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Showing 381 to 400 of 1430 Records
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2023 (12) TMI 1050
Failure on the part of the respondent to deposit an amount paid by the petitioner towards Goods and Service Tax to the respondent No. 1 - HELD THAT:- It is informed by the learned counsel for the Khopoli Municipal Council that the amount of Rs.38,94,868/- has been deposited in this Court on 6th July 2023 by demand draft. If that be so, what remains is the deposit of the said amount with the GST Authorities, in even proportion as per the requirement of the Central Goods and Services Tax (CGST) Act and also the Maharashtra State Goods and Services Tax (MGST) Act - Registry of this Court accordingly to receive intimation from the learned Advocate for the said Respondents authorities, to furnish bank account details of the concerned jurisdictional authorities so that the said amount can be transferred by this Court. The said compliance would be completed within two weeks from today and on receipt of such information, office to deposit the amount as directed within one week thereafter.
The CGST Authorities and SGST Authorities to consider the Petitioner’s case sympathetically with regard to interest and penalty - Petition disposed off.
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2023 (12) TMI 1049
Classification of supply - Supply of outputs as sale of goods - water sold as 'water including natural or artificial mineral waters and aerated waters, not containing added sugar or sweetening matter, not flavoured (other than drinking water packed in 20 litre bottles) - classified under heading 2201 or not.
Supply of outputs as sale of goods or not - HELD THAT:- From the conjoined reading of section 4 of The Sale of Goods Act, 1930 and the Hon'ble Supreme Court judgement in the case of State of Madras vs Gannon Dunkerley & Co.,(Madras) [1958 (4) TMI 42 - SUPREME COURT], it is clear that the modus of operation as purchase of effluent and sale of output is applicable only if all the elements cited in the Section and judgement cited are present. If that is the case, then the classification of supply of treated water, salt and other products, as sale of goods is correct - However, it is emphasized that the mode of operation intended by the applicant i.e. purchase of raw effluent, treating the same and selling the resultant products, can be classified as sale of goods, if and only if, the applicant follows the procedures envisaged in the Sale of Goods Act and rationale of the observations of Hon'ble Supreme Court. If such is the case, the proposed mode of purchase of raw effluent, treat it on own account and supply of output, can be treated as sale of goods and consequently the first question is answered in the affirmative.
Whether the classification of water sold as 'water including natural or artificial mineral waters and aerated waters, not containing added sugar or sweetening matter, not flavoured (other than drinking water packed in 20 litre bottles) under heading 2201 is correct? - HELD THAT:- Water grouped under the heading 22.01 is ordinary water whether or not clarified or purified. And this heading specifically excludes distilled or conductivity water and water of similar purity which are classified in heading 28.53. Therefore, it is amply clear that, water recovered out of the effluent treatment process nothing but an ordinary water which is suitable for reuse by the dyeing and bleaching units as a solvent and as a washing, rinsing medium. Thus, it aptly fits into Sl. No. 99 of Notification No. 02/2017, CT (Rate), dt.28.06.2017 under the heading 2201 rather than Sl.No.24 of Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017 under the same heading 2201 - As per Circular No. 179/11/2022, dated 03.08.2022, issued by Ministry of Finance, regarding applicability of GST on various goods and services, it has been clarified that treated sewage water attracts Nil rate of tax.
The ultimate intention behind the effluent treatment process is to treat the effluent water discharged by textile units to recover water, salt and other chemicals consumed during the course of dyeing and bleaching to the maximum extent possible so as to reuse the same without getting it discharged to pollute water bodies. Moreover, ZLD has been mandated by the TNPCB for all the highly polluting industries including Textile Dyeing and Bleaching industries in order to prevent pollution of River water and ground water. Therefore, it is evident that the common effluent treatment plant has been set up in order to comply with the legislative and environment regulations thereby conserving water through recovery and reuse and not to manufacture water or chemicals - effluent treated water is eligible for exemption as per Notification No. 2/2017- Central Tax Rate as amended vide notification No.7/2022-Central Tax (Rate), dated the 13th July, 2022.
