- CBDT Vide Circular No. 19/2023 dated 23.10.2023; Condonation of delay under u/s 119(2)(b) of the Act, in the filling of Form No. 10-IC for AY 2022-23;
To avoid genuine hardship to the domestic companies in exercising the option u/s 115BAA of the Act, CBDT condone delay in filing subject to following conditions:-
- The return of income for the relevant A.Y. has been filed on or before due date specified u/s 139(1) of the Act.
- The assesse company has opted for taxation u/s 115BAA of the Act in item ( e ) of “Filling status” in “PART A-GEN” of the Form of return of Income ITR-6 and
- Form No. 10-IC is filed electronically on or before 31.01.2024 or 3 months from the end of the month in which circular is issued, whichever is later.
Important Judicial Precedents
- Where assesse had sufficient self-owned/interest-free funds available with him, then it has to be presumed that the amounts of gifts given to his relatives were made from the said funds : ITAT
[2023] 156 taxmann.com 54 (RAIPUR-TRIB) ITAT, RAIPUR BENCH ITA No. 249 (RPR) OF 2022, AY: 2010-11, RAJESH AGARWAL vs. DEPUTY COMMISIONER OF INCOME TAX, RAIPUR-1(1)
As the self-owned funds available with the assesse as the “opening balance” of his capital on 01.04.2009, along with the “net profit” of Rs. 1.14 crore (approx.) earned by him during the year under consideration, which, therein, aggregated to Rs.1.51 crore, was sufficient to source the gifts of Rs.42 lacs to the aforesaid donee’s, viz. S/shri Brijesh Agrawal and Kamal Agrawal, therefore, it can safely be presumed that the
said self-owned funds/ profit generated during the year by the assessee was utilized for making gifts under consideration and no part of the interest-bearing funds were diverted for the said purpose. Accordingly, we are unable to concur with the view taken by the lower authorities who have disallowed the assessee’s claim for deduction of interest expenditure of Rs. 7.56 lac (supra) on the presumption that the interest-bearing funds were utilized by the assessee for making gifts to his nephews, and, thus, vacate the said disallowance so made/sustained by them u/s 36(1)(iii) of the Act.
- IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO(S). 1420 OF 2023 ASSESSING OFFICER CIRCLE (INTERNATIONAL TAXATION) 2(2)(2) NEW DELHI …APPELLANT(S) VERSUS M/S NESTLE SA
It is held and declared that:
- A notification under Section 90(1) is necessary and a mandatory condition for a court, authority, or tribunal to give effect to a DTAA, or any protocol changing its terms or conditions, which has the effect of altering the existing provisions of law.
- The fact that a stipulation in a DTAA or a Protocol with one nation, requires same treatment in respect to a matter covered by its terms, subsequent to its being entered into when another nation (which is member of a multilateral organization such as OECD), is given better treatment, does not automatically lead to integration of such term extending the same benefit in regard to a matter covered in the DTAA of the first nation, which entered into DTAA with India. In such event, the terms of the earlier DTAA require to be amended through a separate notification under Section 90.
- The interpretation of the expression “is” has present signification. Therefore, for a party to claim benefit of a “same treatment” clause, based on entry of DTAA between India and another state which is member of OECD, the relevant date is entering into treaty with India, 59 and not a later date, when, after entering into DTAA with India, such country becomes an OECD member, in terms of India’s practice.
