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Income Tax - Case Laws
Showing 281 to 300 of 695 Records
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2012 (11) TMI 793 - ITAT AHMEDABAD
Addition made on account of reduction in the Gross Profit rate – Held that:- AO did not find any defect in the books of account maintained by the assessee nor did he find false with the explanation furnished by the assessee with regard to the deduction in the gross profit - AO has reached the conclusions without taking into account the quantity details furnished by the assessee along with the Tax audit report - book results can be rejected only if it is shown that the books maintained by the assessee are not reliable for deducing correct income - AO has not given any such finding – addition deleted – in favor of assessee
Taxability of Sales tax subsidy received by the assessee – Held that:- Subsidy has been received from the Government for expansion of running business - assessee treated it as “Capital subsidy”, where as the AO considered it as “Revenue subsidy” - it is an incentive granted to the assessee under 1993 Package Scheme. The incentive has been provided for making addition fixed capital investment in building and plant and machinery – claim of assessee allowed
Disallowance of payment made to Sabarmati Gaushala for purchase of Semen doses – alleged that the assessee could not prove any business connection in incurring this expenditure – Held that:- Appellant has incurred legitimate expense towards purchase of semen doses, which is veterinary item. These semen is injected to get the best quality of breed of milk bearing cattle - expenditure incurred has direct nexus with the objectives of the appellant society – in favor of assessee
Disallowance of legal expenses – alleged that assessee could not file confirmation letter and also the basis for charging such a high amount – Held that:- Claim of Rs.24.50 lakhs pertaining to legal expenses was disallowed, the disallowance of Rs.19.50 lakhs has led to double addition which is not permissible under the Act. The Ld. CIT (A) was convinced with the submissions of the assessee and accordingly deleted addition of Rs.19,50,000/-, as it has led to double addition of the same amount - DR, however, submitted that the said claim of double addition needs verification - matter set aside to the AO for verification
Disallowance of consultancy expenses – Held that:- AO disallowed the above said claim for the reason that the assessee could not file confirmation letter from the payees and also the basis of the fee charged by M/s Chirayu Consultancy - assessee filed copies of bill, confirmation letter, copy of payment voucher and copy of acknowledgement of return filed by them. The assessee claims that the said professionals have directly sent these documents to the assessing officer - AO has made the impugned addition for want of confirmation letters, which means that the said documents might not have reached the AO in time – matter remanded to AO
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2012 (11) TMI 792 - ITAT AHMEDABAD
Disallowance made from the expense claimed under the head Salary and Bonus – Held that:- Payments in cash were made to only casual and temporary workers. Hence on a conspectus of the matter, the Ld CIT (A) restricted the impugned addition to a lump sum figure of Rs.5.00 lakhs for the reason that there is a probability that a part of claim cannot be substantiated by the assessee - AO has doubted the genuineness of this expense for another reason, i.e., the assessee could produce 5 employees out of 10 persons called for by him - disallowance upheld
Determination of GP Rate - held that:- There cannot be any dispute that the assessee cannot realize any profit when a particular item is replaced at free of cost during the warranty period. If such warranty claims are borne by the assessee, then it will certainly have impact on the rate of GP. - the non-maintenance of stock leads to certain other problems, like theft and pilferage and such incidents would also have impact on the rate of GP. - The AO has not factored in such kind of possibilities while working out the average rate of GP. Further the samples taken by the AO cannot be taken as representative samples, as he has not taken samples randomly over the entire year. - Thus, in our view, the rate of GP worked out by the AO also cannot be considered to be a perfect one. - the average rate of GP on sale of spare parts may be fixed at 9% and in our view the same would meet the ends of justice.
