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Showing 141 to 160 of 1354 Records
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2024 (3) TMI 1214
Seeks to refund the GST - deposited against the non-migrated GST - HELD THAT:- Learned counsel appearing for the respondent submits that there is no provision available in the GST portal for transfer of the credit from one GST number to another. He however concedes that the petitioner did not opt for the migration of the service tax registration and the system automatically created a GST number (i.e. the non-migrated GST number).
We direct that the amount standing to the credit of the non-migrated GST number be transferred to the migrated GST number of the petitioner. The petition is disposed of in the above terms.
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2024 (3) TMI 1213
Availment of wrongful credit - bonafide mistake - appellants entered the amount in a wrong table due to technical misunderstanding, as a result of which, the credit of Rs. 46,91,982/- was credited to the CGST account - consistent case of the appellants is that they would fall under Entry 7B and inadvertently the TRAN-1 was filed under Entry 7A and the appellants explained that since they are not registered under the Central Excise Act, they are required to file TRAN-1 under Entry 7B - HELD THAT:- The question would be as to whether on account of such a technical error which undoubtedly is an inadvertent error can the appellants be denied the transitional credit. This issue is no longer res integra and has been considered by several courts as well as this court in a batch of cases in MAT 552 of 2020. More or less an identical issue arose for consideration and the court considered the various orders passed by the other High Courts and disposed of the appeals by permitting the writ petitioners therein to file individual tax credit in GSTR-3B Forms for the relevant months and the assessing officer was at liberty to verify the genuineness of the claim. We are informed that the judgment [2021 (12) TMI 835 - CALCUTTA HIGH COURT]. batch has been given effect to. More recently in the case of S.V. Halavagali and Sons v. Superintendent of Central Excise [2023 (11) TMI 1013 - KARNATAKA HIGH COURT] an identical issue arose for consideration before the court.
In the said case also there was an inadvertent error and the credit was filed under wrong head i.e. 7(d) instead of 7(b). The court after taking into consideration the various orders passed by the other High Courts directed the authorities to consider the claim of the petitioners therein under Column 7(b) of the CGST Rules, 2017 and if there are supporting documents to make the claim and the claim is established, then consequential relief should be allowed.
Earlier similar issue was considered in the case of M/S. G&C INFRA INNOVATIONS VERSUS UNION OF INDIA THE COMMISSIONER, STATE GOODS AND SERVICES TAX DEPARTMENT, KERALA, THE GST COUNCIL, THE PRINCIPAL COMMISSIONER, CENTRAL TAX AND CENTRAL EXCISE, KOCHI GOODS & SERVICES TAX NETWORK, THE NODAL OFFICER, AND OTHERS [2022 (5) TMI 694 - KERALA HIGH COURT] wherein the court took note of the fact that after the GST regime came into force the period between 2017 and 2020 ought to be regarded as the nascent period of legislation and admittedly several glitches occurred even from the part of the department. Further, it was pointed out that the courts have repeatedly held that the said period as a trial and error phase as far as implementation of the statute was concerned and the taxpayers were also in a state of confusion, during the relevant period.
Thus, taking note of the law and the subject as well as the facts of the case, it is a fit case where directions should be issued to the authorities to enable the appellants to rectify the mistake and submit GST TRAN-1 under heading 7B of Table 7(a) of Form GST TRAN-1 and the appellants are directed to comply with the same within three weeks from the date of receipt of the server copy of this order after which the adjudicating authority is directed to verify the same and if admissible, extend the transitional credit to the appellants.
The Nodal Officer of IT Grievance Redressal Mechanism, Kolkata CGST & CX Zone is directed to take note of the direction issued in this judgment and order and facilitate the filing of the TRAN-1 and TRAN-2 by the appellants by rectifying the mistake - In the event such rectification is not possible electronically, the appellants shall be given an option to do so manually.
Appeal disposed off.
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2024 (3) TMI 1212
Petition for the relief - additional tax liability for execution of subsisting Government contracts either awarded in the pre-GST regime or in the post-GST regime - without updating the Schedule of Rates (SOR) incorporating the applicable GST while preparing Bill of Quantities (BOQ) for inviting the bids - HELD THAT:- Petitioner has also prayed for relief of issuance of direction upon the respondents authority concerned to neutralize the impact of unforeseen additional tax burden on Government contracts since the introduction of GST w.e.f. 1st July, 2017 for ongoing contract awarded before the said date and to update the State SOR incorporating applicable GST in lieu of inapplicable West Bengal VAT henceforth.
Considering the submissions of the parties this writ petition is disposed of by giving liberty to the petitioner to file appropriate representation in the aforesaid regard as referred in preceding of this order, before the Additional Chief Secretary, Finance Department, Government of West Bengal within four weeks from date.
It is also recorded that the Additional Chief Secretary, while taking decision on the representation to be filed by the petitioner shall act in accordance with law and pass a reasoned and speaking order on merit and after considering all the judgments of different High Courts upon which petitioners intend to rely. With this observation and direction this writ petition being WPA is disposed of.
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2024 (3) TMI 1211
Charge memo issued to CIT(A) - disciplinary actions on allegations of mala fide against an officer exercising quasi-judicial powers - delay in issue charge memo - appeals decided in exercise of quasi-judicial powers while he was serving as Commissioner of Income Tax (Appeals) at Raipur, between 13.05.2003 and June 2007, had been were wrongly decided by ignoring material facts - Quasi-judicial powers of CIT(Appeals) -Tribunal has quashed the charge memo issued to the CIT(A)/respondent - as argued Tribunal was justified in quashing the charge memo which besides having been issued belatedly, was only a counterblast to the respondent’s challenge to the earlier charge memo wherein the petitioners had leveled similar allegations qua cases decided by him while he was posted as Joint Commissioner of Income Tax during the period between 1996 to 1998
HELD THAT:- We are of the view that even if we were to accept the petitioners’ plea that the decision in S. Rajguru [2014 (8) TMI 1243 - DELHI HIGH COURT] was not applicable to the facts of the present case, or that the said decision as urged by the petitioners was liable to be ignored, the fact remains that the petitioners have not been able to explain the inordinate delay of over ten years in issuing the charge memo.
