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Income Tax - Case Laws
Showing 501 to 515 of 515 Records
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2013 (8) TMI 42 - BOMBAY HIGH COURT
Valuation of property - Acquisition of property u/s 269UD(1) - Held that:- Appropriate Authority has ignored the directions of this Court with impunity by giving the same reasons in support of acquisition of the said property - Comparison of the two orders would itself indicate that it was a cut and paste job and there is no independent application of mind by the Appropriate Authority while passing the impugned order - All the three properties being relied upon by the Appropriate Authority are not similarly placed - The impugned order gives no reason nor does it disclose the manner in which the value of said property has been arrived at from purchase price of built up premises being relied upon by the Appropriate Authority - The Appropriate Authority has completely ignored the directions of this Court and continued to give the same reasons which this Court had found not good enough to sustain the acquisition of the said property - Appropriate Authority has no other reason to justify its action for passing an order under Section 269UD(1) of the Act and therefore, continues to pass orders giving the same reasons. This itself makes the impugned order unsustainable - Reasons for exercise of preemptive right of purchase under Chapter XXC of the Act cannot be sustained as it is passed without considering the submissions of the petitioners - Decided in favour of Assessee.
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2013 (8) TMI 41 - MADRAS HIGH COURT
Capital loss - speculation loss or not - Sale of partly convertible debenture - Held that:- Following decision of Commissioner of Income Tax Vs. New Ambadi Estates (P) Ltd. [2012 (3) TMI 79 - MADRAS HIGH COURT] - Decided against Revenue.
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2013 (8) TMI 40 - MADRAS HIGH COURT
Valuation u/s 50C - Reference not made to DVO - Tribunal upheld valuation done u/s 50C - Held that:- when specific objection was made by the assessee as to the Assessing Officer adopting the market value, under Section 50C(2) of the Act, the Assessing Officer ought to have referred the valuation of the capital asset to the Valuation Officer, whereas, the authorities below referred to Section 50C(1) of the Act alone without adverting to Section 50C(2) - Decided in favour of assessee.
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2013 (8) TMI 39 - ITAT CHENNAI
Entitlement for exemption u/s 11 - whether there was no violation as mentioned under Section 13(1)(c)(ii) - noted by AO that the amounts were due from two concerns in which Managing Trustee of the assessee, namely, Shri P. Subramani was an interested party - Held that:- Treatment of transactions in the books of accounts are prima facie evidence of the nature of such transactions. If an assessee wants to say that payments were for a different purpose than what was shown by it in its account, then the burden of evidence which lies on it is much more rigorous. Except for two Memorandum of Understandings, nothing was brought on record by the assessee. Such Memorandum of Understandings were blindly believed by the CIT(Appeals) without appreciating that these were nothing but self- servicing documents, and not sufficient to dislodge the nature of the transaction recorded by the assessee in its books. Thus, for the impugned assessment year, what was find is that as at the end of the relevant year, even if the three concerns were considered together, a sum of Rs. 1,41,05,523/- was due to the assessee.
Assessee has no case that any interest was received from such parties to which money was lent. There was no security whatsoever given to the assessee. Thus there was an indirect benefit to Shri P. Subramani, Managing Trustee of the assessee- Trust and this fell clearly within the scope of Section 13(1)(c) r.w.s. 13(2)(a) - Such violation did warrant denial of exemption claimed under Section 11, therefore, CIT(Appeals) fell in error in blindly following the order of preceding assessment year and accepting the case of the assessee - appeal filed by the Revenue is allowed.
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2013 (8) TMI 38 - ITAT DELHI
Addition on account of notional interest - advance amount to Toy N Toy International against the purchase of building with furniture fixture fittings - Held that:- The assessee started giving advances in financial year 2006-07 and on 12.5.2006 MOU was executed between the parties for transfer of factory premises and part possession was conveyed. On 2.7.2007 sale deed was executed. Therefore, it can be concluded that till the conclusion of sale deed amounts advanced continued to be for acquisition of assets for which Tribunal had already deleted the notional interest in earlier year.
