duly supported by the audited balance sheet for preceding years and the alleged names appearing in the seized diary BS-44 are name of the outstanding debtors and have no relation with the alleged moneylending business. Ld. CIT(A) has rightly appreciated the facts and deleted the additions which thus no interference is called for. Ground No.4 of the revenue’s appeal is stands dismissed.
Addition u/s 69 on the basis of loose paper as per diary BS-43 - HELD THAT:- Undisputed fact emerge that the alleged loose papers as per the diary BS43 which are the foundation for the addition of ₹ 5,00,000/- do not belongs to the assessee. It actually belongs to Jain trust namely Pandit Todarmal Smarak Trust. One of the partners of the firm namely Shikhar Chand Jain is known to be a preacher and a renowned speaker on Jain Dharma and also attached to the said Jain Trust. These loose papers refer to purchase of the idols of God worshiped by the Jain Community for being placed in a Jain Temple. Therefore, under the given facts and circumstances of the case since the alleged loose paper do not belong to the assessee firm, Ld CIT(A) has rightly deleted the addition. The finding of Ld CIT(A) needs no interference. Accordingly ground no.5 raised by the revenue stands dismissed.
Unexplained jewellery - valuation of inventory of gold and silver ornaments and the diamonds - HELD THAT:- As in view of the CBDT circular dated 11.05.1994, settled judicial precedents, will of late Chameli Devi, Wealth Tax returns for A.Y..2011-12 of the beneficiaries referred in the will, affidavit of Devendera Jain brother of late Chameli Devi substantiating the gift and the statement during the course of search are sufficient enough to explain the jewellery of 10987 grams which was included in the stock of inventory but not accounted in the books as they were personal assets of the partners and not of the assessee firm. Further in light of the evidence filed before us which were also placed before lower authorities which are of the dates preceding to the date of search it cannot be said to be an afterthought submission to explain the gold ornaments weighing 10987.35 grams.
CIT(A) has rightly appreciated the facts and documentary evidences in accepting the contention of assessee that the alleged unexplained stock of gold ornament weighing 10987 gms is the personal jewellery of partners and is therefore duly explained.
Addition for value of 5686 gms of gold jewellery claimed to be purchased prior to the date of search but bills accounted for after the date of search and addition being deleted by ld. CIT(A), we find that the assessee has provided the following details which commonly states that the payments were made prior to the date of search but the bills were received by the assessee subsequent to the date of search.
All the above stated bills along with copy of invoices of the suppliers, details of payments made and confirmations received from suppliers were placed before the Ld. AO. who failed to find any discrepancy or inaccuracy in the above said documents produced before us. Under these given facts and circumstances of the case, we are of the considered view that the Ld. CIT(A) after appreciating the facts brought on record and in light of sufficient documentary evidences has rightly accepted the explanation of the jewellery weighing 5686 gms and thus rightly deleted the addition for alleged unexplained stock.
Jewellery belonging to sister and brother in law weighing 779.64 gms we find merit in the submissions made by the assessee and finding of Ld. CIT(A) that this jewellery weighing 779.64 gms belong to Smt. Meena Jain and Ashok Jain who intended to go to Canada and the same is verifiable on the copy of Passport filed by the assessee. Thus, no addition was called for unexplained jewellery 779.64 gms. It is not in dispute that during the course of search valuation report of jewellery in the name of Ms. Meena Jain and Ashok Jain was found which clearly indicates that the jewellery of 779.64 gms belonged to them. Thus, we find no infirmity in the finding of Ld. CIT(A) deleting addition for unexplained gold ornaments weighing 779.64 gms.
No reason to interfere in the finding of Ld. CIT(A) who had examined the facts of the case in detail and deleted the addition of unaccounted stock of ₹ 4,18,16,751/- which comprised of the alleged unaccounted stock of 10987 gms on account of jewellery of partners/family member, 5685.92 grms on account of purchase bills received after search and 779.64 gms belonging to Ms. Meena Jain and Ashok Jain. Thus, ground no.6 raised by the revenue stands dismissed.
