TaxTMI 
TaxTMI 
2023 (11) TMI 498
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....ainst the confirmation of notional addition of Rs. 4,68,566/- by Ld. CIT(A) as made by the AO towards rent receivable by the assessee w.e.f. 28.07.2012 as per the order passed by the Court of Home Controller, Patna. 3. Facts in brief are that the AO during the course of assessment proceedings, observed that the assessee has rented out the property to Krishna Niketan at monthly rate of Rs. 2,22,115/- and accordingly the AO called upon the assessee to show cause as to why the annual value of the property u/s 23 of the Act should not be calculated by applying same rate in the whole financial year. The assessee replied vide letter dated 21.03.2016 submitting that the above property was let out at monthly rent of Rs. 1,20,000/- per annum of which the assessee's share is ½ at prevalent rate for a period from December, 2008 to November, 2038. It was submitted that over a period, the rental value of property has increased. Besides the tenant was using the property for residential purposes of its staff. Hence the assessee started pressuring the tenant for increase of rent and even the matter went into dispute and suit was filed in the appropriate Court to get the eviction of propert....
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....the AO to delete the addition. The appeal of the assessee is allowed. ITA NO. 89/Pat/2020 (Revenue) & C.O. No. 02/Pat/2021(Assessee)_ for AY 2012- 13 6. The issue raised in ground no. 1 by the revenue is against the order of Ld. CIT(A) quashing the order passed u/s 154 of the Act dated 24.02.2020 by the AO. 7. Facts in brief are that the assessment u/s 143(3) read with Section 147 of the Act was framed by the AO vide order dated 10.12.2019 assessing total income of Rs. 8,18,08,606/-. Thereafter the AO passed a rectification order u/s 154 of the Act dated 24.02.2020 wherein the AO stated that in the assessment order dated 10.12.2019, the section and sub-section under which the assessment was framed, was wrongly mentioned as "section 143(3) r.w.s 147" instead of "section 144 r.w.s 147 of the Act" which was a mistake apparent from the record and accordingly the same was rectified. 8. The Ld. CIT(A) allowed the appeal of the assessee by quashing the order passed by the AO u/s 154 of the Act by observing and holding as under: "I have considered the fact and merit of the case, I have also gone through the Assessment Order as well as grounds of appeal filed and written submission ma....
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....rn for A.Y. 2012-13 filed on 27.04.2019. The ld AR argued that the assessee replied the said show cause notice on 27.11.2019 by submitting that income from capital gain was not included in the return of income on the ground that the said sale deed was cancelled as per terms and conditions agreed between the assessee and the buyer of property. The Ld. A.R also submitted that no notice has been issued and served upon the assessee to invoke the provisions of section 144 of the Act and therefore there is no question of passing the assessment order which is sought to be rectified. The ld Counsel argued that the order passed u/s 154 of the Act has to be annulled as the assessment order passed dated 10.12.2019 cannot be said to have been passed u/s 144 of the Act since there was no failure by the assessee as contemplated u/s 144 of the Act. The Ld. A.R stated that the debatable issue is whether on the facts and circumstances of the case the return of income filed on 20.04.2019 relating to AY 2012-13 is valid or invalid in the view of the provisions of Section 148,139(9) and 292(8) of the Act and therefore inference can only be drawn on the facts and provisions of law of the Act after long....
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....o. 02/Pat/2021 for AY 2012-13 Cross-objection raised by the assessee in support of the order of Ld. CIT(A) and since we have dismissed the appeal of the revenue, then the CO becomes infructuous and is dismissed. 13. ITA No. 94/Pat/2020 (Revenue) & CO No. 03/Pat/2021(Assessee) for AY 2012-13 The only issue raised by the revenue is against the order of Ld. CIT(A) quashing the assessment on the ground that no notice u/s 143(2) was served to the assessee before completing assessment proceedings. 14. Facts in brief are that the assessee filed the return of income on 18.12.2012 declaring income of Rs. 87,64,009/-. Thereafter the case of the assessee was reopened u/s 147 of the Act by issuing notice u/s 148 of the Act on 28.03.2019. The assessee has filed return of income in response thereto on 27.04.2019 which was found to be invalid due to some reasons however no defective notice u/s 139(9) was issued before treating the return as invalid by the AO. Besides the AO did not issue notice u/s 143(2) of the Act during the assessment proceedings. It is pertinent to mention that the AO has not only assessed to income of the assessee on the basis of said return filed by the assessee but als....
