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Showing 101 to 120 of 1566 Records
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2023 (7) TMI 1469
Estimation of income - bogus purchases - HELD THAT:- ITAT correctly held as in agreement with the view expressed by the CIT (A) that, if the purchases are bogus, it would be impossible for the assessee to complete the business transaction and that if the purchase is bogus, the corresponding sale also must be bogus or else the transaction would be impossible to complete and as a necessary corollary, unless the corresponding sale is held to be bogus, the purchase also cannot be held to be bogus, rather it would be a case of purchase from bogus entities/parties. That view has been upheld by the Tribunal in principal while dismissing the appeal of the Revenue.
Calculation of gross profit ratio and addition in the gross profit ratio - We find that the Tribunal has not addressed the issue of adopting the gross profit rate of 5% on the alleged Hawala purchase of Rs.2.45 crores as against the rate of 0.69% declared by the assessee, despite the fact that the CIT (A) had specifically gone into that question and had directed the AO to make 5% addition in the gross profit ratio, while deleting the balance addition. We, therefore, deem it appropriate to remand the matter back to the Tribunal only to the limited extent of going into that issue.
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2023 (7) TMI 1468
Grant of Interim bail - HELD THAT:- It is required to interfere with the impugned judgment, as it grants interim bail, which will run itself out within a period of three weeks.
The present special leave petition is dismissed.
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2023 (7) TMI 1467
Validity of order passed u/s 92CA(3) - Period of limitation - HELD THAT:- As per provision of Sec. 92CA(3A) the TPO is required to pass an order u/s 92CA(3) of the Act at any time before 60 days prior to the date on which the period of limitation referred to in Sec. 153 for making the assessment order of assessment or reassessment or re-computation or fresh assessment as the case may be expires.
Undisputed fact that transfer pricing officer has passed order u/s 92CA(3) on 01.11.2019 whereas the limitation for passing the said order u/s 92CA(3) expires on 31.10.2019, therefore,the order u/s 92CA(3) of the Act is time barred by 1 day.
As the order of the TPO and draft assessment order are barred by limitation, therefore, resulting in assessee not being a eligible assessee u/s 144C(15)(b)(i) of the Act.
Allowability of education cess u/s 37(1) - Assessee claimed education cess paid by the assessee under Finance Act 2004 is not hit by the provisions of Sec. 40(a)(ii) and same is allowable as deduction u/s 37(1) - HELD THAT:- We find that Finance Act 2022 introduced explanation to Section 40(a)(ii) of the Act and clarify that education cess is included in the term tax and retrospectively amended the provisions of Sec. 40(a)(ii) w.e.f 01.04.2005.
In view of the amendment made by Finance Act 2022 as referred supra we don’t find any merit in the ground of appeal of the assessee as it is categorically laid down in the explanation 3 to Section 40(a)(ii) that education cess is included in the term ‘ tax’ as per the provision of Sec. 40(a)(ii) w.e.f 01.04.2005. Decided against assessee.
Dividend distribution tax ought to be taxed at the rate prescribed under the respective DTAA - HELD THAT:- In view of the decision of Total Oil India Pvt. Ltd. [2023 (4) TMI 988 - ITAT MUMBAI (SB)] we don’t find any reason to interfere in the decision of assessing officer, therefore, these ground of appeal of the assessee stand dismissed.
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2023 (7) TMI 1466
Rejection of application filed u/s 190 read with Section 245(2) of the Code of Criminal Procedure, 1973 - it was held by High Court that 'the criminal proceedings initiated against the petitioners / accused Nos. 1 and 2 by the respondent under the provisions of the Prevention of Money Laundering Act, 2002 in Spl.C.C. No. 159/2015 are closed.'
HELD THAT:- At this stage, no interference is called for.
SLP disposed off.
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2023 (7) TMI 1465
Money Laundering - complaint for offences punishable under Sections 13(1)(e) read with Section 13(2) of the Prevention of Corruption Act, 1988 - it was held by High Court that 'The complaint registered against the petitioners in ECIR No. 70/BGZO/2009-10 by the Directorate of Enforcement, Bengaluru Zone, Bengaluru and the proceedings against the petitioners pending before the III Additional District and Sessions Judge, D.K., Mangaluru in Spl.C. No. 74/2018, stand quashed.'
HELD THAT:- It is not required to interfere with the impugned order and, therefore, the special leave petition is dismissed.
