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The High Court held that the assessee is entitled to the deduction under Section 80-IA(4)(ii) of the Income Tax Act, 1961. The Court relied on its own decision in the case of Sabdhagiri Telecom Vs. Income Tax Officer, which in turn had approved the Gujarat High Court's decision in CIT Vs. Himanshu V. Shah. Furthermore, the Court noted a Special Bench decision of the ITAT in Assistant Commissioner of Income Tax Circle-6, Ahmedabad Vs. Himanshu V. Shah, which held that a franchisee of BSNL engaged in installing, maintaining, and operating an EPEX system to support BSNL's functioning could be treated as providing 'basic telephonic services' and was eligible for deduction under Section 80-IA(4)(ii). Based on these precedents, the substantial question of law was answered in favour of the assessee. The appeals filed by the assessee were allowed, and the disallowance made by the revenue was set aside.
The High Court held that the decision in the case of Havells India Ltd. would apply with full force. The Court noted that the findings of the Assessing Officer, Commissioner of Income Tax (Appeals), and the Tribunal revolved entirely on the interpretation of the terms and conditions of the work order/contract. In the absence of any perversity in these findings, the High Court declined to interfere, stating that no substantial question of law arose for consideration. The Court did not specifically address each issue individually but rather dismissed the appeal based on the reasoning that the factual findings were not perverse and the case was covered by the precedent of Havells India Ltd. The operative direction was to dismiss the appeal.
The High Court dismissed the appeals filed by the Revenue on the ground of low tax effect. The court noted that the tax effect involved was Rs. 20,83,790/-, which was below the threshold limit stipulated in Circular No. 3/2018 dated 11.07.2018. However, the court granted liberty to the Revenue to restore the appeals if they found that the appeals were not hit by the monetary limit of the circular. Consequently, the substantial questions of law were left undecided. The operative direction was to dismiss the appeals with liberty to restore, and the connected miscellaneous petition was closed.
The High Court allowed TCA.No.82 of 2019, setting aside the ITAT's order and remanding the matter to the Assessing Officer. The Court found that the ITAT's dismissal of the miscellaneous petition on limitation was incorrect, as the quantum assessment and penalty proceedings are independent. The assessee's claim that the jewelry was declared under VDIS, 1997, and that inherited assets constituted the balance, warranted consideration. The Court noted that the ITAT had considered a similar issue in the case of Shanmugapriya, where reconciliation was permitted, and the assessee succeeded. The Court held that the assessee should be granted an opportunity to reconcile the quantum of jewelry with the Assessing Officer, taking note of the Shanmugapriya decision. The Assessing Officer was directed to pass fresh orders on merits, uninfluenced by previous observations. The substantial questions of law were left open. For TCA.No.954 of 2018, which challenged the dismissal of the miscellaneous petition on limitation, the Court held that no adjudication was required as the substantive appeal was allowed and remanded. Therefore, TCA.No.954 of 2018 was closed, and its substantial questions of law were also left open.
The High Court found that the methodology adopted by the Tribunal in passing the impugned order was incorrect. The Court referred to the Supreme Court's decision in Union of India and Ors. vs. Kamlakshi Finance Corporation and this Court's decision in CIT vs. L.G.Ramamurthi And Ors. to emphasize the principle of judicial discipline, requiring subordinate authorities to follow orders of higher appellate authorities unless suspended or distinguished on factual matrix or declared per incuriam. The Tribunal was aware of the prior decision in Sarvodaya Mutual Benefit Trust (supra) but did not follow it for reasons that the High Court found unacceptable. Consequently, the High Court set aside the impugned order and remanded the matter to the Tribunal for fresh consideration. The Tribunal was directed to take note of the decision in Sarvodaya Mutual Benefit Trust (supra) and either apply it if the facts warrant, or refer the matter to a Larger Bench if it finds the decision not acceptable for valid reasons. The Court explicitly stated it did not venture into the merits or answer the substantial questions of law.
The High Court, after hearing the submissions, dismissed the appeals filed by the Revenue. The dismissal was based on the ground of low tax effect, as indicated by Circular No. 3/2018 dated July 11, 2018, issued by the Board. The Court noted the submission made by the learned Standing Counsel for the appellant/Revenue regarding the appeals being hit by low tax effect. Consequently, the substantial questions of law were left open. The Revenue was granted liberty to seek restoration of the appeals if it was found that the case was not covered by the circular. No costs were imposed, and the connected miscellaneous petition was closed.
The High Court held that no substantial question of law arose for consideration in the appeal filed by the Revenue. The Tribunal had set aside the revision order passed by the Commissioner of Income Tax under Section 263 not on merits, but solely on the ground that it was communicated beyond the period of limitation prescribed under Section 263(2) of the Income Tax Act. The Tribunal found that the revision order was communicated to the assessee on November 29, 2012, and there was no evidence on record to show that it was dispatched or served earlier. The Tribunal relied on the principle that an order must be communicated to the aggrieved party within the statutory period, citing the Kerala High Court decision in Government Wood Workshop Vs. State of Kerala. The High Court agreed with the Tribunal's reasoning that the order was communicated beyond the period of limitation, and therefore, the appeal was dismissed. The substantial question of law was answered against the Revenue.
