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Showing 41 to 60 of 333 Records
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2025 (1) TMI 293
Direction upon the respondents to forthwith disburse the remaining amount of sanctioned refund along with applicable rate of interest for delayed disbursement of claim of refund - HELD THAT:- The CGST authorities cannot be permitted to retain or hold back the amount which has been directed to be refunded in terms of the refund sanction order dated 25th September, 2019 - the respondent no.2 directed to forthwith take steps for issuance of payment advice in favour of the petitioner.
Petition disposed off.
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2025 (1) TMI 292
Challenge to SCN - Cancellation of GST registration of petitioner - client is ready and willing to pay the tax, interest, late fee, penalty and any other sum required to be paid - HELD THAT:- Reliance placed in the case of M/s. Mohanty Enterprises [2022 (11) TMI 1521 - ORISSA HIGH COURT] where it was held that 'In that view of the matter, the delay in Petitioner’s invoking the proviso to Rule 23 of the Odisha Goods and Services Tax Rules (OGST Rules) is condoned and it is directed that subject to the Petitioner depositing all the taxes, interest, late fee, penalty etc., due and complying with other formalities, the Petitioner’s application for revocation will be considered in accordance with law.'.
Petition disposed off.
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2025 (1) TMI 291
Seeking to issue a direction and declare section 16 (4) of the Central Goods and Services Act, 2017 as ultra vires - Imposition of time limit for the availment of Input Tax Credit being violative of Article 14, Article 19(1) (g) and Article 300 A of the Constitution of India and also being violative of the basic structure of the Central Goods and Services Tax Act, 2017 - direction to declare the amendment carried under Rule 61 (5) of the Central Goods and Services Rules, 2017 inserted vide Notification 49/2019-CT dated 09.10.2019 as ultra vires under which GSTR-3B - HELD THAT:- The questions which were involved in the present writ applications has been considered by the G.S.T. Council Meeting and there is a recommendation made by 53rd G.S.T. Council Meeting on 22nd of June, 2024, wherein the G.S.T. Council has taken note of the claim made in the present writ applications. Consequent thereon, the recommendation of the G.S.T. Council has to be given due weightage in accordance with law, as a result of which, these writ applications stand disposed of in view of the recommendations of 53rd G.S.T. Council Meeting and, if any, other matter remaining for consideration, it is open to the petitioners to pursue the remedy in accordance with law before the appropriate Forum.
Application disposed off.
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2025 (1) TMI 290
Dismissal of appeal filed against a penalty imposed, on detention under Section 129 of the Bihar Goods and Services Tax Act, 2017 and the finding of attempt to evade tax - HELD THAT:- In the present case, admittedly, the petitioner has paid the entire penalty. In such circumstances, though there is a procedural irregularity in Annexure-9/A having not shown the amount under dispute, it is opined that the appeal has to be entertained.
Annexure-9 set aside only on the technical reasons - the appeal will stand restored before the first Appellate Authority which shall consider the same on merits after affording an opportunity of hearing to the petitioner.
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2025 (1) TMI 289
Validity of Reopening of assessment - case of the petitioner is not selected for scrutiny for the year under consideration - scope of amended provisions of the Income Tax Act - delay filling SLP - As decided by HC [2024 (4) TMI 1214 - GUJARAT HIGH COURT] on same material only because the year under consideration being A.Y. 2018-19 no scrutiny assessment is undertaken by AO and this being a new regime of reassessment after 1st April, 2021, no different treatment can be given for reopening only because the scope is enlarged by the amended provisions for reopening - when the earlier assessment years which are subjected to reopening for which the notice is already quashed on the same material, there cannot be a reopening for the year under consideration - HELD THAT:- There is a gross delay of 123 days in filing the Special Leave Petition which has not been satisfactorily explained by the petitioner.
Even otherwise, we see no reason to interfere with the impugned order passed by the High Court. Special Leave Petition is, accordingly, dismissed on the ground of delay as well as merits.
