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Showing 401 to 420 of 1354 Records
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2024 (3) TMI 954
Reopening of assessment u/s 147 - Reason to believe - information received from the Investigation Officer, Kolhapur that Petitioner made some cash deposit by assessee-trust - HELD THAT:- It is an admitted fact that Petitioner, a charitable trust registered under Section 12A of the Act, eligible to avail exemption u/s 11 of the Act has deposited the donations received in cash in its bank account and thereby disclosed ‘Nil’ total income for the relevant AY. Moreover, the accounts of Petitioner are recorded, accounted and audited and hence, undoubtedly, there is no undisclosed cash over and above the deposits in its regular bank accounts which were offered for taxation. Thus, there is no material or fact which has been stated in the reasons for reopening assessment in the present case on which any belief can be founded of the nature contemplated by law.
Thus upon perusal of the letter providing the reasons to believe escapement of assessment as well as the order rejecting Petitioner’s objections impugned herein, we have no hesitation in holding that there is no live link, which is a sine qua non between the material before the AO in the present case and the belief which he has to form regarding escapement of income. The sanction under Section 151 of the Act granted by the prescribed authority as well as the notice is issued by the Department without any application of mind. Decided in favour of assessee.
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2024 (3) TMI 953
Reopening of assessment u/s 147 - notice issued u/s 148A(b) as alleged that petitioner was one of the persons who claimed fictitious short-term capital loss - HELD THAT:- There is nothing in the notice to indicate on what basis it is alleged that the short-term capital loss claimed was fictitious. Petitioner had, based on public announcement, invested in the mutual fund. The fact that petitioner received tax free dividend fund cannot be held against petitioner. The fact that petitioner had suffered a loss also cannot be held against petitioner. Even assuming that the transaction was pre-planned, there is nothing to impeach the genuineness of the transaction. Petitioner was free to carry on his business which he did within the four corners of law. Mere tax planning without any motive to evade taxes through colourable devices is not frowned upon even by the judgment of the Apex Court in McDowell & Co. Ltd [1985 (4) TMI 64 - SUPREME COURT]
It is settled law that the reasons for the formation of the belief that there has been escapement of income must have a rational connection with or relevant bearing on the information. Rational connection postulates that there must be a direct nexus or live link between the material coming to the notice of the Income Tax Officer and his view that there has been escapement of income of the assessee from assessment in the particular year.
It is settled law that it is not any and every material, howsoever vague and indefinite or distant, remote and far-fetched which would suggest escapement of the income of the assessee from assessment. The powers of the Income Tax Officer to reopen assessment, though wide, are not plenary. The Act, no doubt, contemplates the reopening of the assessment if grounds exist for believing that income of the assessee has escaped assessment. The live link or close nexus should be there between the information before the Income Tax Officer and the belief which he has to prima facie form an opinion regarding the escapement of the income of the assessee.
In the notice issued under Section 148A(b) of the Act, the Assessing Officer alleges that JM Financial had manipulated accounting methodology so as to artificially inflate the distributable surplus and the investors, in order to reduce their tax liability, entered into these sham transactions and received dividend and short-term capital loss. These are allegations against JM Financial and do not implicate petitioner in any manner. There is nothing to indicate that petitioner had participated knowingly in a sham transaction to reduce his tax liability or to earn dividend or book short-term capital loss.
Therefore, the Assessing Officer is also not clear whether the assessee had booked loss or claimed dividend in the JM Balanced Fund Annual Dividend Option Regular scheme or JM Equity Hybrid Fund Quarterly Dividend. This also indicates non application of mind by the Assessing Officer. Assessee appeal allowed.
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2024 (3) TMI 952
Disallowance of deduction u/s 80-IA(8) - computation of the market value or electricity - Scope of expression “market value” in relation to any goods - ITAT justification in holding that the price at which State Electricity Board sells electricity to industrial consumer in representative of the price that electricity would ordinarily fetch in the open market in terms of section 80-IA(8) - HELD THAT:- We note that the issue would stand concluded in light of the judgment rendered [2024 (1) TMI 1252 - DELHI HIGH COURT] wherein as accepted the alternative plea of the assessee and remanded the matter with a direction to the Ld. AO to deduct the sale proceeds of those items from the cost of raw materials used in the manufacturing process and then accordingly determine the profit of the undertaking to allow the deduction under section 80 IB as per the revised profits so computed.
TP Adjustment - Excessive remuneration to a related party - HELD THAT:- No disallowance in this regard have been made in the earlier years as held comparison done by the AO between the remuneration paid by the assessee company on account of managerial remuneration to Ms. Shallu Jindal with the remuneration paid by Essar Steel Ltd to Sh. Ashutosh Agarwala is not proper as well considering the facts that the assessee company is a profit making venture whereas Essar Steel Ltd. is incurring losses. It should also be noted that the assessee company has also complied with all the provisions of the Companies Act, 1956, relating to the payment of managerial remuneration to its managerial personnel appointed and the said payment of managerial remuneration has also been approved by the Board of Directors. The reference made to Circular No. 6P dated 08.07.1968 issued by the CBDT is apt in the present case. Thus, the Assessing Officer was not correct in making addition on account of managerial remuneration.