The High Court found that the Tribunal had not taken into consideration the assessee's primary submission regarding the applicability of Section 194C of the Act on IUC payments. While the Tribunal made an observation on an alternate submission that the assessee could not be considered an assessee in default, it qualified this by stating the liability for interest would be limited to the period until the deductees paid taxes. The Court held that a litigant is entitled to raise legal issues as principal grounds and alternate submissions. The Tribunal ought to have rendered a finding on the applicability of Section 194C. The Court clarified that the remand order, which set aside the lower authorities' orders, should be read as an open remand. The Assessing Officer is directed to consider all issues pleaded by the assessee and take a fresh decision on merits, uninfluenced by previous orders. The substantial questions of law are left open.
The High Court held that while the assessee was not diligent in prosecuting the matter and their reason for not being aware of the ITAT's order was not convincing, the ITAT should not have dismissed the appeal solely for want of prosecution without adjudicating on merits. The Court referred to the principles laid down in CIT Vs. S.Chenniappa Mudaliar and N.S. Mohan Vs. Income-tax Appellate Tribunal, Chennai. Although the Court was not convinced by the assessee's explanation, it deemed it appropriate to give one more opportunity to the assessee to file a reconciliation statement. The Court noted that the entire tax amount had been recovered. Consequently, the High Court allowed the appeal, set aside the orders of the CIT(A) and the ITAT, and remitted the matter back to the Assessing Officer for fresh consideration. The Assessing Officer was directed to give the assessee an opportunity to file a reconciliation statement and pass orders on merits after affording a personal hearing. The substantial questions of law were left open.
The High Court held that it was not necessary to answer the substantial questions of law raised by the Revenue. This was because, subsequent to the ITAT passing the impugned order recalling its earlier order, the CIT(A) had passed a fresh order on July 27, 2017. In this fresh order, the CIT(A) allowed the revenue's appeal and remanded the matter for fresh consideration to the Assessing Officer. Consequently, the exercise of answering the questions of law in the present appeal filed by the Revenue became academic. The Tribunal's decision to recall the order was based on the principle of affording an opportunity to the assessee in the interest of justice. However, the court did not delve into the merits of whether the recall was justified or whether the Tribunal had the power to review its order, given the subsequent developments. The substantial questions of law were left open.
The High Court held that the Revenue had not made out any grounds to interfere with the orders passed by the ITAT. Regarding the first issue, the Tribunal rightly noted that the AO should have commenced the computation from the returned income (Rs.87,05,011/-) and not the income originally assessed (Rs.1,81,40,652/-) after the order under Section 263 set aside the original assessment. The Tribunal correctly held that the CIT(A) should have confined himself to the additions made in the order dated 28.11.2014 (Rs.36,500/- under Section 40A(3) and Rs.10,77,188/- for bank deposits). For the addition of Rs.36,500/- under Section 40A(3), the Tribunal found business expediency justifying the cash payment. For the cash deposit of Rs.10,77,188/-, the Tribunal affirmed the CIT(A)'s finding that it represented proceeds from earlier deposits and accrued interest, and the assessee did not raise grounds citing violation of Rule 6DD. Similar reasoning applied to AY 2009-10 regarding the addition of Rs.76,32,000/- under Section 40A(3), where the Tribunal found genuine payments due to business expediency. The cross-objections were allowed for both assessment years. The substantial questions of law were answered against the Revenue.
The High Court held that the appeal filed by the Revenue fails and is dismissed. The substantial questions of law are answered against the Revenue. The Court noted that the issue involved the remission of loan liability by availing an early repayment and discount scheme for deferred sales tax. The Tribunal had correctly distinguished the Supreme Court's decision in CIT vs. Thirumalaiswamy Naidu & Sons (supra) on facts and followed the decisions in CIT vs. Mcdowell & Co Ltd (supra) and CIT vs. Sulzar India Ltd (supra). Crucially, the Court referred to its own recent decision in CIT vs. Wheels India Ltd, which considered a similar issue. This decision, in turn, relied on the Supreme Court's judgment in CIT vs. Balkrishna Industries Ltd. ([2017] 88 taxmann.com 273 (SC)). In Balkrishna Industries Ltd., the Supreme Court affirmed the Bombay High Court's view that the requirements of Section 41(1) were not fulfilled, as the transaction did not amount to a remission or cessation of liability but rather a premature payment of the correct value of the debt due to the State. The Court concluded that the decision in Balkrishna Industries Ltd. was clearly applicable to the present case, and therefore, there was no error in the ITAT's order. The ratio decidendi is that a premature payment of a deferred liability at a discounted rate, as per a government scheme, does not constitute a remission or cessation of liability under Section 41(1) of the Income Tax Act, especially when the underlying liability was treated as a loan by the State and the payment was in terms of the net present value.