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2023 (12) TMI 1048
Validity of revision u/s 263 - Allowability of Maintenance expenses and depreciation - Validity of order passed u/s 143(3) by AO confirmed by ITAT and setting aside revisional order of the Commissioner on the question of disallowability maintenance expenses and depreciation - HELD THAT:- Assessee is engaged in business of chartering flights and had derived chartering income which evidences the business nexus of use of aircrafts owned by the respondent/assessee. This being the finding of fact and not disputed by the revenue even before us, it can be safely concluded that the aircrafts were utilised for business purpose.
Even if officers of the assessee i.e. directors have used the aircrafts for business meetings in different locations, it cannot be said to be a personal use. The assessee is a company and thus an artificial juristic person. Therefore, even if directors on some occasion have been allowed to use the aircrafts for their personal use, neither the expenses incurred in maintenance of the aircrafts nor the depreciation of the aircrafts can be disallowed, inasmuch as then, at the best, the value of use of the aircrafts on such occasion is perquisite in the hands of the user. On that account, neither depreciation nor maintenance can be disallowed, even partially.
Tribunal has found that the aircrafts have been used for chartering business. Substantial receipts from chartering business has been shown by the assessee. Therefore, the view taken by the Tribunal in the impugned order, does not suffer from any error of law. Hence, the substantial question of law No.(i) is answered against the revenue and in favour of the assessee.
Since the revenue/appellant themselves have conceded on the question of admissibility of the maintenance expenses and depreciation of the aircrafts, in full, in the matter of the present assessee in other assessment years, therefore, the revenue cannot be allowed to take a contrary stand in the present appeal. Therefore, for this reason also, the afore-quoted substantial question of law is answered in the manner as afore-stated i.e. against the revenue and in favour of the assessee.
Deduction of lease rent for vehicle obtained on lease by the Assessee permitted - Relying upon the judgment of IM/S ICDS. LTD. VERSUS COMMISSIONER OF INCOME TAX. MYSORE & ANR. [2013 (1) TMI 344 - SUPREME COURT] and Rajshree Roadways v. Union of India & Ors. [2003 (3) TMI 50 - RAJASTHAN HIGH COURT] Tribunal held that the issue of lease rent is covered by the aforesaid judgment of the Hon’ble Supreme Court and hence the order passed by the Assessing Officer by taking one possible view, cannot be termed as ‘erroneous’ warranting initiation of revision proceedings under Section 263 of the Act, 1961. The Tribunal also found that in own case of the respondent/assessee for the assessment year 2011-12, the issue was accepted by the revenue, pursuant to the directions of the DRP.
The impugned order of the Tribunal on the point of lease rent cannot be said to suffer from any illegality. Hence, the substantial question of law no. (ii), is answered against the revenue and in favour of the assessee.
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2023 (12) TMI 1047
Income from business u/s 28(iv) - Valuation of shares on scheme of amalgamation - actual market and/or valuation of the Shares of the transferee company being more than face value, the differential valuation of such shares issued representing the value of the net identifiable assets accruing to the transferee constitutes a profit and/or taxable benefit accruing to the transferee company within the meaning of Section 28(iv) - HELD THAT:- To invoke Section 28(iv) of the Act 1961, the necessary requirement is that firstly there should be a benefit and secondly the benefit should arise from business. In the present set of facts, there was neither any benefit nor any benefit arising from business to attract Section 28(iv) of the Act 1961. Under the circumstances, Section 28(iv) of the Act 1961 has no application at all, on the present set of facts. The findings recorded by the Tribunal are findings of fact based on consideration of relevant evidences on record. The findings recorded by the Tribunal do not suffer from any illegality or perversity.
No merit in this appeal. The substantial question of law answered against the revenue and in favour of the assessee.
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2023 (12) TMI 1046
Reopening of assessment u/s 147 - period of limitation - Unexplained deposits - HELD THAT:- An order u/s 148A (d) of the Act of 1961 had been passed and a notice under Section 148 of the Act of 1961 was issued as against the appellant.