Allocation of common expenses u/s 80-IA to eligible and non-eligible unit on the basis of ratio between eligible and non-eligible units - HELD THAT:- As decided in [2024 (1) TMI 1252 - DELHI HIGH COURT] from perusal of the Assessment Order/Order of the TPO/Directions of the DRP, in the present case none of the authorities have doubted that there was no expenses. In facts, the Assessing Officer/TPO/DRP re-allocated the expenditure in the ratio of turnover between eligible and non-eligible units without bringing into the light the flaw or inaccuracy or any suitable explanation involved in relation to the method of allocation adopted by the assessee company.
Non deduction of TDS on bank guarantee commission u/s 40(a)(ia) - As decided by ITAT DRP has directed to delete the bank guarantee commission and without appreciating the same, the Assessing Officer made an addition which is unsustainable. Therefore, we direct the Assessing Officer to comply with the directions of the DRP and grant the relief to the Assessee.
We find no justification to entertain the instant appeal on this solitary question.
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2024 (3) TMI 951
Validity of order of ITAT allowing Applications filed u/s 254(2) - Rectification versus Review of order - TP Adjustment - Comparability analysis done by ITAT - HELD THAT:- ITAT had clearly rendered incompatible and inconsistent findings. In fact we are constrained to observe that paras 12 and 21 were clearly contradictory. It was thus not only imperative but also expedient in the interest of justice for the ITAT to recall its order of 29 September 2020 and correct a manifest error apparent on the record. If that route had not been adopted, it would have left the Transfer Pricing Officer [“TPO”] as well as the Assessing Officer with an unresolvable quandary.
We further note from a reading of the order dated 18 October 2022 that the ITAT has presently kept the issue of comparability vis-a-vis PSL open for its own consideration, and insofar as Sasken is concerned the matter has been remitted to the file of the TPO. In that view of the matter no prejudice as such stands caused to the appellant.
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2024 (3) TMI 950
Refund of the amount as deposited by the assesse towards part payment of demand raised - Justification for retention of the amounts of which refund is sought - Time limit for completion of assessment, reassessment and recomputation - petitioner asserts AO has failed to frame a final order of assessment on or before 31 March 2017, there exists no justification for the respondents to retain the amounts which had been deposited by the petitioner pending finalization of the assessment proceedings
HELD THAT:- As would be evident from a reading of Section 153(5) of the Act, the same deals with contingencies where the matter may have been remitted by the ITAT to other authorities, including the TPO wholly or in part, for the purposes of making a fresh assessment. Dealing with such a contingency, sub-section (5) of Section 153 of the Act provides that effect to such an order of the ITAT would have to be given within a period of three months from the end of the month in which that order is received. However, and insofar as the present case is concerned, it would clearly be governed by sub-section (7) of Section 153 of the Act since the matter itself relates to an order passed by the authority prior to 1 June 2016.
Since the remit ordered by the ITAT, admittedly, was rendered prior to 1 June 2016, it was incumbent upon the AO to have framed a final order of assessment on or before 31 March 2017. Having failed to do so, there would exist no justification for the respondent to retain the amounts which had been deposited by the petitioner.
We further take note of the submission of respondent, who draws our attention to the pendency of appeals preferred by the petitioner against the orders of the ITAT. In our considerate opinion, the mere pendency of those appeals would clearly not detract from the right of the writ petitioner to claim refunds since those appeals have in any case been rendered infructuous consequent to the period of limitation of framing an order of assessment itself having come to an end.
We according allow the instant writ petition and direct the respondents to refund the amounts along with the interest as may be statutorily payable.
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2024 (3) TMI 949
TP Adjustment - Comparable selection - ITAT excluding Modicare Limited [“Modicare”] as a comparable under the Resale Price Method [“RPM”] - ITAT after considering various factors such as the non-availability of data of Modicare for various product segments and marketing strategies, difference between the entities in the treatment of discounts given to consultants/agents and the substantial difference between the entities in the advertising, marketing and promotion expenses incurred by them - ITAT also held that the Transactional Net Margin Method [“TNMM”] ought to be adopted as the most appropriate method for benchmarking the respondent’s case.
HELD THAT:- During the course of hearing today, it was brought to our attention that the matter has been resolved inter partes in terms of the assessment which came to be finalised for AY 2014-15 and that Modicare Limited has been excluded from the list of comparables to determine the ALP and the upward adjustments of income as proposed by the Department has not been undertaken as well. We are informed that the view taken therein has been duly accepted and followed in the subsequent years.
Thus bearing in mind the principle of consistency, we find no justification to entertain the instant appeals.
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2024 (3) TMI 948
Penalty u/s 271D - violation of the provisions under section 269SS - Assessee sold the property for a consideration received in cash - meaning of the term “specified sum”- assessee pleaded that the cash of Rs. 9.38 lakhs was received from the purchaser on the day of registration and before the Jt. Sub Registrar only, since the purchaser did not have sufficient bank balance and hence had to pay such sum in cash, which was accepted by the assessee to avoid inconvenience to the purchase - HELD THAT:- The meaning of the “specified sum” has dealt in the case of ITO vs. Shri. R. Dhinagharan (HUF), [2024 (1) TMI 61 - ITAT CHENNAI] wherein as took the view that the ‘ sum specified’ as per Explanation to Section 269SS of the Act, only applicable for advance receivable, namely, ‘as advance or otherwise’ means advance can be in any manner, and therefore, this provision will not apply to the transaction that happens when the final payment at the time of registration of sale deed and payment takes place before sub-registrar for registration of property.