The High Court held that there was no substantial question of law arising for consideration and dismissed the appeal filed by the Revenue. Regarding the first issue concerning Section 14A, the judgment does not record any specific arguments or findings by the Tribunal or the High Court, implying it was not pressed or decided. Concerning the second issue, the Court found no ground to interfere with the Tribunal's order. The Tribunal had remanded the matter to the Assessing Officer to verify compliance with Section 194C(6) and the belated filing of Form 26Q. The Court noted that the Revenue's apprehension was unfounded as the Tribunal had directed a fresh verification. The Court agreed with the assessee's submission that non-filing of a statement under Section 194C(7) does not necessarily take away the benefit under Section 194C(6), citing the independence of these sub-sections as held in ACIT Vs. Arihant Trading Co. The operative direction was the dismissal of the Revenue's appeal.
The High Court held that the ITAT's decision was based on a reappraisal of factual details. The Tribunal found that the assessee had produced affidavits from 15 relatives, along with their PAN numbers, Wealth Tax returns, and VDIS returns, to explain the gold deposits. The ITAT noted that the AO had accepted 4437 grams of gold deposits but rejected 11065 grams, with the reason for acceptance presumably based on a reply to a question during the search. The Tribunal observed that the lower authorities incorrectly dismissed the claim as an afterthought, despite it being supported by affidavits and corroborative evidence like VDIS declarations and Wealth Tax returns of the creditors. The ITAT reasoned that gold deposit agreements stipulate a return on investment and cannot be deemed gratuitous transactions. Regarding the 1042 grams of gold jewellery belonging to the goldsmith, the ITAT had remanded the issue for fresh consideration to the AO, and the High Court found no ground to interfere with this. The Court concluded that no substantial question of law arose for consideration and dismissed the appeal. The specific amount of addition deleted by the ITAT was 11065 grams of jewellery.
The High Court allowed the appeal, setting aside the order of the Income Tax Appellate Tribunal. The matter was remanded back to the Tribunal for fresh consideration of all issues that may be raised by both the assessee and the Revenue. The Court explicitly stated that it had not expressed any opinion on the merits of the contentions advanced by the assessee or the defence raised by the Revenue. The substantial questions of law were left open. The Court noted that the impugned order was identical to the one considered in previous appeals (TCA.Nos.705 to 707 of 2018) which were also remanded for fresh consideration. The appeal filed before the Tribunal for assessment year 2012-13 was directed to be taken up together with the appeals relating to assessment years 2009-10, 2010-11, and 2011-12. The reasoning for remand was the need for a deeper examination of the factual matrix, including the assessee's objects, financial statements, the principle of mutuality, and the applicability of the provisos to Section 2(15), as highlighted in the previous judgment.
The High Court held that the substantial questions of law raised by the Revenue were answered against it in the case of M/s.Evolv Clothing Company Pvt. Ltd. Vs. ACIT [(2018) 407 ITR 72]. Following this precedent, the High Court dismissed the appeal. The reasoning, as extracted from the cited judgment, is that there was no finding that the commission agents had a place of business in India, and the income was not attributable to operations in India. Section 195 of the IT Act applies only to 'sum chargeable under the provisions of the Act'. If no part of the income is chargeable in India, tax deduction at source is not required, and consequently, no disallowance under Section 40(a)(i) arises. The court noted that the Supreme Court in GE India Technology Centre P. Ltd. v. CIT [(2010) 327 ITR 456 (SC)] held that Section 195 cannot be construed to require TDS on amounts not chargeable to tax in India. Furthermore, the court distinguished 'fees for technical services' from 'commission', stating that commission, being order-specific and a small percentage of the order value, does not fall under the definition of technical services as contemplated by Section 9(1)(vii) and Section 40(a)(i). The appeal was allowed by the ITAT in favour of the assessee, and the High Court upheld this decision.
The High Court held that the appeals filed by the assessee are dismissed and the substantial questions of law are answered against the assessee. Regarding the procedural issues, the court found that the assessee could not take a stand that they need not obey conditions stipulated in the order granting approval under Section 10(23C)(vi), as it is a beneficial provision to be considered with strictness. The court found substantial documentary evidence and other details clearly showing that the assessee Trust had violated all conditions, disentitling them to approval under Section 10(23C)(vi) or registration under Section 12AA. The court distinguished the cases of Sri Belimatha and Balaji Educational and Charitable Public Trust, stating that in this case, there was large-scale diversion of funds. The court found that the revenue had discharged its onus by bringing on record materials justifying the cancellation of approval/registration. The court also noted that the Assessing Officer had found diversion of funds outside the books of accounts, violating the Trust's objectives, which was supported by search findings, admissions, and deposition of trustees. Consequently, the cancellation of approval and registration was justified. The court answered all substantial questions of law against the assessee.