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2025 (1) TMI 288
Jurisdiction of Income Tax Officer, Barotiwala road, Baddi to issue notice u/s 143(2) r/w Section 142 (1) and finalize the assessment of the appellant/petitioner without transferring his case file u/s 127 - transfer of jurisdiction from the Income Tax Officer at New Delhi to the Income Tax Officer at Baddi - Validity of best judgment assessments made u/s 144 in the absence of compliance with Section 127 - HELD THAT:- The twin conditions to be complied with by the respondents for transferring the case of the appellant/petitioner from respondent No.4 to respondent No.5 are: (i) the assessee should have been given a reasonable opportunity of being heard and (ii) the reasons for transfer should have been recorded.
Admittedly, the above procedure has not at all been complied with and the only explanation offered for the same is that Section 127 was not attracted to the instant case as it was respondent No.5 alone, who had the authority to issue notices u/s 143(2) r/w Section 142 (1) of the Act.
A valuable right of assessee is clearly involved in the matter, when he objected to jurisdiction of the assessing officer and transfer of his case, which obviously could not have been adjudicated upon without affording an opportunity of hearing and disclosing to him the reasons for not accepting his point of view.
Accordingly, we find merit in both the appeal as well as writ petition. Consequently, the impugned order(s) framing the best judgment assessment for the respective assessment years are quashed and set aside. However, this judgment shall not prevent the respondents for initiating proceedings afresh by either resorting to Section 127 of the Act or by initiating or continuing the proceedings through respondent No.4.
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2025 (1) TMI 287
Contribution made by a corporate employer towards fund for payment of leave encashment to its employees disallowed as deduction from profit and loss account under the Act - HELD THAT:- The amount of contribution made by the assessee towards the fund for payment of leave encashment to its employees qualifies to be deductible as expenses, subject, however, to the conditions imposed under Section 43-B of the Act.
The proviso to Section 43-B of the Act deals with any sum which is actually paid by the assessee on or before the due date applicable in his case for furnishing the return of income under sub-Section (1) of Section 139 of the Act, in respect of the previous year in which, the liability to pay such sum was incurred and instance of such payment is furnished by the assessee along with such return.
The argument raised on behalf of the assessee deserves to be rejected for the reason that the proviso to Section 43-B relates only to that liability as was incurred by actual payment of the sum in the previous accounting year, which in the instant case is 2001-02. Thus, exception carved out by the aforesaid proviso only derives the limitation from end of accounting year to the date of submission of return as per Section 139 (1).
As per Section 43-B only that sum payable by the assessee as an employer in lieu of any leave at the credit of his employees shall be allowed as deduction where firstly the liability to pay such sum was incurred by the assessee according to method of accounting regularly employed by him and secondly the sum was actually paid by the employer in the previous accounting year.
Whether the assessee in the instant case had incurred the liability to pay a sum to its employees for the previous year in which such sum is actually paid? - In Excide Industry Ltd [2020 (4) TMI 792 - SUPREME COURT] had the occasion to adjudicate the constitutional validity of Section 43-B (f) of the Act and one of the grounds of such challenge was that the proviso had been incorporated to undo the effect of judgment passed by the Hon’ble Supreme Court in Bhart Earth Movers [2000 (8) TMI 4 - SUPREME COURT] While rejecting the challenge on said ground it has been held that the judgment in Bharat Earth Movers was rendered keeping in view the then applicable statutory regime. Adhering to the constitutional validity of Section 43-B (f), the Hon’ble Supreme Court held that the said provision will apply prospectively meaning thereby that the period prior to period of enactment of Section 43-B (f), would be governed by the law laid down in Bharat Earth Movers. In view of such exposition, the assessee cannot derive any benefit from the verdict in Bhart Earth Movers, as he has to independently tackle the obstacles raised by incorporation of Section 43-B (f) w.e.f. 1.4.2002.
It will also be gainful to reproduce Excide Industries Ltd case [2020 (4) TMI 792 - SUPREME COURT] to support our view that the liability incurred by the assessee did not qualify the requirement of Section 43-B(f) of the Act and hence were rightly disallowed by the revenue.
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2025 (1) TMI 286
Reopening of assessment - denial of claim u/s 10B - allegations of under-invoicing exports as well as illegality in carrying the mining activities by the petitioner - HELD THAT:- We find that the claim u/s 10B was restored to the file of the CIT(A) by an order of the Tribunal [2015 (9) TMI 1437 - ITAT PANAJI] CIT(A) was directed to examine the same in the light of the letter dated 17.07.2014 from respondent no. 1. In our opinion, as the proceedings are still pending on the file of the CIT(A), we find force in the submission of present petitioners as squarely covered by the decision of this Court in Sesa Sterlite Limited [2024 (9) TMI 1061 - BOMBAY HIGH COURT] We, therefore, have no hesitation in allowing these petitions in view of the third proviso to Section 147 of the Act. Assessee appeal allowed.