In the present case before us, it is an admitted fact that the assessee received the amount of cash not as advance, but as the final payment in front of the Sub-Registrar at the time of registration for sale of property - we hold that there is no violation of provisions of section 269SS of the Act in the present case in the given facts and circumstances and hence, penalty under section 271D of the Act is not leviable. Grounds raised by the assessee allowed,
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2024 (3) TMI 947
Capital gain computation - allowability of transfer expenses [brokerage, air tickets, hotel accommodation receipts, postal charges receipts, conveyance charges, lawyer fees, photocopying expenses] - as per DR expenditure was merely incidental to the sale transaction and cannot be allowed to be deduction since such an expenditure was not wholly and exclusively for the transfer of property - HELD THAT:- As decided in SHAKUNTALA KANTILAL [1991 (3) TMI 123 - BOMBAY HIGH COURT] what constitute the expenditure incurred wholly and exclusively in connection with transfer as contemplated under section 48(i) of the Act and reached a conclusion that the expression ‘in connection with such transfer’ is certainly wider than the expression ‘for transfer’ and held that any amount of payment of which is absolutely necessary to effect transfer will be an expenditure covered by section 48(i) of the Act.
In the case on hand, the assessee is a non-resident individual and for the purpose of effecting transfer of the property, he had to travel to India and incurred the expenditure for obtaining special power of attorney from Indian Consulate in USA, air tickets, hotel accommodation receipts, postal charges receipts, conveyance charges, lawyer fees, photocopying expenses, without which the transfer could not have taken place. We, therefore, are of the opinion that in terms of the ratio in the case of Shakuntala Kantilal [supra], said expenditure is covered under section 48(i) of the Act is allowable.
We, accordingly hold that the expenditure incurred by the assessee towards special power of attorney from Indian Consulate in USA, air tickets, hotel accommodation receipts, postal charges receipts, conveyance charges, lawyer fees, photocopying expenses are also allowable expenditure and the AO will consider the same and delete the addition so made. Assessee appeal allowed.
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2024 (3) TMI 946
Rejection of the books of account of the assessee company u/s. 145(3) - addition of Cash deposits in bank accounts in demonetized currency - adverse inferences drawn by the A.O regarding the authenticity of the sale transactions of the assessee company i.e. by dubbing the same as sales carried out against SBNs during the demonetization period - HELD THAT:- AO conclusion is not supported by any evidence, but is based on a general presumption, i.e reference to certain media clippings and the modusoperandi that was adopted by some jewellers who during the demonetization period had indulged in laundering the ill-gotten money of their customers, therefore, we are unable to persuade ourselves to concur with the same.
As the rejection of the books of account of the assessee u/s. 145(3) of the Act pre-supposes satisfaction of either of the two conditions contemplated under the said statutory provision, viz. (i) dissatisfaction of the A.O as regards the correctness and completeness of the accounts of the assessee; or (ii) failure on the part of the assessee in computing its income as per system of accounting regularly employed by him, existence of neither of which, had been proved in the case of the assessee company before us, therefore, rejection of its books results by the A.O cannot be approved.
Estimation of income - AO estimated profit element (Net Profit) of 25% on the subject sales - We find substance in the claim of the Ld. AR that no material had been placed on record by the department, which would reveal that the subject sales were not carried out by the assessee company during the pre-demonetization period, i.e, as disclosed in its books of accounts, but were made during the demonetization period. Also, as stated by the Ld. A.R., and rightly so, there is even otherwise no basis for the A.O. to have inferred that the assessee company had carried out the subject sales at an abnormally high profit of 25%.
We are unable to comprehend that as to on what basis, the A.O. had presumed a profit element (Net Profit) of 25% on the subject sales. In our view, both the assumptions of the A.O, viz. (i) that the sales in question were antedated, i.e., though disclosed by the assessee as having been carried out during the pre-demonetization period, but were carried out by the assessee company in lieu of SBN's during the demonetization period; and (ii) earning of the super profit by the assessee company on the subject disclosed sales of Rs. 2.37 crores (approx.) in SBN's, are merely based on mere suspicion, assumptions, presumptions, surmises, and conjecture without any material proving the same.
Although the A.O had drawn support from certain media clippings and status reports of the Income Tax Department on “Operation Clean Money”, and also the fact that certain jewellers had opted for IDS and PMGKY scheme and had offered 25% to 40% of their total cash deposits as undisclosed income, but the said observation, on a standalone basis, in our view, cannot justify the drawing of adverse inferences and the consequential impugned addition in the hands of the assessee company.