Disallowance made from the expense claimed under the head Telephone expenses – assessee had disallowed 1/20th of the expenses claimed under this head towards personal use. The AO however enhanced the disallowance to 1/4th of the total claim – Held that:- Assessee himself had disallowed a part of telephone expenses towards personal use on ad-hoc basis. The said action of the assessee establishes the fact that the telephones were put to personal use also - 1/5th of the expenses claimed disallowed
Disallowance made from the expense claimed under the head “Vehicle expenses” and also from depreciation claimed on Motor car towards personal use – Held that:- Assessee himself had disallowed a part of telephone expenses towards personal use on ad-hoc basis. The said action of the assessee establishes the fact that the telephones were put to personal use also - 1/5th of the expenses claimed disallowed
Disallowance made from Discount and Rebate claim – alleged that the assessee has inflated the claim made under the head “Discount and Rebate” and accordingly disallowed 20% there of – Held that:- AO has failed to adduce the opportunity of cross examining the persons who have given contradictory statements - no merit in the impugned disallowance and accordingly deleted
Disallowance made from the “Labour charges” claim - AO issued letters u/s 133(6) of the Act to four persons to whom an aggregate amount of Rs.10,66,468/- had been paid as labour charges. Since the said letters were returned back un-served, the AO disallowed the said claim – Held that:- Assessee is required to engage out side persons also, to carry out the repair works of vehicles - assessee had deducted tax at source u/s 194C of the Act on the above said payments - assessee had made majority portion of the impugned amount by way of Account Payee cheques. It was also noticed that out of four persons, one had expired, one of them had gone abroad and other two persons were not immediately traceable - AO was not justified in making the addition – addition deleted
Disallowance of Employees’ share of PF – Held that:- Assessee submitted that a grace period of five more days are available under the PF Regulations and the impugned payments have been made within the grace period. It was also submitted that the payments made within the grace period are also considered as payments made within the due date - amounts paid beyond the grace period disallowed
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2012 (11) TMI 790 - ITAT MUMBAI
Whether reference made by the Assessing Officer to the DVO u/s. 55A is bad - Held that:- reference to DVO can only be made in cases where the value of capital asset shown by the assessee is less than its fair market value of land as on 1st April, 1981 shown by the assessee on the basis of approved valuers’s report being more than its fair market value, reference under S. 35A was not valid - reference made by the Assessing Officer to the DVO u/s. 55A in the peculiar facts and circumstances of the case is bad in law - in favour of the assessee
Deduction of lawyer’s fee – Held that:- AO in the absence of any documentary proof has disallowed the claim of the assessee for the deduction of Lawyer fees of Rs.4,00,000/-, the assessee’s share being Rs.1,00,000/- from the sale proceeds of the property – matter remanded to AO
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2012 (11) TMI 785 - ORISSA HIGH COURT
Allegation of discrimination - From the salary of the employees, Opp. Party nos. 2 and 3 deduct income tax U/s.192 and deposit the same with the Central Government. - reimbursement of the tax deducted and paid on that part of the house rent allowance - allege that the company discriminate the members of the petitioner-Association in taking decision not to reimburse the tax deducted and paid on that part of the house rent allowance (hereinafter mentioned as ‘perquisites’), while it is reimbursing same to the non- executives by paying an equivalent amount known as “up-keep allowance”. - held that:- respondents directed to decide the claim of the petitioner as to whether the members of the petitioner-Association and non-executives belong to the same class and the executives are entitled to 5% “Up-keep Allowance” as the non-executives are getting after giving an opportunity of hearing to the petitioner, within a period of one month from the date of production of certified copy of this judgment.
Whether accommodation provided to the Executives working under Opposite party no.1 could be regarded as part of their income on which tax could be deducted at source under Section 192 of the I.T. Act from the salary paid to the Executives. - held that:- it is open to the members of the petitioner-Association to make an application as provided under sub-section (1) of Section 197 to the Assessing Officer and satisfy him that no tax is deductible from the salary on account of the accommodation provided by the employer to them. In such event, the Assessing Officer has to examine the case of the petitioner and if he is satisfied that the members of the petitioner-Association are entitled to be issued with certificate of “No deduction of Income Tax” he shall issue such certificate and on production of such certificate before opposite party No.1, opposite party No.1 is bound not to deduct tax until such certificate is cancelled. Thus, a statutory remedy is available to the petitioner under Section 197 of the Act. Section 197 is a complete provision so far as deduction of tax at source is concerned.
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2012 (11) TMI 766 - DELHI HIGH COURT
Settlement of Case – scope of the term 'pending' case - after the expiry of the time limit prescribed for making an order of assessment under section 143/144 of the Act. – held that: - If the time period to make an assessment had not expired on the date on which the settlement application was made, the commission might entertain and proceed with the same, irrespective of whether income tax returns had been filed or not. However, where the period of twenty one months from the end of the assessment year expired on the date of making of the application, the settlement application cannot be proceeded with.