The impugned order dated July 28, 2022 had been passed u/s 148A (d) of the Act of 1961 and relates to the Assessment Year 2015-2016. The issue of limitation has been dealt with in the impugned order. It has been held that the case of the appellant would fall under definition of asset as laid down under the provision of Clause b of Section 149 (1) of the Act of 1961.
The impugned order has found that, for the relevant financial year a sum had been deposited with ICICI bank by the appellant in his account and that the appellant had failed to produce any supporting documentary evidence to explain such deposit. Such deposit has not been reflected in the relevant assessment year. Therefore, by the impugned order, the authorities had come to a finding that, there was an escapement of income tax chargeable to tax for the relevant assessment year. Consequently, the authorities, by the impugned order have decided that it was a fit case to issue a notice u/s 148 of the Act of 1961 for the relevant assessment year.
Issue of limitation had been taken by the appellant before the authorities. Appellant had also taken the point of limitation and contended that the authorities wrongly assumed jurisdiction by deciding the issue of limitation erroneously before the learned Single Judge. Contention of the appellant with regard to lack of jurisdiction has revolved around the new regime of limitation that had been introduced with effect from April 1, 2021 by the substituted provisions of Sections 147 to 151 particularly Section 149 of the Act of 1961 by the Finance Act, 2021.
In the facts of this case, the appellant had suffered a notice under Section 148 of the Act of 1961 on April 30, 2021. Such notice had been set aside by the High Court on February 22, 2022. The appellant and the department are governed by the directions of Ashish Agarwal [2022 (5) TMI 240 - SUPREME COURT] which had issued directions relating to all notices issued under Section 148 after April 1, 2021. The department by a letter dated May 23, 2022 had provided the materials based on which the proceedings had been initiated. To that the appellant had submitted a response dated June 5, 2022. The impugned order dated July 28, 2022 passed under Section 148A (d) of the Act of 1961 had dealt with the response of the appellant dated June 5, 2022 in extensor. In fact, the impugned order dated July 28, 2022 of the Authorities had set out the entirety of the response of the appellant dated June 5, 2022 in its body and arrived at the finding that, the reply given was not tenable. The impugned order has also ascribed reasons why the reply of the appellant was not found to be tenable.
The impugned order of the authorities under Section 148A (d) of the Act of 1961 cannot be said to be vitiated by breach of principles of natural justice. The appellant had been heard before passing of the order. Appellant had submitted a response to the show-cause notice and filed written submissions which were considered by the Authorities. The impugned order, as noted above, cannot be said to without reasons for arrival at the decision recorded.
Learned Single Judge has exercised discretion not to entertain the writ petition. Learned Single Judge has proceeded to hold that there was no violation of the principles of natural justice or that there was any procedural defect in arriving at the impugned decision dated July 20, 2022 of the Authorities - No ground to interfere in the appeal
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2023 (12) TMI 1045
Payment of interest u/s 244A to the deductor on the refund of tax made u/s 240 - Failure to release the undisputed refund due and determined by respondents themselves in the intimation/order issued u/s 168(1) - stand of the Revenue is interest is not provided for refund of amounts deposited under the equalisation levy and, therefore, the question of payment of any interest does not arise - HELD THAT:- In Tata Chemicals Ltd. [2014 (3) TMI 610 - SUPREME COURT] Apex Court also held that refund due and payable to the assessee is debt owed and payable by the Revenue. The Government, there being no express statutory provision for payment of interest on the refund of excess amount/tax collected by the Revenue, cannot shrug off its apparent obligation to reimburse the deductors lawful monies with the accrued interest for the period of undue retention of such monies. The State having received the money without right, and having retained and used it, is bound to make the party good, just as an individual would be under like circumstances. The obligation to refund money received and retained without right implies and carries with it the right to interest. Whenever money has been received by a party which ex ae quo et bono ought to be refunded, the right to interest follows, as a matter of course
In the present case, it is not in doubt that petitioner was entitled to refund of Rs. 4,23,60,940/- because the amount has been paid after the petition was filed. Since the excess amount has been paid over by petitioner on various dates during Financial Year 2017-2018, in our view, the refund ought to have been processed and paid latest by 31st July 2018.
