TaxTMI 
TaxTMI 
2025 (10) TMI 850
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....gregation of land around 200 acres (Approximately) situated in the revenue estate of village Manda Khas, Thesil Meza, District Allahabad. The assessee has also entered into MOU dated 20/06/2017 as facilator/aggregator of land situated at revenue estate of Village Kandhara, Tehsil-Mau, District-chitrakoot in the state of Uttar pradesh for aggregation of approx .. 130 acres of land with M/s PAN India Infraprojects Pvt Ltd. Hence, during the course of assessment proceedings details in respect of transactions entered into with M/s PAN India Infraprojects Pvt Ltd were called including ledger account of the said party. On perusal of ledger account of M/s Pan India Infraprojects Pvt Ltd, it is seen that the assessee has received credit of Rs. 20,25,54,000/- during F.Y. 2017-18 relevant to A.Y. 2018-19. During the course of assessment proceedings the assessee has stated that these amounts have been transferred in respect of land purchased by PAN India Infraprojects (P) Ltd, the part purchase consideration is routed to the land owners through the assessee firm. In this connection notice u/s 133(6) was also issued to M/s PAN India Infra Projects Pvt Ltd to ascertain the nature of transaction....
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....following reasons. a) The assessee vide notice u/s 142(1) dated 10/02/2023, was requested to furnish details of transactions where in the land purchase was carried out through the assessee alongwith copies of purchase agreement finally executed. The date of compliance to the said notice u/s 142(1) was fixed on 16/02/2023. In response, the assessee has submitted partial details only on 3/3/2023 wherein furnishing details of sale deed no, sale party name and address, measurement of land involved and amount involved, has been submitted. The assessee has furnished the copies of sale deed executed through him only on 21/03/2023 i.e. after issue of show cause notice dated 13/03/2023. No reason was given by the assessee as to why these documents was not given in the first instance itself. It is pertinent to mention here that out of 53 sales deed executed through assessee, only 46 have been submitted by the assessee vide submission made on 21/03/2023. b) The assessee also not furnished copies of bills/invoices raised on M/s Pan India Infraprojects Pvt Ltd till date though specifically asked vide this office notice u/s 142(1) dated 10/02/2023. The assessee has contended th....
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....PAN India infra Projects Pvt Ltd is not mentioned as any purchase party. Further, the assessee has signed the sale deed being the confirming party. The sale deeds squarely do not establish that the transactions were carried out by the assessee for M/s PAN India Infraprojects Pvt Ltd out of which the assessee has shown a receipt of Development charges of Rs 4,48,00,000/ -. Hence, the contention of the assessee that the addition of Rs. 4,48,00,000/- would amount to double addition is not found to be satisfactory in nature and hence rejected. 3.1.6 Thus the assessee has failed to offer satisfactory explanation regarding the aforesaid purchase transaction. Therefore considering the totality of circumstance, the provisions of section 68 is squarely applicable in the case of assessee. 3.1.7 Therefore, cumulatively, considering facts and circumstances of the case, as discussed above, the total credit of Rs. 20,25,54,000/- found credited in the books of assessee for the F.Y. 2017-18 is treated as unexplained cash credit u/s 68 of the Act and brought to tax accordingly u/s 115BBE of the Act. Penalty proceedings u/s 271AAC(1) are separately initiated for addition made u/s 6....
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.... considered, however same is not found acceptable. The assessee has only stressed that it had incurred labour charges of Rs. 5.76 crores as a routine business expenditure while carrying out the business during the year. However, the assessee has not furnished any documentary evidence except the muster rolls of the labours. With regards to muster roll, it is reiterated here that the copies of muster rolls so furnished by the assessee do not establish the purpose for which the labour charges were paid. The muster rolls is found to be self made and has very less authentication to be relied upon. The assessee has failed to prove with supporting documentary evidences the nexus of labour charges with the income shown in the profit and loss account. The labour charges are abnormally very high keeping in view the development charges receipts shown in profit and loss account. This aspect has also not been explained by the assessee. Further, the MOU with M/s PAN India Infra Projects Pvt Ltd, does not indicate that requirement of such expenditure when assessee is acting as a land aggregator. Thus, the assessee's quarely failed to prove the genuineness of labour charge expenditure amounting to....
