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Case Laws
Showing 221 to 240 of 865 Records
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2012 (5) TMI 650 - ITAT JAIPUR
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... ... ..... hat there has been in fact no transfer of funds from the ostensible creditor-investors to the investee-company, i.e., the impugned transactions are paper transactions. If, on the other hand, the impugned investments’ are claimed to represent benami investments, the onus on the Revenue, as explained by the hon’ble jurisdictional high court, is even higher, while, as stated earlier, it has not even made out a prima facie case in support of its claims. Both the decisions cited by the Revenue are not in relation to share investment, which, as in the case of bank deposits, is characterized by a presumption of genuineness, particularly where in relation to a public offer, which thus needs to be impugned by the Revenue where a prima facie case is made out by the assessee-investee. Reliance on the said case law, therefore, would not be of much assistance to the Revenue in the facts and circumstances of the case. 3. In the result, the appeals by the Revenue are dismissed.
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2012 (5) TMI 649 - ITAT HYDERABAD
Allowable business expenditure - Whether the assessee has set up and commenced its real estate business during the relevant previous year? - Whether the assessee can claim business expenditure against interest income credited to P & L A/c?
Held that:- As the assessee has already acquired land entered into development agreement and has started development and construction work for the real estate project, it has set up and commenced its business and therefore entitled to claim expenses as incurred which was debited to Profit & Loss A/c against interest income. In view of the above, we allow the grounds raised by the assessee for the years under consideration.
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2012 (5) TMI 648 - SUPREME COURT
Suit for permanent injunction - principles of res judicata - Entitlement to be declared as owners of half portions of the property - HELD THAT:- It would not be an exaggeration but on the contrary an understatement if it is said that all facets of fraud get attracted to the case at hand. A rustic and illiterate woman is taken to court by a relation on the plea of creation of a lease deed and magically in a hurried manner the plaint is presented, written statement is drafted and filed, statement is recorded and a decree is passed within three days. On a perusal of the decree it is manifest that there is no reference of any kind of family arrangement and there is total non-application of mind. It only mentions there is consent in the written statement and hence, suit has to be decreed. Be it noted, it was a suit for permanent injunction. There was an allegation that the respondent was interfering with the possession of the plaintiff. What could have transpired that the defendant would go with the plaintiff and accede to all the reliefs. It not only gives rise to a doubt but on a first look one can feel that there is some kind of foul play. However, the learned trial Judge who decreed the first suit on 27.11.1973 did not look at these aspects. When the second suit was filed in 1984 for title and the third suit was filed for possession thereafter, the courts below had routinely followed the principles relating to consent decree and did not dwell deep to find out how the fraud was manifestly writ large. It was too obvious to ignore. The courts below have gone by the concept that there was no adequate material to establish that there was fraud, though it was telltale. That apart, the foundation was the family arrangement. We have already held that it was not bona fide, but, unfortunately the courts as well as the High Court have held that it is a common phenomenon that the people in certain areas give their property to their close relations. We have already indicated that by giving the entire property and putting him in possession she would have been absolutely landless and would have been in penury. It is unimaginable that a person would divest herself of one’s own property in entirety in lieu of nothing. No iota of evidence has been brought on record that Bhali, the respondent herein, had given anything to Badami in the arrangement. It is easily perceivable that the rustic woman was also not old. Though the decree was passed in 1973 wherein it was alleged that the defendant was already in possession, she lived up to 1992 and expired after 19 years. It is a matter of record that the possession was not taken over and inference has been drawn that possibly there was an implied agreement that the decree would be given effect to after her death. All these reasonings are absolutely non-plausible and common sense does not even remotely give consent to them. It is fraudulent all the way. The whole thing was buttressed on the edifice of fraud and it needs no special emphasis to state that what is pyramided on fraud is bound to decay. In this regard we may profitably quote a statement by a great thinker:
“Fraud generally lights a candle for justice to get a look at it; and rogue’s pen indites the warrant for his own arrest.”
Ex consequenti, the appeal is allowed and the judgment and decree of the High Court in the Second Appeal as well as the judgments and decrees of the courts below are hereby set aside and as a natural corollary the judgment and decree dated 27.11.1973 is also set aside. There shall be no order as to costs.