Thus we are unable to fathom the very basis, on which, the duly disclosed sales of the assessee company had been related by the A.O to the demonetization period, i.e. 09.11.2016 to 31.12.2016; and also, the presumption drawn by him regarding earning of super profit of 25% on the subject sales, thus, are unable to persuade ourselves to subscribe to the view taken by the lower authorities. Accordingly, we set aside the order of the CIT(Appeals), and vacate the addition made by the A.O. Assessee appeal allowed.
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2024 (3) TMI 945
Revision u/s 263 - PCIT order of revision based on the audit objection - borrowed information or independent application of mind by CIT - HELD THAT:- The bench noted the ld. PCIT has raised four issues, on four issue the ld. AO has raised the issue, the assessee submitted the reply and the ld. AO has taken a plausible view on the matter.
AO taken a view based on the submission made by the assessee which the ld. PCIT merely based on the audit objection and PCIT’s observation that the view taken by the ld. AO on which the ld. PCIT is not in agreement cannot hold the order liable to be sustained
PCIT based on the borrowed information and has not established as to how the view taken by the ld. AO is not correct when the issue raised has already been form part of the proceeding before the ld. AO. Based on the discussion so recorded we are of the considered view that the proceeding initiated u/s. 263 is merely based on the audit objection, PCIT is not agreement with the ld. AO and the observation on the stock, in the audit report already filed by the assessee. Thus, there is clear absence of his satisfaction and there is no independent view of the ld. PCIT even on merits thus, the assessee which has been completed there cannot be the second inning to the revenue without justifying the twin condition to the order passed by the ld. AO.
We note that on all the four issue the AO has called for the details, examined the issue and the plausible view on the matter is taken. Merely there is an audit objection, adverse remark of the auditor and the ld. PCIT is not in agreement with the view of the AO the order cannot be sustained as liable to quash as the twin condition provided u/s. 263 that the order should be erroneous and prejudicial to the interest of the revenue fails and therefore, we do not agree with the finding of the ld. PCIT wherein he could not point out any mistake / error in order which is prejudicial to the interest of the revenue.
The AO while framing the assessment had taken a possible view, and revenue did not demonstrate the error remain on the part of the ld. AO. In fact, when the ld. AO has conducted the required enquiry and not violated any of the conditions mentioned for revision of order as required by Explanation 2 of Section 263 of the Act, the order passed by the Assessing Officer could not be deemed to be erroneous so as to be prejudicial to the interests of the revenue - See MANNA TRUST, [2022 (1) TMI 693 - RAJASTHAN HIGH COURT] wherein as held Jurisdiction of the Commissioner under Section 263 of the Act is restricted and cannot be equated with the appellate jurisdiction. The Commissioner does not sit in appeal.
As proceeding initiated u/s. 263 is merely based on the audit objection, PCIT is not agreement with the ld. AO and the observation on the stock, in the audit report already filed by the assessee. Thus, there is clear absence of his satisfaction and there is no independent view of the ld. PCIT even on merits - Decided in favour of assessee.
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2024 (3) TMI 944
Exemption u/s 11 - Charitable activity u/s 2(15) - AO has rejected the exemption on the ground that the activity of the assessee for advancing the object of general public utility cannot be accepted as the society is advancing the object of general public utility and gross receipt of assessee from such activity was more than Rs. 10 lakhs, in the previous year and therefore the activities of the assessee were held to be not for charitable purpose - assessee submitted that the assessee is registered u/s 12A - HELD THAT:- We find that the assessee is registered u/s 12A and has derived income by way of contributions from the head office, membership fee, income from publication of Indian Foundry journal , other grants and donations etc. besides receiving interest on fixed deposits . We find that undoubtedly the assessee’s main object is general public utility which is clearly covered u/s 2(15) of the Act however the receipts from the said activity is more than 10 lakh and now the issue before us where surplus generated from the said activity is meager so that it does not fall within the ambit of proviso to Section 2(15) of the Act. We note that profit on the receipts is very meager and therefore the decision of Co-ordinate Bench in the case of Indian Chamber of Commerce (2014 (12) TMI 256 - ITAT KOLKATA) is clearly applicable
We are inclined set aside the order of ld. CIT(A) and further uphold that the assessee is entitled to exempt u/s 11 of the Act during the year on the ground that the profit derived from the services rendered as public utility service is very meager. The AO is directed to allow the exemption u/s 11 of the Act. Appeal of the assessee is allowed.
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2024 (3) TMI 943
TP Adjustment - assessee has issued the corporate guarantee on behalf of AE’s - TPO has applied the interest saved approach i.e. interest saved by the AE’s on account of corporate guarantee given by the assessee and based on this approach the TPO has computed the guarantee fees in the hands of the assessee @ 75% of interest saved - HELD THAT:- After giving a thoughtful consideration to the orders of the coordinate Bench for earlier AYs we are of the considered view that the basis of interest split benefit between guarantor and borrower is 50:50 basis, therefore, we direct the AO to restrict the addition by splitting the interest benefit for the year under consideration on 50:50 basis. In our considered view whatever mistake which has happened inadvertently in earlier years cannot be allowed to perpetuate indefinitely. Considering the fact that the coordinate Bench has principally decided the split on 50:50 basis. Ground 1-5 allowed.