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2025 (1) TMI 285
Addition of Long Term Capital Gain Without allowing deduction for indexed cost and exemption u/s 54B - HELD THAT:- As decided in order passed by CIT(A) in the hands of the co-owner A.O. has added total sale consideration without giving effect of the indexed cost of acquisition of the said property. The appellant has submitted the sale deed, valuation report, proof of agricultural activity. In view of the above documents and the remand furnished by the AO, it is held that the appellant is entitled to get benefit of the indexed cost of acquisition while computing the capital gain arose with regard to sale of the aforementioned property - Decided in favour of assessee.
Addition u/s 68 - investment in purchase of immovable property unexplained - HELD THAT:- As assessee has furnished various details in support of the loan the name of the parties, their address, their return of income, confirmation of the parties, extract of the relevant passbook to show the creditworthiness of the parties etc. Accordingly, we are of the considered view that the assessee has been able to discharge the onus regarding the source from Shri Devraj Harshadrai Patel and Ms. Reshmaben Vikrambhai Patel and accordingly addition is not liable to be sustained in the hands of the assessee u/s 68 of the Act.
Addition u/s 69 - unexplained investment - HELD THAT:- The assessee has been able to duly explain the source of investment in the aforesaid property and accordingly, we are of the view that the balance investment of Rs. 32.96 lakhs has been that explained by the assessee - addition is not liable to be sustained as unexplained investment in the hands of the assessee u/s 69 since the assessee has duly explained source of investment in purchase of immovable property, as having been sourced out of sale of immovable property, during the impugned year under consideration.
Unexplained sundry creditors - HELD THAT:- We observe that the assessee had furnished various details of parties viz. their names, addresses, PAN numbers, copy of confirmation, banks statement, ITR-V of all the parties and the relevant bank statement. Accordingly, in light of the elaborate supporting documents produced by the assessee, we find no infirmity in the order of CIT(A) in granting relief to the assessee by holding that the assessee has been able to prove the genuineness and creditworthiness of the lenders. Accordingly, we find no infirmity in the order of Ld. CIT(A) so as to call for any interference.
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2025 (1) TMI 284
Delay of 503 days in filing the appeal before the CIT (A) - cause of delay as the order passed by the CPC u/s 143(1) as well as u/s 154 were not received by the assessee, despite repeated efforts and only on 14/10/2023 the said order passed u/s 154 was supplied to the assessee - HELD THAT:- Prima facie, it appears that the CPC has made addition on account of the amount of Rs. 50.00 lakhs received by the assessee against which TDS u/s 194C was deducted.
In the subsequent year, the said amount was refunded by the assessee to the payer which is duly reflected in the bank account statement of the assessee. Therefore, if the assessee’s case is not examined on merit, it would result in gross injustice for assessing the income which was not earned by the assessee.
Accordingly, when the reasons explained by the assessee are not disputed by the Department that the impugned orders of the CPC passed u/s 143(1) as well as u/s 154 of the I.T. Act, 1961 were not served on the assessee physically and the assessee has explained that he could not even receive these orders digitally, then we find that the assessee has explained a sufficient cause for the delay in filing the appeal before the learned CIT (A). Accordingly, in the facts and circumstances of the case and in the interest of justice, we condone the delay of 503 days in filing the appeal before the learned CIT (A).
Matter is hereby remanded to the record of the AO to verify the fact regarding the receipt of the said amount as well as refund of the same by the assessee. Appeal of the assessee is allowed for statistical purposes.
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2025 (1) TMI 283
Reopening of assessment u/s 147 - mere change of opinion - deduction claimed u/s 80IA - HELD THAT:- AO re-computed the income under the normal provision of the Act. During the original assessment the assessing company has produced the relevant documents and filed the details of deduction claimed u/s 80IA.