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2012 (5) TMI 647 - ITAT MUMBAI
Unexplained Cash Credits u/s 68 - The client code shown by the CSE and as provided by the assessee varied and on this basis, the AO held that the purchases shown by the assessee were not genuine, therefore, the sale proceeds were bogus/sham - HELD THAT:- Revenue authorities have heavily relied on the discrepancy pointed out by CSE, regarding client code, but at no point of time the revenue authorities have been able to prove that the sale of the impugned shares was bogus/sham. We are unable to sustain the additions primarily on the point that the credits in the books of the assessee are on account of sale of a commodity (shares), which is duly reflected in the DMAT account, both of which cannot be challenged. We are in full agreement with the argument of the AR that even if the sale by any chance could not be effected through broker, even then the sale would remain sale, till the time it is not proved otherwise that these were not conducted through regular channels. The burden of proof shifts on the department, which the revenue authorities have failed. Making an addition on conjectures cannot be expected to be sustained. Therefore, additions by AO are to be deleted.
Sale Proceeds of Shares - Credits u/s 68 or Not? - AO disallowed the claim of loss incurred on sale of shares - HELD THAT:- As the sales of shares are not bogus, sale proceeds of the shares are not to be treated as credits u/s 68. Thus, the loss on the sale of shares is allowed.
Decision in favour of Assessee.
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2012 (5) TMI 646 - CESTAT NEW DELHI
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... ... ..... d MRP. This imply that an appellant had used inputs for manufacturing the packing material. Therefore, only for the reason that the appellant had not physically packed their spare parts in the boxes, he cannot be denied cevnat credit. Thus he submits that the impugned order is not sustainable as such this is not a fit case for waiving the condition of pre-deposit. 5. Shri Bharat Bhushan, learned AR for the Revenue on the contrary has argued in support of the order in original as well as impugned order. 6. We have considered the rival contentions and perused the record. After taking into account the overall facts of this case, we are of the view that appellant plea has merit and it deserves to be considered. Thus, we find that the appellant has been able to make out a prima facie case for waiver of the condition of pre-deposit. Stay application is accordingly allowed. Condition of pre-deposit of interest and penalty is waived. 7. Appeal be listed in due course.
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2012 (5) TMI 645 - ITAT DELHI
Addition u/s 68 - Held that:- In the present case, no inquiry was made by the Assessing Officer. He simply treated the information collected by the Investigating Wing as a gospel truth. To our mind that information could be sufficient for starting investigation to that cannot be a substitution of all sort of evidence. On due consideration of the facts and circumstances and the order of Ld CIT (A) we do not find any force in the contentions of Ld DR. Appeal of the revenue is dismissed.
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2012 (5) TMI 644 - ITAT DELHI
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... ... ..... s rightly pointed out by the Assessing Officer as well as learned CIT(A) except e-mail message there is nothing on record to suggest that the assessee visited the product suppliers in connection with the business. There is neither any correspondence with the Bangkok parties with regard to intending visit nor any correspondence subsequent to the visit stating that a personal examination and discussion has culminated into business transactions of any particular product. Despite the specific mention by the Assessing Officer, even till date no material is placed before the Tribunal to show that the assessee’s visit had helped in purchase of products or it has any business nexus with the proposed projects or future projects. Having regard to the circumstances of the case, I am of the opinion that the orders passed by the tax authorities do not call for any interference. I therefore dismiss the appeal filed by the assessee. Order has been pronounced on 18th Day of May, 2012.
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2012 (5) TMI 643 - ITAT DELHI
Reassess the income of the appellant under sections 147/143(3)/145(3) - change of opinion - Disallowance of loss on Indian operations and estimation of income therefrom - Disallowance of payment of employees contribution - Disallowance of payment of employees contribution - Recomputation of deduction U/s 80-HHB of the Act - Interest U/s 234D - disallowance of additional depreciation - prior period expenses
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2012 (5) TMI 642 - ITAT DELHI
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... ... ..... ered on 23/09/08. Further from the language of section 139(5) it is seen that it permits the assessee to file a revised return at any time before expiry of one year from the end of the assessment year or completion of the assessment, whichever is earlier, if the assessee finds any omission or wrong statement in the return filed u/s 139(1) or 142(1). This provision is beneficial in nature and not obligatory in nature as the word used is “may”. Thus, the assessee could have filed a revised return but it was not obligatory on him to do so. Thus, it is clear that there was neither concealment of income nor furnishing inaccurate particulars of income in the return filed by the assessee on 26/09/2008. The position of law has to be considered as on this date as held by Hon'ble Supreme Court in the case of Onkar Saran and Sons (supra). Therefore, we are of the view that the learned CIT(A) rightly deleted the levy of penalty. 7. In the result, the appeal is dismissed.