The appeals which the CIT(A)/respondent is purported to have wrongly decided pertained to the period between 13.05.2003 to June 2007, when he was functioning as the Commissioner, Income Tax (Appeals) at Raipur and therefore, there is undoubtedly a delay of over ten years if computed from 13.05.2003. A CIT(Appeals) decides appeals on a regular basis in his quasi-judicial capacity and cannot be expected to have access to records of all decided cases after so many years. It is, therefore, evident that on account of this inordinate delay in issuance of the charge sheet, grave prejudice was likely to be caused to the respondent.
Even before us, petitioners except for baldly stating that the delay was occasioned due to the long drawn procedure required to be followed before issuing the charge memo to a Group ‘A’ officer like the respondent, has not been able to furnish any reason much less to say any justifiable reason for this inordinate delay. WP dismissed.
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2024 (3) TMI 1210
Rejection of request for exemption from pre-deposit - basis of imposing the liability of the petitioner - HELD THAT:- Taking into consideration the notification, Instruction No.1914 issued u/s 220 of the Income Tax Act as read with OM [F. No.404/72/93-ITCC], we deem it appropriate to direct the first Appellate Authority CIT (appeals) to decide the appeal within a period of three months, without insisting on the recovery of the demand. Till the pendency of the appeal, the demand shall be deemed to be stayed without depositing the pre-deposits 20%.
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2024 (3) TMI 1209
Validity of reopening of assessment - clandestine and unaccounted sales - Reason to believe - absence of power to review - report of the Directorate General of Goods and Service Tax Intelligence relied upon to conclude that there was a large-scale suppression of sale by the petitioner and therefore assessee had not offered sales to tax in its return of income, thus addition of gross profit at the rate of 1% to the income of the business and profession of the assessee - HELD THAT:- Notice giving the reasons for reopening the assessment in the case of the petitioner does not indicate, that any new material has been found, but relies upon the same material and same set of facts as were prevailing, when the earlier order of assessment dated 28.12.2018 was made.
The entire assessment order was based upon the report of the Directorate General of Goods and Services Tax Intelligence, based upon which respondent no. 2, had assessed the income of the petitioner as indicated above. The same report has been considered as a reason for re-opening the assessment in the impugned order, which clearly would indicate that it was not a case of mistake, but was a change of opinion, as the same material, which cannot be sustainable in law.
Though reliance is also placed on the amended section 147 of the Income Tax Act, it does not assist her case for two reasons, (i) the amendment having been brought into effect from 1.4.2021, cannot be applied to the case of the petitioner and (ii) even otherwise, though the expression “reason to believe has been deleted therefrom, what has been held in Kelvinator of India [2010 (1) TMI 11 - SUPREME COURT] regarding the concept of “change of opinion” being treated as an in-built test to check abuse of power by the Assessment Officer, in absence of power to review, would continue to hold the field. Reopening notice set aside - Decided in favour of assessee.
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2024 (3) TMI 1208
Revision u/s 263 - case of the assessee was selected for scrutiny and the AO was passed u/s 143(3) by accepting the returned income - As per CIT internal Audit Party observed that during the assessment proceedings, no proper verification of the purchase of the new assets and depreciation claimed on the assets has been made by the AO - Tribunal held that the AO framed the assessment on limited scrutiny and not the complete scrutiny. However, on perusal of the certified copy of the Assessment Order, it appears that the case of the assessee was selected for complete scrutiny - HELD THAT:- On perusal of the finding of facts arrived at by the Tribunal it is clear that the Tribunal after considering the issue of claiming the depreciation by the respondent-assessee as per the Act has come to the conclusion that the Assessment Order is neither erroneous nor prejudicial to the interest of Revenue.
Tribunal has also observed that the CBDT Instruction No. 9 of 2007 dated 11.09.2007 relied upon by the PCIT would also not be applicable in the facts of the case as the same pertains to the issue of allowability of depreciation and brought forward losses/unabsorbed losses. However, in the case of the respondent-assessee there was no issue pertaining to the brought forward losses or unabsorbed depreciation. No substantial question of law.
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2024 (3) TMI 1207
Penalty u/s. 271(1)(c) - addition on account of disallowance of claim of deduction u/s. 36(i)(viii) - ITAT deleted addition holding that the variation in the deduction u/s. 36(1)(viii) was due to the change in the business profit and it cannot be said that assessee has furnished inaccurate particulars of income - It is department’s case that only because assessee has offered income and not claimed deductions in the return of income would not absolve assessee from the liability of Section 271(1)(c)
HELD THAT:- TAT, in our view, correctly held that provisions of Section 271(1)(c) of the Act are not attracted. The ITAT was of the view and rightly so that assessee had made a bona fide claim under Section 36(1)(viii) as such deductions claimed is linked to the business profit. Only because there was variance in the deductions allowable due to change in determination of business profit, it cannot be said that assessee has furnished inaccurate particulars of income or concealed inaccurate particulars of income.
As held by the Apex Court in Commissioner of Income Tax Vs. Reliance Petro Products Pvt Ltd. [2010 (3) TMI 80 - SUPREME COURT] if we accept the contention of revenue, then in case of every return where the claim sum is not accepted by the AO for any reason, assessee will invite penalty u/s 271(1)(c). A mere making of the claim which is not sustainable in law by itself, will not amount to furnishing inaccurate particulars regarding the income of assessee, such claim made in the return cannot amount to be inaccurate particulars. Decided in favour of assessee.