The expression "pending" in this case, has to be viewed contextually. In plain terms, it would mean when some case, cause or controversy is actually pending consideration before the assessment officer. Since no assessment order can be passed after the expiry of the prescribed time-limit, no proceeding can be taken in it. Moreover, proceeding for assessment/reassessment under section 147 are specifically excluded from the purview of "case" as defined under Section 245A(b). Thus, there is no question of proceedings of the type which are subject matter of this petition can be said to be "pending" - Assessment includes re-assessment too - impugned order of the Settlement Commission admitting the assessee's application, was contrary to law. The impugned order is accordingly set aside. The writ petition is consequently allowed.
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2012 (11) TMI 765 - UTTARAKHAND HIGH COURT
Taxability of Income of foreign company - PE - assessee contended that it’s income is not taxable in India, inasmuch as, it is a foreign company and has no permanent establishment in India. It was contended by the assessee that it had an assembly project in India, which was carrying out, in addition to assembly, installation of certain items, and that project and other activities were carried out in India for a period less than 9 months.
Held that:- ITAT had remanded the matter back for ascertaning the facts - in the event, it is held that the assessee had a permanent establishment during the relevant assessment year in India, it goes without saying that the Assessing Authority would be entitled to take such recourse to law as is permissible against such an assessee under the Income Tax Act.
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2012 (11) TMI 764 - ORISSA HIGH COURT
Review petition - prayer to review the judgment [2011 (12) TMI 230 - ORISSA HIGH COURT] - review regarding the decision on Legality of issuance of notice u/s 143(2) – held that:- There is nothing to show that Notice u/s 142(1) should precede notice under Section 143(2) as far as production of documents/accounts is concerned - Rearguing a point, while addressing on the review petition on the point already argued and decided by the Court in the judgment does not come within the scope and purview of review petition. Therefore, the judgment cannot be reviewed on the first ground of challenge.
Second ground of challenge in the review petition - the petitioner has taken a new stand that the power of the Commissioner under Sec. 264 is very wide and it is not restricted to just supervise the order of the Assessing Officer. - held that:- The above ground now urged in the review petition has neither been taken in the writ petition nor urged while argument was advanced in the writ petition out of which the present review petition arises. On this solitary ground the claim of the petitioner to review the impugned judgment is rejected.
Otherwise also, the contention of the petitioner that the power of CIT (Appeals) under Section 264 is very wide and by exercising such revisional power the Commissioner can entertain even a new claim which was never urged before the Assessing Officer is not legally sustainable. - since there is no provision in the Income Tax Act authorising/enabling the assessee to file any revised statement of income, the Commissioner, who is the creature of the statute, by exercising revisional power under Section 264 cannot allow the petitioner-assessee to revise his income by way of filing a revised statement of income.
It is settled proposition of law that what cannot be done “per directum is not permissible to be done per obliquum”, meaning thereby, whatever is prohibited by law to be done, cannot legally be effected by an indirect and circuitous contrivance on the principle of “quando aliquid prohibetur, prohibeture at omne per quod devenitur ad illud.”
The third ground taken by the review petitioner seeking review of the judgment is that the CIT (Appeals) is not justified to refuse to interfere with the assessment order on the ground that the petitioner preferred a petition under Section 264 of the Act. - held that:- it is not open to the review petitioner to reargue the matter which had already been argued and decided by this Court in judgment under review.
The matter can be looked at from different angle. - In the instant case the judgment passed in W.P.(c) No. 4554 of 2011 [2011 (12) TMI 230 - ORISSA HIGH COURT] out of which the present review petition has been filed was argued by Mr. B.K. Mohanti, Senior Advocate extensively. But the present review petition is argued by Mr. N.L. Das, who is only rearguing the points already argued, which is not permissible under law. - Such practice is deprecated by the Hon’ble Supreme Court - Decided against the assessee.
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2012 (11) TMI 762 - UTTARAKHAND HIGH COURT
Power u/s 263 - erroneous decision - Applicability of sec 44BB - held that:- Assessing Authority did not at all make any endeavour to ascertain, whether Rs.96 and odd crores were received by the assessee for and in respect of services rendered by the assessee or the same was received only by way of sale price of goods/materials sold by the assessee, may be outside India. - There is no finding that the revenue received in respect of that service contract, in connection whereof Rs.96 and odd crores were received by the assessee, could be segregated from the service part or not. There was, therefore, failure on the part of the Assessing Officer to ascertain whether Rs.96 and odd crores revenue would or can come under Section 44BB of the Act - both the limbs of Section 263 of the Act stands satisfied, namely, there was error in the order of Assessing Authority, and that, the error caused prejudice to the revenue – Decided against the assessee.