The assessee has passed an entry for purchase of asset on 2.7.2007. The facts of the present case are similar to the facts of earlier year as the transaction started in earlier year and the amount advanced being for purchase of an asset for business purposes, no disallowance can be made. AO wrongly made the addition by holding that assessee itself added back notional interest from 25.5.2007 which is though a fact but the interest was added back on amounts advanced which was over and above the sale consideration. Therefore, no difference in facts and circumstances of the present case with the earlier year & consequently the addition deleted. In favour of assessee.
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2013 (8) TMI 37 - ITAT KOLKATA
Interest and administrative expenditure - disallowance u/s 14A - CIT(A) restricted the disallowance at 4.03% of the total expenditure on account of interest and other expenditure - Held that:- The assessment year involved in the present appeals is the A.Yr. 2006-07. As decided in case of M/s. Godrej Boyce Manufacturing Co.Ltd. vs DCIT (2010 (8) TMI 77 - BOMBAY HIGH COURT) the amendment had not been made with retrospective effect and that therefore, Rule 8D not to be used with retrospective effect and that therefore, Rule 8D cannot be used in cases prior to the Assessment Year 2007-08.
Further in the case of DCIT, Circle-1, Kolkata vs M/s.Exide Industries Ltd. [2013 (6) TMI 533 - ITAT KOLKATA] following the decision of Sagarika Goods and Services Pvt. Ltd. vs ITO [2013 (6) TMI 534 - ITAT KOLKATA] and DCIT vs EIH Associated Hotels Ltd (2008 (1) TMI 426 - ITAT CALCUTTA-D) has restricted the disallowance u/s 14A at 1% of the exempt income for years prior to the A.Yr.2008-09. Therefore, respectfully following the same AO directed to recomput the disallowance of expenditure relating to the exempt income at 1% of the exempt income being Long Term capital gain and dividend income - appeal of the assessee partly allowed and Revenue dismissed.
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2013 (8) TMI 36 - ITAT MUMBAI
Penalty u/s 271D - violation of the provisions of section 269SS as loan was taken otherwise than by A/c Payee cheque or A/c Payee Bank Draft - Held that:- There was a reasonable cause with the assessee company in requesting its sister concern to immediately make payment to old supplier with whom litigation was going on and also to the supplier of machinery. Thus satisfied that the provisions of section 273B have come to the rescue of the assessee in the present circumstances, thus with the existence of such reasonable cause, there can stand no penalty u/s 271D. In favour of assessee.
Penalty u/s 271E - assessee made cash re-payment totaling Rs. 3,70,306/- thus violation of the provisions of sections 269T - Held that:- M/s Devang Industry Inc. paid Rs. 1,00,000/- to M/s Prajvi Industrial Supplies and Rs. 4,00,000/- to M/s Ravi Industrial Corporation on behalf of the assessee due to financial crunch on the assessee. In order to repay the said loan, the assessee made certain re-payments in cash over the period form 02.04.2005 to 21.08.2005 which totaled Rs.3.70 lacs. Force in the submissions of the assessee that the sister concern was mounting pressure on the assessee to immediately repay the amount in cash, even if it was to be in small installments. Apart from that, it is further noticed that the assets of the company were attached on 11th August 2006 and such attachment was lifted only on 18.03.2006. All the amounts in question were paid to the sister concern during the period of attachment. These facts and circumstances do go to show that there was a reasonable cause within the meaning of section 273B for making such re-payments otherwise than by way of A/c Payee Cheques or A/c Payee Bank Drafts. Thus penalty u/s 271E was wrongly sustained. In favour of assessee.
