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2024 (11) TMI 1398
Provisional attachment orders issued under Section 83 of the CGST/SGST Acts after the expiry of the prescribed period - detention of petiitoner on the allegation of fraudulent transactions, leading to the evasion of GST on a massive scale - HELD THAT:- It is clear from the law laid down in Radha Krishnan Industries [2021 (4) TMI 837 - SUPREME COURT] that while interpreting a taxing statute, the provisions must be construed on its plain terms and the Court must have regard to the purpose underlying the provision and an interpretation which effectuates the purpose must be preferred particularly when it is supported by the plain meaning of the words used - As can be seen from the provision of Section 83 (2) of the CGST/SGST Acts, an order of provisional attachment under Sub-section (1) of Section 83 will cease to have effect after the expiry of the period of one year from the date of the order made under Sub-section (1). As distinct from the provisions of Section 281B of the Income Tax Act, 1961, the provisions of Section 83 (2) of the CGST/SGST Acts do not even provide for the extension of the period of provisional attachment. Therefore, it must be held that on the plain meaning of the words used in Sub-section (2) of Section 83 of the CGST/SGST Acts, an attachment cannot extend beyond the period specified in Sub-section (2) of Section 83.
It is clear that the provisions of Section 83 (2) read with the provisions of Rule 159 of the CGST Rules, 2017 indicate beyond doubt that a provisional attachment under sub-section (2) of Section 83 cannot extend beyond a period of one year from the date on which it was first made. To accept the contention of the Revenue in this case would be to do violence to the language of the statute and permit the Revenue to keep on issuing repeated orders of provisional attachment which would mean that the provisional attachment can continue for as long as the Revenue decides that it must continue. This, obviously, was not the intention of the legislature, for had the intention been different, the provisions of Sub-section (2) of Section 83 would have been worded differently.
In Vodafone International Holdings BV v. Union of India [2012 (1) TMI 52 - SUPREME COURT], the Supreme Court considered whether the sale of certain shares by HTIL to Vodafone would amount to a transfer of a capital asset within the meaning of Section 2 (14) of the Income Tax Act. In interpreting the expression “source of income in India” used in Section 9 (1) (i), the Court approved the above observations in Ransom. These decisions are clear authority for the proposition that the Courts will not step in and supply words or give the provisions of a statute a different meaning even if they feel that such interpretation may be necessary in the larger public interest.
It is not necessary to consider the contention that Ext. P6 series of orders also suffers from the vice of non-application of mind and is a verbatim reproduction of Ext. P2 series of orders.
Ext. P6 series of orders will stand quashed. It is declared that the provisions of Section 83 of the CGST/SGST Acts do not contemplate or authorise the issuance of a fresh order of attachment after the period specified in Section 83 (2) of the CGST/SGST Acts - Petition allowed.
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2024 (11) TMI 1397
Violation of principles of natural justice - non-service of notices - petitioner came to know about the impugned order from the third respondent/Bank on account of the recovery proceedings inititated against the petitioner for non-filing of GST returns - HELD THAT:- It is evident that the impugned show cause notices were uploaded on the GST Portal Tab. According to the petitioner, the petitioner was not aware of the issuance of the show cause notices issued through the GST Portal and the original of the said show cause notices were not furnished to them. In such circumstances, this Court is of the view that the impugned order came to be passed without affording any opportunity of personal hearing to the petitioner to establish its case, thereby violating the principles of natural justice and that it is just and necessary to provide an opportunity to the petitioner to establish their case on merits and in accordance with law.
This Court is inclined to set aside the impugned orders dated 13.12.2023 passed by the second respondent and the consequential Provisional Attachment order dated 05.06.2024 passed by the first respondent - The orders impugned herein are set aside on condition that the petitioner deposits 10% of the disputed tax amount in respect of the assessment year in question within a period of four weeks from the date of receipt of a copy of this order.
Petition allowed.
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2024 (11) TMI 1396
Seeking rectification of a ruling order - Section 102 read with Section 97 of Central Goods and Services Tax Act, 2017 and the Andhra Pradesh Goods and Services Tax Act, 2017 - HELD THAT:- The contention of the applicant has been examined in the light of the original order and noticed that there are some additional equipments which are required to be made available on a ship as additional safety measure in compliance with certain statutory provisions. Though these are also to be compulsorily made available on a vessel and ship but cannot be taken to be parts of a ship as per general understanding but are rather additional equipments on a ship. Hence the request of the applicant for deletion of the term “Lifeboat” in Para no. 2 of Page number 19 is not considered.