The interest, therefore, of course, will become payable from 1st April 2018 if we apply the principles prescribed in Section 244A of the Act. The amount, as noted earlier, has been paid only on 21st August 2023. Consequently, we are of the view that petitioner is entitled to interest on this amount of Rs. 4,23,60,940/- from 1st April 2018 upto 21st August 2023 at the rate of 6% p.a. which is the rate prescribed under Section 244A of the Act.
Since we have awarded simple interest at 6%, we are not granting any cost in this case. This order shall be given effect to and the interest shall be paid over on or before 15th February 2024 - If not paid, with effect from 16th February 2024, the rate of interest payable will be at 9% p.a. until the date of payment. This will be in addition to other proceedings to hold the department and concerned officers to be in willful disobedience of the orders passed by this Court. The difference of 3% (9% - 6%) will be recovered from the Officer who will be responsible to have the interest paid.
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2023 (12) TMI 1044
Penalty u/s 271(1)(c) - undisclosed royalty receipts - assessee earned revenues from two streams i.e. web hosting and domain registration charges and offered revenue from web hosting services to tax in the return filed for the relevant AYs. However, the assessee did not offer to tax its income from domain registration services for the reason that it was under a bonafide belief that this income is not chargeable to tax under the provisions of the Act.
HELD THAT:- Tribunal was of the view that the issue involved in the appeal was debatable. As would be evident, in this behalf, the Tribunal had also taken recourse to the fact that the quantum appeal was pending in this court.
Concededly, the quantum appeals were filed by the respondent/assessee with this court for the AY in issue, i.e., AY 2013-14 and other AYs as well. The other AYs qua which the appeals were filed, as noticed above, were AY 2014-15 and AY 2015-16.
Insofar as these appeals were concerned, the question of law, as framed, was answered in favour of the respondent/assessee and against the appellant/revenue, although, as noticed above, the respondent/assessee had preferred appeals before this court.
The question of law which was framed and answered by this court in [2023 (12) TMI 718 - DELHI HIGH COURT] decided issue in favour of assessee. Thus the penalty imposed in the instant appeal cannot be sustained.
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2023 (12) TMI 1043
Penalty levied u/s 271(1)(c) - undisclosed income taxable as "royalty" - assessee earned revenues from two streams i.e. web hosting and domain registration charges and offered revenue from web hosting services to tax in the return filed for the relevant AYs but did not offer to tax its income from domain registration services for the reason that it was under a bonafide belief that this income is not chargeable to tax - HELD THAT:- Insofar as these appeals were concerned, the question of law, as framed, was answered in favour of the respondent/assessee and against the appellant/revenue by this Court in [2023 (12) TMI 718 - DELHI HIGH COURT] reads as follows:
“Whether on the facts of the case and in law, the Income Tax Appellate Tribunal [in short, “Tribunal”] erred in holding that the income received by the appellant as a consideration for providing domain name registration services amounted to „royalty‟ under Section 9(1)(vi) of the Income Tax Act, 1961 ?”
Given the position that the respondent/assessee before us has succeeded in the aforementioned appeals, the penalty imposed in the instant appeal cannot be sustained. Therefore, the impugned order, in our opinion, requires no interference.
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2023 (12) TMI 1042
GP estimation - AO has determined the GP rate at 6% as against the disclosed GP rate of 4.6%, which was reduced by the CIT(A) to 5% - ITAT has further reduced it and made an ad hoc addition of Rs. 4,00,000/- to the Gross Profit - HELD THAT:- No reason whatsoever has been assigned by the Tribunal to sustain the addition of Rs. 4,00,000/- in the GP rate of the assessee. Under the circumstances, the finding of the ITAT that ad hoc addition of Rs. 4,00,000/- to the disclosed GP rate of the assessee would be reasonable and fair, is based on no material. Even the Tribunal has not recorded any finding based on any material so as to disbelieve the GP rate disclosed by the assessee. Under the circumstances, the ad hoc addition made by the Tribunal to the GP of the assessee is wholly arbitrary and based on no evidence, consequently, it cannot be sustained. Therefore, the substantial question of law no. (i) is answered in favour of the assessee and against the revenue.