TP adjustment on account of royalty - TPO/ CIT(A) held charge of brand royalty of 0.75% in the case of Dabur International Limited and 2% composite royalty in case of Asian Consumer Care Ltd. - HELD THAT:- Following the aforesaid decision of the ITAT in assessee's own case 2022 (10) TMI 219 - ITAT DELHI] A.Y. 2010-11 we direct that in case of Dabur Nepal (P) Ltd., royalty is quantified at nil, the case of Dabur International UAE, royalty is quantified at 0.75% of FOB sales.
Disallowance on account of delay in deposit of ESI / EPF - HELD THAT:- This issue is now squarely covered in favour of the revenue and against the assessee by the decision of Check Mate Services Private Limited [2022 (10) TMI 617 - SUPREME COURT]
Addition u/s. 43B based on audit report - HELD THAT:- As seen from the chart the liability as on the first day of the previous year was Rs. 227754220/- out of which Rs. 160073926/- were paid during the year and Rs. 67156645/- was not paid during the year which means that this amount was never charged to the P & L account, therefore, there is no question of any disallowance. We have verified from the computation of income and we are of the considered view that there is no need of addition which we direct the AO to delete.
Addition for change of accounting policy - HELD THAT:- In the computation of income the assessee has made addition on account of instrumeny hedging adverse currency fluctuation against of balance sheet exposer in FG Rs. 52,93,552/- which means the assessee has already added the loss and that there was no need of any further addition by the AO. We accordingly direct the AO to delete the addition.
Deduction as capital subsidy on statutory exemption from payment of excise duty - HELD THAT:- Respectfully following the decision of the Coordinate Bench in [2021 (2) TMI 1250 - ITAT DELHI] for A.Y. 2008- 09 we hold accordingly and direct the AO to decide the issue fresh after affording a reasonable and adequate opportunity of being heard to the assessee.
Notional interest imputed on trade receivables - assessee interalia raised invoices on account of sales made to its associates enterprises - TPO recharacterized the delay in receipt of receivables as deemed unsecured loans advanced to the AE and sought to impute notional interest on the delay in receipt of receivables @ 12.65% and made addition - CIT(A) accepted it to be an international transaction but since no interest was charged on receivables due from unrelated parties, the CIT(A) deleted the addition - HELD THAT:- We find that an identical quarrel was considered by this Tribunal in assessee’s own case [2022 (10) TMI 219 - ITAT DELHI] in A.Y. 2010-11 and 2011-12 wherein held as not in agreement with the submission of Ld. DR. It is no doubt that after the amendment, receivables are an international transaction which needs to be benchmarked separately but as rightly pointed out by the ld. CIT(A) above that margin of the assessee both in FMCG and non-FMCG segment is much higher than the comparables. Hence, since benchmarking under both the segments has been accepted in the transfer pricing, we do not find any infirmity in the order of ld. CIT(A) that there is no reason to separately benchmark receivables.
Direction to re-compute the deduction 80IB and 80IC of the Act without further allocation of the head office expenses - HELD THAT:- CIT(A) following the principal of consistency followed the order of his predecessor for the assessment year 2007-08 & 2008-09 [2021 (2) TMI 1250 - ITAT DELHI] 2009-10 [2017 (12) TMI 934 - DELHI HIGH COURT].wherein as find no infirmity in the order of the CIT(A) reversing the action of the AO in allocating the head office expenses and depreciation to various eligible units for the purpose of recomputing the deducting u/s 80IB/80IC. The factual finding of the ld.CIT(A) that the assessee has added back the depreciation as per Companies Act, 1956 and claimed depreciation as per the Income-tax and, therefore, the AO was wrong in allocating the difference of depreciation available under the Companies Act and the Income-tax Act to the eligible units could not be controverted by the ld. DR. Similarly, the ld. DR also could not controverted the factual finding given by the CIT(A) that expenses aggregating to Rs. 1,563.02 lakhs being head office expenses were suo motu disallowed by the assessee and added back in the computation of income and once these expenses were claimed by the assessee the same cannot be allocated to the eligible units for computation of deduction u/s 80IB/80IC and, therefore, cannot be allocated to the eligible units.
Addition made u/s. 14A r.w.r. 8D - Exempt income earned or not? - HELD THAT:- The facts on record show that the assessee has not earned any exempt income during the year under consideration, therefore, the ratio laid-down by the Hon’ble High Court of Delhi in the case of Cheminvest [2015 (9) TMI 238 - DELHI HIGH COURT] and Cortech Energy Limited.[2014 (3) TMI 856 - GUJARAT HIGH COURT] squarely apply and respectfully following the same no interference is called for ground No.7 is also dismissed.
TDS u/s 194H - Addition u/s. 40(a)(ia) - assessee has incurred an expenditure on account of bank guarantee commission/ fee for alleged failuer to deduct tax at source - HELD THAT:- We find that the issue is squarely covered by the decision of Hon’ble Jurisdictional High Court of Delhi in the case of JDS Apparels [2014 (11) TMI 732 - DELHI HIGH COURT] wherein the Hon’ble Court has held that amount charged by bank as a fee for rendering banking services to its client could not be treated as commission or brokerage u/s. 194H of the Act.