The original order is amended in para no: 2 of page no: 21 and serial numbers 81 and 89 are included and these are to be considered not as essential part of a warship/submarine but additional equipment’s.
The application is hereby “disposed off”.
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2024 (11) TMI 1395
Validity of Revision u/s 263 - out of provision made for depreciation on investment by the assessee, the Assessing Officer has added only investments in India and excluded a sum pertaining to investments outside India - as decided by HC [2024 (12) TMI 43 - KARNATAKA HIGH COURT] CIT committed an error in holding that the order passed by the AO was erroneous and prejudicial to the interest of the revenue. Accordingly, the order passed by the Commissioner of Income Tax was set aside.
HELD THAT:- Having heard learned counsel for the parties and having gone through the materials on record, we see no reason to interfere with the impugned order passed by the High Court.
Special Leave Petition is, accordingly, dismissed.
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2024 (11) TMI 1394
Claim for deduction on account of the method for determining an NPA - entitlement to deduction on account of de-recognition of interest accruing upon NPAs applying Rule 6EB of the Income Tax Rules, 1962 - directions issued by the National Housing Bank under Section 30A read with 36 of the National Housing Bank Act, 1987 -
As decided by HC [2017 (7) TMI 144 - DELHI HIGH COURT] Section 43D of the Act read with Rule 6EB is a complete Code in itself. There is an element of discretion for the rule making authority to follow or not to follow the NHB guidelines as and when they are revised. The purpose of classification of debts as NPA by the NHB and the purpose for non-recognition of income for the purposes of the Act are different. Given the wording of the relevant provisions of the Act and the NHB Act, it is not possible to agree to HUDCO's proposition that with every change in the NHB guidelines there would be a corresponding automatic change in Rule 6EB.
Even otherwise, as pointed out by the ITAT, the real income principle would have no application as far as Section 43D of the Act. A distinction is required to be drawn between the concept of 'deductions' claimed under the Act which has to satisfy the conditions laid down therein to qualify as such and the prudential norms that the NHB Act may lay down for determining an NPA.
HELD THAT:- Having heard the learned counsel appearing for the petitioner and having gone through the materials on record, we see no reason to interfere with the impugned orders passed by the High Court.
The Special Leave Petitions are, accordingly, dismissed. Interim relief earlier granted by this Court vide Order dated 6-8-2018 stands vacated forthwith.
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2024 (11) TMI 1393
Denial of exemption granted u/s 11 - income from investment which is made in violation of Section 13(1)(d) - HELD THAT:- In the instant case, the assessee is a charitable institution and invested the funds in the shares of the joint venture companies - The said joint venture companies are neither the Government Companies nor the Corporations established under Central or Provincial Acts. The investment was made by the assessee as a promoter in the joint venture companies. The essential nature of the investment made by the assessee was an investment in the shares of the joint venture companies.
Assessee continues to hold share even beyond the cut-off date i.e., 30.11.1983. The funds invested from the assessee corporation was from the profit of previous year relevant to the assessment year 1984-85. Therefore, the assessee had violated the provisions of Section 13 (1) (d) - assessee is, therefore, not entitled for exemption u/s 11 of the Act.
From perusal of Sections 11 and 13 of the Act, it is evident that the Legislature did not contemplate the benefit of denial of Section 11 of the Act, to the entire income and only the income from an investment made in violation of Section 13 (1) (d) of the Act is liable to tax. The aforesaid view has been taken in DIT (Exemption) v. Sheth Mafatlal Gagalbahai Foundation Trust [2000 (10) TMI 26 - BOMBAY HIGH COURT] and in IT (Exemption) v. Agrim Charan Foundation [2001 (8) TMI 78 - DELHI HIGH COURT] respectively
We may examine whether the entire income from such an investment made in violation of Section 13 (1) (d) of the Act, which has accrued to the assessee has to be taxed. From perusal of Sections 11 and 13 of the Act, it is evident that the Legislature did not contemplate the benefit of denial of Section 11 of the Act, to the entire income and only the income from an investment made in violation of Section 13 (1) (d) of the Act is liable to tax.