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2024 (3) TMI 1206
Rectification of mistake u/s 154 - limited scrutiny of “Agricultural Income” - respondent seeks to alter the Assessment Order made u/s 143(3) by including those issues which were not expressly dealt earlier namely (i) Interest on Borrowing, (ii) Goods in Transit & (iii) Interest on account of Excess Refund of amounts. These items were not included in the Assessment Order
HELD THAT:- Under Sub-Section(3) to Section 154 of the Income Tax Act, 1961, an amendment, shall not be made unless the authority concerned has given notice to the assessee or the deductor etc a reasonable opportunity of being heard where such amendment has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee [or the deductor], Thus, it cannot be said that the impugned notice issued to the petitioner was without jurisdiction as the assessing officer is empowered to rectify a mistake which is apparent from the record.”
The power of the officers mentioned in Section 154 is to correct “any mistake apparent from the record” is undoubtedly not more than that of the High Court to entertain a writ petition on the basis of an “error apparent on the face of the record”.
Court spelt out the distinction between the expressions “error apparent on the face of the record” and “mistake apparent from the record” and held suffice it to say that the Income Tax Officer was wholly wrong in holding that there was a mistake apparent from the record of the assessments of the first respondent.
The meaning of the expression, “error apparent on the face of record” is wider than the expression “mistake apparent from the record”. An Assessing Officer is not incompetent to invoke the jurisdiction under section 154 of the Income tax Act, 1961 if such officer had committed a glaring mistake of fact or law while passing the assessment order as held by the Hon’ble Supreme Court in Commissioner of Income Tax vs. Hero Cycles (P) Ltd [1997 (8) TMI 6 - SUPREME COURT]
If an Assessing Officer had also failed to do what was required under the law at the time of passing Assessment Order and has passed an Assessment Order with such defects, such assessment orders can be rectified by the officer by exercising power under section 154 of the Income tax Act, 1961. In this case, this is the effort of the Assessing Officer while exercising the power under section 154 of the Income tax Act, 1961.
No merits in the submission that the impugned notice is liable to be interfered and quashed. Writ petition dismissed.
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2024 (3) TMI 1205
Nature of expenses - expenses on repairs and maintenance of stores and spares - revenue or capital expenditure - HELD THAT:- The Division Bench of this Court in [2019 (8) TMI 1347 - GUJARAT HIGH COURT] dismissed the appeal of the Revenue relying on an order of the Division Bench in the case of Gujarat Narmada Valley Fertilizers and Chemicals Ltd. [2023 (4) TMI 334 - ITAT AHMEDABAD] as held from the perusal of the documents, it can be seen that these expenditures were not totally on the replacement but replacement of part of machinery/plant which in totality cannot be treated at par with the repairs and maintenance that of entire Plant & Machinery. The pipelines and duel fuel burner system are forming some part of entire plant and machinery and both these parts do not function independently or used independently for the projects of the assessee company. Thus, the CIT(A) was not right in confirming the addition. In fact, these expenditures are revenue in nature.
Disallowance u/s 37(1) - expenses being contribution /donation to a trust, though the same is devoid of any business expediency? - HELD THAT:- The Division Bench of this Court in [2019 (8) TMI 1347 - GUJARAT HIGH COURT] held that Agro Products of the assessee company are sold under the brand name ‘Sardar’ which is very popular amongst the farming community since more than four decades. It was an apprehension of the assessee that the construction of a statue of Sardar Vallabhbhai Paltel would significantly enhance the value of the brand name under which the assessee carries on its business. This would help enhance sales as well as exports of the company’s agro products and would as a corollary enhance the brand value of other products of the company. Thus, the contention of the Ld. AR that the expenditure was incurred wholly and exclusively for the purpose of business on account of commercial expediency and accordingly is allowable u/s 37 of the Act, appears to be genuine. Further, it appears that the funding was for State Government. The decision of Gujarat Narmada Valley Fertilisers Co Ltd. (supra) under identical facts held that, the said expenditures were allowed related to deduction under Section 37
Expenditure written off by the assessee - HED THAT:- ADMIT – Only on substantial question of law-(C)
"Whether the Appellate Tribunal is justified in law and on facts in holding that the expenditure written off by the assessee has to be considered as business revenue expenditure without appreciating the fact that expenses incurred for establishing a new project will remain capital expenditure in nature even if these projects did not materialize and hence, cannot be allowed as business expenditure under section 37 of the Act?”
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2024 (3) TMI 1204
Income taxable in India or not - Taxation of Technical Collaboration Fees @ 10% u/s. 9(1)(vii) r.w.s 115A(1)(b) - As per assesee there is no “Service PE” existing in India - as submitted during the scrutiny assessment proceedings assessee has voluntarily agreed to tax the FTS u/s. 115A to buy peace, to avoid litigation and also to avoid penal proceedings, thus this amount is not taxable in India, in the absence of Service PE - HELD THAT:- There is no dispute on the fact that the assessee is not having a Permanent Establishment [PE] in India. Further, there is no specific clause in the DTAA entered into between the Republic of India and Mauritius as pointed out by the Ld. AR in his written submissions, Article-12A was inserted w.e.f 1/4/2017 and cannot be applied for the FY 2017-18. We also find that various judicial pronouncements including the Coordinate Benches and various Hon’ble High Courts have held that in the absence of any specific provisions in the DTAA, the scope of taxing the said income shall be only business profits subject to existence of PE in India, and cannot be tax under the residuary Article of the relevant DTAA.
The said income cannot be expanded within the scope of section 9(1)(vii) r.w.s 115A of the Act.
It is settled position of law that in the absence of a clause in DTAA not dealing with a particular item of income, the payments are not be regarded as residuary income but as business income which is not chargeable to tax in India, in the absence of any PE of the Non-Resident in India. Decided in favour of assessee.