The High Court held that the Tribunal erred in exceeding its jurisdiction by deciding an issue (whether the business was set up) that was not disputed by the Assessing Officer. The AO had disallowed expenses on the basis that commercial operations had not commenced, not that the business was not set up. The High Court referred to various Supreme Court and Tribunal decisions concerning composite business, emphasizing unity of control, management, and common fund as key factors. It found that the assessee had commenced several activities within the scope of its incorporation, and the Revenue had not disputed the unity of control and management. Therefore, the disallowance of expenditure by the AO was considered an error. The Tribunal's order was deemed to be without jurisdiction. The second and third substantial questions of law were answered in favour of the assessee. The appeal was allowed.
The High Court held that no substantial question of law arises for consideration in the appeal. The Court noted that the Revenue's contention that borrowed funds were utilized for investments in shares was not conclusively proven. The ITAT had relied on the findings of the CIT(A), who had recorded that the assessee possessed substantial own funds (Share capital: Rs. 737.62 lakhs, Reserves & Surplus: Rs. 14,951.77 lakhs, Depreciation reserve: Rs. 27,761.93 lakhs, totaling Rs. 43,451.32 lakhs) against which the investment in shares was only Rs. 4,417.20 lakhs. The CIT(A) had also noted that the Assessing Officer had not recorded any satisfaction note for the disallowance when the assessee had adequate own capital. The High Court found these findings to be correct and approved by the Tribunal. Therefore, the appeal was dismissed.
The High Court found that the ITAT's finding that the assessee's activities were purely commercial and generated substantial profit was insufficient to dislodge the CIT(A)'s order. The Court noted that the ITAT had not adequately examined the objectives of the assessee trust and whether their activities fell within the scope of 'advancement of any other object of general public utility'. The Court also highlighted the necessity of considering the CBDT Circular No. 11 of 2008 and various judicial precedents, including decisions of the Chennai Bench of the Tribunal concerning similar associations. The Court observed that the ITAT had not performed the required exercise of analyzing the assessee's objectives and activities in light of these legal provisions and precedents. Consequently, the High Court set aside the ITAT's order and remanded the matter back to the Tribunal for fresh consideration, directing it to examine all issues raised by both parties. The substantial questions of law were left open.
The High Court noted that the assessee had filed a miscellaneous petition before the ITAT, and on instructions from the assessee's counsel, it was submitted that the ITAT had recalled its order dated September 11, 2018, in M.P.No.227/Chny/2018. Consequently, the High Court held that nothing survived for consideration in the present appeal. The substantial questions of law were left open. The operative direction was to dismiss the Tax Case Appeal and close the connected miscellaneous petition without costs.
The High Court allowed the appeal, setting aside the orders of the CIT(A) and the Tribunal. The Court found a factual error in the lower authorities' understanding of the transaction, noting that the CIT(A)'s order stated the amount was a loan received by the assessee from AVPL, while the assessee's balance sheet indicated the assessee had extended a loan to AVPL. The Revenue could not provide material to support the AO's conclusion that the assessee received the loan from AVPL. The Court observed that the CIT(A) and the Tribunal failed to examine the factual matrix, particularly the AO's basis for concluding AVPL was a conduit and the assessee was the beneficiary. The Court held that when an allegation of using a company as a conduit is made, the AO must provide findings based on material and explain the nexus of the transaction. The Court also noted that the CIT(A) had not dealt with the assessee's ground regarding inadequate opportunity before the AO. Consequently, the matter was remanded to the CIT(A) for fresh consideration to allow the assessee to present all records and vindicate their contentions.
The High Court found that the matter required reconsideration by the Tribunal. The Court noted that the Tribunal's decision seemed to hinge on whether expenditure recorded in the books of account could be explained, rather than addressing the core legal arguments concerning the applicability and retrospective nature of Section 115BBE. The Court also highlighted the relevance of CBDT Circular No. 11 of 2019 dated June 19, 2019, which needed to be examined in relation to the introduction of Section 115BBE. Consequently, the High Court allowed the Revenue's appeal, set aside the ITAT's order, and remanded the matter back to the Tribunal for fresh consideration of the issues raised. The substantial questions of law were left open.
The High Court held that the Tribunal was fully justified in treating the software expenses as revenue expenditure, as there was no enduring benefit to the assessee, and every software has a shelf life. The substantial question of law regarding software expenses was answered against the Revenue. Regarding the disallowance under Section 14A and the applicability of Rule 8D, the Court noted that these issues had been decided against the Revenue in several cases, and since the assessments were prior to 2008-09, these questions were necessarily decided against the Revenue. For assessment year 2008-09, concerning additional depreciation, the Court noted that the Revenue did not dispute that these issues were considered and decided against the Revenue in the case of CIT Vs. M/s. Hi Tech Arai Limited. Applying this decision, the other substantial questions of law for assessment year 2008-09 were decided against the Revenue. The Court affirmed the Tribunal's common order.