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2021 (11) TMI 761
Failure to deposit the employees’ contribution to PF/ESI for having not paid the same on or before the prescribed due dates as per section u/s 36(1)(va) - addition made in the intimation made to the assessee u/s 143(1) - Scope of amendment to section 36(1)(va) and u/s 43B - HELD THAT:- We find that this issue has already been decided in INSTA EXHIBITIONS PVT. LTD [2021 (8) TMI 1235 - ITAT DELHI] AND M/S CRESCENT ROADWAYS PRIVATE LIMITED. [2021 (7) TMI 1265 - ITAT HYDERABAD] holding that the amendment to section 36(1)(va) and u/s 43B of the Act effected by the Finance Act 2021 is applicable prospectively ,reading from the Notes on Clauses at the time of introduction of the Finance Act, 2021, specifically stating the amendment being applicable in relation to assessment year 2021-22 and subsequent years. Therefore the addition, we hold, cannot be made on the strength of the amendment effected by Finance Act 2021 to section 36(1)(va)/43B.
Also it is an admitted position that the jurisdictional High Court has in various decisions held that employees contribution to ESI & PF is allowable if paid by the due date of filing return of income u/s 139(1) - we hold that the claim of employees contribution to ESI and PF as per section 36(1)(va) of the Act cannot be denied in the impugned year, i.e. 2019-20 on the basis of amendment made to the section by Finance Act 2021. The order of the Ld.CIT(A) upholding the said disallowance is therefore set aside and the AO is directed to allow the claim of the assessee. - Decided in favour of assessee.
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2021 (11) TMI 760
Revision u/s 263 by CIT - reopening of assessment u/s 147 - "reason to suspect" v/s 'reason to believe' - unaccounted fund was transferred from M/s. Kalyan to M/s. BSR Finance and Construction Ltd. through layering and finally reached to the ultimate beneficiary the assessee (M/s. Usha Polycab Ltd.) - AO has not properly enquired both the issue of ₹ 25 lakhs transacted with M/s. Kalyan; and the loss claimed by the assessee of ₹ 43,02,450/- on account of transaction with M/s. SSL- HELD THAT:- AO has in the reasons recorded for reopening has mentioned about receiving information from the DDIT (Inv.) from which he was informed that huge suspicious transaction of money in the bank statement of M/s. Kalyan took place and that M/s. Kalyan is not doing any actual business and the un-accounted money of beneficiary like assessee are being brought through the guise of share premium/share etc. back to the actual beneficiary.
Information adverse may trigger "reason to suspect" and not 'reason to believe'. When an information adverse like this comes to the notice of the AO then it only triggers 'reason to suspect'. Then what the AO should have done was that he should have made reasonable enquiry and should have collected material which could make him believe that there is in fact escapement of income.
So in the present case the AO when he got this information from the DDIT (Inv.) should have found out the intermediaries through whose hands the assessee had received ₹ 25 lakhs and then should have properly recorded in the reasons recorded the fact from whom the assessee has received ₹ 25 lakhs which has been layered from M/s. Kalyan. Here in this case this important fact/jurisdictional fact is found missing and, therefore, the factual basis on which the AO reopened itself is fragile and, therefore, the reasons recorded to reopen itself is bad in law and, therefore, the reassessment order dated 27.12.2019 passed by the AO itself stands vitiated on the factual findings recorded by the Ld. Pr. CIT that the assessee has received money not from M/s. Kalyan directly but through several layers from M/s. Kalyan, M/s. BSR Finance & Construction Co. and finally reached to the assessee.
This particular assertion of facts itself takes away the base/foundation on which the AO had recorded the reason to believe to reopen the assessment. Therefore, the reassessment order dated 29.12.2019 itself is bad in law and therefore, null in the eyes of law and therefore, the very initiation of revisional proceedings taken by the Ld. Pr. CIT against the assessee itself is void in the eyes of law and therefore quashed. - Decided in favour of assessee.
