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583 orders · Page 8 of 12
The Tribunal held that the addition on account of estimated profit on alleged on-money receipts was justified, but the AO's estimation of 15% was on the higher side. Considering the business context where embedded profit typically ranges between 10%-15%, and noting that Section 44AD provides for 8% presumptive taxation, the Tribunal deemed 11.5% profit to be fair and just. Therefore, the AO was directed to restrict the addition to 11.5% of the alleged on-money receipts. Regarding the addition on account of loan peak balance, the Tribunal found that the entire addition was based on the allegation that the assessee was a beneficiary of accommodation entries, and this was derived from search proceedings in the premises of a third party, Shri Uttamchand S. Jain. The Tribunal noted that no incriminating material was found from the assessee's premises. Citing the Hon'ble Supreme Court's decision in Abhisar Buildwell P. Ltd. (supra) and a Co-ordinate Bench decision in Gujarat Land Developers vs. DCIT, the Tribunal held that completed assessments (unabated) can only be interfered with if there is incriminating material unearthed during the search. As no such material was found from the assessee's premises, the addition on account of loan peak balance was directed to be deleted. Other grounds challenging the validity of the assessment were not pressed and were dismissed.
The Tribunal held that the approval granted under Section 153D of the Income Tax Act, 1961, in both cases was invalid. The Tribunal noted that in both instances, the draft assessment orders were submitted to the approving authority on December 27, 2019, and the approval was granted on the very same day. Given that December 28 and 29, 2019, were holidays (Saturday and Sunday) and December 31, 2019, was the last date for completing the assessment, the approving authority had only two working days (December 27 and 30). The Tribunal found that the approval was granted within 12 hours of submission, indicating a lack of sufficient time for the approving authority to examine the relevant evidence, material, or proposed additions. This haste and time constraint led to a mechanical approval without application of mind, rendering it invalid. The Tribunal relied on the decision in ACIT vs. Serajuddin & Co. and PCIT vs. Shrilekha Damani, which emphasized that the approval under Section 153D is mandatory and not a mere ritualistic formality, requiring reasoned consideration of the material on record. Consequently, the assessment orders dated December 27, 2019, were declared void ab initio and quashed. The additional grounds of appeal were allowed, and the Tribunal did not delve into the merits of the case.
The Tribunal held that the addition on account of estimated profit on on-money receipts was justified but that 15% was on the higher side. To meet the ends of justice, the Tribunal directed the AO to restrict the addition to 11.5% on the alleged on-money receipts. Regarding the addition on account of loan peak balance, the Tribunal found that the entire addition was based on the allegation that the assessee was a beneficiary of accommodation entries and that these additions were based on search action in the premises of a third party, Shri Uttamchand S. Jain. Crucially, no incriminating material was found from the assessee's premises. Following the ratio laid down by the Hon'ble Supreme Court in Abhisar Buildwell P. Ltd. and a Co-ordinate Bench decision in Gujarat Land Developers vs. DCIT, the Tribunal held that completed assessments (unabated assessments) can only be interfered with based on incriminating material unearthed during the search. Since no such material was found, the Tribunal directed the AO to delete the additions made on account of loan peak balance. Other grounds challenging the validity of the assessment were not pressed and were dismissed.
The Tribunal allowed grounds 1 to 4, finding no merit in the adjustment made by the TPO/AO on account of outstanding receivables. The reasoning was that the assessee's main international transactions (Medical Transcription Services and ITeS) were accepted as at arm's length after considering working capital adjustments under the TNMM method. The Tribunal noted that the assessee had applied an interest-rate benchmark PLR of 13.68% while computing working capital adjusted margins for comparable companies in both segments. This indicated that the impact of delayed receivables was already factored into the arm's length analysis. The Tribunal respectfully followed the decision of the Hon'ble Delhi High Court in PCIT vs. Kusum Healthcare (P) Ltd. and a coordinate bench decision in the assessee's own case for AY 2017-18, which held that further adjustment on account of outstanding receivables would distort the picture when working capital adjustments had already been made. Consequently, the impugned adjustment was directed to be deleted. Ground 5 regarding interest under Sections 234A and 234B was considered consequential and not requiring separate adjudication. Ground 6 regarding initiation of penalty proceedings under Section 271AA was dismissed as premature. Ground 7 was not pressed and kept open. The operative direction was to delete the impugned adjustment on account of outstanding receivables.