Perusal of the original assessment order reveals that the assessee company has disclosed all the material facts fully and truly at the time of the original assessment proceedings and the Assessing officer was well aware about the primary facts and the deduction claimed u/s 80IA of the Act. In the re-assessment proceedings no new material was provided by the assessee, the re-assessment cannot be re-opened merely because subsequently the assessing officer changes his opinion.
Because the assessee company has furnished full and truly particulars at the time of original assessment and the assessing officer applied his mind to the material and accepted the view canvassed by the assessee, then mere change of opinion the assessment cannot be re-opened - Re-opening of assessment of the assessee company is bad in law and liable to be quashed. Appeal of the assessee is allowed.
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2025 (1) TMI 282
Reopening of assessment u/s 147 - addition u/s 69 - assessee did not comply to the notices issued - HELD THAT:- In the appellant proceedings before CIT(A), three opportunities of hearing were provided which remained unattended. Due to non-prosecution of appeal and failure to support the grounds of appeal by corroborative submissions, the appeal was dismissed. Before us, the appellant was provided four opportunities of hearing.
The assessee did not respond to the calls and reminders of his Counsel. He also did not respond to the notices issued by us nor any written submission was made. Thus, we find that assessee has no material to support the grounds raised by him; otherwise, there was no reason for the silence of the assessee before the AO, CIT(A) and the Tribunal. In absence of explanation regarding nature and source of investment, the addition u/s 69 of the Act by the AO, which has been confirmed by CIT(A), does not require any interference. Hence, the grounds are dismissed.
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2025 (1) TMI 281
Reassessment proceedings initiated u/s 147 - violation of the principles of natural justice due to the lack of opportunity for cross-examination - unexplained investment u/s 69 - HELD THAT:- Admittedly the materials that were relied on by the assessing officer to make addition in the hands of the assessee were not provided to the assessee and the statements of the persons that was recorded were not subjected to cross objection to the assessee. Subsequently for assessee obtains a retraction statement of those individuals who were subjected to search, will not lead to the presumption that assessee was already aware of the statement recorded. Rejection of deeply is totally untenable. It is a bounden duty of the assessing authority to provide the materials that has been used against assessee to make addition in the hands of such assessee.
There is nothing other than the statement recorded of the partner and the accountant of methods evergreen Enterprises in the possession of the revenue to justify the addition made in the hands of the assessee it is also noted that no further enquiries has been carried out by the AO to unearth any other circumstantial evidence is to support the statements that was relied upon to make addition in the hands of the assessee.
It is no doubt a settled rule that the CIT(A) or the assessing officer is not bound by the technical rules of the Law of Evidence and that, it is open to them to collect materials, record statements etc, to facilitate an assessment even through private enquiry. But if the assessing officer desires to use such materials/statements against the assessee, the assessee must be informed of the material and must be given adequate opportunity to explain the same.
Reassessment order passed in the present facts of the case is in violation of principles of natural justice, and deserves to be quashed. Assessee appeal allowed.
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2025 (1) TMI 280
Penalty u/s 271(1)(c) - disallowance of additional depreciation claimed by the assessee on plant and machinery and leasehold improvements - AO noted that assessee claimed depreciation on cost of machinery after September, 2005 (i.e., in second half of the year) and claimed additional depreciation @20% on machinery - HELD THAT:- We find that both the disallowances were made on the basis of details furnished by assessee. Admittedly all details were available on record. Merely the assessee could not substantiate its claim would not lead to a conclusion that the assessee furnished inaccurate particulars of income. Even otherwise, it is a debatable issue and no penalty is leviable on debatable issue.
Apex Court in the case of Reliance Petro Products Ltd [2010 (3) TMI 80 - SUPREME COURT] held that the words used u/s 271(1)(c) are plain and simple, and unless the case of the assessee is strictly covered by words in this provision, no penalty can be invoked. By any stretch of imagination, making an incorrect claim in law cannot tantamount to furnishing in accurate particulars.
Merely because the assessee claimed deduction of interest expenditure has not been accepted by the revenue, penalty under section 271(1)(c) is not attracted. If the contention of the revenue is accepted, the assessee would be liable to penalty under section 271(1)(c) in every case where the claim made by the assessee is not accepted by the AO for any reason. Appeal of the assessee is allowed.