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2024 (3) TMI 1203
Disallowance of WIP - CIT(A) deleting the disallowance being the amount provided in valuing work-in-progress of construction contracts - As per revenue to that extent profit of the assessee company got reduced - HELD THAT:- Respectfully following the decision of Co-ordinate Bench in assessee's own case in the preceding Assessment Years 1994-95, we find no merit in the ground raised by the Revenue in its appeal wherein as observed that the Tribunal has made specific finding in the earlier years that the valuation of work-in-progress relating to incomplete contracts has been made by the assessee company in a consistent manner following the accepted principles of accounting and decided the issue in favour of the" assessee. Respectfully following the decision of the coordinate bench in assessee's own case, we set aside the impugned orders of the authorities below and allow the ground of appeal raised by the assessee. Decided against revenue.
Disallowance of Commission - AO has disallowed payment of commission as the assessee had not furnished adequate evidence to substantiate that the expenditure was incurred wholly and exclusively for the purpose of business - HELD THAT:- We find that this issue is recurring. In absence of any cogent evidence, the assessee’s claim of payment of commission has been consistently dismissed. Similar is the situation in the impugned assessment year. No evidence has been brought on record by the assessee to substantiate its claim. Decided against assessee.
Addition u/s. 40A(9) - Contribution to Utmal Employees Welfare Fund - disallowed assessee’s claim on the ground that the said payment is not backed by any legal provision or any law for the time being in force, hence, the amount was disallowed u/s. 40A(9), also confirmed by CIT(A) - HELD THAT:- As this issue has been decided by the Tribunal [2022 (5) TMI 104 - ITAT MUMBAI] (supra). The Co-ordinate Bench following the order of Tribunal in assessee's own case for preceding Assessment Year allowed assessee’s contribution towards Utmal Employees Welfare Fund. We find that this issue has been recurring since Assessment Year 1994-95. In preceding Assessment Years, the Tribunal has consistently allowed contribution towards said Fund.. The facts being similar in the impugned assessment year, ground No.2 of appeal is allowed for parity of reasons.
Reduction in depreciation claim arising on account of refusal to treat transfer of Bangalore Undertaking as “Slump Sale” - HELD THAT:- We find that identical ground was raised by the assessee as additional ground of appeal in appeal for Assessment Year 2001-02 [2020 (10) TMI 1324 - ITAT MUMBAI] The Co-ordinate Bench decided the issue following the decision of Tribunal in assessee’s own case for Assessment Year 1998-99. No contrary material is placed before us by the Department. Hence, respectfully following the decision of Co-ordinate Bench we direct the Assessing Officer to accept assessee’s claim of depreciation. Decided in favour of assessee.
Disallowance u/s.14A on account of interest expenditure - assessee has earned income from tax free bonds - contention of the assessee is that assessee is having own funds sufficient to cover the investments - HELD THAT:- It is no more res-integra that where the assessee is having mixed bag of; own interest free funds and borrowed interest bearing funds, it shall be presumed that the assessee has made investments from own interest free funds. Similar disallowance made by AO in Assessment Year 2001-02 & Assessment Year 2002-03 [2022 (5) TMI 104 - ITAT MUMBAI] was deleted by the Co-ordinate Bench. We deem it appropriate to restore this issue to Assessing Officer for the limited purpose of verification of availability of assessee’s own funds matching investments. In the result, ground No.4 of appeal is allowed with aforesaid directions.
Nature of receipts - Extinguishment of Sales Tax deferred loan liability treated as revenue receipts - HELD THAT:- As decided in assessee own case [2020 (10) TMI 1324 - ITAT MUMBAI] we are inclined to set aside the order of CIT(A) on this issue by holding that such receipt is a capital in nature - Decided in favour of assessee.
Deduction u/s. 80HHC - Reduction of 90% gross interest received from profits & gains of Business - HELD THAT:- We find that the Co-ordinate Bench while deciding the appeal for Assessment Year 2001-02 and Assessment Year 2002-03 following the decision of Tribunal in assessee's own case in [2020 (10) TMI 1324 - ITAT MUMBAI] for Assessment Year 2001-02 restored the issue back to the file of Assessing Officer. Both sides are unanimous in stating that the facts relating to Assessment Year under appeal on this issue are identical, hence, respectfully following the decision of Co-ordinate Bench we restore this issue back to the file of Assessing Officer with similar directions.
Set off of loss on export of trading goods against profits on export of Manufactured goods - As assessee fairly stated that this issue has been decided against the assessee in the preceding Assessment Years, the facts in the impugned assessment year are identical. In view of the statement made by ld.Counsel for the assessee, sub-ground No. (b) is dismissed.
Reduction of 90% Miscellaneous Income received from profits of Business - We find that similar issue was raised before Co-ordinate Bench in appeal by the assessee in Assessment Year 2001-02 and Assessment Year 2002-03 placing reliance on the decision of Tribunal for Assessment Year 2000- 01 [2020 (10) TMI 1324 - ITAT MUMBAI] restored the issue back to the file of Assessing Officer. The Revenue has not placed on record any material to controvert the submissions of the assessee, hence, following the decision of Co-ordinate Bench, we restore sub-ground (c) to the Assessing Officer for parity of reasons.
Reduction of profits in respect of projects eligible for deduction u/s. 80HHB - We find that this issue was also considered by Co-ordinate Bench in the preceding Assessment Year and was restored to the Assessing Officer. Both sides are unanimous in stating that the facts relevant to the issue are identical to the facts in appeal for Assessment Year 2001-02 [2020 (10) TMI 1324 - ITAT MUMBAI] Hence, following the decision of Co-ordinate Bench, the issue in sub-ground (d) is also restored to the Assessing Officer.
Rejection of claim of deduction u/s. 80IA in respect of Captive Power generating units - HELD THAT:- this issue has been considered by the Tribunal in the preceding Assessment Years in favour of assessee.