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.... Court has held that failure of the Assessing Officer issue notice under section 143(2) of the Act is fatal toorder of reassessment; such failure cannot be condoned by referring to section 292BB of the Act. 4. In the case of CIT Vs. Fomen to Finance and Investment(P.) Ltd. [2020] 113taxmann.com 237 (Bombay), the Hon'ble Bombay High Court has held that for block assessment of undisclosed income also, provision of section 142,143(2) and 143(3) of the Act are applicable and no assessment can be made without issuing notice under section 143(2) of the Act. 5. In the case of Sanjeev Aggarwal Vs. DCIT [2016] 70 taxmann.com 265(Chandigarh-Trib.) the Hon'ble Chandigarh Tribunal has held that where the Assessing Officer passed an order under section 147 read with section 143(3)of the act for making assessment without issuing notice under section 143(2) of the Act, it would be invalid.. 6. CIT Vs. Bihari Lal Agrawal[2013] 33 taxmann.com 553 (Allahabad); 1. ITO Vs. DD Ahuja & Brothers [2014] 45 taxmann.com 336(Lucknow-trib.); 2. G.N.Mohan Raju Vs. ITO[2015] 57 taxmann.com 415 (Bangalore-Trib.); 3. Mohinder Kumar Chhabra Vs. ITO [2014] 48 taxman.com 120(Delhi-Trib.) In vie....
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....ssued u/s 148 of the Act by the AO has not only assessed the income on that basis of such return of income but also issued notice u/s 142(1) of the Act along with questionnaires as annexure whereby it was show caused as to why the income from capital gain should not be added to the income of the assessee due to non declaration of the same in the return of income. The ld. A.R argued that by misconstruing the provisions of section 139(9) of the Act and 292B of the Act, the AO has treated the return of income as invalid which is wrong and in defense, he relied on certain decisions namely PCIT Vs Silver Line 363 ITR 465 (Delhi) and Sapthagiri Finance and Investments Vs ITO (2013)90 DTR (Mad)289. The ld AR contended that in absence of issue of notice u/s 143(2) of the Avct , the assessment framed u/s 143(3) r.w.s. 147 of the Act is illegal and invalid. The ld AR argued that the said defect of non issuance of notice u/s 143(2) is not curable even u/s 292BB of the Act. In defense of his arguments the ld AR relied on the PCIT Vs Hotel Blue Moon(2010)188 Taxman 113(SC) and Sanjeev Aggrawal vs DCIT (2016) 70 Taxman 265 (Chd Tribunal). 17. After hearing the rival contentions and perusing the....
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.... became invalid and was cancelled and consequently no capital gain was shown in the return of income. Therefore even on merit the revenue has no case and Ld. CIT(A) has rightly allowed the appeal of the assessee. Consequently we dismiss ground no.2 of the revenue by upholding the order of Ld. CIT(A). Cross-objection is in support of the appellate order of Ld. CIT(A) and therefore is being dismissed as we have dismissed the appeal of the revenue. 19. ITA NO. 96/Pat/2021 for AY 2016-17 The only issue raised in the grounds of appeal is against the confirmation of addition of Rs. 34,00,000/- by the Ld. CIT(A) as made by the AO u/s 68 of the Act. 20. Facts in brief are that the return was filed on 31.03.2017 declaring total income of Rs. 4,24,41,600/- which was revised by the assessee declaring total income of Rs. 2,49,73,811/-. The said revision was done in order to reduce the claim u/s 54EC and 54F against the declared long term capital gain on certain long term gain during the course of assessment proceedings. The AO observed that the assessee has taken unsecured loan of Rs. 34,00,000/- and accordingly called upon the assessee to furnish the details of names and addresses of the p....