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2012 (5) TMI 641 - ITAT MUMBAI
Disallowance of expenditure u/s 14A
Due date for payment of deposit linked insurance premium
Nature of income - We are unable to appreciate the contentions of the assessee that the income should rightly be assessed under the head “Income From House Property”. The assessee cannot take a “U” turn by filing an additional ground. To decide as to whether an income has to be assessed under the head “Income From Business” or under the head “Income From House Property”, certain material facts have to be examined. The agreements, the functions of the parties, etc., have to be seen.
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2012 (5) TMI 640 - ITAT PUNE
Revision u/s 263 - Claim of deduction u/s 80-IB(10) - Held that:- The requirement of filing the audit report along with the return was not mandatory but directory and that if the audit report was filed at any time before the framing of the assessment, the requirement of section 80-IA(7) would be met. The Tribunal was also held right in holding that the Commissioner did not even call for any explanation of the assessee and the issue of fulfillment of the conditions of section 80-IA had not been part of the show-cause notice. Therefore, it could not form the basis for revision of the assessment order under section 263.
The project had started prior to 1-4-2005 the definition of built up area as given in section 80IB(14) is not applicable and the built up area as per the DC rules of PMC was less than 1500 sq.ft. The Assessing Officer has included the area covered by the terrace in the built up area. The terrace is not includible in the built up area computed as per DC rules. Accordingly, the built up area of the flat is less than 1500 sq.ft. and therefore, the CIT(A) was justified in allowing the deduction as claimed by the assessee.
Deduction u/s 80-IB(10) - Held that:- If the project is started prior to 1-4-2005 the limit of 2000 sq.ft. or 5% whichever is lower is not applicable and the deduction is to be allowed to the entire project. Assessing Officer was not justified to take date of commencement as 20/04/2005 which was date of revalidation. So Brahma Aangan project already commenced on 17/03/2001 i.e. prior to 01/04/2005. Similarly in respect of Brahma Majestic plan was sanctioned on 27/06/2003 i.e. much before 01/04/2005. We direct the authorities below to allow deduction u/s 80-IB(10) of the Act on account of both these projects.
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2012 (5) TMI 639 - ITAT MUMBAI
Disallowance of interest to the advances given to HGPL - Held that:- CIT(A) while deciding this issue has deleted the additions of ₹ 46,64,53,318/-. However, at the same time on the proposed addition of ₹ 27,54,66,028/-, the Ld. CIT(A) has given part relief to the assessee and confirmed the disallowance of proposed interest relateable to advances made within the year on proportionate basis based on the ratio of borrowed funds to total funds. The assessee before us has suo motto calculated such disallowance at ₹ 9,01,98,977/-. To this extent, we find that both the orders of lower authorities are lacking in details regarding break up of interest attributable to the various categories referred to above.
So far as the advance to HGPL is concerned, we find that the said advance has direct bearing with the commercial needs of the assessee. Once it has been established that the advances have been made for commercial reasons, no part of interest can be disallowed.
Therefore, modifying the order of Ld. CIT(A), the AO is directed to allow the claim of interest
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2012 (5) TMI 638 - ITAT CHENNAI
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... ... ..... he applicability of the provision of Sec.195 and consequently the effect of non-deduction of TDS u/s.195 r.w.s. 40(a)(i). As we have held that the assessee does not have a bona fide belief for non-deduction of tax nor the assessee has been able to prove that it had bona fide belief that the income of the non-resident representative were not taxable in India and hence we are of the view that the Ld. C.I.T. was right in holding that non deduction of TDS u/s.195 does deny the assessee the benefit of deduction of expenditure of the remuneration paid to the two non-residents to the extent of ₹ 95.99 lakhs and consequent enhancement of the assessment thereof. In the circumstances, the appeal of the assessee is dismissed.” We, therefore, do not find any merits in the appeal filed by the assessee which, therefore, stands dismissed. 4. In the result, appeal filed by the assessee is dismissed. Order pronounced in the open court after conclusion of hearing on 3rd May, 2012.