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2025 (1) TMI 279
Penalty levied u/s 271(1)(c) - chargeability of Short-Term Capital Gains (STCG) on sales of shares of an entity - HELD THAT:- The assessee has earned Long Term Capital Gains as well as Short Term Capital Gains (STCG) on these transactions. Initially, an assessment was framed wherein STCG was computed at Rs. 52.10 Crores raising tax demand of Rs. 479.08 Lacs.
The order was rectified and the STCG were recomputed and corresponding tax demand was reduced to Rs. 283.75 Lacs in rectification order passed u/s 154 on 31-03-2016. The matter reached up-to Tribunal wherein the matter was restored back to the file of AO for re-computation of capital gains since there was error in the computation of STCG. Pursuant to the same, another assessment order was passed on 31-12-2018 wherein STCG has been re-computed at Rs. 40.33 Crores and finally, tax demand of Rs. 1.45 Crores has been raised against the assessee which has thus attained finality. The primary liability to compute correct taxes was on assessee and the assessee could not absolve himself by shifting this burden to the remitter banker.
Even otherwise if this argument was to be accepted, it would be pertinent to note that the assessee has never reflected aforesaid transactions in Income Tax Returns. Even assuming that the banker had deducted due taxes, still the assessee was obligated to reflect this income in the return of income. Having not done so, the argument thus raised by Ld. AR could not be accepted. We order so.
Though it has been submitted that the assessee has settled the final tax liability and paid due taxes forthwith as finally determined by Ld. AO, no evidence thereof has been adduced before us to support the same - CIT(A) has deleted the penalty merely by extracting observations of Hon’ble Supreme Court in the case of Hindustan Steels Ltd [1969 (8) TMI 31 - SUPREME COURT] - The arguments as well as case laws being put before us by revenue as well as by AR have nowhere been considered by first appellate authority. No finding has been rendered on the alternative submissions made by the assessee.
We deem it fit to set aside the impugned order and restore the issue of levy of penalty back to the file of Ld. CIT(A) for de novo adjudication.
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2025 (1) TMI 278
Education cess applicability to DTAA between India and the USA - assessee is citizen of USA and residing permanently in India - assessee submitted that the rates as specified in DTAA include surcharge and surtax and education cess would be applicable only for income earned in India - CIT(A) has denied the claim on the ground that the assessee has claimed relief u/s 90 - HELD THAT:- Tax rates are computed first and thereafter, applicable relief is granted to the assessee. As per Article 2(1)(b)(i) & (ii) of India-USA DTAA, surcharge and surtax are included in the maximum rates as specified under Articles 10 and 11 of DTAA.
Therefore, when Article-2 states that surcharge is included in Income Tax and the Tax Rate as prescribed under Article 10 / 11 shall be deemed to include tax surcharge and since cess is nothing but an additional surcharge, the prescribed tax rates under DTAA shall be deemed to include the cess also.
In the decision of The BOC Group Ltd. [2016 (1) TMI 414 - ITAT KOLKATA]it was held that surcharge and education cess is not leviable when the tax rates are prescribed under DTAA. Similar is the decision of M/s M. Far Hotels Ltd. [2013 (4) TMI 339 - ITAT COCHIN] and Motiani [2013 (12) TMI 1105 - ITAT MUMBAI] No contrary decision has been shown to us. Accordingly, we hold that the tax rates as prescribed under DTAA would embed education cess as well. The CPC is directed to re-compute the tax liability of the assessee.
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2025 (1) TMI 277
Penalty u/s 271B - non compliance to provision of Sec. 44AB - assessee claims that due to honest and bonafide belief and under the impression that they are not required to file return of Income u/s 139 of the Act along with the tax audit report couldn’t filed the ROI & audit report within the due date.
HELD THAT:- Assessee submitted that even the internal auditors from the co-operative department also not appraised the management about the matter. It is only after getting the notice u/s 142(1) assessee sought opinion from a professional who advised them to get their accounts audited and file return of income at the earliest. Acting upon immediately, they appointed a CA firm to carry out the tax audit and file their return of income which were ultimately filed on 13/03/2018.
Reading of the relevant provisions of 273B r.w.s. 271B and r/w Section 44AB we are of the considered opinion that assessee demonstrated that there was a reasonable cause for the said failure as per the provisions contained in section 273B of the Act.