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....ling of return of income u/s 139(1) of the Act for A.Y. 2018-19. However, till this date you have not furnished necessary challans of the payment of above outstanding statutory dues. Consequently, the outstanding amount of statutory dues of Rs. 1,29,15,767/- is to be disallowed u/s 43B of the Act. You are therefore requested to show cause as to why the amount of Rs. 1,29,15,767/- should not be disallowed u/s 43B of the Act and added to your total income for A.Y. 2018-19." 3.3.5 In response, the assessee vide its submission dated 21/03/2023 has submitted as under, "9.2 The assessee begs to object to the proposed dis-allowance for the reason that the provisions of section 43B of the Act are not attracted t the amount in question. It is submitted that section 43B of the Act applied to the statutory duties etc debited to the profit and loss account but not paid on or before the due date of filing of return of income u/s 139(1) of the Act, where as the amount in question represent the service tax/GST debited by us to the customer's account and not to the profit and loss account, by corresponding credit to the liability account. Thus, the said amount not impacted the pr....
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....ions and perused the record. In this case, the assessee has collected an amount of Rs. Rs. 3,52,69,463/- for the assessment year 2012-13 and Rs. 2,42,72,852/- for the assessment year 2014-15 as service tax and not remitted the same to the Government exchequer, before the due date of filing of the return of income. As such, the issue whether the provisions of section 43B of the I. T. Act applies to service tax, which is not paid before the due date of filing of the return. It was considered by the co-ordinate Bench of the ITAT, Hyderabad Benches in the case of M/s. Bartronics India Ltd. v. ACIT [ITA No.2188 and 2189/Hyd/2011 vide order dated 31.05.2012 that when the assessee has not paid the service tax as required under the provisions of section. 43B, which is also very much covered u/s 43B of the I. T. Act. The provisions of section 438 of the Act is very clear and it states that "any sum payable by the assessee by way of tax, duty, cess or fee, by whatever name called, under any law for the time being in force". Therefore, even the service tax is liability which covers u/s 43B of the Act and non-payment of the same within the stipulated time as specified u/s 43B of the Act attrac....
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....d view of Hon'ble ITAT, Cochin Bench, Cochin is supported by several other judicial authorities, including the judgment delivered by Hon'ble ITAT. Bangalore in the case of M/s. Jain Christopher v DCIT in ITA No.855/Bang/2012 - order dated 12.04.2013, as well as the judgment delivered by Hon'ble ITAT, Delhi in the case of M/s. Hemkunt Infratech (P) Ltd. v. DCIT [ITA No.6683/Del/2017 - order dated 23.03.2018." Support is also drawn from the recent judgment in the case of Smt. Husna Parveen Vs CIT (Appeal) (ITAT Varanasi) having ITA No.3/VNS/2022 dated 22/08/2022 where in it is held that The assessee cannot be permitted to adopt a modus operandi and giving an accounting treatment to the GST without passing through the profit and loss account to circumvent the provisions of section 43B. 3.3.9 In view of the above stated facts and circumstances, the assessee has not deposited the GST/Service tax liability within the due date under section 139(1) and therefore liable to tax u/s 43B of the Act. Accordingly, the entire outstanding liability on account of GST/Service tax of Rs. 1,30,50,629/- brought to tax under the head "Profits and Gain from business and prof....