Deduction u/s. 80G - assessee has claimed deduction being 50% paid as donation to various trust/ organizations - AO denied the claim of exemption holding that the organizations did not have valid 80G certificates - When the certificates were produced before the CIT(A) he refused to admit the same as they were not produced before the AO - HELD THAT:- We are of the considered view that the CIT(A) ought to have admitted the evidences. In the interest of justice and fair play we restore this issue to the files of the AO. The assessee is directed to furnish the certificates of eligibility and the AO is directed to consider the same and decide the issue as per the provisions of the law.
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2024 (3) TMI 942
TP Adjustment - bilateral Advance Pricing Agreement (APA) between India and the USA - international transaction pertaining to receipt of information technology enabled services and payment towards K-Net charges - whether international transactions between the Applicant and its AEs as Covered Transactions? - HELD THAT:- As the year under consideration is covered under the APA [bilateral Advance Pricing Agreement [APA] between India and USA, the assessee filed its modified return of income which we have been told has been processed. Since the modified return of income is now available with the AO, we deem it fit to restore the impugned quarrel to the file of the Assessing Officer. The Assessing Officer is directed to consider the modified return of income in light of APA and decide the issue afresh after affording reasonable and adequate opportunity of being heard to the assessee. Accordingly, Ground No. 1 with all its sub-grounds is allowed for statistical purposes.
Foreign Tax Credit - HELD THAT:- HCL Comnet Systems And Services Ltd [2023 (11) TMI 1238 - DELHI HIGH COURT] has decided the issue in favour of the assessee as relying on Wipro Ltd. case [2015 (10) TMI 826 - KARNATAKA HIGH COURT]
Short credit of TDS - HELD THAT:- We are of the considered view that this issue needs verification and we direct the Assessing Officer to verify the details of TDS and allow credit as per provisions of law. Ground No. 5 is allowed for statistical purposes.
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2024 (3) TMI 941
Application for final approval u/s 80G(5)(iii) - time limit prescribed for making an application for final approval u/s 80G - 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:- CBDT has extended the date upto 30.09.2023 for making application under Clause (i) to First Proviso to section 80G(5) of the Act, which means that the institutions, which were already registered prior to the amendment brought to section 80G(5) by Amendment Act of 2020 w.e.f. 01.04.2021, if an institution for some reasons could not make an application for renewal/continuance of registration under Clause (i) to First Proviso to section 80G(5) of the Act within the stipulated period of three months, it could still apply under Clause (i) upto 30.09.2023.
Once an institution has applied under Clause (i) to First Proviso to section 80G(5) of the Act on or before 30.09.2023, it will be further governed by the statutory provisions of Clause (iii) of First proviso to section 80G(5) of the Act and not by the CBDT Circular for the purpose of limitation. CBDT Circular is for extension of date to help the institutions which could not apply under Clause (i) within stipulated period of three months, and not for curtailing limitation or barring institutions for final registration under Clause (iii) to First Proviso to section 80G(5) of the Act.
For making application for final registration under Clause (iii) to First Proviso to section 80G(5) of the Act, the institution must have been provisionally registered either under Clause (i) or Clause (iv) to First Proviso to section 80G(5) of the Act.
If the view of the ld. CIT(Exemption) is accepted to be correct, then no institution which has already been into charitable activities before seeking provisional approval under Clause (iv) to First Proviso to section 80G(5) of the Act would ever be entitled to grant of final registration under Clause (iii) to First Proviso to section 80G(5) of the Act even after grant of provisional approval, which would make the relevant provisions of section 80G(5) otiose and defeat the object and purpose of these statutory provisions.
As held that after grant of provisional approval, the application cannot be rejected on the ground that the institution had already commenced its activities even prior to grant of provisional registration. Thus the date of commencement of activity will be counted when an activity is undertaken after the grant of provisional registration either under Clause (i) or Clause (iv) to First Proviso to section 80G(5) of the Act.
In the case in hand, the assessee admittedly has applied for final registration after grant of provisional registration under Clause (iv) to First Proviso to section 80G(5) of the Act and therefore, the application filed by the assessee is within limitation period.
The issue is otherwise squarely covered by the decision of Vivekananda Mission Asram [2023 (12) TMI 1298 - ITAT KOLKATA] and in the case of “West Bengal Welfare Society [2023 (9) TMI 1422 - ITAT KOLKATA] and Sri Aurobindo Bhawan Trust, Krishnagar vs. CIT(Exemption)” [2024 (3) TMI 839 - ITAT KOLKATA] - Therefore, the impugned order of the CIT(Exemption) is set aside 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. The ld. CIT(A) will decide the application for final registration within three months of the receipt of copy of this order. Appeal of the assessee is treated as allowed for statistical purposes.
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2024 (3) TMI 940
Penalty u/s. 271B - penalty u/s. 271A has been levied as assessee has not audited his book of accounts as per the provisions of section 44AB - HELD THAT:- It is a settled proposition of law that once the penalty has been levied u/s. 271A of the Act for non maintenance of books of accounts, then penalty u/s. 271B of the Act cannot be levied. See Varadagovind Parthasarthy Iyer [2023 (8) TMI 1444 - ITAT MUMBAI].