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2023 (7) TMI 1464
Challenge to proceedings for offences punishable under Sections 45, 3, 4 and 8(5) of the Prevention of Money Laundering Act, 2002 - it was held by High Court that 'if the proceedings under the PMLA are permitted to be continued qua the petitioners, it would become an abuse of the process of law and would result in miscarriage of justice.'
HELD THAT:- It is not required to interfere with the impugned order and, therefore, the special leave petition is dismissed.
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2023 (7) TMI 1463
Accrual of income in India - payment received for rendering satellite transponder facilities by the respondent/assessee to its customers in India - HELD THAT:- As appellant/revenue, that the issue raised in the present appeal is covered by the decisions rendered by the coordinate benches in M/s Asia Satellite Telecommunications Co. Ltd [2011 (1) TMI 47 - DELHI HIGH COURT] and New Skies Satellite BV [2016 (2) TMI 415 - DELHI HIGH COURT]
We are told that the appellant/revenue has preferred Special Leave Petition(s) against the said decisions, which are pending adjudication. Accordingly, the appeal of the appellant/revenue is closed, following the abovementioned decisions rendered by the coordinate benches
It is, however, made clear that if the Supreme Court were to rule otherwise, the parties will be bound by the decision rendered in the SLPs
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2023 (7) TMI 1462
Depreciation on Goodwill - valuation of intangible assets - assessee claimed that those acquisitions are for purchase of unit for lumpsum consideration, as going concerns in the nature of slump sale, which is subject to capital gain tax u/s 50B in the hand of seller - according the Assessing officer the acquisitions are in the nature of amalgamation - HELD THAT:- On perusal of relevant clauses referred, we find that transaction in both the cases are of slump sale and not, amalgamation as stated by the Assessing Officer.
Fifth proviso ( now sixth proviso) to section 32(1)(ii) is in relation to allocation of the depreciation on the asset between predecessor and successor entities, whereas in the instant case goodwill was not in existence as intangible asset in the case of predecessor companies from whom the assessee has acquired corresponding units under slump sale. Therefore, the said provision is also not applicable of the facts of the instant case
The ratio is in the case of United Breweries [2016 (9) TMI 1527 - ITAT BANGALORE] is not applicable over the facts of case as in the said case there was amalgamation of the three wholly owned subsidiaries whereas in the instant case there is a acquisition of units of third parties by way of slump sale.
DR before us submitted that allocation of values to the fixed asset acquired has been on lower side for creating goodwill as intangible asset. But in our opinion, if the quantum of goodwill is reduced, the valuation of the fixed asset will increase, which are also eligible for depreciation and thus in the exercise of reallocation of values among the goodwill and other fixed asset ,will be a revenue neutral exercise
We concur with the arguments of the learned counsel of the assessee that goodwill arising from transactions of acquisition of units of GSK and CTPL, is eligible for depreciation under the provisions of the Act. As far as claim of the assessee for allowing depreciation on said goodwill corresponding to assessment year 2008-09, we are of the opinion that claim with respect to depreciation for assessment years 2008-09, cannot be allowed in the appeal for assessment year 2009-10. It is for the assessee to explore necessary remedy under the provisions of the Act or any other legal remedy as advised. The ground No.2 (two) of the appeal of the assessee is accordingly allowed.
Depreciation on purchase of software - only request made in this ground is for allowing depreciation in respect of expenditure on computer software, which was claimed as revenue expenditure in earlier by the assessee but rejected by the ld CIT(A) and held as capital expenditure - HELD THAT:- Since the said decision has been claimed as finally accepted by the assessee, the assessee deserve depreciation in subsequent years including in year under consideration. In principle, we agree with the claim of the assessee, however, we restore the matter for verifying that decision of ld CIT(A) in earlier AY 2007-08 has not been reversed by higher appellate authorities, and then after verification, allow the claim as directed above. The ground is allowed for statistical purpose.
Deletion of erroneous demand - difference between refund issued to the assessee and refund determined as payable to the assessee - HELD THAT:- This issue is consequential to the computation of tax liability while giving effect of this order. We direct the Assessing Officer to verify the claim while giving effect of this order of Tribunal. The ground of the appeal is accordingly allowed for statistical purpose.
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2023 (7) TMI 1461
Rejection of registration u/s. 12AB - assessee had not incurred any expenditure as per the objects mentioned in the trust deed and a perusal of the receipt/payment account of the assessee showed that the assessee’s trust had collected mess fees 50 times of the admission fee and had also incurred expenditure on fooding @ 50% of the gross receipts - HELD THAT:- The order of registration can be issued only after recording satisfaction with regard to the genuineness of the activities of the trust as provided u/s.12AA of the Act.