We are also of the opinion that an honest belief founded upon reasonable grounds, of the existence of a state of circumstances, which assuming them to be true, would reasonably lead any ordinary prudent and cautious man, placed in the position of the person concerned, to come to the conclusion that the same was the right thing to do. Our above view finds support from the various decisions cited by the assessee.
From the conduct, behavior and attitude of the assessee, it is clear that as soon as notice u/s 142(1) was served on the assessee, the assessee sought opinion from a professional who advised them to get their accounts audited and file return of income at the earliest. Immediately on advice, they appointed a CA firm to carry out the tax audit and file their return of income which was ultimately filed on 13/03/2018.
As the assessee society’s total income after deduction u/s 80P of the Act was NIL and hence, they on an honest and bonafide belief and under the impression that they are not required to file return of Income u/s 139 of the Act along with the tax audit report cannot be said to be without a reasonable cause within the meaning of Section 273B. Assessee appeal allowed.
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2025 (1) TMI 276
Imposition of tax and penalty under Black Money Act - Effective date of implementation of Black Money Act, 2015 - AY 2014-15 & AY 2015-16 - HELD THAT:- The first previous year under the provisions of Black Money Act, 2015 would be FY 2015-16 and the corresponding AY will be AY 2016-17. Therefore, the AO could not have assessed the income of the assessee for AYs 2014-15 and 2015-16. Similarly, there would not have any jurisdiction to impose penalty for AYs 2014-15 and 2015-16 before coming into force the Black Money Act, 2015.
Assessee was not supposed to comply the provisions of Black Money Act, 2015, before it has come into force and, therefore, the assessee cannot be held liable for non-compliance of any provisions of the Black Money Act, 2015 in relation to AY 2014-15 and 2015- 16 and penalty levied u/s. 41 & 43 of the Black Money Act, 2015 and would also be not sustainable for AY 2014-15 and AY 2015-16. Therefore, there is no force in the appeals of the revenue relating to action of the Ld. CIT(A) in deleting the tax imposed u/s. 10 of the Black Money Act, 2015 and penalty levied u/s. 41 & 43 of the Black Money Act, 2015 for AYs 2014-15 and 2015- 16.
Non-Retirement Fund (NRF) held by the assessee - dividend income reinvested in the NRF - AY: 2016-17 - AO calculated the equivalent currency in Indian value of the undisclosed foreign income at Rs. 1,95,537/- and imposed tax @ 30% - HELD THAT:- Undisclosed foreign income and asset are to be assessed by the AO under the Black Money Act, 2015 in the year in which it has come to the knowledge of the AO. Admittedly, there was no undisclosed asset of the assessee in the foreign country. Regarding the dividend income earned on the NRF fund, the plea of the Ld. AR of the assessee is that the same would not fall in the definition of income as the assessee had invested in a fund, wherein, the dividend, if any, earned on such fund would automatically form part of the fund and was not separately taxable.
The assessment year 2016-17 was the first year when the Black Money Act, 2015 came into force. The foreign income earned by the assessee was taxable, otherwise, in that country.. The tax on the said dividend income was withheld as per the USA Tax Law as such dividend income formed part of the investment/fund itself. The Ld. Counsel in this respect has explained that the Black Money Act, 2015 had come into force for the first time in AY 2016-17 only and that the provisions of the Black Money Act, 2015 were not so clear and it was not ascertainable as to whether the dividend earned by the assessee on the fund, which had become part of the investment fund, itself, was required to be disclosed in the return of income filed u/s. 139 of the Act.
As per the provisions of section 3 of the Act, the undisclosed asset was to be taxed in the year in which the information regarding the same comes to the knowledge of the AO which of course came to his knowledge in November, 2018, relevant to AY 2019-20. No infirmity in the order of the Ld. CIT(A) in deleting the impugned addition made by the AO. This appeal of the revenue is accordingly, dismissed.
Penalty imposed u/s. 41 of the Black Money Act, 2015 on the addition made u/s. 10(3) of the Black Money Act, 2015 on account of foreign income assessed deleted as we have upheld the order of the Ld. CIT(A) in quashing the assessment and, therefore, by deleting the addition made by the AO u/s. 10 of the Black Money Act, 2015.