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.... total discrepancy of Rs. 2,83,90,510/-, between the receipts as per profit and loss account and the receipts as per the ledger account of the parties concerned, an amount of Rs. 1,30,50,629/- represent the amount of GST/Service tax which has not been credited to profit and loss account as the amount of these taxes were directly taken to the balance sheet under the head current liablility. With respect to the balance amount of Rs. 1,56,72,702/-, the assessee has contended that this amount was receivable from M/s Azure Power Jupiter Pvt Ltd which did not constitute its income as the same was reimbursed by the assessee for Azure Power Jupiter Pvt Ltd. The assessee has further contended that since this amount of Rs. 1,56,72,702/- was not debited to profit and loss account, and therefore the amount receivable from Azure Power Jupiter Pvt ltd was also not credited to the profit and loss account. In support of this contention, the assessee has furnished ledger account reimbursement expenses for Azure power Jupiter Pvt Ltd. Accordingly, with this contentions the assessee has tried to explain the discrepancy of Rs. 2,83,90,510/ -. 3.4.7 The contention of the assessee has been cons....
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....y proceedings u/s 270A are initiated separately for under reporting of income in consequences of misreporting. 3.5 Variation-V 3.5.1 Variation on account of land Development expenses 3.5.2 During the year under consideration the assessee has debited land development expenses of Rs. 13,03,426/ -. During the course of assessment proceedings vide notice u/s 142(1) dated 09/01/2023, the assessee was requested to furnish details in respect of these expenses claimed, as under; "Details of Land Development expenses. 1. Name, address, PAN of the person to whom paid. 2. Copies of invoices raised by the party involved. 3. Details of land towards which the said expenses incurred. The details may be submitted land wise if more than one land is involved. 4. Mode of payment" 3.5.3 In response, the assessee vide its submission dated 23/01/2023, has stated that the said amount has been paid to various persons engaged in development work. The assessee has further contended that all the payments have been made through banking channel. The assessee has submitted copy of ledger account of Land development expenses in supp....
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....nt also and will submit shortly. 10.4 With regard to the allegation of not furnishing the details of land towards which the land development expenses have been claimed, we beg to enclose herewith a statement showing full particulars of land which have been procured by the assessee for PAN India Infraprojects (P) Ltd as Annexure-XI hereto. 3.5.7 The above reply filed by the assessee have been perused, but same is not acceptable. for the following reasons. a) On perusal of ledger account of land development expenses, there are total 48 entries found in the ledger involving total payments of Rs. 13,03,425/ -. There are 31 entries involving amount of Rs. 8,40,037/-, as accepted by the assessee, he could not provide even name of the person to whom the assessee has made the payments towards land development expenses. b) The assessee has not brought on record any documentary evidence as to what services have been provided by the persons involved. The assessee has failed to furnish any bills/invoices raised by these persons for the services rendered by them. c) The assessee has stated that, the said expenditure was incurred towards land developm....
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....2(1) dated 10/02/2023 the assessee was once again requested to furnish balance details. In response, the assessee submission dated 27/02/2023, stated that the bills of remaining amount of Rs. 24,36,981/- are not traceable. 3.6.3 In view of above stated facts, the assessee was requested show caused vide show cause notice dated 13/03/2023 as to why expenditure debited on account of purchase of material of Rs. 24,36,981/- should not be disallowed for want of documentary evidence and added back to your total income. 3.6.4 In response to show cause notice, the assessee vide its submission dated 21/03/2023 submitted as under; " Sir, in this regard, we have been able to trace out further bills to the tune of Rs. 5,25,250/ -. The same are attached for your kind consideration, marked as Annexure-XII. The remaining bills are still being traced out and would be submitted shortly. As such no disallowance as proposed by your goodself is warranted". 3.6.5 The submission filed by the assessee have been perused. The assessee has stated that bills of Rs. 5,25,250/- has been traced out. On perusal of bill submitted by the assessee it is seen that they are related ....
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....In the submission filed by the assessee the assessee has stated that" the amount of compensation was decided after negotiation with the land owners. After detailed negotiation with the land owners, the amount of compensation decided on the agreements for payment of crop compensation to the land owners were executed. In this case the so called crop compensation were given in the month of August 2017, and the agreement was executed only in the month of March 2018. The assessee, further not brought on record any documentary evidence to show that the persons to whom paid the crop compensation were really holding agricultural land. Also assessee has not brought on record the purchase deed of the said Agricultural land sold to the company namely PAN India Infra Pvt Ltd. The assessee was requested to furnish the copy of purchase agreements in respect of transactions entered into with PAN India Infraproject pvt ltd vide notice u/s 142(1) dated 10/02/2023(point no.11). However, same has not been submitted till date. Therefore, the assessee was requested to show caused vide show cause notice dated 13/03/2023 as to why expenditure claimed of Rs. 76,00,000/- towards crop compensation payment s....