The substantial question of law framed in these Appeals is answered by stating that the investment made by the assessee in its joint venture companies is an investment made in violation of Section 11 (5) read with Section 13 (1) (d) of the Act and, therefore, the assessee is not entitled to claim the benefit of exemption under Section 11 of the Act. However, only the income from such an investment made in violation of Section 13 (1) (d) of the Act is liable to tax.
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2024 (11) TMI 1392
Disallowance u/s.14A - rectification u/s 154 - HELD THAT:- Disallowance u/s 14A of the Act is limited to Rs.2,77,80,538/- and the same cannot be treated as an enhancement of assessment and further held that neither assessee nor AO have mentioned particular figure without linking the same to the allowance of the interest paid and when the allowances of interest has not reached finality, it cannot be said that quantum of disallowance u/s 14A has finally be arrived at and also held that the first appellate authority has omitted to consider the aspect of amount disallowable u/s 14A of the Act and the said mistake was rectified by the Commissioner in the appeal while exercising the power conferred u/s 154 and the same is permissible.
In South Indian Bank Limited [2021 (9) TMI 566 - SUPREME COURT] by relying the judgment of Maxopp Investment Ltd [2018 (3) TMI 805 - SUPREME COURT] held that the purpose behind Section 14A by not permitting deduction of the expenditure incurred in relation to income, which does not form part of total income, is to ensure that the assessee does not get double benefit. Once a particular income itself is not to be included in the total income and is exempted from tax, there is no reasonable basis for giving benefit of deduction of the expenditure incurred in earning such as income.
In T.S.Balaram [1971 (8) TMI 3 - SUPREME COURT] and MEPCO Industries Limited [2009 (11) TMI 24 - SUPREME COURT] the Hon’ble Supreme Court held that a mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may be conceivably two opinions. A decision on a debatable point of law is not “mistake apparent from the record”.
The above said judgments are not applicable to the facts and circumstances of the case on the ground that the assessee had filed three calculations of the interest to be allowed u/s 14A of the Act before the AO to determine the total income and allowance of interest paid to the M/s.Tamil Nadu Newsprint and Papers Limited. Hence, the contention of the learned counsel for the appellant that the provisions of Section 14A of the Act is not applicable to the assessee is not tenable under law, especially the appellate authority passed order dated 29.12.2003 rectifying the disallowance amount u/s 14A basing upon the calculations made by the assessee and the same cannot be treated as enhancement of assessment.
It is pertinent to mention here that the assessee itself had accepted the disallowance under Section 14A of the Act and therefore it was not debatable issue. The appellate authority after following the due procedure as contemplated under the law including the issuance of notice and after considering the objections of the parties rectified the error and made disallowance and the same is within the purview of the provisions of the Act. Hence, substantial questions of law are answered against the assessee.
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2024 (11) TMI 1391
Exemption from income tax u/s 10(26) - Petitioner is working as Director in the department of Soil, Government of Meghalaya. She is a resident of Khasi Hills. She claims to be a member of the scheduled tribe as defined under Article 366(25) of the Constitution of India - Petitioner's withdrawal of application for revision under Section 264 - HELD THAT:- First of all, the Income Tax Act, 1961 provides very detailed machinery for investigation and determination of income and its assessment to tax. It also provides a structured system for assessment, preferment of appeal from such assessment, revision and so on. Writ petitioner has to avail of that remedy which in our opinion is efficacious. Secondly, as a writ court we should not exercise jurisdiction to adjudicate upon highly disputed facts by evaluating very voluminous evidence, which is involved here.
We find from the records petitioner assessee filed an application for revision u/s 264 of the said Act for the assessment year 2014-15. On 9th June, 2022, she withdrew it.
Now, petitioner submits that her client had no hand in the withdrawal of that application and that it was the handy work of the respondent No.9.
We are not going into the correctness of the allegations made against the respondent No.9, narrated hereinabove.
We are of the view that considering the gravity of the dispute, this application for revision under Section 264 of the said Act be treated as pending. We set aside the alleged withdrawal of the Section 264 application purported to have been made by the letter dated 9th June, 2022.
We direct the income tax authorities to hear the petitioner, the respondent No.9 and other interested parties, if any and dispose of the Section 264 application by a reasoned order within three months of communication of this order. The petitioner is given liberty to make an application before the income tax authorities for any interim order pending this proceeding under Section 264 of the said Act. All points are kept open before the income tax authorities.
