×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
This appeal by the assessee is directed against order dated 28/04/2016 passed by the Ld. Commissioner of Income-tax (Appeals)-30, New Delhi, for assessment year 2011-12 raising following grounds:
1. That the Commissioner of Income Tax (Appeals) [‘CIT(A)’] erred on facts and in law in not holding that the assessment order passed by the assessing officer under section 147/143(3) of the Incometax Act, 1961 (“the Act”) is beyond jurisdiction, bad in law and void-ab-initio.
1.1 That the CIT(A) erred on facts and in law in upholding validity of re-assessment proceedings without appreciating that the same were initiated without there being ‘reason to believe’ that income of the appellant had escaped assessment and were based on incorrect inference drawn from documents already available on record.
1.2 That the CIT(A) erred in not appreciating that reassessment proceedings under section 147 of the Act having been initiated merely on the basis of certain third party information, without independent application of mind by the assessing officer, is illegal and bad in law. Without Prejudice
2. That the CIT(A) erred on facts and in law in upholding the disallowance of travel expenditure amounting to Rs.l 1,00,000, incurred by the appellant for availing services of a chartered flight on the ground that the appellant had failed to substantiate that such expenditure was incur ed wholly and exclusively for the purpose of business.
2.1 That the CIT(A) erred on facts and in law in concluding that the chartered flight servi es were not availed for business purposes,disregarding the evidences filed by the appellant during the course of assessment/appellate proceedings.
2.2 That the CIT(A) erred in not appreciating that the expenditure was incurred in relation to travel of directors/executives of the appellant- ompany, which undoubtedly was a business expenditure incurred wholly and exclusively for the purposes of business.
2 3 Without prejudice, the CIT(A) erred in not restricting the amount of disallowance to Rs.9,97,280, being the actual amount of expenditure claimed as deduction by the appellant in the relevant assessment year.
2. Briefly stated facts of the case are that the assessee filed return of income on 29/09/2011, declaring total income at nil. The assessment under section 143(3) of the Income-tax Act, 1961 (in short ‘the Act’) was completed on 16/12/2013 at nil income after set off of brought forward losses of earlier years amounting to Rs.3,79,34,262/- and after making following additions:
3. Subsequently, the Assessing Officer issued notice on 07/04/2014 under section 148 of the Act in view of reason to believe that the payment of Rs.11 lakh made to Mrs. J.K. Lakshmi Cement Ltd., on account of hiring of a chartered flight was not incurred for business purposes. The assessee objected to the issue of notice under section 148 of the Act and also filed a letter dated 06/03/2014 stating that return of income filed on 29/09/2011 might be treated as return filed in response to notice under section 148 of the Act. The Assessing Officer completed assessment under section 143(3) read with section 147 of the Act on 05/05/2014 after making disallowance of hiring charges for chartered fligh amounting to Rs.11 lakhs. The assessee filed appeal before the Ld. CIT(A) and made detailed submissions objecting the legality of issuing notice under section 148 of the Act as well as on merit. The detailed submission of the assessee have been reproduced by the ld. CIT(A) on pages 8 to 28 of the impugned order. According to the assessee, the Assessing Officer has formed his reasons to believe on the basis of suspicion that the expenditure incurred was not business expenditure and there was no tangible material before him and it was based on enquiry to be conducted in future. The assessee relied on the decision of the Allahabad High Court in the case of Indra Prastha Chemicals