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2021 (11) TMI 759
Interest on refund - relevant time - to be calculated from expiry of three months after passing of the Tribunal’s final order or it has to be calculated from the date of final order of the tribunal - rate of interest should be 6% or 15% or any other rate - entitlement of interest on interest - HELD THAT:- In the earlier round of litigation in the same case this tribunal in the order No A/1641/WZB/AHD/08 dated 19.08.2008 [2008 (8) TMI 731 - CESTAT, AHMEDABAD] held that interest liability arises from the date of the order of the tribunal and not the date of judgment of the Hon’ble Supreme Court - In the above order of the tribunal though the order of the commissioner(Appeals) was upheld but at the same time it was stated that interest liability arises from the date of order of the tribunal.
Rate of interest - HELD THAT:- The rate of interest is statutorily prescribed under section 27 (A) read with Notification issued there under according to which 6% as rate of interest was prescribed. The departmental officer is bound to follow the statutory provision strictly and therefore, no interest more than 6% can be calculated. Even this tribunal which is creature under the statute of Customs Act cannot decide the rate of interest out of the statutory provisions. Accordingly, the rate of interest i.e. 6% decided by the Lower Authority is correct and legal - Learned Commissioner (Appeals) has rightly held that the Adjudicating Authority has rightly applied simple rate of interest as 6% P.a. Therefore, the assesseee cannot be granted interest at the rate of 15% or any other rate above 6%.
Entitlement of interest on interest amount - HELD THAT:- Learned Commissioner (Appeals) has concluded that being a creature of the statute he has no power to allow interest on interest amount to the appellant. There are no infirmity in the above finding. Even this Tribunal also being a creature under statute of customs Act cannot decide anything beyond the provisions of the statue of the Customs Act. There is no statutory provision for granting the interest on interest. Therefore, the decision on this issue by the Learned Commissioner (Appeals) is legal and correct - we concur with the Commissioner (Appeals) on the issue of rate of interest and interest on interest.
Appeal is partly allowed.
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2021 (11) TMI 758
Sanction of Scheme of amalgamation of the transferor companies into the transferee company (Scheme) - Section 230, 232 of the Companies Act, 2013 - HELD THAT:- Various directions with regard to holding, convening and dispensation with various meetings issued - directions for issuance of notices also given.
The scheme is approved - application allowed.
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2021 (11) TMI 757
Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- The records revealed that inspite of the Corporate Debtor falling due to the Operational Creditor, he failed to make any payment. He did not even respond to the Demand Notice. The Copy of the Demand Notice delivered by the Operational Creditor to the Corporate Debtor is on record. The Affidavit filed by the Operational Creditor shows that no reply is given by the Corporate Debtor relating to the dispute of the unpaid operational debt. The Copy of the financial statement furnished by the financial institutions is also filed. Hence, this Application is found to be complete.
The petition is admitted - moratorium declared.
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2021 (11) TMI 756
Dishonor of Cheque - seeking permission to lead defence evidence were dismissed - right to lead defence evidence closed - seeking directions for recalling of CW-1 for further cross-examination - petitioners has prayed that only one opportunity may be granted to the petitioners to lead defence evidence and the petitioners undertake to examine the defence witnesses in one day - HELD THAT:- Doubtless, the petitioners are guilty of delaying the trial, however, this Court cannot lose sight of the fact that a fair trial is the hallmark of criminal procedure. It entails not only the rights of the victims but also the interest of the accused. It is the duty of every Court to ensure that fair and proper opportunities are granted to the accused for just decision of the case. In furtherance of the above, adducing of evidence by the accused in support of his defence is also a valuable right and allowing the same is in the interest of justice.
This Court is of the opinion that interest of justice would be served if the petitioners are allowed to lead defence evidence, subject to their examining the defence witnesses on one single day. The cross-examination of all such defence witnesses shall also be conducted on the same day.
It has been informed that the next date of hearing fixed before the Trial Court is 13.12.2021 - it is directed that the matter be listed before the concerned Trial Court on 22.11.2021 for the petitioners to take appropriate steps for leading their defence evidence. The same shall however be subject to payment of cost of ₹ 30,000/- in each case, to be payable to the respondent, within a period of two weeks from today.