Disallowance u/s. 14A for the purpose of computing book profit u/s. 115JB - HELD THAT:- Special Bench in the case of Vireet Investments Pvt. Ltd. [2017 (6) TMI 1124 - ITAT DELHI] has held that while computing book profits u/s. 115JB of the Act disallowance made u/s.14A r.w.r. 8D shall not be considered. The Hon’ble Karnataka High Court in the case of Sobha Developers Ltd. [2021 (1) TMI 378 - KARNATAKA HIGH COURT] has reiterated that disallowance made u/s. 14A could not be added to book profits of assessee u/s.115JB of the Act. In light of aforesaid decisions, assessee succeeds.
Adjudication of additional grounds - assessee is claiming deduction u/s. 80HHC and 80HHE of the Act under MAT provisions - HELD THAT:- The additional grounds raised by the assessee are purely legal, hence, additional grounds are admitted for adjudication. Since, these grounds have been raised for the first time before the Tribunal, we deem it appropriate to restore this ground to the Assessing Officer for consideration and adjudication on merits after affording reasonable opportunity of making submissions to the assessee, in accordance with law. Hence, additional ground No.1 and 2 are allowed for statistical purpose.
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2024 (3) TMI 1202
Application for final approval u/s 80G(5)(iii) rejected - as per revenue assessee had already commenced its activities since long even prior to grant of provisional registration, and since the time period for making application mentioned in Clause (iii) to First Proviso to section 80G(5) of the Act had already expired, therefore, the assessee could not be granted final registration u/s 80G(5) - HELD THAT:- The issue is squarely covered by the decision of the Coordinate Kolkata Bench of the Tribunal in the case of “Tomorrow’s Foundation [2024 (3) TMI 941 - ITAT KOLKATA] the appeal of the assessee is allowed accordingly and the ld. CIT(Exemption) is directed to grant provisional approval to the assessee under Clause (iii) to First Proviso to section 80G(5) of the Act, if the assessee is otherwise found eligible. It is directed that the ld. CIT(E) will decide the application of the assessee for final approval as expeditiously as possible but not later than two months from the receipt of this order.
As further directed that, if the assessee is granted final approval by the ld. CIT(E) then, the benefit of approval u/s 80G of the Act, available to the assessee prior to the Amendment brought vide Amending Act of 2020, will be deemed to be continued without any break. The assessee will not be deprived of the benefit during the time period falling between 31/03/2021 and the date of grant of provisional approval under clause (iv) i.e., 28/05/2021, due to technical errors occurred in making the application under the relevant provisions of the Act because of the confusion and misunderstanding on part of the assessee as well as on part of the ld. CIT(E) in properly interpreting the relevant provisions. Appeal of the assessee allowed for statistical purposes.
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2024 (3) TMI 1201
Rejection of approvals u/s 80G - approval application filed belatedly - As per revenue Form 10AB has not been filed within the due dates as mentioned in the Act or within the time limits extended by CBDT - whether its is genuine hardship case? - HELD THAT:- It is to be noted that the assessee trust has commenced its activities on 14.07.2017 and assessee is also provisionally approval u/s. 80G(5)(iv) - assessee trust was required to file application in Form No.10AB u/s. 80G(5)(iii) of the Act within the time period of six months prior to expiry of the period of provisional approval or within six months of commencement of its activities, whichever is earlier, in term of clause (iii) of first proviso to sub-section (5) of section 80G.
We have gone through the CBDT Circular No.6 of 2023 dated 24.03.2023 and noted that the CBDT has clarified the provision relating to charitable and religious trusts and has extended the timeline for furnishing Form No.10A seeking provisional registration/approval within the extended period up-to 30.09.2023.
Timeline prescribed for filing Form No.10AB for registration u/s. 12A of the Act in the case of assessee trust has been extended up-to 30.09.2023 after considering the genuine hardship faced by charitable institutions vide various CBDT circulars and finally, vide Circular No.6/2023 dated 24.05.2023. Similarly, the timeline prescribed for filing Form No.10A for recognition u/s. 80G of the Act was also extended up-to 30.09.2023 by the same circular for trusts filing registration under clause (i) to first proviso to section 80G(5) of the Act.
Once, the CBDT has extended the timeline for filing Form No.10AB for recognition u/s. 12A of the Act and also for filing Form No.10A for recognition u/s. 80G of the Act extended up to 30.09.2023 for trusts filing registration under clause (i) of first proviso to section 80G(5) of the Act, we find no difference in continuing hardship as recognized by CBDT even in filing Form No.10AB for renewal of recognition u/s. 80G of the Act under clause (iii) of first proviso to section 80G(5) of the Act.
In our view, this being a genuine hardship case, which is recognized by Revenue or CBDT by issuing a general circular, we are of the view that this specific provision of clause (iii) to first proviso to section 80G(5) cannot be excluded and or it has not been the intention of the CBDT while issuing the circular.
In our view, we agree with the argument of assessee that the timeline prescribed under clause (iii) of first proviso to section 80G(5) of the Act should be treated as directory and not mandatory especially considering the transitional nature of the amendment as brought out by the taxation of other laws (relaxation and amendment of certain provisions) act 2020 for bringing new regime. Hence, in our view, the CIT(Exemptions) should not have rejected the assessee’s application in Form No.10AB only for this technical reason.
Hence we remand the matter back to the file of the CIT(Exemption) to decide the issue on merits.
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2024 (3) TMI 1200
TP adjustment for administrative support serves in relation to Inter Bank Indemnities - selection of MAM - HELD THAT:- The facts in the impugned assessment year are identical to the facts in Assessment Year 2008-09 held that TNMM method would be the Most Appropriate Method in the facts and circumstances of the instant case and CUP could not be applied herein because of non availability of data.
In any case in respect of adjustment made simply relying on 133(6) information from the market had been deleted by this Tribunal in the case of Asian Paints Ltd [2014 (1) TMI 16 - ITAT MUMBAI] It is also prudent to note that the same transactions were accepted by the Id. TPO upto A Y2012-13 in the case of the assessee Hence, even going by the rule of consistency as has been held in the case of Radhasoami Satsang [1991 (11) TMI 2 - SUPREME COURT] there is no need for the Id. TPO to take a divergent stand when there is no change in the facts and circumstances during the year with that of earlier years Hence, we direct the Id TPO to delete the adjustment made in respect of guarantee fees. Decided in favour of assessee.