In this Full Bench judgment M/S REHAM FOUNDATION KANDHARI LANE LAL BAGH LUCKNOW [2019 (10) TMI 151 - ALLAHABAD HIGH COURT] as further held that where the Commissioner has refused to accept application for registration of trust u/s. 12AA of the Act after recording his finding on the basis of material on record before him holding that the activities and objects of the trust were not genuine, the Tribunal, on the basis of same material on record, can come to the conclusion that the order of the Commissioner was perverse.
In such a situation, Tribunal can direct the registration of trust without remanding the matter to the Commissioner. However, the evidences furnished before us in the form of paper book [which were also submitted before the CIT(E)], are unfortunately not sufficient evidence to enable us to satisfy ourselves that the objects of the trust are indeed genuine. CIT(E) has ignored/misconstrued /misinterpreted the evidences placed before her.
The material before us is also not sufficient for us to reach a conclusion regarding the genuineness of the activities of the assessee trust. Therefore, on the peculiar facts of this case, we deem it appropriate to restore the issue to the file of the ld. CIT(E) with the direction to decide the issue afresh. Appeal filed by the assessee stands allowed for statistical purposes.
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2023 (7) TMI 1460
Exemption u/s 11 - Income from property held for charitable or religious purposes - addition of capital gain on sale of value of two vehicles and a flat - CIT(A) deleted addition - HELD THAT:- Assets were purchased prior to 1st April, 2015 i.e. April, 2008. They are forming part of block of asset and if these facts are visualized in the light of second and third example, then it would reveal that the assessee’s case falls in this category. The Board has explained the situation as to how the new scheme is to be implemented on number of assets forming a single block. The ld. Assessing Officer has failed to construe the meaning and scope of this concept in the impugned assessment order rather he has not applied his mind and just made the addition. Therefore, ld. CIT(Appeals) has rightly deleted the addition and we do not find any merit in this ground of appeal of the Revenue, it is dismissed.
Properties not used for educational purposes - Properties shall be deemed to be in use for the benefit of specified person if such person is using it without charging adequate rent or other compensation.
AO has just expressed his apprehension that the nature of property would suggest that these will be used by other person referred to in sub-section (3) of section 13 of the Income Tax Act and these properties would be used without paying rent to the assessee.
AO has no where recorded a finding demonstrating the fact that these properties have factually been used by specified persons. The persons who are associated with the Society and because of their position taken undue advantages.
Neither any investigation was made towards that issue nor any finding has been recorded. During the course of hearing, assessee drew our attention towards CBDT Circular dated 21st July, 1966 whereby the scope of sections 13(2) and 13(3) were explained and this Circular contemplates that few instances in which property of a Trust or Institution may be taken to be used or applied for the benefit of an ‘excluded’ person namely house property belonging to the Trust or Institution and used by such excluded person free of rent or at concessional rent.
The value of benefit conferred on the ‘excluded’ person in such cases would be determinable, respectively, with reference to fair rental value of the house property.
Thus according to the Department, acquisition of property is not inherently disallowed to a Charitable Institution because it is in the domain of the Charitable Institution to acquire property for furtherance of its charitable activity and those properties are not being used by the Institution but used by some other associated persons on account of their proximity to the Institution by misusing the property, in that case, fair market value of such utilization is to be determined and to that extent benefit will not be granted to the Institution while determining the taxable income.
AO made the additions without comprehending the true scope of sections 13(2) and 13(3) of the Income Tax Act. Therefore, the additions are rightly deleted by the ld. CIT(Appeals) and no interference is called for at the end of the Tribunal. Decided in favour of assessee.
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2023 (7) TMI 1459
Enlargement on bail - twin conditions contained in Section 37 of the NDPS Act, 1985 satisfied or not - offence punishable under Section 20(b)(ii)(C) of the Narcotic Drugs and Psychotropic Substances Act, 1985 - HELD THAT:- The prolonged incarceration, generally militates against the most precious fundamental right guaranteed under Article 21 of the Constitution and in such a situation, the conditional liberty must override the statutory embargo created under Section 37(1)(b)(ii) of the NDPS Act.
There are merit in the contention of learned counsel for the respondent – State that the petitioner being not a resident of the State of Orissa, some stringent conditions are required to be imposed upon him.