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2021 (11) TMI 755
Dishonor of Cheque - specific allegations made against these petitioners about their role in issuing the cheques in question and its subsequent dishonour or not - vicarious liability under Section 141 of NI Act - HELD THAT:- The responsibility of the directors and day to day activities of the directors in the company would be disclosed in the Trial - Further, the reliance of the Judgment in the case of "Pooja Ravinder Devidasani Vs. State of Maharashtra and another" [2014 (12) TMI 1070 - SUPREME COURT] placed by the learned counsel for the petitioners wherein it is held that "the appellant was neither a Director f the accused company nor in charge of or involved in the day to day affairs of the company at the time of commission of the alleged offence. There is not even a whisper or shred of evidence on record to show that the appellant could be vicariously held liable for the offence with which she is charged".
However, in the present case, it is admitted fact that the cheques were issued by the Directors with seal of the company and signature of the petitioners who were the directors in the company in favour of the respondent/complainant for the supply of the material.ie. waste and scrap of iron and steel to M/s. Mehala Castings and Components Pvt. Ltd. These cheques have been given for the business transaction held between the petitioner's company and the complainant's company. In such circumstances, the petitioners/Directors of the company have issued the said cheques in question in favour of the respondent/complainant.
Whether the company is not functioning from January 2014 and the petitioner were not directors in the company at that point of time could be tried and decided only in the Trial. Further the averments made by the petitioner is not acceptable while the petitioners have not produced any substantial material to prove that the directors have not involved in the affairs of the company and they were not responsible in the day to day activities of the company - All these averments are factual in nature and the same has to be established only at the time of Trial.
The petitioners cannot seek to quash the C.C.Nos.367 and 368 of 2015 on the file of the Judicial Magistrate Court No.1, Tiruppur as they have failed to produce the substantial evidence to prove their averments before this Court. Hence, this Court is not inclined to accept the contentions of the petitioners - Petition dismissed.
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2021 (11) TMI 754
Validity of proceedings under Sections 78 and 79 of CGST Act, 2017 - no recovery order as appearing in Annexure P-9 was ever served upon the petitioner - HELD THAT:- Perusal of Notice (Annexure P-10) would show that in two of the notices i.e. Recovery No.34 of 2021 and 35 of 2021, order date is mentioned as 18.8.2021. Under Section 78 of the Act of 2017, the period of three months is provided for making payment of the tax assessed/ascertained by the Proper Officer but the letter/notice Annexure P-10 to third party under Section 79 (1) (c) of the Act of 2017 was issued on 1.10.2021 which is less than three months period from the date of the recovery order No.34 of 2021 and 35 of 2021. It is not disputed by learned counsel for the respondents that no specific reasons have been assigned for issuing notice under Section 79 (1) (c) of the Act of 2017 for initiating proceedings under Section 78 of the Act before lapse of three months period.
Considering the entirety of the facts and circumstances of the case, submission made by learned senior counsel for the petitioner that no order was served upon the petitioner as required under Section 78 of the act of 2017, as an interim measure, it is directed that effect and operation of order /notice dated 01.10.2021(Annexure P-10) shall remain stayed till the next date of hearing subject to petitioner depositing 50% of the total payable tax amount within a period of three weeks from today.
Application disposed off.
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2021 (11) TMI 753
Cancellation of registration of petitioner - taxpayer neither attended personal hearing nor responded to the query raised by this office - Section 107 (1) of CGST Act, 2017 - appeal has been filed within the prescribed time- limit or not - whether or not the appeal filed against the order of cancellation to be decided? - HELD THAT:- In the instant case the appeal has been filed by the appellant with the delay of 17 months 10 days from the normal period prescribed under Section 107 (1) of CGST Act, 2017. Delay in filing the appeal is condonable only for a further period of one month provided only in case of sufficient cause is shown by the appellant. There is no reason given by the appellant for acceptance of appeal beyond the normal period prescribed under Section 107 (1) of CGST Act, 2017. Thus, there are no option but to reject the appeal as time barred without going into the merits of case.
The appeal is rejected as time barred - appeal disposed off.
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2021 (11) TMI 752
Revocation of cancellation of registration - rejection due to not deposit interest liability against late discharged cash payment and also appellant not replied to the show cause notice - HELD THAT:- On account of inadvertent mistake, particulars of disputed order were wrongly entered of Registration passed by the learned Superintendent, Circle-3, Jaipur Ward-I. This was a genuine clerical mistake which has caused ab-initio incorrectness in appeal memo. That the appellant has deposited of interest and be considered as the requirement has been complied.