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2024 (11) TMI 1390
Disallowance u/s 43B - non-payment of liabilities such as VAT, Entry Tax, CST before the prescribed date of filing the return of income u/s 139 (1) - HELD THAT:- It is admitted position on record that the appellant / assessee did not claim the amount in his profit and loss account as an expenditure / deduction, nor the appellant claim deduction in respect of that account u/s 43B.
In that view of the matter, the AO, CIT(A) and the ITAT, all three authorities have concurrently erred in holding that the appellant has claimed deduction / expenditure u/s 43B of the IT Act adding to its taxable income. Accordingly, the impugned order passed by the ITAT holding that the appellant is liable to pay tax is liable to be and is hereby set aside. The substantial question of law is answered in favour of the assessee and against the Revenue.
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2024 (11) TMI 1389
Reopening of assessment u/s 147 - cash deposits were made in the bank account of the petitioner - HELD THAT:- The total value of the transactions, which were suggestive of petitioner’s income escaping assessment was quantified. The petitioner had responded to the impugned notice raising several issues. However, we do not find that the said response contains any information either as to the quantum of cash deposited during the previous year relevant to the AY 2017-18. There was also no explanation as to why large amounts were received in cash.
AO had passed the impugned order holding that the petitioner’s response was found to be unsatisfactory.
The entire purpose of issuing a notice u/s 148A (b) of the Act is to enable the Assessee to respond to the information available with the AO, which may be suggestive of the Assessee’s income escaping assessment. In the instant case, where the allegation is that a large cash deposits were made in the bank account of the petitioner, the least that was required for the petitioner was to inform the AO as to the correct quantum of the cash deposits in his bank account and his explanation for the same. This crucial information is not available in the petitioner’s response to the impugned notice.
It is relevant to note that at the threshold stage of issuing a notice under Section 148 of the Act, the AO is not required to finally conclude whether any income has escaped assessment. The notice merely initiates the reassessment proceedings. Thus, all rights and contentions of the petitioner to contest the quantum as well as the taxability of the amounts as reflected in the impugned notice and the impugned order are reserved. We are unable to accept that any interference by this court is warranted in proceedings under Article 226 of the Constitution of India.
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2024 (11) TMI 1388
Reopening of assessment u/s 147 - Reason to believe - income from Long Terms Capital Gain ('LTCG’) and this entitles the petitioner to claim deduction u/s 54-B - HELD THAT:- From the perusal of the reply filed during assessment proceedings and the assessment order, it is evident that there was no specific question raised with regard to deduction claimed u/s 54B. The case would have been on different pedestal if the AO during the assessment proceedings had raised query with regard to deduction u/s 54B. In that case the reply and material filed by the petitioner relating to the deduction would have either been accepted or rejected or further probe ordered.
There is no quarrel with the proposition of law that the reassessment proceedings cannot be initiated merely on change of opinion. The reasons for reopening clearly indicates that the AO had reason to believe that income had escaped assessment. We at this stage are not at all suggesting that the inference drawn is correct. What is required at this stage is that the AO has reason to believe that there was an escaped assessment.
There is no bar that u/s 147 of the Act that the reasons to believe cannot be based upon the material already available on record. It is not a case of change of opinion, the petition is dismissed.
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2024 (11) TMI 1387
Validity of reopening of assessment - invoking the extended period of limitation - Addition of deemed dividend u/s 2(22)(e) as assessee had purchased a property and for acquiring the property assessee received entire amount from the company in which assessee holds 29% of shares - whether there was any tangible material that was available for reopening the assessment?
HELD THAT:- The fact that emerges from the discussion above, it is clear that a sum was sought to be added to the income of the petitioner as “deemed income” vide Assessment order dated 29.12.2017. The petitioner unsuccessfully challenged the same before the CIT (Appeals) who by an order dated 08.09.2022 had rejected the petitioner's Appeal. The Tribunal has now reversed the decision of the Commissioner's Appeal dated 08.09.2022 affirming the Assessment order dated 29.12.2017.
The attempt of the Department is to merely includes an additional amount over and above a sum which was the subject matter of the earlier Assessment order which stands deleted. In the light of the above development and in the light of the fact that the Appeal itself has been withdrawn it has to be construed that the issue stands answered against the Revenue and in favour of the Petitioner.