While directing that the petitioner shall be released on bail on his furnishing bail bonds to the satisfaction of the Trial Court, it is directed that he shall be required to produce two local sureties before the Trial Court. The petitioner shall also appear before the Trial Court on every date of hearing.
SLP disposed off.
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2023 (7) TMI 1458
Stay of demand - demand calculation - whether 20% of the demand for the purpose of staying the balance demand should be calculated with regard to total disputed demand or in respect to outstanding demand specified u/s.156? - HELD THAT:- The ‘outstanding demand’ may comprise of various components which assessee may not have even challenged or would be a result of various adjustments. Whereas, the disputed demand has to be seen qua the addition which has been disputed before this Tribunal on which the appeal has been filed u/s. 253(1).
Here in this case, the assessee has deposited TDS on such capital gain but the entire addition was challenged before the AO as well as before this Tribunal.
Such TDS amount undisputedly is more than 20% of the demand as worked out by the ld. AO in his computation of demand relating to this addition. Accordingly, there cannot be any doubt of misinterpretation that 20% has to be reckoned with the disputed demand and precisely for this reason Tribunal has clearly directed the AO twice as mentioned above.
Despite such direction, AO has blatantly ignored the directions and instead asked the assessee to firstly pay the entire demand which is outstanding and then second time 20% of the demand of the whole outstanding demand as worked out by him post credit of TDS.
Such an action of the ld. AO is not correct and accordingly, balance disputed demand is hereby stayed - firstly, for the reason that there is no fault on the part of the assessee to conduct the appeals and it is the department who is been seeking adjournment time and again as noted above and Secondly, already stay was granted by this Tribunal looking to the prima facie case on earlier occasions which has been misinterpreted by the AO.
Accordingly, the stay is granted for the balance demand for a further period of six months or till passing of the order whichever is earlier.
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2023 (7) TMI 1457
Addition u/s 68 r.w.s. 115BBE - cash deposits made during demonetization period - HELD THAT:- Standard Operating Procedure (SOP) issued by the Department vide CBDT Instruction No.03/2017 dated 21.02.2017 in connection with the assessment of demonetization deposits clearly states that there should not be abnormal jump in cash sales and in the instant case cash is deposited within one or two days from the time of its receipt.
On examination of the cash book of the assessee, we find that the assessee had cash balance of Rs. 55,93,580/- as on 08.11.2016, i.e., the date on which demonetization was announced, which sufficiently explains the source of deposit of Rs. 52,60,000/- in specified bank notes. Apart from this, the assessee had duly furnished the month wise details of sales, month wise details of purchase, corresponding freight charges incurred month wise, month wise power and fuel expenses and month wise selling expenses in the form of rebate and discount. The assessee also furnished the quantitative details of goods month wise for rice, sugar, chana dal and wheat flour before the ld. AO. All these facts clearly go to prove the genuineness claim made by the assessee that cash deposits of Rs. 52,60,000/- has been made out of cash balance available with the assessee and, hence, in our considered opinion, there is absolutely no case made out by the Revenue for making addition u/s 68 of the Act
We find that none of the parameters mentioned in the SOP dated 21.02.2017 issued by the CBDT for assessment of demonetization cases is applicable. There is no abnormal jump in cash sales during demonetization period as compared to earlier history; there is no abnormal jump in percentage of cash sales; the cash deposit was made only on two dates, i.e., on 10.11.2016 of Rs. 20,60,000/- and on 11.11.2016 in specified bank notes in two different bank accounts; there is sufficient stock available with the assessee; and there was no occasion to inflate the stocks by introducing fictitious purchases by the assessee; there was no transfer of deposited cash to another account or other entity which are not relevant for the assessee. Hence, even as per the SOP dated 21.02.2017 issued by the CBDT which is mandatorily to be followed by the Revenue authorities, no addition could be made in the instant case. Decided in favour of assessee.
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2023 (7) TMI 1456
Validity of Rectification u/s 154 - unaccounted stock found during survey - income surrendered should be charged to tax @ 30% u/s 115BBE - whether rectification sought by the appellant is not the rectification of a ‘’mistake apparent from the records’’ ?
HELD THAT:- CIT(A) while reaching to the conclusion held that such rectification do not come under the purview of Section 154. It is also noted that the ld.CIT(A) also mentioned in his order that rectification sought by the assessee is not the rectification of mistake within the confines of the provision of Section 154 of the Act whereas factually no rectification application was filed by the assesee rather it was AO’s rectification u/s 154.