The Tribunal directed the AO to restrict the addition on account of estimated profit on on-money receipts to 11.5%. It also held that additions on account of loan peak balance cannot be made without incriminating material found during the search from the assessee's premises.
The Tribunal held that the approval granted under Section 153D of the Income Tax Act, 1961, was invalid. The facts indicated that the draft assessment order was submitted on December 27, 2019, and the approval was granted on the same day. Given that December 28 and 29, 2019, were holidays and December 31, 2019, was the last date for completing the assessment, the approving authority had only two working days (December 27 and 30). The approval being granted on the same day of submission, within 12 hours, suggested a lack of sufficient time for examination and application of mind, rendering it mechanical and hasty. This was consistent with the ratio laid down in ACIT vs. Serajuddin & Co. and PCIT vs. Shrilekha Damani, where approvals granted under similar time constraints were held invalid. Consequently, the assessment orders, being based on an invalid approval, were declared void ab initio and quashed. The Tribunal did not delve into the merits of the case as the assessment orders were quashed.
Regarding the first issue concerning the exemption under Section 10(10D), the Tribunal noted that the policy was assigned to the assessee on 06.05.2011, prior to the Finance Act, 2013 amendment. The Tribunal referred to the decision of the Coordinate Bench in Smt. Harleen Kaur Bhatia, which held that assignment leads to conversion and a change in the policy's character. The Tribunal found that the assignment endorsement on the policy supported the assessee's claim. The Tribunal reasoned that the amendment by the Finance Act, 2013, clarifying that 'Keyman Insurance Policy' includes assigned policies, is prospective and does not apply to assignments made before AY 2014-15. Therefore, the Tribunal held that the policy, after assignment, became a regular life insurance policy and the proceeds were eligible for exemption under Section 10(10D). Concerning the second issue of the Rs. 30,00,000/- cash deposit, the Tribunal found that while the assessee asserted the source from prior withdrawals and explained it was due to a postponed marriage, the explanation required further verification. The Tribunal noted the inconsistency in withdrawal patterns and household expenses and the lack of corroborative evidence for marriage-related arrangements. Accordingly, the Tribunal set aside the CIT(A)'s order on this issue and restored the matter to the Assessing Officer for fresh verification, allowing the assessee to furnish additional evidence. The issue was allowed for statistical purposes.
The Tribunal held that the reassessment proceedings were invalid because the revenue failed to establish proper service of the notice under Section 148 and the reasons recorded for reopening, as required by law. Consequently, the assessment order was quashed.
The Tribunal held that capital gains are not attracted in the year of entering into the JDA, as ownership rights were not transferred. Following the Bombay High Court's decision in Sadia Shiekh, capital gains are exigible only when the flats are handed over to the appellant.
The Tribunal held that the addition on account of estimated profit on on-money receipts was to be restricted to 11.5%. The Tribunal found the AO's estimation of 15% to be on the higher side, while acknowledging that 8% is the presumptive rate under Section 44AD. To meet the ends of justice, 11.5% was deemed appropriate. Regarding the addition on account of low peak balance of accommodation loans, the Tribunal held that it was devoid of any incriminating material found from the assessee's premises. Citing the Supreme Court's decision in Abhisar Buildwell P. Ltd. and a coordinate bench's decision in Gujarat Land Developers, the Tribunal concluded that additions cannot be made in completed assessments without incriminating material. Therefore, the AO was directed to delete the impugned additions on account of loan peak balance. Other grounds challenging the validity of the assessment were not pressed and were dismissed.
The Tribunal held that the revisionary order under section 263 was unsustainable as the issue of non-reconciliation between TDS and reported income had been decided in the assessee's favor by the ITAT and the High Court in his own cases. The AO had also considered this issue during assessment.