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2024 (11) TMI 1386
Deduction in respect of the broken period interest paid - method of accounting followed by the appellant in respect of broken period interest - Tribunal in rejecting the assessee’s contention was of the view that when the securities are purchased by the appellant along with interest thereon, the price paid becomes the cost of the asset which is to be debited to Profit & Loss Account - HELD THAT:- As in American Express International Banking Corporation [2002 (9) TMI 96 - BOMBAY HIGH COURT] question was answered in favour of the assessee wherein as find that the assessee's method of accounting does not result in loss of tax/revenue for the Department. That, there was no need to interfere with the method of accounting adopted by the assessee-bank.
Our attention is also drawn to a recent decision of the Supreme Court in Bank of Rajasthan Ltd. [2024 (10) TMI 875 - SUPREME COURT] wherein the Supreme Court affirmed the view taken by this Court in CitiBank NA [2008 (8) TMI 766 - SUPREME COURT], American Express International Banking Corporation [2002 (9) TMI 96 - BOMBAY HIGH COURT] as also in HDFC Bank Ltd. [2014 (8) TMI 119 - BOMBAY HIGH COURT] question answered in affirmative in favour of the assessee and against the Revenue.
Deduction in respect of the expenditure incurred by the assessee on the issue of Fully Convertible Debentures - assessee had made a ‘rights issue’ of Fully Convertible Debentures (FCDs) and in such connection, had incurred expenditure on account of printing expenses, advertisement, professional fees, stamp duty and filing fees, bank charges, packages, etc. - deduction was rejected by AO on the ground that the real intention of the assessee was to increase its capital and not to raise borrowed capital - HELD THAT:- In answering such issue in favour of the assessee and against the Revenue, observed that the said question would stand covered by the decision of Havells India Ltd. [2012 (5) TMI 449 - DELHI HIGH COURT] which followed the decision of the Supreme Court in India Cements Ltd. [1965 (12) TMI 22 - SUPREME COURT] and the decision in Commissioner of Income Tax vs. Secure Meters Ltd. [2008 (11) TMI 66 - RAJASTHAN HIGH COURT] held that the expenditure incurred thereon was revenue in nature. Decided in favour of the assessee and against the revenue.
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2024 (11) TMI 1385
TDS u/s 195 - Assessee had not deducted tax at source on the payments made to Ciena, US - disallowance u/s 40(a)(i) - addition was premised on the assumption that the payments made to Ciena, US were chargeable to tax, under Section 9 (vii) of the Act, being fees for technical services - ITAT deleted addition on finding that the services rendered by the Ciena, US did not contain an element of make available of the technology - HELD THAT:- ITAT had noted that Ciena, US provides technical on-call advisory services. Ciena, US remotely provides support services through call centres, to the customers of the Assessee, in case of problems of outage, or where emergency technical support is required in cases where a system is compromised. However, in cases where the equipment develops any defect and requires repair, the same has to be shipped overseas to Ciena, US for the repairs. It is also relevant to note that Ciena, US is the manufacturer of the equipment supplied to customers in India, and the agreement between the Assessee and Ciena, US, is essential to ensure that the support services are provided to the customers in India.
Revenue’s contention that Ciena, US directly provides knowledge, technology, skill and experience to the Assessee for it to render services is not supported by the plain language of the Agreement dated 01.04.2010. Thus, the contention that consideration paid by the Assessee was fees for included services as defined under paragraph 4(b) of Article 12 of the DTAA, is not merited.
As noted-above, the findings of the learned ITAT regarding the nature of services rendered by Ciena, US are the findings of the fact. It is also important to note that no question regarding whether the said findings are perverse has been projected by the Revenue in this case. Decided against revenue.
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2024 (11) TMI 1384
Validity of Reopening of assessment u/s 147 - Addition on the ground other than assessment was reopened - Assessee contention that since no addition had been made on account of the reasons on the basis of which the reopening of the assessment was sustained no other addition was permissible accepted by ITAT - HELD THAT:- Section 147 of the Act enables the reopening of concluded assessments only in exceptional cases, where there the AO has reason to believe that Assessee’s income for the relevant period has escaped assessment. It is trite law that concluded assessment should not be lightly interfered with. If the ground on which the concluded assessment is sought to be re-opened, cannot be sustained, there would be little rationale for expanding the reassessment proceedings.