It is worthwhile to mention that the ld. CIT(A) misinterpreted the facts and dismissed the appeal of the assessee, however, the facts still remain that the assessee had offered the income with regard to stock difference by considering it as business income and the AO also accepted the same.
Even otherwise, there was no finding in the order of the assessment that income so surrendered has been determined as income referred to in Sec. 68, Sec. 69, Sec. 69A, Sec. 69B, Sec. 69C or Sec. 69D. Therefore, while drawing the strength from the decision of Shri Hari Narain Gattani [2020 (10) TMI 559 - ITAT JAIPUR] wherein income surrendered by the assesee was taxed u/s 115BBE of the Act @ 60% by passing order u/s 154 of the Act but the same was quashed by the ITAT.
Thus we are of the view that the unaccounted stock found during survey is related to business and thus assessable as business income under the normal provisions of the Act. Therefore, the order passed by the AO u/s 154 is quashed and thus the appeal of the assessee is allowed.
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2023 (7) TMI 1455
Revision u/s 263 by CIT - determination of correct head of income - business income or capital gain - assessee had purchased the property in question with an intention to build Tech Park, but due to recession, the building was not constructed and as the firm had no funds, assessee sold the land.
As decided by HC [2022 (10) TMI 1120 - KARNATAKA HIGH COURT] merely because two plausible views are available and the AO has taken one view, the jurisdiction u/s 263 cannot be exercised. Thus, we are of the considered view that invoking Section 263 in the facts and circumstances of the case was erroneous. First question as to whether the Tribunal was right in holding that there was no infirmity in the order of revision, requires interference and the said finding needs to be set-aside.
On second question whether the Tribunal was right in holding that no enquiry was made by the AO during the original assessment proceedings - In view of the admitted facts that the land was purchased and sold without any development, no elaborate enquiry was required and the Assessing Officer has noted the facts required for the case and passed the Assessing orders.
HELD THAT:- Upon hearing the counsel the Court made the following
Delay condoned. Issue notice, returnable on 05.09.2023.
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2023 (7) TMI 1454
Disallowance of festival, gift, and puja expenses - HELD THAT:- We find that the CIT(Appeals), had observed, that the aforesaid expenses claimed by the assessee company were related to and incurred for the purpose of its business. As further observed by CIT(Appeals) that the aforesaid expenses were duly reflected in the books of accounts of the assessee company and the AO had not pointed out any specific instance of defect in the vouchers supporting the aforesaid claim for deduction of expenses while making the disallowance - Disallowance of the assessee’s claim for deduction of the aforesaid expenses festival expenses and gift expenses.
Disallowance u/s 14A r.w Rule 8D - HELD THAT:- As observed by the CIT(Appeals) and, rightly so, now when the assessee company had substantial interest free funds available with it to justify the investments made in the exempt dividend income yielding unquoted equity shares, therefore, no disallowance of any part of its claim for deduction of interest expenditure was called for u/s 14A r.w Rule 8D(2)(ii) of the Income tax Rules, 1963. Our aforesaid view is supported by the judgment of HDFC Bank [2016 (3) TMI 755 - BOMBAY HIGH COURT] wherein it was held that no disallowance u/s.14A can be made in respect of interest paid on borrowings if assessee's own funds and non-interest-bearing funds exceeded the amount of investments in tax free securities.
Disallowance u/s 40(a)(ia) - transmission/wheeling charges u/s 194C or 194-I or u/s.194J - HELD THAT:- Similar view had been taken in the case of CIT Vs. Maharashtra State Electricity Distribution Co. Ltd [2015 (5) TMI 396 - BOMBAY HIGH COURT] wherein, it was observed by the Hon’ble High Court that as the transmission charges and/or Wheeling charges were not amounts paid under any arrangement for use of land, building, plan machinery, equipment, furniture, fitting etc. and therefore, could not be brought within the meaning of rent. Equally, it was observed that the payments were not fees for technical services. It was also held by the Hon’ble High Court that the expression of Transmission charges and/or Wheeling charges entails distribution of electricity in the area of the Corporation and they could not be subject to provisions of Section 194-I of the Act.