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2013 (8) TMI 35 - ITAT HYDERABAD
Loss from foreign exchange transaction in the forward market - speculative loss v/s business loss - Held that:- As in the present case assessee is not a dealer in foreign exchange & is engaged in the business of edible oils. In the course of import of vegetable oil from foreign supplier, the company entered into a contract. If the assessee in accordance with the proposed purchase booked a foreign currency forward contract with its banker in order to safeguard the company's interest from loss on account of foreign exchange fluctuation that contract cannot fall under the purview of Section 43(5) as per which speculative transaction means a transaction in which a contract for the purchase or sale of commodity settled otherwise thereby actual delivery or transfer of such commodity. If an assessee in order to hedge against the exchange fluctuation losses had booked foreign exchange transaction in the forward market with the Bank and incurred any loss, that loss cannot be considered as speculative loss and it is a business loss. As decided in CIT vs. Badridas Gauridu Pvt. Ltd. (2003 (1) TMI 61 - BOMBAY High Court) in order to hedge against the losses, the assessee had booked foreign exchange in the forward market with the bank. However, the export contracts entered into by the assessee for export of cotton in some cases failed. Thus the assessee was entitled to claim deduction in respect of payment made on account of cancellation of forward booking of foreign exchange with banks as a business loss.
Also see CIT vs. Soorajmull Nagurmull (1980 (9) TMI 69 - CALCUTTA High Court). Thus AO has to see the forward contract entered by the assessee for covering risk of underlying transaction and such underlying transaction to be segregated and loss on these transactions to be considered as business losses. Loss on other transaction which are not underlying transaction has to be considered as speculative transactions. As assessee has filed a chart showing the details of speculative transaction at ₹ 19,63,702/-. The Assessing Officer is directed to exclude these contracts and decide accordingly - appeal of assessee partly allowed for statistical purposes.
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2013 (8) TMI 15 - GUJARAT HIGH COURT
Disallowance of interest u/s 40A(2)(b) - Rejection of books of accounts - CIT deleted estimation of additional profit - Tribunal set aside CIT order and upheld addition - Held that:- out of the three persons from whom loan taken, two persons cannot be said to be related to the assessee within the meaning of section 40A(2) (b) - It is required to be noted that as such the aforesaid persons are found to be nephews of the assessee and the finding that money was first diverted by the assessee from his business as a gift to the aforesaid three persons and thereafter the same money was given to the assessee at the rate of 16% per annum and on which the assessee claimed benefit under section 40A(2)(b) and the entire series of transactions were illusory, colourable and not genuinely for the purpose of the business - Decided against Assessee.
Disallowance of salary payment u/s 40A(2)(b) - ITAT held that the assessee has devised a colourful mechanism to avoid tax liability in the hands of his proprietary business - Held that:- although payment might have been made and there might have been agreement in existence, still it would be open to the Assessing Officer to take into consideration various factors which would go to show whether the payment was made as required by the section 37 of the Act or not. It is required to be noted that as such the Assessing Officer after taking into consideration the relevant factors came to the conclusion that the payment was not made wholly or exclusively for the purpose of the business of the assessee and therefore, the Assessing Officer rightly disallowed the aforesaid deduction which has been rightly restored by the ITAT - Decided against assessee.
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2013 (8) TMI 14 - MADRAS HIGH COURT
Deduction u/s 10B(2)(ii)(iii) - designer products - manufacturing activity for export of handicraft items of dried parts of plants - Reconstruction of business - Tribunal referring to case Aspinwall & Co. Ltd. V. CIT [2001 (9) TMI 3 - SUPREME Court] - allowed deduction deduction u/s 10B(2)(ii)(iii) - Held that:- process which the assessee had undertaken satisfies the test of manufacture to qualify for relief under Section 10B - apart from cleaning and grading, the assessee had taken further processing; that what is purchased as raw material and what is exported as a product for export are totally different items. The process that the assessee had undertaken clearly points out the irreversible nature of the final end product from a raw material purchased - Decided against Revenue.