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2012 (11) TMI 761 - ITAT AHMEDABAD
Commodity trading loss - Speculation loss or not - allowable as set-off against other heads of income - held that:- As per 43(5)(d): an eligible transaction in respect of trading in derivatives referred to in clause (ac) of Section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) carried out in a recognized stock exchange shall not be deemed to be a speculative transaction and there is no requirement to refer the matter to Hon'ble President, ITAT for constitution of a Special bench as issue is decided in favour of the assessee by respectfully following the Tribunal decision rendered in the case of [Tejas K. Shah vs ITO 2010 (9) TMI 905 - ITAT AHMEDABAD] - In the result, appeal of the revenue is dismissed and ground of assessee has become infructuous as set off of loss is already allowed and, therefore, there is no case of any increase in tax liability.
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2012 (11) TMI 760 - ITAT HYDERABAD
Unexplained Share Application Money – income from undisclosed sources u/s 68 - Following the judgement of Supreme court in case of [CIT Vs. Lovely Exports Pvt. Ltd 2008 (1) TMI 575 - SUPREME COURT OF INDIA] Held that:- if the share application money is received by the assessee-Company from promoters, whose names and PAN are given to the AO, then the Department is free to proceed to re-open their individual assessments in accordance with law and share application money cannot be treated as undisclosed income – in favour of assessee.
Disallowance of Expenses and Salary and Wages in part – Held that:- Order of the CIT(A) on the ground that the disallowance sustained by the CIT(A) is reasonable as the assessee was not able to produce any evidence regarding the genuineness of expenditure even before us during the hearing is confirmed - disallowance only to the extent of 10% of the claim of assessee is sustained - ground of appeal is dismissed – in favour of assessee.
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2012 (11) TMI 759 - ITAT HYDERABAD
Application of Income of Society through another society - exemption u/s 11 - benefit to founders attracting provisions of section 13(1) - Following the decision of court in case of [CIT v MatriSeva Trust 1999 (3) TMI 34 - MADRAS HIGH COURT ] Held that:- As per the Bye Laws of the other Arboretum societies, the members cannot derive any benefit or have right over the property of the Society on its dissolution. Hence the amount spent by the Assessee for the maintenance of Forest land should be considered as application, notwithstanding the fact that the forest lands are held by other societies. In the circumstances such expenses incurred by the Assessee Society, either by themselves or through other societies with similar objects in furtherance of the objects of the Society should be considered as application of the Society’s income.
Whether any part of the application of donated funds by the assessee has directly or indirectly benefited founders of the assessee society – It was stated that in the case of the other societies also the members are not entitled any income of right to any property of the society on its dissolution. This being so the other societies are no different from the assessee society and the Department has not made a case as to how the common management members would derive benefit from the monies spent by the Assessee society for maintenance of the forest lands of the other societies - individual members of the William Frederick Durr family, who are Executive Committee members of the charitable society, are not the beneficiaries of this valid application of monies by the assessee (DVA) society - application of income by the assessee (DVA) did not violate the provisions of S.13(1)(c) and hence the assessee’s claim u/S. 11 is upheld - In the result, the appeal of the Department is dismissed.
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2012 (11) TMI 758 - ITAT HYDERABAD
Determination of Gross Profit ratio in restaurant business - AO rejected Books of account due to inflating of expenses and suppression of sales made and in absence of bills and vouchers – Held that:- AO is directed to estimate Gross Profit at the rate of 35% on total turnover instead of 40% as determined by him and as against @ 31.15 on the admitted sales by assessee - the appeal of the Revenue is allowed in part.
Disallowance of expenditure towards advertising charges u/s 40(a)(ia)– Held that:- As the payment was made and not payable on the date of balance-sheet, TDS payment and provisions of sec.40(a) are not attracted, expenditure claimed cannot be disallowed - ground raised by the assessee in its Cross Objection is allowed.