Also, we find that similar issue had been adjudicated by the Tribunals in favour of the assessee in the case of GRIDCO Limited [2011 (11) TMI 77 - ITAT, CUTTACK] and that of Noida Power Company Ltd. [2018 (3) TMI 1080 - ITAT DELHI] We, thus, on the basis of our aforesaid deliberations, finding no infirmity in the view taken by the CIT(Appeals), uphold the same.
Disallowance out of ash handling expenses - HELD THAT:- We find that the A.O had not pointed out any specific bill or voucher which as per him was not verifiable. Also, the AO had not given any reason as to why the assessee’s claim for deduction of the aforesaid expenditure was not admissible. As is discernible from the records, the expenses were incurred by the assessee company for its business purposes and were duly recorded in the books of account. The CIT(Appeals) had deleted the ad-hoc disallowance of ash handling expenses correctly.
Delayed deposit of employee’s share of contribution towards EPF is liable to be disallowed as per the mandate of Section 36(1)(va) r.w.s. 2(24)(x) - HELD THAT:- As relying on Checkmate Services P. Ltd. [2022 (10) TMI 617 - SUPREME COURT] therefore, in terms of our aforesaid observations we respectfully follow the same and uphold the view taken by the AO and sustain the disallowance of the delayed deposit of employees share of contribution towards EPF
Disallowance u/s.14A r.w Rule 8D - HELD THAT:- When the assessee company had admittedly not received any exempt income during the year under consideration, therefore, no disallowance u/s.14A of the Act was called for in its hand. Our aforesaid view is fortified by the judgment of Chettinad Logistics Pvt. Ltd [2018 (7) TMI 567 - SC ORDER] and Cheminvest Limited [2015 (9) TMI 238 - DELHI HIGH COURT] Backed by the aforesaid judicial pronouncements, it was submitted by the AR that as per the settled position of law no disallowance u/s.14A in absence of any exempt income could have been made in the hands of the assessee company. We, thus, now when the assessee company had not received any exempt dividend income during the year under consideration, therefore, no disallowance u/s.14A of the Act was warranted in its case. Accordingly, in terms of our aforesaid observations, finding no infirmity in the view taken by the CIT(Appeals), we uphold the same
Disallowance u/s 40(a)(ia) of transmission/wheeling charges - HELD THAT:- As in own case while adjudicating the Ground of appeal No.3, the present issue is disposed off on the same terms. Accordingly, finding no infirmity in the view taken by the CIT(Appeals) who had rightly vacated the disallowance u/s 40(a)(ia) of the Act of transmission charges we uphold the same. Thus, the Ground of appeal No.3 raised by the revenue is dismissed.
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2023 (7) TMI 1453
Eligibility for deduction u/s 80IA - eligible units at Baroda & Surat which included certain receipts under the head other income but the same was not treated by the AO as income eligible for deduction -HELD THAT:- Assessee in eligible unit and has shown certain recoveries from employee and contractor for the facilities provided to them and retention money/ tender fee receipt etc. As such, the assessee has also incurred corresponding expenses which claimed to be higher than the amount recovered/received.
The assessee, instead of adjusting the expenditure on account of refund or recovery has shown such receipt as separate item of income under the head miscellaneous income.
Accordingly, we find that these receipts are directly linked to the expenditure incurred in the eligible unit which has been accepted by the revenue. If the assessee would have reduced the cost of such expenditure by the amount of refund/recovery, there would not have been any question of showing the impugned income and consequently denying the deduction claimed by the assessee under section 80IA - It is just a manner of presentation of the income and expense. As such, the assessee has represented the recovery/receipt out of such expenses separately as income instead of reducing the cost.
Admittedly, the corresponding expenses have been allowed as deduction against the income from generation and sale of electricity. Thus, it has a live link with the activity of the assessee. Accordingly, we hold that the assessee is eligible for deduction on such receipts. In view of the above, the ground of appeal raised by the assessee is hereby allowed.
Income from writing of balance of sundry creditor - As we note that there is no dispute about the fact that the creditors whose balances were written back are from eligible unit. It is without any ambiguity that the sundry creditor arises out of purchases of material, consumables & stores. Thus, the expenditure on account of purchases of material, consumable & stores utilized in the eligible has already been accounted in the profit and loss account as an expenditure of the industrial undertaking.
Therefore income arising on account of writing back the balances of such sundry creditors has direct nexus with income derived from the business of the industrial undertaking. Hence, the assessee is eligible for deduction under section 80IA - Thus, we do not find any infirmity in the finding of the CIT(A) in this regard.