The Tribunal allowed the appeal of the assessee. The Judicial Member found that the Assessing Officer (AO) solely relied on the statement of Ashwin Sheth recorded during the search action without conducting any independent investigation or bringing material on record to substantiate the figure of Rs. 8,80,000/-. There was no evidence connecting this alleged on-money payment to the assessee. The assessee had consistently denied paying any additional amount beyond the agreed sale consideration and payments made under a supplementary agreement. The Tribunal noted that a person's statement can only be read against an individual if supported by corroborative evidence, and a mere statement cannot be treated as evidence against a third person unless tested by cross-examination. The Tribunal followed the decision in Hoshang Jamshed Mohta vs. ITO and the Supreme Court's ruling in Andaman Timber Industries vs. CCE, holding that making an addition based on a third-party statement without affording an opportunity for cross-examination is unjustified. Therefore, grounds related to the denial of cross-examination and the addition under Section 69A were allowed. Since relief was granted on merits, other submissions on the validity of reopening became academic.
The Tribunal noted the assessee's request and the department's non-objection. It allowed the withdrawal request, dismissing the appeal as withdrawn, but granted the assessee the liberty to seek restoration of the appeal if the settlement under the VSV Scheme does not materialize.
The Tribunal directed the AO to restrict the addition on account of estimated profit on on-money receipts to 11.5%. It also held that additions on account of loan peak balance cannot be made without incriminating material found during the search from the assessee's premises.
The Tribunal noted that the assessee requested the appeal be treated as withdrawn with liberty to revive it if the DTVSV application does not materialize. The Revenue did not object to this request.
The Tribunal held that mesne profits received for the deprivation of use and occupation of property, in this case, are in the nature of damages and constitute a capital receipt, not chargeable to tax. The Tribunal followed the view favouring the assessee when there are divergent opinions among High Courts.
The Tribunal held that mesne profits received for the deprivation of use and occupation of property, in this case, are in the nature of damages and constitute a capital receipt, not chargeable to tax. The Tribunal followed the view favouring the assessee when there are divergent opinions among High Courts.
The Tribunal held that the assessee should be given another opportunity to produce the concerned parties for verification. The matter was restored to the Assessing Officer for a de novo assessment.
The Tribunal decided that the addition on account of estimated profit on on-money receipts was on the higher side at 15%. Considering the presumptive taxation under Section 44AD at 8% and the general practice in the real estate business, the Tribunal directed the AO to restrict the addition to 11.5% of the alleged on-money receipts, deeming this rate to meet the ends of justice. Regarding the addition on account of loan peak balance, the Tribunal held that the basis of this addition was the allegation of accommodation entries derived from search actions on third parties, not from the assessee's premises. Citing the Supreme Court's decision in Abhisar Buildwell P. Ltd. and a Co-ordinate Bench ruling, the Tribunal found that no incriminating material was found from the assessee's premises to justify additions to completed assessments (unabated). Therefore, the Tribunal directed the deletion of additions made on account of loan peak balance. Other grounds challenging the validity of the assessment were not pressed and were dismissed.
The Tribunal held that the AO failed to record specific findings against the assessee and relied on general modus operandi reports without adverse findings on the assessee's documents. For un-abated assessments, additions require incriminating material found during search, which was absent here.
The Tribunal found merit in the assessee's submission that there was a mistake in reporting correct salary income in Form 26AS vis-à-vis Form 16. Consequently, the matter was restored to the jurisdictional assessing officer to verify the facts and pass a fresh assessment order.
The Tribunal held that the notices issued under Section 148 were invalid because the approval for their issuance was obtained from the Pr. CIT instead of the Pr. CCIT/DGIT, as required under Section 151 when more than three years have elapsed from the end of the assessment year. Consequently, the assessment orders are liable to be quashed.
The Tribunal held that the AO failed to record specific findings against the assessee and relied on general modus operandi reports without adverse findings on the assessee's documents. For un-abated assessments, additions require incriminating material found during search, which was absent here.
The Tribunal held that the AO failed to record specific findings against the assessee and relied on general modus operandi reports without adverse findings on the assessee's documents. For un-abated assessments, additions require incriminating material found during search, which was absent here.
The Tribunal held that the assessee's claim for vacancy allowance under Section 23(1)(c) of the Act for the vacant units should be accepted, as the assessee was actively trying to let them out. Therefore, the annual value of these units should be considered 'Nil'.