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2013 (8) TMI 13 - RAJASTHAN HIGH COURT
Disallowance of depreciation - Vehicles registered in the names of the purchasers and financed by the assessee under a hire purchase agreement - CIT disallowed depreciation - Tribunal allowed depreciation - Held that:- Section 32 requires that the assessee must use the asset for the "purposes of business". It does not mandate usage of the asset by the assessee itself. As long as the asset is utilised for the purpose of business of the assessee, the requirement of Section 32 will stand satisfied, notwithstanding non-usage of the asset itself by the assessee - As the owner, it used the assets in the course of its business, satisfying both requirements of Section 32 of the Act and hence, is entitled to claim depreciation in respect of additions made to the trucks, which were leased out - Following decisions of CIT v. Bansal Credits Ltd.[2002 (11) TMI 76 - DELHI High Court], CIT v. M.G.F. (India) Ltd.[2004 (1) TMI 10 - DELHI High Court] and CIT v. Annamalai Finance Ltd.[2004 (10) TMI 51 - MADRAS High Court] - Decided against Revenue.
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2013 (8) TMI 12 - RAJASTHAN HIGH COURT
TDS u/s 194J - whether TDS is to be deducted on the amount payable on account of service tax or not - ITAT set aside the demand - Held that:- The words, “any sum paid”, used in Section 194J of the Act, relate to fees for professional services, or fees for technical services. As per the terms of agreement, the amount of service tax was to be paid separately and was not included in the fees for professional services or fees for technical services - The service tax was to be paid separately or not, is purely a question of fact and as per the agreement entered in the present case, it was to be paid separately and there is a finding of fact in this regard, recorded by the Appellate Authority as well as the Appellate Tribunal also - Decided against Revenue.
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2013 (8) TMI 11 - UTTARAKHAND HIGH COURT
Application of Section 44BB - Tribunal held that assessee is sully covered u/s 44BB - Held that:- Section 44BB deals with all kind of services in connection with prospecting for, or extraction or production of mineral oils; Section 44DA deals with, amongst others, fees for technical services from a non resident, not being a company, or a foreign company, after 31st March, 2003. At the same time, Section 115A deals with technical service fees in case of a foreign company - in respect of fees received by a non-resident assessee for providing service in connection with prospecting for, or extraction or production of mineral oil, such assessee would be covered by Section 44BB until before proviso to Sub-section (1) of Section 44BB was inserted - Assessing Officer did not make any inquiry, whether the assessee had a fixed place of business or profession in India or a permanent establishment in India - Therefore matter remitted back to A.O. - Decided against Revenue.
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2013 (8) TMI 10 - ANDHRA PRADESH HIGH COURT
Non-compliance of Section 194-B - TDS on Payment toward stake money - Assessee in default u/s 201(1) - Held that:- respondent arrived at the said conclusion on appreciation of various factual aspects relating to petitioner's business activity and the documents furnished along with its explanation. Therefore, it is only for the appellate authority to determine on examination of the record and on appreciation of the documents produced by the petitioner, whether the respondent has exceeded its jurisdiction in holding the petitioner as a defaulter assessee. That being so, the error of jurisdiction which the respondent has allegedly committed in passing the impugned orders is not a mere error apparent on the face of the record which can be corrected under Article 226 of the Constitution of India - if aggrieved, the petitioner has to pursue the remedy of appeal available under the Statute, but they cannot straightaway invoke the jurisdiction of this Court under Article 226 of the Constitution of India - Decided against assessee.
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2013 (8) TMI 9 - GUJARAT HIGH COURT
Addition u/s 69B - Valuation report u/s 142A - Tribunal deleted addition - Held that:- sole basis for making the addition was the DVO's report. DVO's report may be a useful tool in the hands of the Assessing Officer, nevertheless it is an estimation and without there being anything more, cannot form basis for additions under Section 69B of the Act - Decided against Revenue.
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