The appellant has deposited ₹ 11,062/- towards interest liability on 15.06.2021 (vide DRC-03 ARN No.AD0806210018946 Dated 15.06.2021 CGST ₹ 5,531/- and SGST ₹ 5,531/- for the period April-2020 to December-2020). Further, the appellant submitted copy of DRC-03 dated 15.06.2021 and also filed GSTR-3 B return for the period July-2020 August-2020 September 2020, October-2020, November-2020 and December-2020 respectively.
The appellant has filed returns upto date of cancellation of registration hence, the appellant has substantially complied with the said provisions of the CGST Act/Rules, 2017 in the instant case. Therefore, the registration of appellant may be considered for revocation by the proper officer.
The proper officer is ordered to consider the revocation application of the appellant after due verification of payment particulars of tax, late fee, interest and status of returns - appeal disposed off.
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2021 (11) TMI 751
Characterization of receipt - revenue or capital receipt - compensation received by the appellant from Suzlon Energy Ltd. in terms of the purchase orders on account of failure of performance guarantee parameters of capital assets purchased by the appellant - HELD THAT:- It is settled legal position that there is no singular test available to determine whether a receipt is a capital receipt or a revenue receipt for which it is necessary that the Assessing Officer should examine the facts of each case. Therefore, we are of the considered view that the manner in which the Tribunal had interpreted the decision of Saurashtra Cement Ltd. [2010 (7) TMI 11 - SUPREME COURT] and come to a conclusion that it does not help the assessee is incorrect. The Tribunal is required to rely the legal proposition laid down in the Hon’ble Supreme Court as well as the other decisions which have been referred to by the Hon’ble Supreme Court.
Matter requires to be remanded to the Tribunal for a fresh consideration to consider the legal issue which was decided by the Hon’ble Supreme Court in Saurashtra Cement Ltd. It goes without saying that the Revenue also will be given adequate opportunity by the Tribunal to put forth their contentions on the grounds canvassed by the assessee before us in this appeal. In the result, the appeal is allowed and the order passed by the Tribunal is set aside on the subject issue alone, namely, whether the compensation received by the assessee from Suzlon Energy Ltd. in terms of the purchase orders on account of failure of performance guarantee parameters of capital assets, namely, wind turbine generators, purchased by the assessee was on revenue account made for reducing loss incurred in the course of business or a capital receipt outside the purview of taxation and the matter shall be remanded to the Tribunal for a fresh decision.
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2021 (11) TMI 750
Addition u/s 68 - unexplained cash credit - assessee could not satisfactorily explain the genuineness of the transactions and creditworthiness of the share applicants in question - CIT-A deleted the addition - HELD THAT:- Order passed by the CIT(A) does not suffer from any error. CIT(A) is entitled to exercise the power of the Assessing Officer. Therefore, two options were available before the CIT(A), in the event he found that facts were required to be brought on record. The first of the options available was to remand the matter to the Assessing Officer for fresh consideration. The second option would be to call for the remand report from Assessing Officer by keeping the appeal pending.
CIT(A) exercised the second option which undoubtedly could go to save a lot of time in the matter of completion of the assessment. Upon direction being issued by the CIT(A) calling for a remand report, the Assessing Officer before us treated the matter with more seriousness and after thorough factual exercise reported that genuineness and creditworthiness of the share applicants have been established. In absence of any material available with the revenue to discard the remand report we find the CIT(A) was fully justified in accepting the remand report in deleting the addition.
Tribunal has also re-examined the facts and rightly accepted the conclusion arrived at by the CIT (A). Thus we find there is no questions of law much less substantial questions of law arising for consideration in this appeal. - Decided against revenue.