The Tribunal held that the AO failed to dispose of the assessee's objections to the reopening by passing a speaking order, which violates principles of natural justice. Following the jurisdictional High Court's precedent, the reassessment proceedings were quashed.
The Tribunal dismissed the appeal as withdrawn, granting the assessee liberty to approach the Tribunal for restitution if the Vivad Se Vishwas Scheme application is not accepted.
The Tribunal noted that the quantum proceedings had been remitted back to the Ld. CIT(A) for fresh adjudication. Consequently, the penalty order was also remitted back to the Ld. CIT(A) to decide the penalty appeal after the quantum appeal is decided.
The Tribunal held that the Commissioner of Income Tax (Appeals) rightly deleted the addition, relying on previous ITAT decisions that found these lenders to be genuine. The Tribunal found that the assessee had provided sufficient evidence, and the AO had not independently examined the documents.
The Tribunal held that the SEBI report clarified that there was no manipulation in the trading of M/s. Splash Media & Infra Ltd. shares and the transactions were genuine. Therefore, the addition made by the AO under Section 68 and the consequential adhoc commission were deleted.
The Tribunal held that the Assessing Officer (AO) did not ask for variations in sale prices with regard to any particular flat, despite the assessee's request for such clarification. The AO's reliance on the website www.magicbricks.com was found to be inappropriate, as the website's disclaimer clearly stated that the data was not based on actual transactions and required independent verification. The Tribunal also noted that the AO made no efforts to issue notices to purchasers to ascertain the actual sale consideration paid. The conclusion of a huge difference in sale prices was considered mere guesswork. The Tribunal further observed that many flats were sold in 'shell condition', which naturally leads to price variations. The AO rejected the books of account based on guesswork and surmises without cogent material. The Tribunal relied on the Supreme Court's decision in K.P. Varghese v. ITO (1981) 131 ITR 597, which held that the onus is on the Revenue to establish understatement of consideration with cogent evidence. Since the Revenue failed to provide such evidence, the addition made by the AO was unjustified. The Tribunal found that the CIT(A) had rightly deleted the addition. Therefore, all grounds of appeal filed by the Revenue were dismissed.
The Tribunal noted that the assessee's claim of incorrect shareholding was not adequately substantiated with credible evidence. However, the Tribunal also acknowledged that the assessee had presented additional evidence regarding business interest and requested the matter be remanded to the Assessing Officer to consider the claim of business expediency.
The Tribunal held that the AO failed to dispose of the assessee's objections to the reopening by passing a speaking order, which violates principles of natural justice. Following the jurisdictional High Court's precedent, the reassessment proceedings were quashed.
The Tribunal found merit in the assessee's contention that the notice under Section 148 of the Income Tax Act, 1961, for AY 2017-18 was issued without obtaining prior approval from the appropriate authority. The Tribunal noted that the period of three years from the end of AY 2017-18 had elapsed on March 31, 2021. According to Section 151(ii) of the Act, for cases where more than three years have elapsed, the approval must be obtained from the Principal Chief Commissioner or Chief Commissioner. However, the approval for the notice was obtained from the Principal Commissioner, which is not the mandated authority under the new regime for cases beyond three years. The Tribunal relied on the Supreme Court's decision in the case of Ashish Agarwal (supra) which clarified that for issuing notices under Section 148A and 148 on or after April 1, 2021, prior approval from the authorities specified under Section 151 is required. Consequently, the Tribunal quashed the notice issued under Section 148. As the notice was quashed, the Tribunal deemed it unnecessary to delve into the merits of the case regarding the addition made under Section 68.
The Tribunal held that the notice issued under section 148 of the Act on 10.07.2022 for AY 2015-16 was barred by limitation. Consequently, the reassessment proceedings and the assessment order were quashed.
The Tribunal held that the appeal form was invalid due to being unsigned and unverified. Notices sent to the assessee were returned as 'address not known'. Therefore, the appeal was rejected in-limine.