The High Court held that the decision in Mak Data P. Ltd. was not applicable as it arose from survey proceedings, whereas the present case involved an inadvertent error discovered after the AO pointed it out, leading to a rectification petition. The Court found the facts similar to Price Waterhouse Coopers Private Limited, where the Supreme Court held that no penalty could be imposed for a bona fide and inadvertent error, describing it as a human error. The Court noted that the assessee had immediately filed a petition for rectification under Section 154 with an explanation of inadvertent error. The factual findings of the CIT(A) and the Tribunal, that the omission was an inadvertent error and not contumacious conduct with an intention to understate income, were accepted. Consequently, the Court found no substantial question of law arising and dismissed the appeal.
The High Court found that the CIT(A) had not rendered a finding on the validity of the reopening, observing that such a contention was not raised before the Assessing Officer and could not be entertained at the appellate stage. The High Court held that the CIT(A), as the First Appellate Authority, is entitled to examine the entire facts, and the validity of reopening, being a mixed question of law and fact, can be entertained. The Court also noted that the assessee did not specifically contest the reopening proceedings before the Tribunal by placing decisions, nor did it contest the Revenue's stand that only an intimation under Section 143(1) was issued. Considering these facts, the High Court deemed it appropriate to remand the matter to the CIT(A) for a fresh consideration, allowing both the assessee and the Revenue to canvass all points. The orders of the Tribunal and CIT(A) were set aside.
The High Court held that the decision of the Hon'ble Supreme Court in CIT Vs. K.Srinivasan applies with full force to the assessee's case. The Court referred to Explanation (2)(iii) and (iv) to Section 115JB, which states that the amount of income tax shall include surcharge and education cess. It also noted the legislative history and the Supreme Court's explanation of 'surcharge' as an additional charge. Furthermore, the Court cited Circular No. 3 of 2018 of the CBDT, which clarifies that 'tax effect' includes applicable surcharge and cess. The Court found that the Revenue had not made out a case for interference with the Tribunal's order. The substantial questions of law were answered against the Revenue. The appeal was dismissed, with no costs.
The High Court held that the first and second substantial questions of law, relating to depreciation, would not arise for consideration as the matter had been remanded by the ITAT to the Assessing Officer for fresh consideration. Therefore, these questions were left unanswered. Regarding the third substantial question of law, the Court upheld the ITAT's finding. The Revenue did not dispute the deduction allowed under Section 36(1)(iv) and (v) for contributions to approved funds. The Court found that the assessee was bound by the Tuticorin Port Trust Employees Retirement Regulations, 1979, which had statutory force. Payments made in terms of these regulations for monthly pension to retired employees, after deducting TDS, fall under general deductions allowable under Section 37(1). The Court reasoned that these payments were actual business expenditures incurred due to statutory obligations and were not covered by Section 36(1)(iv) and (v) in a manner that would preclude a Section 37(1) claim. Furthermore, similar claims for earlier years had been allowed. The Court concluded that the Revenue had not made out any ground to interfere with the ITAT's order. The third substantial question of law was answered against the Revenue.
The High Court dismissed the appeal filed by the Revenue. The dismissal was based on the Revenue's submission that the appeal was not being pursued due to a low tax effect, in line with Circular No. 3 of 2018 dated 11.07.2018. Consequently, the substantial questions of law framed for consideration were left open. The Revenue was granted liberty to seek restoration of the appeal if the tax effect was later found to be above the threshold limit or if it fell under exceptional clauses mentioned in the Circular. No costs were awarded. The specific findings on the merits of the substantial questions of law were not adjudicated upon due to the dismissal on the ground of low tax effect.
The High Court dismissed the appeal filed by the Revenue. The Court found that the Commissioner of Income-tax (Appeals) had examined the factual position and concluded that the expenditure incurred by the assessee was recurring in nature and thus revenue in nature. While the Tribunal had referred to the decision in CIT vs. Southern Roadways Ltd., it had affirmed the findings of the CIT(A). The Court distinguished the cases cited by the Revenue, namely CIT vs. Arawali Construction Co. (P) Ltd. and Bharti Televentures Ltd. vs. Additional/Joint Commissioner of Income-tax, on facts. The Court also noted its own recent decision in CIT, Trichy vs. The Lakshmi Vilas Bank Ltd., which was confirmed by the Supreme Court, dealing with a similar question. The substantial questions of law were answered against the Revenue. The operative direction was the dismissal of the appeal.