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2021 (11) TMI 749
'Inter Corporate Deposits' treated to be not an ICD and a payment made regarding high seas sales in 'Indian Currency' - external commercial borrowing - whether excess of jurisdiction as the impugned order proceeds on the basis that there is a violation of 'Foreign Exchange Management Act, 1999' ('FEMA') without even issuing notice to the counter party;Statutory appeal under Section 246A - availability of alternate remedy - HELD THAT:- The arguments that the norms of FEMA have not been set out with specificity or required approval details have not been set out with specificity in the impugned order are all clearly arguments in the nature of an appeal qua impugned order i.e., not arguments compelling interference in writ jurisdiction. To be noted, impugned order i.e., assessment order proceeds on the basis that Xangbo is non resident owned, non resident controlled with opaque ownership (97.99% share holding being subscribed by a Cayman Island Controlled entity, which has been allowed 'Foreign Direct Investment' (FDI) in 100% wholesale sector). All these turn heavily on facts and therefore, this is also another reason to say that these are clearly matters for legal drill in the nature of an appeal and does not warrant interference in writ jurisdiction.
If there is an error in holding that FEMA norms have not been followed or that the business is not approved under FEMA, these are matters which can be corrected in an appeal. All this turns heavily on facts and on merits of the matter. Excess jurisdiction as an illustration is a case/situation where an Authority exercises jurisdiction which is not vested in it. In this case, if the respondents have levied any fine or have mulcted the writ petitioner with any of the consequences for FEMA violation under FEMA that may well qualify as a case of excess jurisdiction. The consequences under FEMA do not form subject matter of impugned order. If there is no violation of FEMA, it is well open to the writ petitioner to canvass the same in a statutory appeal. Therefore, this is not a case of excess jurisdiction. This Court is unable to accept the argument that this is a case of excess jurisdiction.
As rightly contended by learned Revenue counsel, in this case, writ petitioner has not raised the point that the time granted is not reasonable, adequate or ample. On the contrary, writ petitioner has responded to the notice and the same has culminated in the impugned order. Therefore, it is made clear that this Court has not expressed any opinion or view on the merits of the matter and as to whether time granted is reasonable, ample or adequate as that does not fall for consideration in the case on hand. Suffice to say that the writ petitioner has responded and the impugned order has been made.
This Court is clear in its mind that none of the exceptional circumstances, which have been culled out in DUNLOP INDIA LIMITED AND OTHER [1984 (11) TMI 63 - SUPREME COURT] are attracted in the case on hand. To be noted, excess jurisdiction point urged has been negatived by this Court and the same has been delineated supra elsewhere in this order.
In the light of the discussion and dispositive reasoning this Court has no difficulty in coming to the conclusion that this is a fit case to relegate the writ petitioner to file statutory appeal under Section 246A - there is no ground warranting interference in writ jurisdiction qua impugned order. Though obvious, it is made clear that if the writ petitioner chooses to take the alternate remedy route and file a statutory appeal under Section 246A of IT Act, Appellate Authority shall consider the appeal on its own merits and in accordance with law de hors any observation made in this order. Observations in this order which may have the trappings of some expression touching upon merits is for the limited purpose of disposal of captioned writ petition and therefore, if writ petitioner chooses to avail alternate remedy, statutory appeal shall be dealt with by Appellate Authority untrammelled by any observation made in this order. Though obvious, it is also made clear that alternate remedy if availed by the writ petitioner will be subject to pre deposit [either direct or indirect as contended] and limitation.
This Court is informed that the time limit for preferring the statutory appeal is 30 days. If the writ petitioner chooses to seek exclusion of the time spent in this Court qua captioned writ petition for computing this 30 days (by resorting under Section 14 of The Limitation Act, 1963), the same can be considered by Appellate Authority on its own merits and in accordance with law. This order will neither impede nor serve as an impetus in such a legal drill.
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2021 (11) TMI 748
Review petition on Maintainability of appeal - low tax effect - petitions seek review of order whereby interference was declined in view of the circular no. 17/2019 dated 08/08/2019 issued by the Ministry of Finance - HELD THAT:- Petitioners informed that almost similar Review Petition in Principal Commissioner of Income Tax- 1 Vs. Gurvinder Singh Bhatia [2021 (7) TMI 1287 - MADHYA PRADESH HIGH COURT] was also dismissed by this Court.
In absence of showing as to how review jurisdiction can be invoked and further showing ingredients, on which review jurisdiction can be exercised, interference is declined.