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2012 (11) TMI 757 - ITAT MUMBAI
Procedure u/s 274 - levy the penalty 271(1)(c) – On the date of hearing AO issue penalty order u/s 274 on the same day after getting approval from Add. CIT – Assessee contended that Add. CIT did not apply his mind and acted in a mechanical way in giving his approval to levy penalty – Held that:- On perusal of copy of approval by Add. CIT and the fact that penalty notice was issued in April, 2001, it is observed that penalty proceedings were kept in abeyance as the assessee filed appeal disputing the additions made by the AO. AO might had discussed the matter with Addl. CIT without waiting for the written submissions to be filed by the assessee. Therefore, mere surmise on the part of the assessee that there has not been application of mind by the Add CIT while granting his approval for levy of penalty u/s 271(1) (c). Issue decides in favour of revenue
Penalty u/s 271(1)(c) - loss of sale of machine claim as revenue loss instead of capital loss – Mere rejection of claim of the assessee held as concealment of income - Value of machine shown as CWIP - Machine become outdated without installation – Machine transfer to store and was sold as store scrap – Held that:- The disallowance of bonafide claim cannot be treated as furnishing inaccurate particulars of income or concealment of particulars of income. Mere rejection of the claim of the assessee would not attract provisions of Sec. 271(1)(c). It is not a case where it could be said that assessee has claimed the said loss as revenue loss dishonestly for avoiding tax particularly when all the relevant facts have been disclosed pertaining to the claim made. Even on erroneous claim for deduction cannot warrant penalty until and unless it is proved that the claim was made with dishonest intention. Issue decides in favour of assessee.
Penalty u/s 271(1)(c) – Assessee claim capital expenditure as revenue expenditure – AO levy penalty u/s271(1)(c) on furnishing inaccurate particulars of income – Concealment of income – Held that:- As the issue as to whether the expenditure constitute revenue expenditure or capital expenditure is a debatable issue. The assessee placed all relevant facts in the return filed and made its claim bonafide as revenue expenditure. Nothing is available on record to show that the belief of the assessee and the explanation of the assessee were false and inherently impossible. Even an erroneous claim for deduction cannot warrant penalty unless and until proved that the claim is made with dishonest intention. In favour of assessee
Penalty u/s 271(1)(c) – Concealment of income – AO disallow claim of interest expense in relation to advance given to subsidiaries/ sister concerns – Held that:- mere making of claim which is not sustainable in law by itself will not amount to furnishing inaccurate particulars of information regarding income or concealment of income. The department has also not brought on record that the claim of the assessee was not bonafide. Issue decides in favour of assessee
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2012 (11) TMI 756 - ITAT MUMBAI
Addition on account of accrued interest – Assessee has given loan to unrelated party - Interest at 18% was taken as accrued upto 30.6.1996 and subsequently no amount was recognized as income in the books of account – Assessee contended that principal itself is doubtful for recovery, question of accounting interest as income does not arise – Held that:- As one of the fundamental principles of accounting that, as a measure of prudence and following the principle of conservatism, the incomes are not taken into account till the point of time that there is a reasonable degree of certainty of its realization, while all anticipated losses are taken into account as soon as there is a possibility, howsoever uncertain, of such losses being incurred. There is uncertainty in realizing the principle itself. The principles laid down in recognizing the income equally applies to the facts of the case. For these reasons, we are of the opinion that no notional interest can be brought to tax. Appeal decides in favour of assessee
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2012 (11) TMI 755 - ITAT DELHI
Undisclosed income under section 68 of Income tax Act - Creditworthiness - Genuineness of the transaction – Held that:- Creditworthiness is proved by the assessee by way of auditor’s statement, copies of income tax returns and confirmations. Section 68 lays down initial burden and does not contemplate infallible burden on the assessee to prove the source of source of the share applicants and every bit of transaction which may be perceived by the AO. The nature of burden is initial in nature, which has been discharged by the assessee – addition deleted
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2012 (11) TMI 754 - ITAT DELHI
Penalty u/s 271(1)(c) of the Act – assessee was required to furnish the details of consultancy expenditure – alleged that assessee was not able to file the invoice or the bill – Held that:- Assessee claimed payment of professional charges in two years. The expenditure in both the years is substantial compared to other expenses debited in profit and loss account - In respect of professional charges, admittedly there is no evidence to prove that they were incurred for the purpose of business. The ostensible reason is that looking to the nature of services, no documentation could be made in respect of services rendered - no basis has been provided for computing the payment either in this or in the next year. This has to be seen in the context of the fact that no business has been conducted in these two years and there is no change in the investments also - mere showing the expenditure under a separate head “consultancy charges” does not lead to inference that all the facts were disclosed - payment has no nexus whatsoever with the business of the assessee and that the explanation furnished by the assessee is not bona fide. Accordingly, the levy of penalty is upheld - appeals dismissed
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2012 (11) TMI 753 - ITAT DELHI
Calculation of long term capital gain - determination of date of sale – sale of factory land - enhancement in the value of consideration – Held that:- In the instant case, the agreement to sell was entered in to on 8.1.2007 while the sale deed was executed on 14.8.2007 and registered. There is not even a whisper in the assessment order regarding handing over of the possession while the ld. CIT(A),without even referring to various terms and conditions in the agreement to sell or sale deed, accepted the submissions of the assessee that possession was handed over on 8.1.2007 itself. – matter remanded to CIT to bring out clearly as to when the possession of aforesaid immovable property was actually allowed - Decided in favor of assessee for statistical purposes.