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....l in the case of ACIT vs. Golden Line Studio Pvt. Ltd. (2018) 98 taxmann.com 299 (Mumbai-Trib) has held as under: "15. However, in the instant case, we are of the view that the "nature" of the transaction has been explained by the assessee as Share Premium, which could not be contradicted by the revenue with any other material. There is no dispute with regard to the "Source". Hence, in effect, the conditions prescribed in sec. 68 of the Act has been fulfilled by the assessee. With regard to the basis for excess premium, we have noticed that the AO has considered the share premium amount as excess in nature, only for the reason that it is in excess of Book value of shares. We have noticed that the "book value" of shares would value only "Equity shares" and not "Preference shares". Hence, the very basis on which the AO determined the excess premium" should, in our view, is not sustainable. In any case, the assessee has shown that the transaction is a commercial transaction involving receipt of money @ Rs. 500/- per share and repayment of the same @ Rs. 750/- per share after a period of five years. Yet another point, which supports the case of the assessee is that the assessee had r....
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....of acquisition of new house as a residential flat on 04.02.2016 beside deduction of Rs. 50,00,000/-u/s54EC of the Act for making investment in the NHAI Bond during the relevant assessment year. According to AO, the long term capital has accrued to the assessee in AY 2012-13 and not during the year when the part of money was received by the assessee and therefore, the AO rejected the claim u/s 54EC & 54F and added the same of Rs. 4,95,12,849/- to the income of the assessee. 25. The Ld. CIT(A) allowed the appeal of the assessee by observing and holding as under: As regards the denial of exemption as per sale deed submitted before Assessing Officer as well during appellate proceedings it is mentioned that in case the cheque amount will not be realized by the appellant then the sale deed will stand nonexistent and amount paid by the purchaser will be forfeited. In this case amount of consideration could not be realized by the appellant because the said cheque was bounced and payment could not be effected. After this the appellant took back the possession of land and filed case in High court & civil court. The compromise between appellant and purchaser took place in A.Y. 2016-17 an....
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....d declared capital gain tax and paid the said tax and invested an amount of Rs. 50,00,000/- in REC Bond u/s 54EC of the Act. After considering the facts mentioned above, I find force in appellant's arguments and submission. Assessing Officer could not consider the fact that actual transaction of said land could only take place in A.Y. 2016-17 and appellant correctly calculated the capital gain tax. In view of the above, addition made by the Assessing Officer on account of disallowance of exemption claimed under section 54F & 54EC of the Act is hereby deleted. As regards the addition on account of disallowance of claim of loan liability to the tune of Rs. 34,00,000/- On perusal of assessment order, it is observed that after availing several opportunities the appellant has not provided the reason why the name of M/s Rohit Engicon Put. Ltd. was not disclosed in earlier replied. On the basis of material available on record the A.O added the loan liabilities of the assessee in his total income. During the assessment proceedings as well as appellate proceedings the appellate failed to substantiate the loan liabilities of Rs. 3400000/-. Hence the addition made by the A.O, is h....
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.... 28. Facts in brief are that the assessee carried on business under the name Kumar Enterprises as a proprietor. During the instant financial year the assessee has not carried on any business in the name of M/s Kumar Travels or M/s Taran Communications in which the assessee was doing business in the earlier years. During the year, the balance sheet and profit and loss account of M/s Kumar Enterprise was furnished before the AO. The assessee has been shown the business income of Rs. 4,87,700/- from M/s Kumar Enterprise in his total income. The AO rejected the books of account u/s 145(3) on the ground that income from M/s Kumar Travels and M/s Taran Communications were not shown in the books of account and therefore the same were liable to be rejected. The AO estimated the income of Rs. 2,00,000/- per month and after revising the income shown by the assessee , made an addition of Rs. 19,19,300/- on estimated basis. 29. The Ld. CIT(A) in the appellate proceedings allowed the appeal of the assessee by observing and holding as under: "On going through the submission made by the appellant, it is observed that the assessee during the financial year 2015-16 had carried on business under ....