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Income Tax - Case Laws
Showing 161 to 180 of 236 Records
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2010 (5) TMI 596 - ITAT CHENNAI
Whether Assessee would be liable to deduct tax, in the situation Revenue never considered such receipts taxable in India. - Rectification of Order by Tribunal u/s 254(2) - Held that:- payments made by the assessee were being considered as royalty,whether there was any permanent establishment in India or whether the receipts would be taxable in the hands of the recipient became irrelevant. This ruling was made on the basis of section 9(1)(vi). decided against Assessee. Regarding Rectification of Order. - Held that:- the Tribunal has only got a limited power of rectifying a mistake which is apparent from the record itself and even an error of judgment is outside the ambit of section 254(2) of the Act. decided against Assessee.
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2010 (5) TMI 583 - ITAT AHMEDABAD
Penalty - Addition - Unexplained creditor - The assessee did not furnish details like confirmation from that other party and period corresponding to purchase of yarn, or placing of order or dispute for recovery - The claim of the assessee was not supported with evidence inasmuch as he was unable to produce evidence about the nature of meetings and the persons who attended the meeting - The fact of incurring of expenditure was not doubted but what was doubted was the business purpose of the expenditure - the penalty in respect of addition of Rs.90,000 is deleted Even though onus of the assessee during the assessment proceedings is confined to submitting evidence regarding identity of the creditor, creditworthiness of the creditor and genuineness of the transaction - No party having paid money to the assessee for purchase of the goods would forgo its money if it cancels the order - There is nothing to show that the details of the funds as claimed by the assessee have actually come from the alleged purchaser or of alleged transaction or of allege failure of the transaction - Thus the explanation furnished by the assessee cannot be treated as bona fide Regarding the third condition that all the facts relating to the explanation and computation of income has been disclosed by the assessee - in the present case details of the identity of the creditor or of the broker or of the terms and conditions of the purchase or of attempts to import the goods from Singapore, or of attempt to return the money and or, of attempt to settle the dispute have not been provided - penalty is leviable under Explanation 1(B) to Sec. 271(1)(c) in respect of addition of Rs.7 lakh - In the result, appeal filed by the assessee is partly allowed
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2010 (5) TMI 582 - KERALA HIGH COURT
Search and seizure - Block assessment - Undisclosed income - Application to Settlement Commission - Estimation of net profit - whether this Court in a writ petition, can interfere with such findings made on certain questions of fact -it was observed that the proper method for determining the total income of the applicant in the block period would be the net wealth accretion over the years in the block period and the Commission has totally deviated from the same - Held that: interference can be made only if it is found that the order is contrary to any of the provisions of the Act - There is no violation of the provisions of the Act and there is no error apparent on the proceedings also - The writ petition is therefore dismissed
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2010 (5) TMI 581 - ALLAHABAD HIGH COURT
Search and seizure - Block assessment - Undisclosed income - The petitioners have nowhere averred in the writ petition that the Department was not possessed with any such information or material or that on the basis of such information or material no opinion with regard to undisclosed income could have been formed. In the absence of such pleadings the submission advanced on behalf of the petitioners cannot be appreciated - It is not even the case of the petitioners that the aforesaid two witnesses were not known to them or that they were not respectable persons summoned on their request - Search and seizure operation cannot be held to be, on the facts and circumstances, without jurisdiction or in contra-vention of any provision of the Act or the Rules so as to occasion this court to interfere in the matter - Decided in favour of the assessee
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2010 (5) TMI 577 - ITAT LUCKNOW
Addition of Rs. 11,15,482 - Methods of accounting - Rental income - Scrutiny - assessee was running a cold storage and revenue was recognized, at the point of time of upliftment/exit of potato in good marketable condition - The storage rent did not become due prior to upliftment, this method has been followed regularly and consistently right from the beginning of the business - assessee did not receive any advance rent and the rent was charged at the time of uplifting of the potatoes since inception and this method of accounting was followed consistently and if the method was to be changed then effect was to be given for the earlier year also - assessee can either adopt a cash system of accounting or mercantile system of accounting and the said method of accounting is to be followed regularly - assessee should have shown the proportionate rental income for the period January to March 2006 also in the assessment year under consideration since the assessee is following mercantile system of accounting, the income for the period starting from 1-1-2006 to 31-3-2006 is to be accounted for on accrual basis for taxing the income in assessment year 2006-07 but the assessee is entitled to set-off of the income relating to the period 1-1-2005 to 31-3-2006 which had been received in the financial year 2005-06 and included in the taxable income, considering that the mercantile system of accounting has been adopted by the assessee