Once the penalty u/s. 271A has been levied for non maintenance of books of accounts, no penalty u/s. 271B of the Act can be levied. This view has been supported by the decisions of various high courts. It is observed that in the present case in hand the ld. A.O. had levied a penalty u/s. 271A of the Act which according to the ld. AR has been accepted and paid by the assessee. As per the decisions cited herein above, we deem it fit to hold that penalty u/s. 271B of the Act cannot be levied in the present facts of the case for non auditing of the books of accounts where the assessee has failed to maintain the same. We hereby direct the ld. A.O. to delete the impugned penalty. Ground no. 1 raised by the assessee is hereby allowed.
Penalty u/s. 271(1)(c) - Assessee has concealed the particulars of income during the year under consideration - CIT(A) upheld the penalty vide an ex parte order holding that the assessee has failed to substantiate his claim neither by documentary evidence nor by the submission of the assessee - assessee contended that there has been no variation in the returned and assessed income - HELD THAT:- It is observed that the assessee had filed his return of income in response to notice u/s. 148 of the Act, declaring total income which amounts to business income on the total turnover and commission income which aggregates to Rs. 6,57,615/- out of which the assessee had claimed deduction of Rs. 15,970/- under Chapter VIA of the Act. A.O. in the assessment proceeding had accepted the return of income filed by the assessee and determined the total income without any variation between the returned and the assessed income
From the above observation, we deem it fit to hold that as there has been no variation in returned and the assessed income, there could not be any possibilities of the assessee concealing the particulars of income which could attract the provision of section 271(1)(c) of the Act. We hereby deem it fit to direct the ld. A.O. to delete the impugned penalty levied u/s. 271(1)(c) of the Act. Hence, the grounds raised by the assessee are hereby allowed.
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2024 (3) TMI 939
Deduction u/s 80IC - Claim denied on the ground that the audit report in Form No.10CCB was not filed within the due date - assessee pleaded that there are case laws for the proposition that if Form 10CCB is filed during the course of assessment before the final order the deduction is to be allowed - HELD THAT:- The due date of filing of return in this case was 07.11.2017. The return was filed on 29.08.2017 and the Tax audit report was also filed on 28.10.2017 and Form 10CCB on 28.05.2018. The return was processed under section 143(1) of the Act on 08.02.2019
We find that in this case, Form 10CCB was filed before the intimation u/s 143(1) dated 08.02.2019. In these circumstances, the case laws point out that deduction is to be allowed. See G.M. KNITTING INDUSTRIES (P.) LTD. & AKS ALLOYS (P.) LTD. [2015 (11) TMI 397 - SC ORDER] wherein held that even if form 3AA was not filed along with return of income but the same was filed during the assessment proceedings and before the final order of the assessment was made that would amount to sufficient compliance. Also see GREEN DOT HEALTH FOODS PVT. LTD. [2023 (2) TMI 516 - ITAT DELHI] - Appeal of the assessee stands allowed.
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2024 (3) TMI 938
Seeking rectification of an alleged mistake - error apparent on the face of record or not - submission in the applications is that this Tribunal committed an error because this Tribunal was competent to decide but had not decided the question of jurisdiction - HELD THAT:- These applications seeking rectification of mistake are misconceived. The appellants were represented by a learned counsel who made submissions on their behalf. Needless to say, that when a learned counsel makes submissions, the court has to presume those to be on the instructions of the appellants. After arguing the appeal on merits and partly succeeding and partly failing in the appeal, the appellant then decided to hire a new counsel to find fault with the submissions made by the previous counsel and further alleging that this Tribunal committed a mistake in proceeding on the basis of the submissions made by the previous counsel.
It is also incorrect to say that this Tribunal did not follow the directions of the High Court and had not applied its mind on the question of jurisdiction. It had not only applied its mind but also recorded in paragraphs 1 and 2 of the Final Order the question of jurisdiction not only with respect to the judgment in M/S MANGALI IMPEX LTD., M/S PACE INTERNATIONAL AND OTHERS VERSUS UNION OF INDIA AND OTHERS [2016 (5) TMI 225 - DELHI HIGH COURT], the review petition filed by the Revenue and the further retrospective amendments made by Finance Act, 2022.
Considering the judgments and the subsequent amendments, if it has to be decided if the officer issuing the SCN had jurisdiction or not in this case, it can only be done on the basis of the submissions made by both sides. Both sides did not want to press the question of jurisdiction and therefore the matter was decided on merits and it was decided so.
The Tribunal can rectify if there is a mistake apparent on record. In this case, there are no mistake at all in Final Order, let alone, an error apparent on record. Therefore, the applications deserve to be dismissed and are dismissed.
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2024 (3) TMI 937
Recovery of duty foregone - non-installation of the capital goods and consequent non-fulfilment of post-importation condition - It is the contention that the ‘capital goods’ had not been installed within the prescribed time period and that the export obligation could not, therefore, have been fulfilled - HELD THAT:- It is on record that the ‘capital goods’ were found to have been installed at premises other than that indicated in the licensing documents. It was held in the impugned order that, though the rent agreement for the said premises had been produced, documents evidencing shift of the ‘capital goods’ was neither available nor furnished by the appellant. The imports had been permitted, and duty had been foregone, subject to condition that ‘export obligation’ would be completed within six years. It is also on record that the licensing authority had extended the time-period for effecting the installation which, in effect, re-scheduled the date by which the export obligation would have to be fulfilled.