Rate of tax on interest income from foreign currency loans - Tribunal has consistently held that interest income earned on foreign currency loans is taxable @20%. CIT(A) in impugned order has followed the decision of his predecessor in AY 2008-09, which in turn followed the decision of Tribunal in assessee's own case in AY 1997-98 - We find no infirmity in the findings of the CIT(A) on this issue, hence, ground No.1 of appeal is dismissed, sans-merit.
Deduction u/s. 44C - AO allowed head office expenses only to the amount reflected in Form 3CEB - Assessee claimed that deduction u/s. 44C should be allowed to the extent of Rs. 9,90,15,825/- or 5% of adjusted total income, whichever is lower - AO rejected the contentions of the assessee further held that the assessee had furnished incomplete and partial details - HELD THAT:- No specific details in respect of the amount in excess of Rs. 2.10 crores is furnished by the assessee - CIT(A) re-examined the documents and accepted submissions of the assessee. CIT(A) allowed assessee’s claim primarily for the reason that the claim of the assessee is within the limit of 5% of the adjusted total income and the said claim of the assessee is supported by auditors certificate. The Co-ordinate Bench in the case of Doha Bank QSC [2020 (11) TMI 371 - ITAT MUMBAI] held that head office expenses attributable to the business of assessee in India is allowable in accordance the provisions of section 44C, irrespective of the fact whether or not any amount is debited in the books of account.No contrary material is brought before us by the Department to controvert the findings of the CIT(A) or the decision cited by assessee.
Not allowing interest on income tax refund as exempt from tax in accordance with the provisions of Article 11(3)(a)(i) of India – Canada DTAA - Whether interest income on income tax refund is exigible to tax in India or is exempt in light of provisions of Article 11(3) of India-Canada DTAA? - HELD THAT:- The treaty under reference in the said case was India-Italy DTAA. On reading of Article 12 of the aforesaid treaty which deals with “Interest”, we find that provisions of clause (3) are pari-materia to clause (3) of Article 11 of India Canada-DTAA. Hence, the ratio decidendi in the case of Ansaldo Energio SPA [2016 (5) TMI 945 - MADRAS HIGH COURT] would apply to the instant ground of appeal.
In so far as the decision in the case of B.J. Services Co. Middle East Ltd. [2015 (5) TMI 1036 - UTTARAKHAND HIGH COURT] on which the CIT(A) has placed reliance, we find that it referred to UK-India DTAA. We have examined the provisions of the said treaty. The provisions of Article -12 dealing with interest in the said DTAA are not parimateria to India- Canada DTAA. There is no clause in Article-12 of India UK-Treaty similar to Article -11(3) in India –Canada Treaty. Hence, the decision in the case of B.J. Services Co. Middle East Ltd [2015 (5) TMI 1036 - UTTARAKHAND HIGH COURT] would not apply to the facts of the present case. In the facts of case and the decision of Hon'ble Jurisdictional High Court, we find merit in assessee succeeds on ground No.2.
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2024 (3) TMI 1199
Validity of assessment order passed u/s 153C/143(3) against Settlement Commission order - as submitted assessee JV had carried out one single contract during the relevant year and that the Settlement Commission had finally settled the taxable income for AY 2013-14 qua such contract undertaken for UMC and that the final assessment order pursuant thereto had been passed by the AO, thus no further income in relation to the same contract could be again re-assessed by the AO - HELD THAT:- Section 153A or 153C of the Act, is overriding only Sections 139, 147, 148, 149, 151 & 153 of the Act. As rightly pointed out by the Ld. AR, it does not override the specific provision of Section 245-I of the Act, which provides that the orders passed by the ITSC shall be conclusive as to the matters stated therein and no matter covered by such order shall, save as otherwise provided in that Chapter, be reopened in any proceeding under the Act or under any other law for the time being in force. In this regard, we take note of the legal maxim expressio unius est exlcusio alterius, which means that express mention of one is the exclusion of other [GVK Industries Ltd [2011 (3) TMI 1 - SUPREME COURT]]. Since Section 153A overrides only the specific provisions, as stated hereinabove, then it clearly means that provisions of Section 245-I has been excluded and that it has not been overridden by Section 153A of the Act.
We therefore hold that the AO erred in law by reopening the assessment for AY 2013-14 and made addition u/s 153C of the Act, which assessment had already been concluded and settled by ITSC, Mumbai, whose order had attained finality. Thus orders passed u/s 153C/153A/143(3) is held to be impermissible in law and is accordingly all additions made therein also stands deleted. - Decided in favour of assessee.
Bogus purchases - payments made to the thirty (30) vendors were fake - HELD THAT:- Analysis and the inference drawn by the AO is found to be actionable. This analysis was however only the starting point of investigation. The Revenue however ought to have brought on record further corroborative material to support their analogy that the entire value of these payments had come back and remained unaccounted in the hands of the assessee. We take note of the fact that, the assessee had provided the relevant supporting evidence such as invoices, ledgers, proof of payments etc. which it was ordinarily required to substantiate the genuineness of these purchases. Also, there was no statement made by any Directors of the assessee Group averring that these payments found noted on these loose papers were not genuine. However, at the same time, none of these parties complied with the enquiries made by the AO. None of them provided their work orders, financials, audit reports, details of expenses incurred, bank statements etc. to justify the work done for the assessee. Amongst the thirty (30) parties, Shri Gursahani who represented six (6) parties attended the enquiry and admitted to undertaking work viz., providing labour to the assessee but was unable to provide any of the details as sought by the AO and the reason given by him was theft, for which copy of FIR was provided. The fact however remains that, independent enquiries from the vendors could not be made. Overall therefore, we are in agreement with the Ld. CIT(A) to the extent that the assessee was unable to fully discharge the genuineness of these payments made to the thirty (30) vendors.