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2010 (5) TMI 576 - ALLAHABAD HIGH COURT
Penalty u/s 271(1)(c) - Scrutiny - Undisclosed income - While moving application for voluntary disclosure, the assessee must disclose the correct facts, instead of making a ground on false pretext - There has been no trans- action of share of Sri Niwas Leasing and Finance Ltd. in the Delhi Stock Exchange during the period in question. There has been no sale and pur- chase of shares by M/s. S. J. Capital Ltd. between May 15, 2003 and May 21, 2003. Thus, the assessee had not approached the Assessing Officer with the clean hand - The manner in which the assessee has tried to prolong the case before the Assessing Officer by not providing information immediately and narrating incorrect facts in the letter dated December 6, 2006 shows that the assessee has deliberately concealed the income and disclosure was not voluntary but under compulsion being cornered by the Assessing Officer - Held that: disclosure by the assessee does not seem to be voluntary and bonafide but under compulsion. The assessee has not furnished correct information while moving the letter dated December 6, 2006 with unclean hand - Decided against the assessee
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2010 (5) TMI 575 - ITAT, MUMBAI
Addition - Rs. 1.73 crore under the head 'business income' - Addition towards the value of 7,707 sq.ft. representing shops/flats at the rate of Rs. 2,250 per sq.ft. on the basis of statement of Shri Mohan Singhani, one of the continuing partners of the firm - The learned CIT(A) held that this addition was not sustainable on the ground that the income would be assessed in future years depending on the handing over of possession of 7,707 sq.ft. of built up area to the assessee and its subsequent sale. The learned A.R. has filed an application under Rule 27 of the ITAT Rules, 1963 contending that the learned CIT(A) failed to consider the correct valuation and area allocable. In support of his application, the learned A.R. put forth that the first appellate authority had not given any decision on the correct area and the aspect of valuation in view of his decision that income on this account would arise only when property is handed over to the assessee or subsequently sold. It was, therefore, contended that no addition be made in this year on account of the value of shops/flats and in the years of sale by the assessee, the correct area and value be directed to be considered - Appeal is partly allowed
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2010 (5) TMI 571 - ALLAHABAD HIGH COURT
Income escaping assessment - Search and seizure - Reference to valuation cell - he assessment has been made on 5-9-1984 and, therefore, section 142A of the Act is not applicable in the present case and, accordingly, the reference made by the assessing authority to the valuation cell for the determination of the cost of construction for the year under consideration was without any authority of law - the valuer's report could not be made the basis for initiation of the proceeding under section 148 of the Act - Decided in the favour of assessee
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2010 (5) TMI 570 - GUJARAT HIGH COURT
Reassessment - Claim of the deduction u/s 80HHC - Assessment after a period of four years from the end of the relevant assessment year - Merely making a claim cannot be stated to be non-disclosure of material facts so as to vest in the Assessing Officer jurisdiction u/s 147 of the Act - Besides, as already noted hereinabove, the respondent seeks to reopen the assessment after a period of four years from the end of the relevant assessment year - In the reasons recorded, there is nothing to indicate that the assessee has failed to disclose fully and truly all material facts necessary for its assessment for the year under consideration - Hence, the ingredients of the proviso to section 147 of the Act are clearly not satisfied - In the circumstances, there is no justification for assumption of jurisdiction by the respondent-Assessing Officer for reopening the proceedings u/s 147 of the Act - the petition succeeds and is accordingly decided in favour of assessee.
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2010 (5) TMI 569 - DELHI HIGH COURT
Condonation of delay - In the present case, the trial was initiated on March 31, 1987 in respect of the assessment year 1976-77 - There is no explanation given by the respondents as to why other prosecution witnesses have not been examined despite the passage of time and it is also evident from the record that there is no explanation given by the Income-tax Department for the delay in examining the other prosecution witnesses - Accordingly, the present complaint is quashed subject to a deposit of Rs.25,000 in the Prime Minister's Relief Fund by petitioner No. 2 - he amount be deposited within four weeks and an affidavit of compliance along with the receipt of payment be filed on record with a copy to Mr. Sabharwal
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2010 (5) TMI 565 - ITAT, KOLKATA
Penalty u/s 271D - Treatment of share application money as Deposit - The object of introducing section 269SS is to ensure that a taxpayer is not allowed to give false explanation for his unaccounted money, or if he makes some false entries, he shall not escape by giving false explanation for the same. During search and seizures, unaccounted money is unearthed and the taxpayer would usually give the explanation that he had borrowed or received deposits from his relatives or friends and it is easy for the so-called lender also to manipulate his records to suit the plea of the taxpayer. The main object of section 269SS was to curb this menace of making false entries in the account books and later giving an explanation for the same.” - In absence of any judgment of Hon’ble Apex Court or of Hon’ble jurisdictional High Court on the issue, the considered opinion that the contribution towards share application money received in cash does not come within the scope and ambit of the expression ‘deposit’ appearing in the provisions of section 269SS in order to justify the levy penalty under section 271D - Hence the ld. CIT(A) was correct in law in deleting penalty under section 271D - The appeal of the revenue is dismissed