The High Court answered all four substantial questions of law against the Revenue. For the first question regarding profit on sale of investments, the Court followed the Delhi High Court's decision in Oriental Insurance Co. Ltd. vs. Deputy Commissioner of Income-tax, which held that prior to April 1, 2011, there was no provision requiring the disallowance of loss on sale of investments, implying profits were also treated similarly in that period. For the second, third, and fourth questions concerning TDS on surveyors, the applicability of Section 115JB, and TDS on re-insurance commissions, the Court relied on its own previous decisions. Specifically, for the third question on Section 115JB, the Court referred to its judgment in The Commissioner of Income Tax vs. M/s.Cholamandalam MS General Insurance Company Limited, where the provision was held not applicable to insurance companies. The ratio decidendi is that the specific provisions and judicial pronouncements, particularly those concerning the period prior to April 1, 2011, and the nature of insurance business, support the assessee's position on these issues. The appeals were dismissed, and the substantial questions of law were answered against the Revenue.
The High Court held that the ITAT was correct in confirming the order of the CIT(A). The Court reasoned that the purpose of assessment proceedings is to correctly assess the tax liability in accordance with law. If the reasons provided by the assessee for not claiming reliefs earlier are reasonable and not mala fide, technical issues like not filing a revised return should not bar the assessee from placing material before the Assessing Officer. The Court distinguished the case of M/s. Lakshmi Card Clothing Mfg. Co (P) Ltd. by noting that in that case, the claim was sought to be made via a Section 154 petition for rectification of a mistake apparent from the record, which was not the situation here. In the present case, all necessary details were available with the Assessing Officer, and no fresh information was required. Therefore, the appellate authorities were justified in allowing the additional grounds, as the omission was bona fide. The substantial questions of law were answered against the Revenue.
The High Court dismissed both Tax Case Appeals. Regarding T.C.A.No.416 of 2018, the Court concurred with the ITAT's finding that the assessee's mother, a housewife, could have saved money from household expenses provided by her husband or son, and that her savings habit, supported by an affidavit, could not be lightly dismissed. The Court found no reason to doubt her capacity to gift Rs. 5,05,000/- given the economic situation. The Court held that the question raised by the Revenue was not a substantial question of law and thus dismissed the appeal. For T.C.A.No.417 of 2018, the Court found that the arguments advanced by the Revenue pertained to factual re-examination of entries and transporter statements, which cannot be canvassed as substantial questions of law in an appeal under Section 260-A. The Court noted that the CIT(A) had granted partial relief by restricting the disallowance on freight charges to Rs. 44,30,887/-, finding the assessee's books of accounts and freight expense details justifiable. The Tribunal affirmed this. Therefore, the Court held that no substantial question of law arose and dismissed the appeal.
The High Court held that the ITAT, along with the lower authorities, proceeded on a legal principle without an in-depth study of the facts. The court emphasized that legal principles must be applied to the specific facts of a case. The Assessing Officer had not conducted a proper factual inquiry to ascertain if there was an inextricable link between the interest earned and the setting up of the business, despite the assessee's specific submissions. The court noted that the decision in Tuticorin Alkali Chemicals & Fertilizers Ltd. was based on the finding that the funds were 'surplus', whereas in cases like Bokaro Steel Ltd. and Indian Oil Panipat Power Consortium Ltd., interest earned on funds inextricably linked to setting up the business was treated as a capital receipt. Therefore, the High Court set aside the order of the ITAT and remitted the matter back to the Assessing Officer for a fresh consideration. The Assessing Officer is to conduct a fact-finding exercise, record his findings on facts, and then apply the relevant legal principles, uninfluenced by previous observations.
The High Court noted that the assessee had filed a miscellaneous petition before the ITAT, and subsequently, the ITAT had recalled its order dated November 16, 2017. In light of this development, the High Court found that no issue survived for its consideration. Consequently, the Tax Case Appeal was dismissed. The substantial questions of law were left open, meaning they were not decided on their merits. No costs were awarded. The operative direction was the dismissal of the appeal.
The High Court held that the appeal filed by the Revenue fails and is dismissed. The substantial questions of law were answered against the Revenue. The Court relied on the Supreme Court's decision in CIT vs. Balkrishna Industries Ltd., which affirmed the Bombay High Court's judgment. The Supreme Court had held that for Section 41(1) to apply, there must be an allowance or deduction made for a loss, expenditure, or trading liability, and subsequently, the assessee must obtain an amount or benefit in respect of such liability by way of remission or cessation. In this case, the payment made by the assessee represented the NPV of the future sum, and the statutory arrangement did not amount to a remission or cessation of the assessee's liability. The Court found that all requirements of Section 41(1) could not be fulfilled. Therefore, the difference was not treated as a remission of liability or a revenue receipt under Section 28(iv).