In our view, it would not be apposite to accept an expansive interpretation to the provision of Section 147 of the Act. Given that the nature of the proceedings is to unsettle concluded assessment, a strict interpretation of the plain language of Section 147 of the Act, is warranted. We respectfully concur the view of this court as articulated in Ranbaxy Laboratories Limited [2011 (6) TMI 4 - DELHI HIGH COURT] and ATS Infrastructure Ltd.[2024 (7) TMI 1441 - DELHI HIGH COURT] and Jaguar Buildcon Pvt. Limited. [2024 (8) TMI 517 - DELHI HIGH COURT]
It is also relevant to note that various courts had taken a view that the reassessment proceedings were confined under Section 147 of the Act only to the issues (reasons to believe) on the basis of which the assessments were reopened. Thus, there was no scope for making any addition other than those which were circumscribed by the reasons to believe as recorded by the AO prior to the issuing a notice under Section 148 of the Act. However, this controversy was set at rest by introduction of Explanation 3 by virtue of the Finance Act, 2009 with retrospective effect from 01.04.1989.
Explanation 3 to Section 147 merely clarified that the AO would assess or reassess the income in respect of the issue which had escaped assessment and such other issue, which came to the notice subsequently. However, the said explanation does not control the import of the plain language of Section 147 of the Act. Explanation 3 to Section 147 of the Act, merely clarifies that the jurisdiction of the AO was not confined to assessing or reassessing of the income of an Assessee only in respect of the issue, which formed a part of the reasons recorded for reopening the assessment. The said explanation cannot be interpreted to mean that the AO could assess other incomes of the Assessee even in cases where no addition is made on account of the reasons for which reassessment was initiated. No substantial question of law arises in the present appeal.
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2024 (11) TMI 1383
Unexplained credit u/s 68 - assessee has failed to discharge its initial onus to prove creditworthiness and genuineness of transaction - sum reflected as outstanding in the final books of accounts of the Assessee - HELD THAT:- It is settled law that the credit in the books of accounts may be taxed u/s 68 if the AO on the basis of evidence and material on record can reasonably infer that the assessee’s explanation regarding the transaction reflected as credit in his books, is a subterfuge and the transaction as disclosed, is not genuine.
It is also necessary to observe that the AO is not required to examine the commercial expediency of the transaction and supplant its view in place of the transacting parties. AO is required to give a wide latitude to the commercial discretion of the contracting parties to enter into a transaction. And, unless the AO finds, on the basis of cogent material, that the transaction is a subterfuge and is not genuine, the AO must accept the same.
There is no dispute as to the creditworthiness of Unitech and that it had paid the amount of Rs. 67.5 crores to the Assessee. There are no attendant circumstances, which would suggest that the Assessee had camouflaged its taxable income as an advance against the sale of property. It is material to note that Unitech has also not reflected the payment as an expense and has derived no tax advantage by making a payment of Rs. 67.5 crores to the Assessee. The transaction is, thus, tax neutral.
Both the parties (Unitech as well as the Assessee) have claimed that the said amount was paid and received as an advance for purchase of the subject property. The AO has found fault with the documentation as the stamp paper had been issued prior to the date of the Agreement as typed on the non-judicial stamp paper. Whilst in some cases the finding to the said effect may be of significant relevance in determining the genuineness of the transaction, but may not be dispositive in other cases.
Whether a flaw in documentation is indicative of a subterfuge must necessarily be determined bearing in mind other attendant facts of the case. In a case where the attendant facts and material indicates that the assessee has taxable income/ undisclosed assets, which would have been brought to tax but for being disguised as another transaction, any irregularity or flaw in the documentation may be of significance. In absence of any material indicating that the credit reflected in the books, but for being so reflected, may be chargeable to tax, it would not be reasonable for the AO to reject the Assessee’s explanation on account of any irregularity or flaw in the documentation of the transaction.
As explained in Sumati Dayal [1995 (3) TMI 3 - SUPREME COURT] the apparent transaction may be rejected if there are reasonable grounds to indicate that the same is not real. Thus, it may also be apposite for the AO to draw an inference as to what is the real, while considering rejection of what is apparent.
It is material to note that the questions of law as projected by the Revenue and as noted at the outset are premised on the assumption that the creditworthiness of Unitech was in doubt. But as noted before there is no cavil that Unitech had sufficient funds to make the payment that it had.
The questions as framed are answered in favour of the Assessee and against the Revenue.