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2021 (11) TMI 747
Penalty u/s. 271(1)(c) - defective notice u/s 274 - whether AO failed to specify the charge and record requisite satisfaction with regard to concealment of income or furnishing of inaccurate particulars of income - HELD THAT:- As in the notice issued u/s. 274 r.w.s. 271(1)(c) of the Income Tax Act, 1961, there was no specific charges as relates to concealment of income or furnishing of inaccurate particulars of income. From the notice dated 30/03/2013 produced by the Ld. AR during the hearing, it can be seen that the AO was not sure under which limb of provisions of Section 271 assessee is liable for penalty. Besides that the Assessment Order also did not specify the charge as to whether there is concealment of income or furnishing of inaccurate particulars of income in assessee's case. Thus, there is no particular limb mentioned in the notice issued under Section 271(1)(c) r.w.s. 274 - See M/S SSA'S EMERALD MEADOWS [2016 (8) TMI 1145 - SC ORDER]
Inappropriate words in the penalty notice has not been struck off and the notice does not specify as to under which limb of the provisions, the penalty u/s. 271(1)(c) has been initiated, therefore, we are of the considered opinion that the penalty levied u/s. 271(1)(c) is not sustainable and has to be deleted. Notice under Section 271(1)(c) r.w.s. 274 of the Act itself is bad in law. - Decided in favour of assessee.
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2021 (11) TMI 746
Exemption u/s 11 - rejection of application seeking registration u/s. 12AA - appellant is a company incorporated under the provisions of Section 8 of the Companies Act, 2013 and promoted by IIS (Deemed to be University) Trust which is also solely engaged in imparting education having necessary approvals u/s.12AA - HELD THAT:- Assessee company had filed an application on 16.10.2020 seeking registration u/s. 12AA of the Act. Thereafter, the assessee company was issued a letter dated 30.12.2020 asking them to submit certain documents/explanation and to submit original registration certificate and Memorandum of Association for verification - only part information/documentation was submitted by the assessee company. Thereafter, a show cause notice dated 11.03.2021 was issued asking for certain specific details/information and matter was fixed for hearing on 15.03.2021.
In response to the show cause, the ld PCIT stated that the assessee company furnished part details and failed to furnish clarification regarding certain objects having elements of commercial/business nature and clarification on the objects benefiting particular community or class in terms of ICG-IISU Alumnae Association and not for general public utility, ownership proof of the assessee premises. Pr. CIT therefore stated that the assessee company has failed to furnish valid explanation inspite of giving sufficient opportunity and being a limitation matter, he decided basis material available on record and application seeking registration u/s. 12AA was rejected.
AR submitted that in response to the show cause dated 11.03.2021, the assessee company did submit its response vide letter dated 19th of March, 2021 and it is therefore, factually not correct that the assessee company has not submitted the requisite information and explanation as sought by the ld. Pr. CIT rather he has failed to correct appreciate the submissions so filed by the assessee company.
While examining the assessee's application seeking registration u/s. 12AA, the ld. Pr. CIT has raised broadly two issues which require deeper examination. Firstly, certain objects of the assessee company have been stated to be having elements of commercial/business nature and secondly, whether the objects sought to be achieved were for the benefit of Alumnae ICG-IISU and whether the same qualify as benefiting the public at large and can therefore be classified as object of general public utility. Though the assessee claims to have submitted the requisite explanation, however, in absence of findings by the ld. Pr. CIT, we deem it appropriate that the matter is set aside to the file of ld. Pr. CIT to examine the same afresh - Appeal of the assessee is allowed for statistical purposes.
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2021 (11) TMI 745
Addition u/s 68 on unsecured loans - HELD THAT:- Loans from directors and group entities and the assessee had filed requisite documents to substantiate these transactions during remand proceedings - AO has also accepted these transactions in the remand proceedings - assessee has discharged the primary onus as required u/s. 68. Therefore, the additions have rightly been deleted by Ld. CIT(A) and no interference is required to that extent.
Remaining additions we find that the assessee has merely filed confirmations and no other documents have been filed by the assessee in support of the transactions. AR has submitted that these loans were procured from the market as per the requirement - onus to prove the genuineness of the same is on the assessee. Therefore, with respect to these 11 parties, we remit the matter back to the file of Ld. CIT(A) with a direction to the assessee to file requisite documentary evidences to establish the genuineness of the same.