Addition u/s 68 - transaction of sale of jewellery out of receipt of gift of jewellery - HELD THAT:- The opinion of the Assessing Officer for not accepting the explanation offered by the assessee as not satisfactory is necessarily required to be based on proper appreciation of material and other attending circumstances available on record. The Assessing Officer has to form his opinion objectively with reference to the materials available on record and not merely on surmises and conjecture. Application of mind is a sine qua non for framing the opinion of the Assessing Officer. Since in the present set of facts the assessee has offered proper explanation based on documentary evidences and the evidences so filed by the assessee were not found to be in-genuine or fake, therefore, genuineness of the sale transaction of jewellery by the assessee could neither be disputed nor Section 68 could be invoked to make addition in the income of the assessee. The legal proposition with respect to applicability of Section 68 has also been settled by the Hon’ble Supreme Court in Commissioner of Income Tax Vs. P. Mohanakala[2007 (5) TMI 192 - SUPREME COURT] which also helps the assessee in the present set of facts. Therefore, the addition of Rs. 9,00,000/- upheld by the Tribunal cannot be sustained. Decided against the revenue.
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2023 (12) TMI 1041
Addition u/s 68 - onus to prove - ITAT sustained addition - HELD THAT:- Tribunal correctly concluded that once unexplained credit was found in the books of accounts, the initial onus under Section 68 of the Act lay on the assessee.
Tribunal held that there was no material except the assertion of the appellant/assessee that he was merely an entry provider and, therefore, only the amount received as commission ought to have been added to his income.
Appellant made a valiant attempt to defend the position of the appellant/assessee by submitting that the appellant/assessee could not assist the AO in unravelling the truth, since Mr Dinesh Prasad had expired immediately after the assessment order was passed in the first round.
Having regard to the record and the approach adopted by the Tribunal, we are unable to persuade ourselves that this is a fit case for interfering with the impugned order. No substantial question of law arises for our consideration.
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2023 (12) TMI 1040
Sham collaboration agreement - addition made after adjustments towards technical expertise and brand value - addition made by the AO is the collaboration agreement as executed between the assessee and an entity named, MGF Development Ltd. - collaboration agreement entered into between the assessee and MGF cast several obligations upon the latter, which included providing and securing funds, bank guarantee and technical expertise for the integrated hotel project and assessee was required to pay 60% of the revenue earned from the transfer/sale of the integrated hotel project to MGF.
Tribunal’s view that the contention of revenue that the collaboration agreement represented a sham transaction was not established and consideration for sharing the revenue was provided by MGF in the form of funds, technical support/assistance for execution of the project and the benefit of its brand value that had been acquired perhaps over the year - HELD THAT:- Tribunal as concluded that the obligation cast on the respondent/assessee to share the revenue from the project represented commercial expediency. In a nutshell, the Tribunal applied the well-established principle that the AO could not have put itself in “the armchair of the businessman” and decide what amount would pass as a reasonable expenditure, vis-à-vis the subject project.
In our view, having regard to the findings of facts returned both by the CIT(A) and the Tribunal, no interference is called for. As was correctly concluded by the Tribunal, the amount received by MGF had been offered for tax and quite clearly, addition in that regard could not have been made in the hands of the respondent/assessee, once the remittance had been accepted in the hands of MGF. In a manner of speech, in our view, what is sauce for the goose is also sauce for the gander. No substantial question of law arises for our consideration.
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2023 (12) TMI 1039
Rectification u/s 154 - case of the Petitioner is that in the course of re-assessment proceedings, the Assessment Officer have wrongly added ICDS while computing taxable income u/s 115JB - also stated that in terms of provisions of law, ICDS will be added in the normal course in determining the income, but in the present case on hand, the assessee is liable to pay the tax in terms of provisions u/s115JB of the Act and hence the Petitioner filed a Rectification Petition u/s. 154
HELD THAT:- While passing the reassessment order, the Respondents have added ICDS while computing income in terms of Section 115JB of the Act. There is no provision in law to add ICDS and therefore when there was no provision, the question of adding the said ICDS while calculating deemed income under Section 115JB would not arise.
