TaxTMI 
TaxTMI 
2020 (6) TMI 696
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....ome Tax (Appeals) has erred in law as well as on facts in deleting the addition of Rs. 43.46, 874 /- (including disallowance of Rs. 13.67.240 /- in respect of which the CIT(A) has also directed the AO to decide assessee) made on this issue after giving reasonable opportunity of hearing the account disallowance u/ s 40 (a)(ia) of the I. T. Act. 3.. The Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on facts in deleting the addition of Rs. 7, 24. 395 /- made on account of disallowance u/ s 40 (a)(ia) of the I.T. Act. 4.. The Ld. Commissioner of Income Tax (Appeals) has erred in facts in deleting the addition of Rs. 30.64.438 /- made disallowance u/ s 14 A read with rule 8 D. 5.. The Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on facts in deleting the addition of Rs. 1. 27.13.360 /- made on account of disallowance of brokerage expenses. 6.. The Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on facts in deleting the addition of Rs. 1. 71.979 /- made on account of disallowance of expenses u/ s 40 A(2)(b) of the I.T. Act. 7.. The Ld. Commissioner of Income Tax (Appeals) has e....
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....oner of Income Tax (Appeals) has erred in law as well as on facts in deleting the addition of Rs. 2. 86.594 /- made on account of disallowance of expenses u/ s 40 A(2)(b) of the I.T. Act." 4. In CO No. 271/Del/2015, the assessee has raised the following grounds: "1. That the additions/disallowance made by the Assessing Officer by passing the assessment order under Section 153A r.w.s. 143(3) are illegal, bad in law & without jurisdiction. 2. That on the facts and circumstances of the case, the CIT(A) erred in not quashing the order dated 10.08.2010 passed by the assessing officer under section 153A as barred by limitation since the same had been passed beyond time limit specified under section 153B(1) of the Income Tax Act, 1961 ('the Act') inasmuch as: a) the audit conducted by the special auditor under section 142(2A) of the Act was not required because the assessing officer did not point out any complexity in the books of accounts of the appellant before issuing any such directions; and b) in any case, the extended time period allowed to the special auditor for furnishing audit report could not be excluded in terms of clause (ii) of Explanat....
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.... 6. That the CIT(A) erred on facts and in law in not accepting method of accounting and accounting policies adopted by the appellant in respect of Bikaner project accounting for recognizing the revenue and cost thereof. 6.1 That the CIT(A) erred on facts and in law in upholding without any basis and justification for presuming the sale value of the Bikaner Land as Rs. 201.61/- per sq. feet (Estimated) against the actual sale value for the plot to plot evidenced by proper, authentic and legal documents, wherein no defect/deficiencies/ in correctness have been found. 7. Re: Disallowance under section 14A/ r.8D That the CIT(A) erred on the facts and in law in upholding addition of Rs. 2,93,635/-under provision of section 14A/r.8D of the Act. Re: Interest under section 234A/B of the Act 8. That the assessing officer erred on facts and in law in charging/ computing interest under sections 234A & 234B of the Act. 5. In CO No. 284/Del/2015, the assessee has raised the following grounds: "1. That the additions/disallowance made by the Assessing Officer by passing the assessment order under Section 143(3) are illegal, bad in law &....
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....ection 40 (a) (ia).RelianCe is placed upon CIT Vs. Vector Shipping Services (P) Ltd. 357 ITR 642 (ALLAHBAD) (S.LP of the Department has been dismissed by Hon'ble Appex Court vide order dated 02.07.2014) 5.2 That without prejudice, out of total expenditure Rs. 40,78,60,092/-, only Rs. 15,97,52,489/- have been claimed as deduction and balance have been transferred to work in progress, therefore not claimed as a deduction, thus only 39.16% of the total expenditure are claimed as deduction. Consequently at the most, only 39.16% of such expenditure which ultimately stands hold being incurred in violation of section 40(a) (ia) can be disallowed. Re: Addition of assumed, presumed and deemed assessable profits from Bikaner and Mohali Projects. 6. That the CIT(A) erred on facts and in law in not accepting method of accounting and accounting policies adopted by the appellant in respect of Bikaner and Mohali projects accounting for recognizing the revenue and cost thereof. 6.1 That the CIT(A) erred on facts and in law in upholding without any basis and justification for presuming the sale value of the Bikaner Land as Rs. 201.61/- per sq. feet (Estimated) ag....
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....ecial Auditor vide letter dtd. 25.03.2010 requested for extension of time. * This request was forwarded by the AO to CIT, Central - II, New Delhi. * Vide his letter dtd. 13.04.2010, granted the extension for a further period of 60 days i.e. upto 13.06.2010. * The special audit report (SAR) has been furnished to the AO on 11.06.2010. 9. The issue before us is to examine whether the action of the ld. CIT, Central-II for granting extension for the further period is legally valid are not. 10. The ld. AR referred to the provision below Section 142(2C) and argued that it is the Assessing Officer who can grant the extension of period for completion of audit but not the CIT, Central-II. He referred to the provisions of the Act which are as under before resting his detailed arguments: "Provided that the [Assessing] Officer may, [suo motu, or] on an application made in this behalf by the assessee and for any good and sufficient reason, extend the said period by such further period or periods as he thinks fit; so, however, that the aggregate of the period originally fixed and the period or periods so extended shall not, in any case, exceed one hundred....