The High Court allowed the appeals, setting aside the orders of the Tribunal. For TCA.No.286/19, the Court held that the CCIT's rejection of the application for approval under Section 10(23C)(vi) was flawed. The rejection was based solely on the absence of a specific 'no profit clause' in the trust deed, without examining the financials or the substance of the activities. The Court noted that the assessee had provided cash flow statements and argued that surplus was incidental and ploughed back. It also found a violation of natural justice as the CCIT's order dated 06.05.2016 was passed without affording an opportunity to the assessee. Therefore, the matter was remanded back to the CCIT for a fresh decision after examining the entire financials and other records. The substantial questions of law were answered in favour of the assessee. Consequently, for TCA.Nos.287 and 288 of 2018, the Tribunal's orders were also set aside, and the matters were sent back to the Assessing Officer to await the CCIT's decision as directed in TCA.No.286/18. The Court found that the rejection of exemption under Section 10(23C)(vi) was the basis for the substantive assessments. No issue was expressly left undecided, but the substantive issues regarding exemption were remanded.
The High Court held that no question of law, let alone a substantial question of law, arises for consideration in these appeals. Consequently, the Tax Case Appeals filed by the Revenue were dismissed. The Court found no merit in the grounds raised by the Revenue concerning the ITAT's confirmation of the CIT(A)'s order. The expenditure of Rs. 8.5 Crores, which included Rs. 5.5 Crores to clear an encumbrance in favour of Smt. Tillaikarasi, Rs. 2.75 Crores paid to Mr. Vikram Mohan to return original title deeds, and Rs. 2.74 Crores each paid to outgoing shareholders Mr. K. Rajesh and Mrs. Srivalli, was considered by the CIT(A) and the ITAT as an eligible deduction for preserving and protecting the title of the property. The High Court did not delve into the specifics of each issue but concluded that the appeals lacked substantial questions of law. No issue was expressly left undecided.
The High Court rejected substantial question of law no. 3, noting that the issue of whether the assessee was a developer or a works contractor was decided in favour of the assessee by the CIT(A), and the Revenue had not appealed that specific finding. Regarding substantial questions of law nos. 1 and 2, the Court held that these issues did not arise in the present case. The transactions (sale of flats) occurred in November 2008, much before the amendment to Section 80IB(10) came into effect on 01.04.2010. The Court noted that this issue was considered in the case of Elegant Estates, where the Tribunal's order was upheld by a Division Bench of the same High Court, which held that it was not a substantial question of law. Therefore, the appeal was dismissed as no substantial question of law arose for consideration.
The High Court held that the Tribunal erred in setting aside the DRP's order on the grounds that the DRP had exceeded its jurisdiction. The Court noted that the DRP's order dated 24.11.2015 was an order reducing the variation proposed in the draft assessment order, which is permissible under Section 144C(8). The Court emphasized that the appeal before the Tribunal was against the final assessment order dated 28.12.2015, which gave effect to the DRP's directions, and not directly against the DRP's order. Therefore, the Tribunal should have considered the correctness of the final assessment order on its merits. The Court found that the Tribunal should decide the matter rather than allowing the Revenue's appeal in its entirety. The substantial questions of law were answered in favour of the assessee, the Tribunal's order was set aside, and the matter was remanded back to the Tribunal to decide the Revenue's appeal on merits.
The High Court did not decide the substantial questions of law on merits. The Revenue submitted that the appeals were not being pursued due to low tax effect, in accordance with Circular No. 3 of 2018. Consequently, the High Court dismissed the appeals on the ground of low tax effect. The substantial questions of law were left open, and the Revenue was granted liberty to seek restoration if the tax effect was found to be above the threshold or fell under exceptional clauses of the Circular. No costs were awarded.
The High Court held that there was no substantial question of law arising for consideration. The Tribunal correctly found that the assessee had not disclosed the receipt of the gift in his original return and later claimed a loss on the sale of shares in response to a notice under Section 148. Crucially, the assessee failed to furnish any registered document of gift before any of the authorities, indicating he had not legally owned the shares allegedly gifted by his daughter. The Tribunal also noted that the donor, Mrs. Meera Arun, did not demonstrate sufficient sources for the cash investment in shares. Therefore, the Tribunal's factual finding that the transaction was entirely bogus and that Section 49 of the Act did not apply, as the capital asset did not become the property of the assessee in terms of the Act, was upheld. The High Court found that the assessee did not cooperate with the assessment proceedings. The appeal was dismissed.
The High Court held that no substantial question of law arose for consideration. Regarding the first issue, the Court noted that the reassessment proceedings were upheld by the CIT(A) and the Tribunal, with the CIT(A) rightly holding that the proviso to Section 147 did not apply as there was no original assessment under Section 143(3). The Tribunal also found no change of opinion. The Court found that the factual findings of the Assessing Officer and CIT(A) regarding the nature of transactions, the increase in unsecured loans not from business activity but from mutual fund redemption, and the pattern of management of group companies were not dislodged before the Tribunal. The Tribunal agreed with the CIT(A)'s findings and saw no reason to interfere. The second issue concerning unabsorbed depreciation was not explicitly discussed in the provided text, but the overall dismissal of the appeal implies it was not found to be a substantial question of law or was decided against the assessee implicitly.