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....e deeds for sale of land by the land owners to the nominees of Pan India Infraprojects (Pvt.) Ltd are enclosed, collectively marked as Annexure-XV. (iv) With regard to balance Crop. Compensation payment of Rs. 14,00,000/-, your goodself has observed that the assesse has not submitted anything except ledger account of Crop. Compensation. In this regard, it is submitted that Rs. 14,00,000/- have been paid to seven (7) land owners @ Rs. 2,00,000/- each. But no formal agreement was executed in respect of Crop. Compensation paid to them. However, they are also land owners, belonging to the family of the land owners in respect of whom 2 (two) agreements dated 23.03.2018 have been submitted. Their names also appear in the six sale deeds enclosed in Annexure-XV above. 12.3 In view of the submission made hereinfore and evidence enclosed as above, no adverse inference may be drawn and Crop. Compensation of Rs. 90,00,000/- may kindly be allowed." 3.7.6 I have perused the above submission of the assessee, however same is not acceptable for the following reasons. * In respect of claim of Rs. 76,00,000/-, the assessee has submitted two unregistered documents m....
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....xpenses. Date of payment Amount 06/04/2017 50000 08/04/2017 80000 3.8.3 Thus from the above, considering the amount involved for payments towards legal fees, the assessee was required to deduct tax at source. The assessee however failed to do so. The assessee was therefore requested to show caused vide show cause notice dated 13/03/2023 as to why Rs. 39,000/- being 30% of 1,30,000/- should not be disallowed u/s 40(a)(ia) of the Act and added to the total income of the assessee. 3.8.4 The date of compliance to above show cause notice was fixed on 19/03/2023. The assessee vide its submission dated 21/03/2023 merely stated that "aforesaid payments do not attract the provisions of TDS due to the nature of payments and therefore no disallowance is called for. " 3.8.5 The submission filed by the assessee have been perused. However same is not tenable. The assessee has not brought on anything on record, as to what was the nature of payments so as to they do not attract the provisions of TDS. In absence of any such details and considering the nature of payments shown by the assessee in the submission filed by it, the provisions of section 194J a....
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.... the Income Tax Act, 1961 and notice under Section 148 of the Income Tax Act, 1961 dated 29.03.2022 before the appellate authority. One of the grounds raised therein is that these notices/orders could not have been issued/passed in the first place. Certain jurisdictional issues have been raised. The submission is that the jurisdictional assessing authority could not have issued the said notices/orders, it is only the faceless assessing authority who could have done it. Mr. Pradeep Agrawal says that instead of entering into the merits of the issues the appellate authority should first decide jurisdictional issue." 3. Learned Departmental Representative raised no objection to the jurisdictional issues being decided first. 4. In these circumstances, we dispose of this writ petition with a direction to the appellate authority i.e. opposite party no. 5 to consider and decide the jurisdictional issues raised by the petitioner appellant before it at the earliest but as per law and after hearing the Department, as, in the event jurisdictional issues are decided in favour of the petitioner then the appellate authority may not have to go to the merits of the issues unless o....