Estimation of income on Bogus purchases - Only the profit element embedded in the payments ought to be assessed to tax and that on the given facts, the disallowance of entire value of purchases was unwarranted.
Following the above order of ITSC and having regard to the fact that the same contract was continued in the relevant AY 2014-15, we hold that the profit of the assessee for the year is to be estimated at 8% of the contractual receipts. The Ld. AR had pointed out to us that, the assessee had offered 8% of contractual receipts in the return of income filed u/s 153C of the Act. The AO is accordingly directed to verify this contention and ensure that the total income is finally assessed at 8% of the contractual receipts for the relevant AY 2014-15. With these directions, these grounds are disposed off.
Disallowance of contractual payments - AO had disputed the genuineness of the contractual payments made by the assessee to IDCC - HELD THAT:- IDCC had regularly filed their service tax returns and VAT Audit reports and that it had fully discharged its service tax and VAT liabilities levied on their invoices to the credit of the Government. Having perused the financials of IDCC, we note that it has reported substantial turnover in excess of several hundred crores in AYs 2013-14, 2014-15 & 2015-16 respectively. The audited financials reveal that IDCC is a fully functioning company engaged in rendering contractual services.
CIT(A) is also noted to have taken cognizance of the income declared by IDCC across various assessment years of the appellate order, which showed that IDCC was declaring substantial income each year and therefore lacked the characteristics of a paper/shell entity as alleged by the AO. It is further noted that the AO was unable to find any defect in any of these documents. Even before us, the Revenue was unable to point out any specific infirmity in these evidences furnished by the assessee and IDCC, which demonstrated the genuineness of the payments made towards sub-contract charges. Payments made to IDCC was genuine and the AO is held to be unjustified for disallowing the same.
Unexplained cash credit in the hands of the assessee JV - principle of telescoping - protective addition - HELD THAT:- Same income should not be taxed twice i.e. once at the time of generation and thereafter at the time of application for routing back into the business. The said principle would equally apply where the cash generated by business concerns are routed through partners/directors - JV partners had disclosed income in the hands of the assessee JV before the ITSC, Mumbai and such additional income represented the intangible addition / secret profit, which applying the judicially approved principle of telescoping, could be set off against any unexplained money/investment found by the Revenue.
Since the additional income offered to tax in earlier years was sufficient to cover such cash investment alleged to have been made by JV partners, no separate protective addition was required to be made in the hands of assessee JV. Accordingly, the appeal of the Revenue is dismissed.
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2024 (3) TMI 1198
Estimation of income - bogus purchases - HELD THAT:- Since there is allegation of getting accommodation bills, it is possible that the assessee could have purchased goods from someone else, while the purchase bills were obtained from some body else. In that case, there is a possibility that the assessee could have made some profit, which can be assessed by the AO
What could be assessed by the AO is only the profit element involved in the alleged bogus purchase transactions
The gross profit rate in respect of trading of diamonds may be taken at 3%. In the instant case, the assessee has sold the alleged bogus purchases and hence it was a trading transaction. Since the assessee has already declared gross profit rate of 1.42%, we are of the view the addition should be restricted to 1.58% (3% less 1.42%). Accordingly, we modify the order passed by Ld CIT(A) and direct the AO to restrict the addition to 1.58% of the value of alleged bogus purchases. Appeal filed by the assessee is partly allowed.
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2024 (3) TMI 1197
Calculation of Capital Gain - Non-Resident - Applicability of section 144C - eligible assessee - Disallowance of brokerage expenses - Fair market value determination of the rear basement - HELD THAT:- We are of the considered view that the facts as brought before us require verification and, therefore, in regard to disallowance of brokerage, the issue is restored to the file of ld. AO for giving an opportunity to the assessee and allow the same in totality, if found verified.
Fair market value of the rear basement - We are of the considered view that before the DRP, the assessee had brought on record evidences indicating that the assessee had acquired interest in the rear basement by way of agreement to sell dated 15.04.1994. The fact that this property was rented out and Form 16A against the rent paid by Israel Aircraft Industries Ltd. for the period 01.04.1996 to 31.03.1997 was sufficient piece of evidence to show that the rear basement was acquired before 01.04.2001. Thus, there was no justification for the DRP to disregard the registered valuer’s report and instead direct AO to accept the circle rates. Thus, the directions of the DRP to the AO to apply circle rate is also not sustainable and, to that extent, the DRP directions and the findings of the ld. AO in the final assessment order require to be reversed with the direction that the indexed cost of rear basement should be taken, on the basis of the valuation report as provided by the assessee, as per law.
Assessee has sold the second floor of D4/5, Vasant Vihar, New Delhi, in which she had 50% of the share by way of sale deed dated 07.12.2018 for a sale consideration coming to her share at Rs. 6,87,50,000/-. The assessee has claimed that there was a brokerage of Rs. 20,28,125/- and a copy of invoice is made available aThe claim of the assessee is that the assessee has been charged brokerage of Rs. 20,28,125/- in respect of her 50% share in the second floor and the AO ought to have allowed the same in full. A clarification of the broker Satia Homes Pvt. Ltdis provided certifying and confirming that the assessee was owner of 50% of second floor of D4/5, Vasant Vihar, New Delhi for which separate tax invoice No.18 dated 04.12.2018 was issued on account of brokerage to the assessee and the same was paid by her. This amount was inclusive of GST @ 18%. This brokerage amount pertains only to 50% share in the second floor of D4/5, Vasant Vihar, New Delhi.
We are of the considered view that the facts as brought before us require verification and, therefore, in regard to disallowance of brokerage, the issue is restored to the file of ld. AO for giving an opportunity to the assessee and allow the same in totality, if found verified.