Penalty levied u/s. 43 of the Black Money Act, 2015 - the assessee’s foreign assets and foreign income during the year, which the assessee had not disclosed in the income tax return filed u/s. 139(1) of the Act, were of the value, which was more than Rs. 5,00,000/- - CIT(A) deleted penalty observing that the AO has not properly dealt with the issue and the order passed by the AO u/s. 10(3) of the Act did not indicate on which basis the decision has been reached that the assessee had undisclosed foreign income/asset - HELD THAT:- Provisions of section 43 do not suggest that the aforesaid penalty is mandatory, rather, as per the provisions, “AO may direct that such person shall pay, by way of penalty, a sum of Rs. 10 lakhs”. It has been held time and again that the word ‘may’ also include ‘may not’.
Since this was the first year of the implementation of the Black Money Act, there was no undisclosed assets of the assessee, the assets in question have been earned by the assessee from known sources of income (salary) and due taxes paid thereupon as per USA Tax Laws and not taxes were payable by the assessee on such assets in India and further that the provisions of Black Money Act, 2015 were new and it was very difficult even for tax Practitioners, what to say of the ordinary assessees, who are not conversant with such complicated provisions to differentiate between the assets and undisclosed assets. Hence, the procedural lapse occurred on the part of the assessee was not intentional rather the assessee has been caught unawares of such lapse. Under the circumstances, in our view, the Ld. CIT(A), considering the overall facts and circumstances of the case was justified in deleting the impugned penalty.
Appeals of the revenue are hereby dismissed.
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2025 (1) TMI 275
Unexplained money u/s 69A - reliance on third party statement - Whether the statement/document made by/received from third party can be relied on making the addition, without giving an opportunity to contradict the same and/or the opportunity to cross examine the person who gave the statement/document? - HELD THAT:- The statement/document made by/received from third party cannot be relied on making the addition, without giving an opportunity to contradict the same and/or the opportunity to cross examine the person who gave the statement/document. Thus, the question no. 1 is answered accordingly.
Suo-moto disclosure made before the Settlement Commission made base for making the addition - As decided in Smt. Renu Sehgal [2019 (8) TMI 990 - ITAT JAIPUR] has ultimately held that addition made merely on the basis of suo-moto disclosure made by the Assessee before the ITSC, is not sustainable in the eyes of law.
Therefore on the aforesaid analyzations and discussions, we are of the considered view that the suo-moto disclosure made before the Settlement Commission without corroborative material/evidence cannot be made base for making the addition. Hence the question no.2 is answered accordingly.
In the present case admittedly except a letter filed before the DCIT, Central Circle-6(4)/Settlement Commission; there is no other corroborative material/documents for making and sustaining the addition in hand. Even otherwise, no opportunity was given by the AO or the Commissioner to the Assessee to cross examine the person who gave the statement/made disclosure/issued the letter as relied on for making the addition. Hence, the addition in hand is unsustainable, hence the same is deleted. Decided in favour of assessee.
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2025 (1) TMI 274
Addition of notional interest on the interest free advances - chargeability to tax founded on ‘real income’ or not? - undisclosed interest income on short term Loans and Advances - HELD THAT:- No justification for adding any notional interest on the interest free advances as the assessee had ample interest free funds out of which such advances were made for business purposes. In the case of S.A. BuildeRs [2006 (12) TMI 82 - SUPREME COURT] even interest paid on borrowings was allowed as a deduction if the same were advanced for business purposes. There is merit in the arguments of the assessee that only real income which had accrued to it could be assessed and no income could be presumed to have been earned in the absence of any evidence.
Even in the case of the three debtors whose replies have been considered by the Ld. AO, no evidence could be ascertained by him that any interest was payable or paid by them to the assessee and the amounts had been reduced from the total advances for calculating the notional interest. The observation of the Ld. AO confirmed by the Ld. CIT(A) that the assessee had paid 9% interest on the funds borrowed is also not borne out of analysis of the facts of the case as reported in the balance sheet and audited accounts and no interest was debited during the year while calculating its income.
No justification for presuming notional interest on the amounts advanced merely because replies were not received from the debtors, though the assessee counters that argument by stating that confirmations/replies from eight of the debtors comprising 69.56% of the total advances in value were uploaded. Hence no income could be presumed nor any disallowance out of interest debited could be made when the assessee had not claimed any interest as a deduction. Decided in favour of assessee.
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9911796707