Advances u/s. 69 - Assessee made advances towards purchase of land to various parties which were added by Ld. AO as unexplained investments - HELD THAT:- The investments made by the assessee are part of regular books of accounts and therefore, the same could not be held to be unexplained investment u/s. 69. The ground raised by the revenue stand dismissed.
Amount paid for land - HELD THAT:- The onus was on AO to supply to impounded documents to the assessee along with an opportunity to cross-examine Shri Sanjay Sonawane. In fact, no statement was recorded from Shri Sanjay Sonawane and therefore the additions were unsustainable in terms of the decision of M/s. Andaman Timber Industries [2015 (10) TMI 442 - SUPREME COURT]. In the absence of any corroborative evidence and without affording opportunity of cross-examination, the addition could not be made. Finally, the additions were deleted against which the revenue is in further appeal before us.
We find that the issue has been clinched very correctly by Ld. CIT(A). The allegation of Ld. AO as well as consequent addition made in the hands of the assessee has no legs to stand. The additions are based on surmises and presumptions without there being any corroborative evidence on record. The adverse material has never been confronted to the assessee and the allegations of cash payment are bereft of any concrete evidence on record. Hence, the adjudication do not call for any interference on our part. The ground raised by the revenue stand dismissed.
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2021 (11) TMI 744
Disallowing of reimbursement of expenses and allowances under the provision of the Income Tax Act claimed against salary income - submission of the ld. Counsel that identical allowances were allowed by the AO in the order passed u/s 143(3) in the subsequent years - HELD THAT:- We deem it proper to restore this issue to the file of the AO with a direction to decide the issue afresh in the light of his decisions in the subsequent years in the order passed u/s 143(3) after obtaining necessary details from the assessee on this issue. The ground raised by the assessee is accordingly allowed for statistical purposes.
Disallowance on account of depreciation and interest on vehicles - AO disallowed the claim of deduction u/s 57 on the ground that the assessee did not furnish the requisite details towards claim of depreciation and interest by filing the copies of invoice in support of purchase of vehicles, copies of rent agreement in respect of letting out of the vehicles and the loan certificate for claiming interest - CIT(A) upheld the action of the AO on the ground that both the vehicles were given on rent at very low rentals and the assessee, in the process incurred huge loss which has been utilized to set off the income from house property - HELD THAT:- The matter requires a re-visit to the file of the AO to find out as to the status in the preceding and succeeding years since the two vehicles were purchased on 27th December, 2010 and 29.09.2011 respectively. The AO may find out what is the rental income of Toyota Innova and Tata Canter in other cases to ascertain as to whether the assessee is deliberately entering into an agreement with a concern just to incur losses so as to set off the same from income from house property. The AO shall decide the issue as per fact and law and after giving due opportunity of being heard to the assessee. Ground No.2 raised by the assessee is accordingly allowed for statistical purposes.
Reopening of assessment u/s 147 - CIT(A) giving a direction u/s 150(1) to the AO for taking action in the hands of the assessee as per law - HELD THAT:- The assessment year involved in the instant case is 2012-13. The property was purchased on 01.07.2010 for ₹ 22 lakhs. The assessee has obtained housing loan from the bank. The bank has valued the property at higher price for sanctioning the loan. Under these circumstances and in absence of any evidence with the AO or the CIT(A) that either the recipient has received any extra money or that the assessee has paid anything over and above what is stated in the sale deed, merely on the basis of valuation report by the bank for sanctioning of the loan cannot be a ground for giving a direction to the AO to reopen the assessment for another assessment year which was not the subject matter of appeal before the CIT(A). Even otherwise also, the CIT(A), in the instant case, passed the order on 5th February, 2019. On this date, the time limit for reopening of assessment u/s 149 for the assessment year 2011-12 was not available as the period of reopening the assessment for preceding six assessment years as on the date of passing of order by the CIT(A) was available only upto assessment year 2012-13. The various decisions relied on by the ld. Counsel supports the proposition that the order passed by the CIT(A) issuing direction u/s 150(1) is barred by limitation.
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