There is nothing available on record to indicate that, after such installation, as claimed by the appellant in application for relaxation of time for fulfillment had been preferred, exports had been undertaken. It would also appear to us that the deferment of time for installation does not, of itself, re-schedule the deadline for completion of export obligation. The imports had been effected in October 2012 and December 2012 with post-import fulfilment of the export obligation by 2018.
In the facts and circumstances of fulfilment of export obligation not having been evinced and the stipulated deadline prescribed in the authorisations not adhered to, the confirmation of duty liability, equal to the duty foregone, would appear to be reasonable. However, there is no finding on the entitlement for depreciation in proportion to the export performance established from the records. This would have a bearing on the other consequences under Customs Act, 1962. The rectification of that want requires that the impugned order be set aside and matter remanded back to the original authority for fresh decision after consideration of the facts and circumstances including evidence of exports undertaken by deployment of the said capital goods that may be furnished by the appellant herein.
The appeal is disposed off by way of remand.
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2024 (3) TMI 936
Classification of goods - Nutrition/Dietary Supplements classified under Tariff item 21069099 attracts IGST at the rate of 18 % under serial No. 453 and/or 23 of Schedule III of Notification No. 1/2017- Integrated Tax (Rate) dated 28-06-2017 as claimed by the appellant or the said goods is covered under serial No. 9 of Schedule IV of the said notification which provided for IGST at the rate of 28% as claimed by the Revenue? - HELD THAT:- The case of the department is that since goods are covered under Serial No. 9 the same will not fall under either Serial No. 453 or 23 of Schedule III, which is absolutely incorrect. Other than the specified goods covered under Serial No. 9 all other goods fall under Serial No. 453 and/or 23 of any chapter falls under the discerption given therein. We find that the Adjudicating Authority has not given any heed to a vital fact that discerption mentioned in serial No. 9 is only for some specific items which does not cover the goods of the present case. Therefore, the appellant’s goods does not fall under Serial No. 9. Accordingly, the Serial No. 453 and/or 23 of Schedule III is the correct entry where the appellant’s goods fall. Hence, the correct rate of IGST applied by the appellant i.e. 18% is correct and legal.
The identical issue has been considered by this Tribunal in the case of NEUVERA WELLNESS VENTURES P. LTD. VERSUS C.C. MUNDRA [2023 (10) TMI 964 - CESTAT AHMEDABAD] wherein it was held that From tariff entry of 2106, it can be seen that the entry covers various food preparation not elsewhere specified or included. However, out of the many items provided under tariff item 2106, the serial No. 9 described only some of those goods. This also establish that Serial No. 9 is not a general entry which covers entire entry of 2106 but only some of the goods which are specified in the description of goods are provided under serial no. 9 of Schedule IV,. This fact also strengthens the claim of the appellant that their goods are not covered under serial no. 9 of the schedule IV of Notification 1/2017-IGST-Rate and correctly falls under Serial No. 453 according to which the rate of IGST is 18%.
The appellants have correctly declared their goods under Serial No. 453 and/or 23 of Schedule III of Notification No. 1/2017- Integrated Tax (Rate) which attracts 18% of IGST. Therefore, the impugned order is not sustainable.
The impugned order is set aside. Appeal is allowed.
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2024 (3) TMI 935
Classification of imported goods - defatted coconut - to be classified under CTH 08011990 or under CTH 23065020? - Benefit of Notification No.50/2017- Customs dated 30.06.2017 Sl. No. 114 - HELD THAT:- As per the first test report dated 11.11.2020, oil content is 46.8% and it confirm to the FSSAI (Food Products Standards and Food Additives) standard of defatted coconut. There is no reason given in the impugned order-in-original to discard the said finding. Thereafter another set of sample were drawn and sent to Coconut Development Board. Vide report dated 08.12.2020, they have also classified that sample submitted is defatted coconut and oil content was 45.51%. Alleging that the said report was not clear about the parameter for identifying the defatted and desiccated coconut, on further query was made and they have confirmed that as per Codex committee there is no difference between defatted and desiccated coconut.
The adjudicating authority proceed with technical standards for desiccated coconut as per CODEX standard (CODEX STAN 177-1991) and concluded that goods which was defatted coconut is low fat desiccated coconut classifiable as under CTH 08011110. Such presumption is drawn on conclusion that to bring the goods under CTH 2306, oil should have removed from them and in the nature of residues material suitable for any subsequent use after there primary use in food industry. Such finding is arrived without considering the standard prescribed by the FSSAI and only based on the standard of Codex. Such method adopted by the adjudicating authority for classification of food articles is prima facie unsustainable. Moreover, Revenue is not disputing the fact that similar goods are being imported through Chennai port.
There is no infirmity in the order issued by the Commissioner (Appeal) - Revenue is directed to classify the goods as per the declaration made by the respondent by extending the benefit of notification as applicable - Appeal dismissed.
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