In such view of the matter, the aforesaid error has to be rectified. As relying on MK VENKATACHALAM, INCOME-TAX OFFICER, AND ANOTHER [1958 (4) TMI 4 - SUPREME COURT] it is clear that in the event of any mistakes on the record both in law and on facts, it can be rectified. Following the same, this Court is inclined to set aside the impugned order.
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2023 (12) TMI 1038
Delay in filing the revised return of income u/s 139(5) - delay of 37 days in filing the revised returns - petitioner filed his return of income without claiming relief u/s 89 - petitioner is a Pilot - HELD THAT:- There was a delay of 37 days in filing the revised returns. Initially, the petitioner had filed his Income Tax Returns within the prescribed time limit. However, he has not availed the benefits available u/s 89 of the Income Tax Act. Petitioner is a Pilot, who has been travelling throughout India. That apart, he is also a Trainer for the Pilots. Therefore, by oversight, he had filed his returns without claiming the exemption, which is available u/s 89 of the Income Tax Act and there is no dispute on the aspect that the petitioner's entitlement to claim the said exemption.
In the present case, the petitioner should have filed the revised returns within the time limit prescribed under the provisions of the Income Tax Act. However, due to the nature of work, the petitioner was unable to file his revised returns in time.
No doubt, the petitioner is a Pilot, who has to travel throughout India and also he is a trainer of Pilots. As a Pilot, he cannot be excepted to reach home in time everyday. He may be compelled to stay away from his home town. Further, in this writ petition, the petitioner is asking for condonation of delay of 37 days. Therefore, this Court feels that for the interest of justice, the said delay of 37 days in filing the revised returns has to be condoned, since it is not a tax liability that the petitioner is not going to pay to the respondent, but it is an exemption, which he is entitled to claim under the provisions of Income Tax Act. The said entitlement cannot be deprived by citing the reasons of delay of 37 days in filing the revised returns.
Regarding the argument that Respondents that there must be some discipline in filing the returns, otherwise it would set an example to demoralise the work done by the Officers, who are in-charge of filing returns is concerned, this Court is of the considered view that the question of demoralisation of work will not come into picture here, since it is the duty of the Officers to scrutinize the returns and in the course of scrutinizing the returns, if anything is found, it is the duty of the Officers concerned to intimate the same to the Assessees and hence, while performing their duty. In fact, this Court expects that the officials should assist the Assessees and inform the defects in time, if any, noticed in the returns then and there.
This Court is inclined to set aside the impugned order passed by the respondent. Accordingly, the impugned order is set aside and the delay of 37 days in filing the revised returns is hereby condoned.
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2023 (12) TMI 1037
Unexplained investments - assessee alleged to have receipt it as gift - Non establish relation between the donor and the assessee with documentary evidence - addition made by the AO was non furnishing of requisite document during the assessment proceedings - DRP held that, since the basis of addition made by the AO was non furnishing of requisite document during the assessment proceedings, the panel, in the interest of natural justice and with the objective to arrive at true determination of taxable income of the assessee, considers it appropriate to take the additional evidence filed by the assessee on record - HELD THAT:- We have given credence to the following facts like Copy of UK passport of donor to prove his identity, date of birth and age of 72 years, Details of his personal residence and complete residential address, Copy of duly signed letter of confirmation from the donor stating that he had gifted a sum to his sister's son i.e. the assessee on 22.12.2015 to prove the genuineness of the transaction.
A perusal of the bank statement of the assessee showing receipt of funds, also showing the details of remittance received by the assessee in his NRE account on account of said gift. Documentary evidence to prove that the assessee and donor are both UK citizens and non-residents and thus the documentary evidence to support and substantiate documents generally applicable in India such as gift deeds were neither relevant nor executed between them. A signed letter of confirmation was submitted before the AO.