The Tribunal held that the Commissioner of Income Tax (Appeals) rightly deleted the addition, relying on previous ITAT decisions that found these lenders to be genuine. The Tribunal found that the assessee had provided sufficient evidence, and the AO had not independently examined the documents.
The Tribunal held that the taxability of the enhanced compensation and interest is postponed until the final order of the High Court, as the right to receive the amount was disputed and subject to the outcome of the appeal. Consequently, the penalty levied on this addition was also deleted.
The Tribunal held that the taxability of the enhanced compensation and interest is postponed until the final order of the High Court, as the right to receive the amount was disputed and subject to the outcome of the appeal. Consequently, the penalty levied on this addition was also deleted.
The Tribunal upheld the CIT(A)'s decision on all three grounds. For employee contributions, it relied on the Supreme Court's judgment in *Checkmate Services Pvt. Ltd. v. CIT*. For the interest disallowance and GST/Service Tax disallowance, the Tribunal noted the assessee's failure to provide documentary evidence to substantiate business purpose or timely payment, respectively.
The Tribunal held that the PCIT's order under Section 263 was not valid. It found that the AO had applied his mind and followed one of the possible views, thus the order was not erroneous nor prejudicial to the interest of the revenue.
The Tribunal held that the assessee had purchased the property in accordance with Section 54F, as the payments were made in 2008, which was after the sale of the leasehold property. The Tribunal also found that the interest income from a fixed deposit had already been offered to tax by the assessee's mother and directed the AO to delete the addition.
The Tribunal held that the assessee had discharged its onus by providing complete details of the lenders, who were active companies with substantial net worth and were regularly assessed to tax. The AO's addition was based solely on an investigation report without independent verification.
The Tribunal held that the CIT(A) was correct in quashing the reassessment order. The Tribunal noted that the CIT(A) had extensively considered the Supreme Court's decision in Rajiv Bansal. The key issue was the validity of the sanction under section 151 of the Act. The Tribunal found that since the order under section 148A(d) and the notice under section 148 were issued on 23.07.2022, which was after three years from the end of AY 2017-18 (31.03.2021), the specified authority for granting sanction, as per section 151(ii) of the Act, should have been the Principal Chief Commissioner or Chief Commissioner (Pr.CCIT/CCIT). However, the prior approval was obtained from the Pr. Commissioner of Income-tax-20, Mumbai, which was not the appropriate authority under section 151(ii). The Tribunal rejected the Revenue's contention that the notice was issued within the 'surviving period' and was valid. The Tribunal found that the sanctioning authority was not in accordance with the provisions of section 151(ii). Therefore, the notice under section 148 was invalid, and the consequent reassessment order under section 147 was quashed. Other grounds of appeal were rendered academic. The Tribunal relied on the decision of the Supreme Court in Rajiv Bansal and a coordinate bench decision in Assistant Commissioner of Income Tax vs Munish Financial, Mumbai.
The Tribunal restored the matter to the CIT(E) for fresh adjudication, providing the assessee with an adequate opportunity to furnish the requisite details and make necessary compliance. The appeals were allowed for statistical purposes.
The Tribunal held that the Commissioner of Income Tax (Appeals) rightly deleted the addition, relying on previous ITAT decisions that found these lenders to be genuine. The Tribunal found that the assessee had provided sufficient evidence, and the AO had not independently examined the documents.
The Tribunal found that the assessee was prevented by sufficient cause from responding to the notices from the CIT(A). Therefore, in the interest of substantial justice, the CIT(A)'s order was set aside, and the matter was restored to the CIT(A)'s file for fresh adjudication.
The Tribunal held that the assessee had sufficiently explained the source of the cash deposits, which were derived from his business of lending against gold ornaments. Therefore, the addition under Section 69A was deleted.
The Tribunal held that the prior approval for issuing the notice under Section 148 and passing the order under Section 148A(d) was not obtained from the appropriate authority as required by Section 151(ii) of the Income Tax Act. Consequently, the notice and reassessment order were quashed.
The Tribunal condoned the delay of 19 days in filing the cross-objection. The core issue was the validity of reassessment proceedings, specifically the approval for reopening obtained from the Principal Commissioner instead of the Principal Chief Commissioner as required by Section 151 for cases beyond three years.