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2010 (5) TMI 564 - ITAT, DELHI
Penalty - Addition - The learned counsel for the assessee has submitted that there is no requirement to disclose in the audit report the matter with regard to disallowance of loss within the meaning of Section 94(7), and as such mere because the fact of disallowance of loss to be made u/s 94(7) was not mentioned in the audit report, it could not be said that the assessee has concealed the particulars of his income or furnished inaccurate particulars of his income - What has been disclosed by the assessee in the return of income is only the amount of loss adjusted against the other taxable income of the assessee, and amount of dividend claimed exempt without disclosing any other particulars whatsoever relating to the purchase and sale of units - it is a case where the assessee has failed to furnish any explanation and material particulars relating to the income and loss arising to the assessee on purchase and sale of the units in question as to why the loss incurred on sale of units were not adjusted or set off against the dividend income - It is well settled that all and every fanciful and fantastic explanation offered by any person cannot in itself be construed to be a bona fide one Tribunal has cancelled the assessment on account of legality of the notice taken up in appeal, and, therefore, on this ground alone, the penalty cannot be imposed - At this stage, a reference is made to a decision of Hon'ble jurisdictional high Court of Delhi in the case of CIT vs Escorts Finance Ltd. dated 21th August, 24, 2009 where penalty levied u/s 271(l)(c) in respect of the disallowance of assessee's claim made u/s 35D for expenses incurred for public issue of shares was held to be justified - u/s 94(7) of the Act, against the taxable profit of the assessee instead of adjusting the same against exempted dividend income and thereby derived double benefit, is totally in disregard to the clear and unambiguous provisions contained in Section 94(7) of the Act and is not bonafide, and further, the assessee has failed to disclose fully and truly all materials relating to that claim in the return of income - In the result, the appeal filed by the assessee stands dismissed
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2010 (5) TMI 563 - GUJARAT HIGH COURT
Addition - unexplained share application money - Tribunal recorded that all payments were received by cheques and were credited in the bank account of the respondent; the share application forms contained all details of the depositors; their confirmations were clear with all addresses; and that they were on the departmental records as tax-payers - Tribunal was of the view that the assessee had given the names and addresses of the share applicants, it was within the knowledge of the revenue that the said share applicants were assessed to Income-tax, hence the burden was on the revenue to make further inquiry - In absence of any findings recorded by the Assessing Officer to the effect that the share applicants are bogus, there is nothing on record to doubt or disbelieve the confirmations and application forms submitted by the depositors - Whether burden has been discharged or not is a question of fact - Decided in the favour of assessee
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2010 (5) TMI 557 - ITAT BANGALORE
set off of unabsorbed depreciation - Interest u/s 234B, 234C and 234D - Deduction u/s 80IA - . The carried forward losses of the eligible business are required to be set off first against the income of the subsequent years of the eligible business while determining the profits eligible for deduction under section 80-IA - since the specific provisions of section 80-IA(5) have overriding affect, the other provisions of law including section 70 on set-off of unabsorbed depreciation/business loss relied upon by the appellant is not attracted in the case of the appellant - it may appear that the carried forward loss of the eligible business were required to be set off first against the income of the subsequent years of eligible business while determining the profits eligible for deduction under section 80-IA of the Act and set-off of losses from other sources under the same head is not permissible Regarding interest - This ground of the assessee is not maintainable as charging of interest under sections 234B and 234C of the Act is mandatory and consequential in nature - levy of interest under section 234D is purely a legal ground and is chargeable, following the order of the Hon’ble ITAT, Delhi E, Special Bench in ITO v. Ekta Promoters (P.) Ltd. [2008 (7) TMI 452 - ITAT DELHI-E] - the assessee’s appeal is allowed
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2010 (5) TMI 556 - KERALA HIGH COURT
Search - Block assessment - Concealment of income - The Appellate Tribunal by a common order arrived at a finding that no evidence was disclosed in the search to show that there was suppression of sales for the assessment years 1996-97 to 2000-01 - A reading of section 131 of the Income-tax Act would show that the Assessing Officer is vested with the same powers as are vested in a court under the Code of Civil Procedure, 1908 in respect of (a) discovery and inspection, (b) enforcing the attendance of any person, including any officer of a banking company and examining him on oath, and (c) compelling the production of books of account and other documents - the statement of the partner and employees recorded and documents collected are relevant and admissible in respect of all matters for the purpose of any investigation connected with any proceedings under the Income-tax Act - It was further ruled that insertion of proviso to section 113 is mere clarification - While setting aside the orders in first and second appeal, the assessment order is restored with modification reducing the concealment of income at 14 per cent. of the total turnover - Appeal is allowed partly