Details of PAN of donor in India to prove his identity and credit worthiness, Details of investments held by Donor in India in Bharti Airtel which were sold for approximately Rs. 2150 crores in 2005 to prove his credit worthiness. The relationship between the assessee's mother and the donor was established with a joint reading of the said affidavit along with the copy of Indian passport of the assessee's mother Smt. Sumi Malik.
Copy of assessment order u/s 147/143(3) framed by colleague of the Ld. AO himself duly scrutinizing and accepting the sale of investments by the donor in AY 2007-08. In the instant case, the sale of investment being considered was to the tune of Rs. 19,80,37,899 as against gift of Rs. 6.87 crores, to establish the credit worthiness of the donor. Copy of ITRs of the donor for AY 2016-17 and 2017-18 declaring income of Rs. 4,12,79,631 and Rs. 20,11,631 respectively to establish the credit worthiness of the donor.
Hence keeping in view in the facts narrated above, we hold that no addition is called for in this case.
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2023 (12) TMI 1036
LTCG - eligibility or claim of exemption of u/s. 54F - As per AO new asset cannot be considered as acquired within 02 years of transfer of original asset - HELD THAT:- The assessee sold residential property on 17.04.2014 for Rs. 70,00,000/- and the entire sale proceeds were invested from 01.05.2014 to 08.07.2014 in purchase of property named “ The Grands Arch” from the builder “Ireo”. - New property acquired vide Possession letter dated 04.07.2016 and conveyance deed dated 29.04.2016.
Since the assessee has invested the entire sale proceeds for the purchase of new house within three months of sale of the old house, the assessee is eligible for claim of exemption of u/s. 54F - Appeal of the allowed is allowed.
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2023 (12) TMI 1035
Shifting of income by client code modification - HELD THAT:- Addition cannot be made on the basis of DDIT report into the shifting of income through client code modification alone where the AO has not carried out any further independent verification into the matter. In the present case also the assessee has maintained all the books of account and also furnished all the documents qua the F & O segment done through the said broker.
We also note that the AO has not doubted the F & O transactions loss incurred to the tune of Rs. 18,16,26,178.83/- and has doubted only the transactions through M/s Indianivesh Securities Pvt. Ltd. registered broker that too on DDIT Report. Under these facts, we are not in a position to sustain the order of Ld. CIT(A) which has also discussed DDIT report by SEBI without giving any independent finding on the issue. Accordingly we set aside the order of authorities below and direct the AO to delete the addition.Appeal of the assessee is allowed.
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2023 (12) TMI 1034
Estimation of income - bogus purchases - HELD THAT:- Estimation of profit of the assessee @4% is reasonable - Therefore, direct the AO to estimate the profit of the assessee @4% instead of 5%. Grounds raised by the assessee are partly allowed.
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2023 (12) TMI 1033
Penalty u/s 271(1)(c) - disallowance u/s. 36(1)(iii) - Penalty imposed for furnishing inaccurate particulars of income - HELD THAT:- It is pertinent to note that the Hon’ble Supreme Court in case of Reliance Petro-Product Pvt. Ltd. [2010 (3) TMI 19 - SUPREME COURT] categorically stated that the word inaccurate particulars means that the details supplied in the return are not accurate not exact or correct and not according to truth or erroneous. In the absence of finding by the AO that any detail supplied by the assessee in its return were found inaccurate or false cannot attract section 271(1)(c) of the Act.
In fact, the assessee at the time of assessment proceedings has given a detailed calculation related to interest u/s. 36(1)(iii) on borrowed funds for acquiring capital assets and this very same amount was added by the AO and thus it cannot be said that the assessee furnished inaccurate particulars of income or concealed particulars of income though the assessee was under bonafide mistake did not state the same in its return of income.
The notice also lapses on the part of not specifying the particular of limb of section 271(1)(c) of the Act which was decided by the Hon’ble Apex Court in case of CIT vs. SSA’s Emerald Meadows [2016 (8) TMI 1145 - SC ORDER], hence the appeal of the assessee is allowed and the penalty does not survive. Decided in favour of assessee.