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2024 (11) TMI 1382
LTCG - Disallowance of deduction u/s 54 - whether the Assessee had constructed a residential house on the agricultural land within the stipulated period of three years from the date of transfer of the aforesaid property in question, that is, on or before 25.09.2017? - HELD THAT:- A plain reading of Section 54 of the Act that the allowance is available if the capital gains arising from a sale of residential property is utilised by the Assessee for purchasing a residential property or constructing a residential house. It is obvious that the construction of a residential house would entail raising a construction for inhabitation as a residential dwelling unit.
The Inspector’s report, which the learned ITAT had accepted is a makeshift guardroom made of plywood of 7 feet x 6 feet was found on the site and a similar room of plywood of 16 feet x 12 feet with a toilet attached was found at the said site. Putting together a structure of plywood sheets cannot be construed as constructing a residential house. The Inspector had also reported that there was no electricity or water connection on the land and electricity was used by genset.
The first inspection report indicated that the exact location itself of the land was difficult to find as the area was vast and inhabited and comprised of hilly terrain. It is material to note that the structures made of plywood sheets were found to exist on the subject property during the second visit of the Inspector conducted on 7.12.2017.
In our view, no question of law arises for consideration of this court given the description of the subject property in question, as noted by the learned ITAT in its order. The findings of the learned ITAT cannot be assailed as perverse or manifestly erroneous.
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2024 (11) TMI 1381
TP Adjustment - inclusion of E4e Healthcare as a comparable - Assessee had objected to the use of the said entity as a comparable on the ground that its annual report was not available in the public domain - HELD THAT:- None of the objections of the Assessee with regard to the inclusion of E4e Healthcare were adjudicated. However, the assessee did not agitate the matter further, because the learned TPO had determined the ALP adjustment for the AY 2012-13 as NIL. It is thus, clear that the Assessee’s contention that E4e Healthcare is functionally dissimilar to the assessee and therefore, could not be included as a comparable, has not been considered by any authority. As noted above, the orders passed by the learned DRP, the learned TPO and the learned ITAT proceeded on an assumption which are ex-facie incorrect.
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2024 (11) TMI 1380
Interest towards refund negatived in the Rectification Petition - HELD THAT:- As in the present case, it is seen that the impugned order came to be passed negativing the petitioner's claim for interest by stating that in terms of Section 244 A (2) of the Act, if the proceedings resulting in the refund are delayed for the reasons attributable to the assessee (petitioner in this case), the delay so attributable to him shall be excluded from the period, for which, the interest is payable, but the respondent failed to take into considering that only due to the faults committed on their side, (i.e. Department) in having failed to deal with the petitioner's case with abundant caution, the petitioner is now facing loss. Further, this Court is of the view that there cannot be a straight jacket formula in all such cases, where, the assessees are claiming for refund/interest.
The impugned order is set aside. The matter is remanded to the respondent for re-consideration, in which case, respondent is directed to consider the petitioner's claim for interest and pass orders towards release of the interest amount from the date of filing of the Revision Petition i.e. 31.03.2014 till the date of payment i.e. On 31.10.2024, with interest at the rate of 6% p.a. after deducting a sum as already been refunded to the petitioner.
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2024 (11) TMI 1379
Validity of reopening of assessment - Ropening as based on the purported guideline value of the property at Rs. 16,000/- Per. Sq. Ft. - difference between the value adopted for the computation of the stamp duty and the guideline value is to be taxed - HELD THAT:- The Court is of the view that the impugned order in over-ruling the objection of the petitioner, on the ground of difference, between the purported guideline value of the property at Rs. 16,000/- Per. Sq. Ft. is not available as it is inspired due to change of opinion.
That apart, the records that have been filed before this Court is Rs. 16,000/- Per. Sq. Ft. is for the commercial property and not for residential property. The SRO’s letter dated 04.10.2022 confirms that value that was adopted only Rs. 12,000/- Per. Sq. Ft. That apart Section 47 A of the Indian Stamps Act, 1899, it is the Jurisdictional Registering Officer, who is the competent authority under the Indian Stamps Act, 1899 to come to a conclusion, whether there was any under valuation or not.
If there is under valuation, the property would not have been registered at Rs. 12,000/- Per. Sq. Ft. Prima-facie, it is clear that the reopening of the assessment is only inspired from change of opinion, as all the materials available for completing the assessment. Impugned order is liable to be set aside in the light of the decision of Kelvinator of India Ltd., [2010 (1) TMI 11 - SUPREME COURT]
Hon’ble Supreme Court has made it clear that the power that is to be exercised under Sections 148 cannot be used for change of opinion as there is no power to review completed assessment.
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