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....s ACIT in WP no. 1778 of 2023 which was subsequently followed in many cases decided by Hon'ble Bombay High Court. In recent decisions High Courts of Delhi in TKS Builders Pvt Ltd vs ITO [2024] 167 taxmann.com 759, Triton Overseas Pvt Ltd vs Union of India 156 taxmann.com 318 (Cal.) Talati and Talati LLP vs ACIT [2024] 167 taxmann.com 371 (Guj.) and Mark Studio India Pvt. Ltd. WP no. 25223 and 25227 of 2024 (Madras) it has been decided that notice issued u/s 148 by the JAO was legal and as per the scheme of faceless assessment. Hon'ble Madras High Court. 7: The Delhi High Court in TKS Builders Pvt Ltd (supra) has decided that The CBDT has conferred power upon the income tax authorities of the NFAC to exercise the power and function of assessment 'concurrently', while the original jurisdiction continues with the jurisdictional AO. When the material is placed in the hands of the jurisdictional AO, it would be entitled to initiate the process of reassessment by following the procedure prescribed under section 148A of the Act. The Scheme and provisions of the Act do not denude the jurisdictional AO of the authority to undertake assessment or completely deprive i....
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....nal AO during assessment proceedings. Moreover, section 144B of the Act itself confers a power upon the Principal Chief Commissioner or the Principal Director General to transfer cases to the jurisdictional AO. Section 144B of the Act is inherently procedural and only outlines the process in which a faceless assessment may be conducted. Section 144B of the Act is only concerned with assessments and randomised allocation of cases to different assessment units. It is not intended to establish a substantive basis for the exercise of reassessment powers. Moreover, section 144B of the Act lacks provisions for initiating reassessment proceedings. While the roles for assessment within the NFAC are assigned, it does not explicitly include any procedural provisions to govern the pre- issuance stages of a notice under section 148 of the Act. In the case of Sanjay Gandhi Memorial Trust v. Commissioner of Income Tax (2023 SCC Online Del 3161) the Delhi High Court held that while the faceless system centralises case handling through the NFAC, this framework does not completely replace or nullify the jurisdictional AO's role. 10. In deciding the above Hon'ble Delhi Court had ref....
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.... COMPILATION OF CASE LAWS 7 Copy of judgement and order dated 14.09.2023 passed by Hon'ble High Court of Telangana in the case of Kankanala Ravindra Reddy vs ITO, reported in [2023] 156 taxmann.com 178 (Telangana). 8 Copy of status report in the case of Kankanala Ravindra Reddy pending before Hon'ble Supreme Court of India in SLP(C) No. 003574-/2024 filed by the Revenue. 9 Copy of judgement and order dated 03.05.2024 passed by Hon'ble High Court of Bombay in the case of Hexaware Technologies Ltd. vs ACIT, reported in [2024] 162 taxmann.com 225 (Bombay). 10 Copy of status report in the case of Hexaware Technologies Ltd. pending before Hon'ble Supreme Court of India in SLP(C) No. 021188-/2024 filed by the Revenue. 11 Copy of judgement and order dated 02.07.2024 passed by Hon'ble High Court of Bombay in the case of Venus Jewel vs ACIT, reported in [2024] 164 taxmann.com 414 (Bombay). 12 Copy of judgement and order dated 19.07.2024 passed by Hon'ble High Court of Punjab & Haryana in the case Jatinder Singh Bhangu vs Union of India, reported in [2024] 165 taxmann.com 115 (Punjab & Haryana). 13 Copy of judgemen....
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....Court. Under the scheme of the Act, one consolidated assessment order for a particular year by the Assessing Officer is to be passed, and separate assessment orders for separate issues would not be in consonance with the scheme of the Act. Similarly, the learned CIT(A) is also required to pass one consolidated order on the appeal filed by the assessee against the assessment order passed by the Assessing Officer. It would have been another matter, had the learned CIT(A), in the present case, decided the jurisdictional issues in favour of the assessee. In that scenario the issues on merits would have become merely academic and did not have been decided by the learned CIT(A). However, that is not the case here. In the present case, the learned CIT(A) has decided the jurisdictional issues against the assessee therefore, he was required to pass the order on the grounds taken by the assessee on merits as well. In this context, it will be useful to refer to relevant provisions of law under section 250(6), section 250(7) and section 251(1) of I. T. Act, which are reproduced below for the ease of reference: Section-250 (6) The order of the [Joint Commissioner (Appeals) or ....