- Expenses incurred by assesse hotel on renovation, refurbishment and repairs, partly capitalized in books of account of are in nature of revenue expenditure, admissible under section 37(1) – YES: HC
[2023 -155 taxmann.com 376 (DELHI), ITAN 1397 OF 2006, HIGH COURT OF DELHI, ASIAN HOTELS LTD. vs. COMMISSIONER OF INCOME TAX]
Section 37(1) of the Income-tax Act, 1961 – Expenses incurred by assesse hotel on renovation, refurbishment and repairs, partly capitalized in books of account of are in nature of revenue expenditure, admissible under section 37(1)
- Once eligibility of deduction under section 10AA has been accepted in initial assessment year, then it cannot be withdrawn in subsequent years for a breach of certain conditions which are required to be seen or examined in first year of claim – YES: ITAT
[2023-155 taxmann.com 374 (Mumbai – Trib.), ITAN 2050(MUM.) OF 2023, A.Y. 2012-2013, ITAT MUMBAI BENCH ‘E’ ASSISTANT COMMISSIONER OF INCOME TAX, 24 (1) vs. H.K. DESIGNS (INDIA) LLP]
The Assessing Officer in the order giving effect has passed orders for assessment years 2007-08 to 2011-12 pursuant to the orders of the Tribunal, wherein he has allowed the deduction under section 10AA. The Assessing Officer having gone through the various details submitted by the assesse with respect to claim of deduction under section 10AA has himself held that the assesse is eligible or deduction under section 10AA. It is also noticed that the year under consideration is not the first year in which the assesse has claimed the deduction under section 10AA and that it is well settled position that once the eligibility of deduction under section 10A or 10B or 10AA has been accepted in the initial assessment year, then it cannot be withdrawn in the subsequent years for a breach of certain conditions which are required to be seen or examined in the first year of claim. Therefore, section 10AA deduction cannot be denied to the assesse for the said reason. Accordingly, the assesse is held to be entitled for deduction under section 10AA.
The fixed deposits are held as margin money with the banks and that there is nexus between the interest earned and the business of the assesse. Therefore, following the above decision of the co-ordinate bench, it is to be held that the interest income earned by the assesse from fixed deposits held for the purpose of margin money is eligible or deduction under section 10AA.
Income from sale of gold dust also to be considered for the purpose of arriving at the profits eligible for deduction under section 10AA. The Assessing Officer is directed to re-compute the deduction under section 10AA accordingly.
- Where assesse duly made claim of deduction under section 80JJA in original return of income, however same was not reported in Tax Audit Report and on realizing mistake, Tax Audit Report was revised and also Form 10DA required for claiming such deduction was also filed albeit after filing of original return of income but before date of intimation, denial of deduction under section 80JJAA was not justified
[2023 – 155 taxmann.com 607 (Delhi – Trib.) IN THE ITAT DELHI BENCH ‘G’ Sai Computers Ltd. vs. Assistant Director of Income-tax, CPC]
The assesse seeks to submit that once the substantial compliance has been made by filing the prescribed form albeit after the return of income, such belated filing of prescribed form is not fatal in the sense that the requirement of rule 19AB and rule 12(2) are not mandatory per se but are essentially directory in nature. It is found that the Bangalore Bench in Jeans Knit (P.) Ltd. v. DCIT, [2022] 138 taxmann.com 480 (Bangalore – Trib.) has taken a view that filing of such prescribed form is directory requirement and hence would stand satisfied if the accountant’s report is furnished during the course of assessment.
In consonance with the view taken by the Co-ordinate Bench, the denial of deduction under section 80JJA solely for reasons of belated filing of the prescribed form is not justified. Consequently, the action of the Commissioner (Appeals) is set aside and the Assessing Officer is directed to grant relief by way of deduction as claimed. Ground is accordingly allowed.
- Where assesse sold land and all payments towards investment in new agricultural land were made after receipt of advances on sale of land received by assesse on various dates and assesse had also taken loan which was invested in new land and loan was repaid afterwards, out of sale consideration received, deduction under section 54B could not have been denied.
[2023 156 taxmann.com 90 (Raipur – Trib.) IN THE ITAT RAIPUR BENCH
Income Tax Officer vs. Rekhchand Jian]
It was the submission of Ld. Sr. DR that Ld. CIT(A) has grossly erred in deleting the addition ignoring fact that the Bikri Ikrarnama between the assesse along with Shrichand Golecha and others & M/s Satyam developers was duly notarized and the assesse is also a party to the same and accepted the same. Whereas, the Sahmati Patra and Kabja Patra dated. 10/09/2014 was not notarized. Moreover, the Sahmati Patra / Kabja Patra and the Bikri Ikrarnama were not referred in the sale deed executed on 30/03/2015. Another argument of the department was that the Sahmati Patra/ Kabja Patra which was the basis for claiming the deduction u/s 54B was not having any discussion that the seller had given the full possession or the ownership right of land to the purchaser, rather the possession of the land was conditional one i.e. only for the purpose of performing of agricultural work. It is the contention of revenue that possession for limited purpose of agriculture does not come under clause (v) of Section 2(47) of the I.T. Act. Accordingly, it was the prayer of the department that the decision of Ld. CIT (A) was erroneous, not justified and is subject to reversal.