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2010 (5) TMI 548 - ITAT, BANGALORE
Registration under section 12A of the Income-tax Act - applicant trust was registered under section 25 of the Companies Act - trust is to promote commerce, art and science for serving the unserved people through facility management service - assessee trust filed its application for registration under section 12A of the IT Act - assessee trust works as agent for the banks and receives remuneration for the services rendered from the banks concerned - activity of the assessee trust, falls within the realm of advancement of objects of general public utility and is hit by the proviso to section 2(15) of the IT Act - assessee trust is carrying on the business in the nature of trade, commerce or business - for this reason denied the benefit of registration under section 12A of the Income-tax Act
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2010 (5) TMI 547 - ITAT, MUMBAI
Revision - Scrutiny - Disallowance - The assessee is an investment company and during the relevant year it had income mainly from house property, income from business and capital gains - it is observed that the allowability of the said expenditure was disputed/doubted by the ld. CIT on the basis that there was no business activity of the assessee company in foreign countries - There was thus no error in the assessment order passed by the A.O. on this issue as alleged by the ld. CIT warranting any revision u/s 263 - The ld. D.R., has made an attempt to support the impugned order of the ld. CIT passed u/s 263 on the new ground which was not there given by ld. CIT in the notice issued u/s 263 to the assessee - In the case of CIT vs. L.F.D.'Silva, 192 ITR 547 - Accordingly held that there was no error in the assessment order passed by the A.O. u/s 143(3) as alleged by the ld. CIT in the notice issued u/s 263 and this being so, the ld. CIT was not justified in revising the said assessment - In the result, appeal of the assessee is allowed
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2010 (5) TMI 544 - ALLAHABAD HIGH COURT
Income from other sources – Deduction – Expenditure must be wholly and exclusively incurred to earn income – Intention to earn income must be established – Borrowed funds invested in financially fragile sister concerns – No intention to earn income but merely to assist concerns – deduction of interest paid on borrowings not allowable
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2010 (5) TMI 543 - ITAT, HYDERABAD
Depreciation - SAF Plant has been capitalized w.e.f. 1.4.1999 - The plant has not been in operation since capitalization - The entire plant and machinery is kept ready for use and was not used for business considerations, since the production of pig iron and silicon manganese is not economical, the assessee stopped the process of manufacturing the pig iron and it was selling the sponge iron directly to various industries in India - Held that: - since capitalization this SAF Plant, it was not in operation as such it cannot enter into block asset and the condition laid down in Sec.32 (1) not fulfilled and the assessee is not entitled for depreciation on this plant - This ground of the assessee is dismissed Disallowance – Provision for increased wages - Held that: - provisions made towards additional liability on account of enhanced wage and salary are allowable in the year of making such provision - Matter is sent back to the file of assessing officer for fresh consideration to allow ascertained liability on production of requisite evidence by the assessee for crystallization of this expenditure in the assessment year under consideration.
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2010 (5) TMI 540 - ITAT, MUMBAI
Capital gain - TDS - The order treating Hindalco as Agent of Alcan had been passed on 20.2.2004 i.e. after a period of two years and ten months from the end of the previous year in which Hindalco made payment to Alcan - The income so chargeable to tax was received by Alcan from Hindalco and therefore section 163(1)(c) were clearly attracted - Agent had deducted tax u/s 195 of the Act will not be a bar to proceed and pass an order u/s. 163 of the Act - It is also not the case of Agent that proceedings for assessing income of the principal, is barred by time - The purpose of section 163 is to secure payment of taxes by the non-resident where the non resident subjects himself to proceedings before the AO and expresses his willingness to discharge tax liabilities and if the same is accepted and assessment made on the non resident, there was no necessity to make an assessment on the Agent in India - Since the substantive assessment made by the Assessing Officer in the hands of the principal has been upheld by the learned CIT(A), he was wholly unjustified in confirming the protective assessment in the case of the Agent also - Hon'ble Kerala High court in the case of CIT Vs. Fertilizers & Chemicals (Travancore) Ltd., (1987 -TMI - 25894 - KERALA High Court) has held that the direct assessment on the nonresident would not affect the jurisdiction of the ITO to assess the agent of the non-resident under section 163 - Accordingly the assessee appeal is annulled Regarding interest u/s 234B - Since the relevant orders have already been quashed by us while deciding the assessee’s appeal, the departmental appeal is rendered infructuous and is liable to be dismissed on that ground - In the result, ITA No. 3667/Mum/05 is dismissed. ITA No.4685/Mum/05 is allowed. ITA No.4968/Mum/05 is dismissed. ITA No.6923/Mum/06 is dismissed
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