Stamp duty paid by the assessee for purchase of second floor have not been considered by the AO in the cost of acquisition - As submitted on behalf of the assessee that stamp duty of Rs. 10 lakhs was paid at the time of sale deed on 09.02.2009, in regard to front portion of the second floor on and a stamp duty of Rs. 7 lakh was paid on the purchase of rear portion of the second floor by sale deed dated 07.02.2009 and, thus, for arriving at the cost of acquisition for second floor, this amount of Rs. 17 lakhs should have been considered.
We are of the considered view that apparently, the ld. AO has failed to take note of the directions of the DRP in this regard and, accordingly, we direct the AO to give benefit of the stamp duty for arriving at the cost of acquisition in regard to second floor.
As a consequence of the aforesaid discussion, the grounds No.4-7 are cumulatively decided in favour of the assessee.
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2024 (3) TMI 1196
TDS u/s 195 - proceedings u/s 201 - non-deduction of tax at source on payments made to its Non-Resident Telecom Operators (NTOs) for provision of bandwidth capacity and provision of interconnect services - HELD THAT:- Tribunal in the case of M/s. VSL (the payer) [2019 (12) TMI 206 - ITAT BANGALORE] in the proceedings under section 201 of the Act, had held that the said charges paid to the non-resident is Royalty/FTS and the income is deemed to accrue or arise under section 9 - However, the order of the Tribunal in the case of VSL was reversed by the Hon’ble jurisdictional High Court in the case relied on by the CIT(A)
Since the Hon’ble jurisdictional High Court has categorically held that the payment made by the VSL is not Royalty/FTS, the same cannot be brought to tax in the hands of the assessee under section 9 of the Act and the relevant DTAA. The relevant finding of the Hon’ble jurisdictional High Court has been elaborately extracted in the impugned order of the CIT(A), therefore the same is not reiterated here. In view of the aforesaid judgment of the Hon’ble High Court in the case of VSL [2023 (7) TMI 1164 - KARNATAKA HIGH COURT], we hold that CIT(A) is justified in deciding the issue on merits in favour of assessee and deleting the additions made by the AO for Assessment Years 2009-10 and 2010-11 - Decided in favour of assessee.
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2024 (3) TMI 1195
TP adjustment - price of the power transferred by the section 80IA eligible captive power plant of the assessee to the non-eligible manufacturing units of the assessee and thereby, reducing the claim of deduction claimed by the assessee u/s 80IA - HELD THAT:- As decided in assessee own case [2023 (2) TMI 341 - ITAT KOLKATA] transfer pricing adjustment made for deduction u/s 80IA of the Act raised by the Revenue are dismissed.
Claim of balance additional depreciation - assessee purchased and installed new plant and machinery in the preceding year but put to use the same for a period less than 180 days in that year - HELD THAT:- As decided in assessee own case [2023 (2) TMI 341 - ITAT KOLKATA] we are of the view that the law laid down by the Hon'ble High Court of Karnataka in the case of CIT and another vs. Rittal India Private Lid [2016 (1) TMI 81 - KARNATAKA HIGH COURT] is applicable to the present case, thus we hold that the assessee is entitled to claim remaining 50% depreciation of such 20% which is equal to the actual cost of new plant and machinery, accordingly ground no-I raised by the assessee is allowed.
Nature of expenses - Deduction on proportionate basis of the compensation paid in connection with the mining activity for obtaining limestone, used as raw material for manufacturing of cement - AO disallowed the claim of the said expenditure by observing that the same was capital expenditure in nature - HELD THAT:- As decided in assessee own case [2023 (2) TMI 341 - ITAT KOLKATA] held that payment of compensation to persons whose rights are infringed by the mining activity is revenue in nature.
Nature of receipt - amount received by the assessee as industrial promotion assistance from the State Govt. - revenue v/s capital receipt - HELD THAT:- As decided in Tribunal [2023 (2) TMI 341 - ITAT KOLKATA] to hold that the interest subsidy is to be treated only as a capital receipt and accordingly the grounds raised by the assessee in this regard are allowed.
Disallowance u/s 14A r.w.r.8D - HELD THAT:- The impugned order of the CIT(A) is modified and it is directed that the Assessing Officer would recompute the disallowance u/s 14A r.w.r 8D(2)(iii) by considering all investments including investments in subsidiary companies which yielded dividend income. This Ground of the revenue’s appeal is partly allowed.
MAT Computation - exclude the subsidy from the books profits assessable u/s 115JB - HELD THAT:- As decided in own case of assessee [2023 (2) TMI 341 - ITAT KOLKATA] no infirmity in the finding of ld. CIT(A) holding that the subsidy/incentive received by the assessee which have been held to be capital receipts are to be excluded from the book profit u/s 115JB.
Upward adjustment made to book profit on account of disallowance of expenditure computed u/s 14A of the Act r.w.r. 8D - HELD THAT:- It is to be pointed out that as per Explanation 1(f), the book profit means the profit shown in the statement of profit and loss account as increased by the amount of expenditure relatable to the exempt income. The said amount of expenditure has already been ordered to be determined as per our observations made above while adjudicating the issue relating to the disallowance u/s 14A vide Ground No.10 of the revenue’s appeal. It has to be further noted that section 115JB in itself does not prescribe any procedure to calculate the expenditure relatable to exempt income earned by the assessee. The said provision has been separately and specifically placed in the Act u/s 14A of the Act. Therefore, the book profits of the assessee are liable to be increased by the expenditure as calculated u/s 14A of the Act as provided under Explanation 1 to Clause (f) of section 115JB of the Act. In view of this, it is directed that the book profits will be increased u/s 115JB of the Act by the disallowance calculated as per our directions given while adjudicating Ground No.10 of the revenue’s appeal. This ground of the revenue’s appeal is hereby allowed.
Deduction of leave encashment actually paid - HELD THAT:- Claim of leave encashment actually paid by the assessee during the previous year relevant to A.Y 2015-16 allowed.
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