The High Court held that no substantial question of law arose for consideration. Regarding the first issue, the Court found that the ITAT had correctly analyzed the expert opinion, noting that the expert himself stated practical recoverability might not exceed 10 Kgs per bird, while the AO used 19.10 Kgs. The ITAT also considered the CIT(A)'s elaborate exercise, including market information gathered on poultry manure sales. The Court stated that it, as an appellate authority under Section 260A, could not re-assess factual aspects. For the second issue, the Court noted that the CIT(A) had allowed Rs.2,37,99,820/- earned from poultry droppings to offset property purchase after elaborate reasoning and allowing telescoping. The ITAT had independently examined this factual position, analyzed seized records, and upheld the CIT(A)'s decision. The Court found no perversity in the findings of the CIT(A) or the ITAT that would warrant interference under Section 260A. Therefore, the appeals were dismissed.
The High Court dismissed the appeals filed by the Revenue. The learned Standing Counsel for the Revenue fairly submitted that the appeals were not being pursued due to low tax effect, referencing Circular No.3/2018 of the Central Board of Direct Taxes, which sets revised monetary limits for filing appeals. Consequently, the appeals were dismissed on the ground of low tax effect. The Court explicitly stated that the substantial questions of law raised for consideration were left open. No costs were awarded, and the connected miscellaneous petitions were also dismissed.
The Revenue's appeal was dismissed on the ground of low tax effect. The learned Standing Counsel for the Revenue fairly submitted that the appeal was not being pursued due to the low tax effect, referencing Circular No. 3/2018 issued by the Central Board of Direct Taxes. This circular revises monetary limits for filing appeals, and under the revised limits, the Revenue would not be entitled to pursue appeals where the tax effect does not exceed Rs. 50 lakhs. Consequently, the present appeal was dismissed based on this circular. The substantial questions of law raised for consideration were expressly left open and not decided on merits. No costs were awarded.
The High Court held that there was no substantial question of law arising for consideration. The Tribunal had made a specific factual finding that the assessee was not engaged in turnkey projects, thus establishing functional dissimilarity between the assessee and M/s. Engineers India Ltd., justifying its exclusion. This factual finding was not disputed by the Revenue with any material evidence before the Tribunal or the High Court. The Revenue's argument that M/s. Tele Communication Consultants India Ltd. was also engaged in turnkey projects was countered by the assessee's submission that only a specific portion (0.56% operating margin cost) related to engineering services was considered, a point not contested by the Revenue. Furthermore, the TPO's earlier justification for including M/s. Engineers India Ltd. for assessment year 2007-08 was rendered unsustainable by a subsequent TPO order dated October 31, 2016, which did not include M/s. Engineers India Ltd. as a comparable for that year. The Court found no fault with the Tribunal's factual exercise. Consequently, the appeal was dismissed.
The High Court dismissed the appeals filed by the Revenue. The primary reason for dismissal was that the tax effect in these appeals was below the monetary threshold of Rs. 50,00,000/- stipulated in CBDT Circular No. 3 of 2018, which governs the Department's decision to pursue matters. The Revenue failed to point out any distinguishing features that would render the circular inapplicable. Consequently, the Court held that the Revenue could not pursue these appeals due to the low tax effect. The substantial questions of law were left open, and the appeals were dismissed without costs. The Revenue was granted liberty to seek restoration if the tax effect was later found to be above the threshold limit. No finding was given on the merits of the substantial questions of law.
The High Court allowed the appeal filed by the assessee and set aside the order passed by the Tribunal. The Court held that the Tribunal erred in not taking into consideration sub-clauses (v) and (vi) of Section 2(47) of the Income Tax Act, read with Explanation 2. The Court noted that Explanation 2 clarifies that 'transfer' includes disposing of or parting with an asset or any interest therein, or creating any interest in any asset in any manner whatsoever, by way of an agreement or otherwise. The Court found that the assessee had received consideration, handed over possession, and executed an irrevocable registered Power of Attorney, which, read with the agreement for sale, constituted a transfer. The Court also referred to CBDT Circular No. 495 of 1987, which brought power of attorney arrangements within the ambit of 'transfer' under Section 2(47)(vi). The Tribunal's reasoning that the transfer occurred only on the date of the sale deed was considered an error, especially since similar orders for co-owners had attained finality. The substantial questions of law were answered in favour of the assessee. The operative direction was to allow the appeal and set aside the Tribunal's order.
The High Court dismissed the appeal filed by the Revenue. The dismissal was based on the Revenue's submission that the appeal was not being pursued due to a low tax effect, in accordance with Circular No. 3 of 2018, dated 11.07.2018. Consequently, the substantial question of law framed for consideration was left open. The Revenue was granted liberty to seek restoration of the appeal if, at a later stage, it was found that the tax effect exceeded the threshold limit or fell under exceptional clauses mentioned in the Circular. No costs were awarded.