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2023 (12) TMI 1032
Revision u/s 263 - LTCG - admissibility of deduction u/s 54F - CIT broadly observed that the Assessing Officer has wrongly accepted the methodology of computation of capital gains and consequent deduction u/s 54F - HELD THAT:- As pointed out on behalf of the assessee, two pre-requisites must coexist before the designated authority could exercise the revisional jurisdiction conferred on him namely; the order should be (i) erroneous & (ii) the error must be such that it is prejudicial to the interests of the Revenue. However, an erroneous order does not necessarily mean an order with which the Pr.CIT is unable to agree. The AO while passing an order of assessment, performs judicial functions.
An order of assessment passed by the AO cannot be interfered only because some other view is also possible on the issue as held in CIT vs. Greenworld Corporation [2009 (5) TMI 14 - SUPREME COURT] If in given facts and circumstances of the case, two views are possible and one view as legally plausible has been adopted by the AO then existence of other possible view alone would not be sufficient to exercise powers under s.263 of the Act by the Pr.CIT /CIT concerned. Hence, there can be no doubt that the provision cannot be invoked to correct each and every type of mistake or error committed by the AO. It is only when an order is erroneous and causing prejudice, that the Section will be attracted. An incorrect assumption of facts or incorrect application of law will satisfy the requirements of the order being erroneous.
In the instant case, it is sought to be demonstrated on behalf of the assessee that necessary inquiries were made towards computation of Long Term Capital Gains and deduction claimed u/s 54F of the Act. It was further pointed out that although two separate agreements have been executed due to demarcation of share in single property to different persons due to gift or bequeath by will, the property remains only one and therefore eligible for deduction under Section 54F - assessee has advanced justification for cost of improvement of Rs. 25 lakhs claimed under Section 54F of the Act.
Eligibility of deduction towards two units under two different agreements sought to be questioned by the Pr.CIT - Reasons are not far to seek. Both the agreements have been claimed to have been entered at the same time and in respect of same property. The kitchen continues to be only one and therefore, two different agreements will not give rise to different residential property. The electricity bill is also common as demonstrated. The background facts for division of property has also been narrated. These facts could have been easily appreciated by the Pr.CIT with some minimal inquiry.
CIT has simply shifted the burden on the AO and eventually on the assessee without discharging his judicial duties expected in law. Besides, such allegation does not appear in the show cause notice issued at the first instance. While it is true that the directions are not necessarily required to be restricted to the show cause notice alone but however in the same vein, opportunity must be given to the assessee in some form to meet the point in issue in the course of revisional proceedings. In the absence of notice to the assessee that the purchase of residential property is being considered as two different residential units, the assessee had no occasion to rebut the ground raised directly in the revisional order. The directions at this point given to the Assessing Officer without opportunity to assessee in the course of revisional proceedings thus requires to be set aside on this score too.
We hardly see any merit in the plea of the assessee that amount of Rs. 25 lakh set apart and kept in the Capital Gain Account Scheme towards cost of improvement of residential property acquired is eligible for deduction under Section 54F of the Act. Such cost of improvement can, at best, be treated as cost of improvement deductible at the time of sale of such property as and when happens. The direction of Pr.CIT on the point thus cannot be assailed.
Appeal of the assessee is partly allowed.
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2023 (12) TMI 1031
Approval u/s. 10(23C)(vi)(via) - Claim denied on the ground that the institution is engaged in the multi-objects apart from education - HELD THAT:- It is pertinent to note that the distinguishing facts which have been pointed out by the ld. A.R. does not stand in toto in light of decision of Hon’ble Apex Court in New Noble Education Society [2022 (10) TMI 855 - SUPREME COURT] and in fact after verifying the objects of the society which is placed before us clearly sets out that the assessee is not solely into the activity of education.
A.R. pointed almost 19 decisions, but the same will not be applicable in Assessee’s case as in Assessee’s case, the assessee is doing other activities and not exclusively dealing with education as explained and decided by the latest decision of Hon’ble Apex Court in case of New Noble Education Society (Supra). Therefore, there is no need to interfere with the findings of CIT (Exemption). Thus, both the appeals filed by the assessee are dismissed.
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