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2012 (11) TMI 752 - ITAT DELHI
Addition on account of share capital u/s 68 of the I.T. Act - credit worthiness and identity of creditors and genuineness of the transactions – Held that:- After the assessee filed the requisite details of the share applicant companies as far as the onus upon the assessee is concerned it stood discharged - initially in proceedings considering the issue u/s 68 the initial burden of proof lies upon the assessee yet once he proves the identity of the creditors/share applicants by either furnishing their PAN numbers or Income tax assessment number and shows the genuineness of the transaction by showing money in his books either by account payee cheque or by draft or by any other mode then the onus of proof would shift to the Revenue.
AO of the assessee cannot take the burden of assessing the profit and loss account of the creditor when admittedly the creditor himself is an income tax assessee. After getting the PAN number and getting the information that the creditor is assessed under the Act, the AO should enquire from the AO of the creditor as to the genuineness of the transaction and whether such transaction has been accepted by the AO of the creditor but instead of adopting such course, the AO himself could not enter into the return of the creditor and brand the same as unworthy of credence – in favor of assessee
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2012 (11) TMI 751 - ITAT AHMEDABAD
Employees Provident Fund and ESIC - alleged that the Employees Contribution towards Provident Fund and E.S.I.C. had been paid late after the due date by the assessee – Held that:- Contribution towards PF and ESIC having been paid by the assessee within 2 to 4 days after grace period provided under s.43B but before filing the return is allowed - against the Revenue
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2012 (11) TMI 750 - ITAT AHMEDABAD
Undisclosed income – alleged that assessee incurred estimated expenditure of Rs.25,19,86,000/- in acquiring development rights of Shela Land whereas a sum of Rs.4,55,00,000/- only was recorded in the books of account and, therefore, the difference represented the assessee's unexplained or unaccounted investment – Held that:- Amounts have been received through account payee cheques through normal banking transactions and all the transactions are recorded in the books of accounts - amounts received against the booking of the plots are in the nature of business turnover accounted in the books of accounts - Since the assessee recorded the receipts in the books of accounts for booking of the plots which would ultimately be turnover/sales of the assessee which is not disputed by the AO, on which profit is shown, no addition could be made on account of unexplained credit u/s 68 of the IT Act - Merely because the Tribunal in the block assessment order observed that the same addition could be taken up in regular assessment as noted by the AO would not be a reason for the AO to make the addition without any just cause – In favor of assessee
Addition on account of unexplained cash deposits in the bank accounts – Held that:- cash deposits on various dates in the bank account of the assessee company are duly recorded in the regular books of accounts even prior to the search. The books of accounts of the assessee have not been disputed by the AO. All the cash deposits were found to have been made out of the cash balances available in the books of accounts on the date of the deposit in the bank. Since the book entries are not in dispute, therefore, there is no need to file separate cash flow statement as is argued by the learned DR because the book entries explaining the availability of the cash with the assessee company on the date of bank deposits would be more significant and relevant as against cash flow statement - AO has not brought any adverse material against the assessee on record to prove that the assessee utilized or spent the amount of withdrawal in any specific item – In favor of assessee
Addition on account of unaccounted income of Radhe Acre I & II Schemes – Held that:- Complete details of the sales of the plot from 15.3.1996 to 31.3.1996 have been filed - Assessing Officer has merely assumed that during the post search period also the assessee company indulged in charging on-money. No evidence or material has been brought on record by the Assessing Officer to support such assumption - AO merely on the basis of block assessment order assumed that in the post search period also assessee has received on money. No evidence or material was brought on record by the AO to support his assumption. Merely on the basis of assumption no such addition could be made against the assessee - In favor of assessee
Interest expenditure – held that:- the assessee company had huge interest free funds of its own which were sufficient to cover any alleged interest free advances made by the assessee. No nexus has been proved between the interest bearing borrowed funds and interest free advances. The explanation of the assessee clearly proved that funds have been used for the purpose of business. – Decided in favor of assesse.
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