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2023 (7) TMI 1452
Revision u/s 263 - valuation of shares - determination of fair market value of the shares - shares are issued at premium and value at which shares were issued was higher than the value determined u/s 56(2)((viib) r.w.r 11UA of the Rules
HELD THAT:- Assessee has not issued and allotted shares to strangers but the shares have been issued to the existing promoters and existing shareholders. Therefore, the question of identity goes into oblivion.
We understand that the valuation of an unquoted equity shares in terms of Rule 11UA of the Rules can, at the option of the assessee, be determined as per either NAV Method or as per Discounted Free Cash Flow Method, which means that the option is given to the assessee and once the assessee has exercised an option, AO is bound to follow the same unless by bringing cogent material on record, the AO established perversity in the method adopted by the assessee.
A perusal of the record shows that the basis of valuation report is free cash flow projections weighted average cost of material, terminal value total company value, fair market value of the company. Method adopted by the assessee is in line with the relevant provisions and relevant rules.
In our considered opinion, once the value of shares has been determined by adopting any of the two methods, i.e. NAV or DCF, then such value shall be deemed to be FMV of the assessee company and the AO cannot question the valuation per se.
AO has not even considered equity and preference share capital. Further, number of convertible preference shares have been computed by the AO @ Rs. 10/- whereas the actual face value is of Rs. 100/- per share. Because of these gross mathematical errors, the AO computed the NAV as per the share as on 31.03.2014 at Rs. 2.70 as against Rs. 92.67 by the assessee.
If the mathematical corrections are considered, it can be seen from the above chart that there is hardly any variation between the FMV adopted by the assessee and that of the AO, be it DCF or NAV.
Considering the facts of the case in totality, in light of the decision of M/S. CINESTAAN ENTERTAINMENT PVT. LTD. [2021 (3) TMI 239 - DELHI HIGH COURT] we do not find any error or infirmity in the findings of the ld. CIT(A). Therefore, the order of the ld. CIT(A) does not call for any interference. The impugned appeals by the Revenue are dismissed.
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2023 (7) TMI 1451
Rejection of application of assessee-trust for registration u/s 12AB - mismatch the name of the trust in different documents - HELD THAT:- The assessee is in existence from 1952 and registered under the provisions of Bombay Public Charitable Trust vide registration No. B-99 Surat, and after enforcement of Wakf Act,1995 and on constituting Wakf Board on 02/12/1996 all trust of category ‘B’ are govern by Gujarat Wakf Board. Considering the fact that the basic ground of rejection of application under section 12AB was mismatch in the name of assessee vis-à-vis name shown in PAN, Application under Form10AB, and Trust deed, which is not intentional or deliberate but may due to inadvertence, otherwise the registration number with Charity Commissioner and PAN is not in dispute.
We find that the assessee was not given opportunity either to explain the mismatch or to get such mismatch to correct, thus, in our view, the assessee deserve one more opportunity to correct their name, wherever required, therefore, we deem it appropriate to restore the issue back to the file of ld. CIT(E) reconsider the registration of assessee under Section 12AB of the Act afresh and pass order in accordance with law.
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2023 (7) TMI 1450
Denial of registration u/s 12AB - mismatch in the name of assessee in PAN/Form-10AB and in translated copy of registration deed - HELD THAT:- CIT(E) has accepted that the assessee has filed/attached/uploaded trust deed and details regarding the registration with Charity Commissioner with translated copy. The ld. CIT(E) was of the view that there is a mismatch in the name of assessee in PAN/Form-10AB and in translated copy of registration deed.
We find that such mistake may be inadvertent otherwise the registration number and PAN and the object of assessee are not in dispute. The assessee is in existence from 2017 and registered under the provisions of Bombay Public Charitable Trust vide registration No. WKF 213-Surat.
Considering the fact that the basic ground of rejection of application under section 12AB was mismatch in the name of assessee vis-à-vis name shown in PAN, Application under Form10AB, and Trust deed, which may due to inadvertence, or due to English or Gujarati translation, otherwise the registration number with Charity Commissioner and PAN is not in dispute.
The assessee was not given opportunity either to explain the mismatch or to get such mismatch to correct, thus, in our view, the assessee deserve one more opportunity to correct their name, wherever required, therefore, we deem it appropriate to restore the issue back to the file of ld. CIT(E) reconsider the registration of assessee under Section 12AB of the Act afresh and pass order in accordance with law - Appeal of assessee is allowed for statistical purposes.
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