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....as under:- a) Anjuman M.H. Ghaswala:- This case related to Power of Settlement Commission Vs. CBDT for waiver of interest u/s 234A, 234B & 234C of IT Act. b) Kelvinator of India Ltd:- Issue of change of opinion for the reason to believe escapement of income. c) Dr. Nalini Mahajan:- These issue was exercising power to issue authorization u/s 132 by Additional Direction. In all these cases, the jurisdiction was challenged on the basis of either initiation of assessment or search authorization or level of interest which is distinguishable on the facts of the case, which is only extension of time period for audit u/s 142(2A). C. Ld. AR argued that exercise of statutory power of an authority at the discretion of another authority vitiates the proceedings. 11. The Purtabpore Co. Ltd. v. Cane Commissioner of Bihar and others: 1969(1) 12. Commissioner of Police, Bombay v. Gordhandas Bhanji: AIR 1952 SC 16 13. Anirudhsinji Karansinhji Jadeja and Another v. State of Gujarat: (1995)5 SCC 302 14. State of U.P. & others v. Maharaja Dharamander Prasad Singh & others: (1989)2 SCC 505 My submission are as und....
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....tries Ltd. Cited Supra. The relevant explanation is reproduced as under:- "Provided that the Assessing Officer may, suo moto or on an application made in this behalf by the assessee and for any good and sufficient reason, extend the said period by such further period or periods as he thinks fit; so, however, that the aggregate of the period originally fixed and the period or periods so extended shall not, in any case, exceed one hundred and eighty days from the date on which the direction under sub- section(2A) is received by the assessee." The requirement of application of proviso can be summarized as under:- 1. The assessing officer can extend the time period for audit u/s 142(2A) either suo moto or an application made by the assessee. 2. The assessing officer has for good and sufficient reason can extend period for audit. In present case the facts are as under:- 1. The assessing officer has received the request from special auditor for extension of time to complete audit u/s 142(2A) which was account of delay on the part of the assessee. 2. The assessing officer was satisfied on the reason submitted by the s....
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....hi. Sir, Subject: Second appeal in the case of ACIT Vs Soul Space Projects Ltd., ITA No.193/Del/2015 for A.Y.2007-08, 1849/Del/2015 for A.Y.2008-09 and 4352/Del/2015 for A.Y. 2009-10 - matter reg. Ref: F.No. CIT/DR/ITAT/G-Bench/2019-20/195 dated 27.01.2020. Kindly refer to the above noted subject. 2. On perusal of assessment and special audit records in the case of Soul Space Projects Ltd, it is found that M/s Dinesh Mehta & Co., Special Auditor appointed in the case of Soul Space Projects Ltd., has filed an application on 08.04.2010 related to extension of time for furnishing the special audit report. Accordingly, the then AO has forwarded a letter to Ld. CIT, Central - II, New Delhi on 08.04.2010 regarding extension of special audit in this case and stated as under:- "2. M/s Dinesh Mehta & Co. has filed a request vide letter dated 25.03.2010 for granting extension of time for a further period of two months for submission of the aforesaid report because there is delay on the part of assessee to furnish details and information required by the auditors as per annexure appended by the auditors with the aforesaid letter (C....
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....nvey the extension of period to the Special Auditors. The above referred letters are also enclosed herewith for ready reference." 13. The order of the DCIT, Central Circle-17, which is an important document to determine whether the provisions of Section 142(2C) are followed or not. F.No. DCIT-CC-17/Special Audit/2010-11/40 Office of the Deputy Commissioner of Income Tax Central Circle -17, Room No. 353, ARA Centre, Jhandewalan Extension, New Delhi Phone No. 23593441 Date: 13/04/2010 To, The Principal Officer, M/s Soul Space Projects Ltd. A-21/B-1 Extn., Mohan Co-operative Industrial Area, Mathura Road, New Delhi Sub: In the matter of M/s Soul Space Projects Ltd. - Assessment Year 2006-07 to 2008-09 - Special Audit under section 142(2A) of the Income Tax Act, 1961... regarding Sir, Please refer to the above. In this connection you are hereby informed that the Commissioner of Income Tax (Central) - II, New Delhi vide his office letter F.No. CIT/(C)-11/10-11/24 dated 12/04/2010 has granted extension of 60 days to the special auditors M/s Dinesh Mehta & Co., Chartered Accou....
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....o below Sec. 142 (2C) provides for the procedure for giving extension for completing the special audit task. It clearly provides that the Assessing Officer shall extend the said time period if the conditions as mentioned in the said proviso stands satisfied. Thus, while initial direction is to be given with the approval of CCIT / CIT, however, for extension, it is only the Assessing Officer who has to take a decision for extension. It is to be specifically pointed out that in Sec. 142 (2A) law mandates the prior approval of CCIT/ CIT, while in the proviso below Sec. 142 (2C), while to grant extension, the sole power is vested with the Assessing Officer. The statute u/s 142(2A) provides for special audit with the previous approval of the CIT is intended with an objective that the subject matter stands examined by the higher and more experienced officers so that it may not bring unnecessary work and equity to the assessed. Once the issue u/s 142(2A) stands examined by the higher authorities, thereafter, for the issue of extension u/s 142(2C), there is no need for the higher authorities to be involved and the law provided the circumstances, on existence of which, this decision has bee....