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2012 (5) TMI 637 - ITAT INDORE
Disallowance of claim of deduction u/s 80IB(10) - Held that:- Assessing Officer was not justified in rejecting the affidavit furnished by the assessee and concluding that the appellant had constructed duplex house no. 128(28) having built up area of 1610.53 sq.ft. Since during the year under consideration, out of 35 Duplex Houses, only five houses were sold and the assessee has claimed that in respect of three houses, different size was found by the DVO. We also find that the Assessing Officer had not examined the affidavit filed by the assessee nor cross examined the respective occupant of house no. 128(28) to ascertain the additional construction done by him. In the interest of justice, we restore this ground back to the file of the Assessing Officer to have a fresh measurement of the house and if the same is found to be up to 1500 sq.ft., he shall allow the assessee’s claim for deduction subject to other conditions of section 80IB(10) being fulfilled. We direct accordingly.
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2012 (5) TMI 636 - ITAT HYDERABAD
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... ... ..... s loss at ₹ 7,24,93,410/- and has allowed ₹ 7,24,93,410/- being the lesser of the two as deduction under Explanation-III to section 115JB(2) of the Act. However, in the course of appeal proceedings before the CIT (A), the AO in his remand report has re-worked the brought forward loss at ₹ 54.92 crores and unabsorbed depreciation at ₹ 28.67 crores. From a plain reading of section 1154JB(2) of the Act, it is clear that lesser amount between the brought forward loss and unabsorbed depreciation has to be allowed as deduction. In the present case, since unabsorbed depreciation has been worked out by the AO at ₹ 28.67 crores which is lesser between the two, it has to be considered for deduction under Explanation (iii) of section 115JB (2). The order of the CIT (A) is modified to this extent. Hence, the ground raised is allowed in favour of the revenue. 8. In the result, the appeal stands partly allowed. Order was pronounced in the Court on 04-5- 2012.
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2012 (5) TMI 635 - ITAT AHMEDABAD
Disallowance of remuneration to working partner - Held that:- We are in agreement with the decision of the CIT (A) that once the additional income offered for taxation during the survey is accepted and it has been explained business as the source of additional income then there is no bar in the Act from claiming partner’s remuneration from such additional business income. Accordingly, we find no infirmity in the order of CIT (A). Hence this ground of the Revenue is dismissed.
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2012 (5) TMI 634 - DELHI HIGH COURT
Reopening of assessment - Held that:- In view of the judgment of the Supreme Court in Assistant Commissioner of Income Tax versus Dhariya Construction Company, (2010 (2) TMI 612 - Supreme Court of India) reopening cannot be sustained.
Further, in Commissioner of Income Tax versus Puneet Sabharwal, (2010 (12) TMI 846 - Delhi High Court) it has been held that addition cannot be solely made on the basis of the valuation report.
We also notice that before the CIT(Appeals), the assessee had pointed out that the Assistant Valuation Officer had relied upon one transaction relating to sale in DDA auction of a property located in a different location. It was also stated that the property in question is located in category B and the circle rates notified by the Government of NCT of Delhi on 18th July, 2007 for category B colony was ₹ 34,100/- per square meter. The Assistant Valuation Officer has taken the land rate for the sale transaction in question, which relates to September, 2005, at ₹ 92,975/- per square meter.
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2012 (5) TMI 633 - ITAT AMRITSAR
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... ... ..... ing of the wrong figure before the bankers is for the purpose of hypothecation of goods for availing credit facility. Therefore, in view the decisions of Hon’ble Punjab & Haryana High Court in the case of CIT vs.Veerdip Rollers Pvt. Ltd. 323 ITR 341 (P&H), CIT vs. Punjab Rice & General Mills 264 ITR 582 (P&H), CIT vs. Sidhu Rice & General Mills 281 ITR 428 (P&H) and decision of Hon’ble Madras High Court in the case of CIT vs. N. Swamy 241 ITR 363 (Mad.), the AO in the present case is not justified in making any addition under section 69 of the Act, in the absence of any positive material of any investment outside the books of account. Thus, we find no infirmity in the order of the ld. CIT(A), who has rightly deleted the addition made by AO. Thus, all the grounds of appeal raised by the Revenue are dismissed. 6. In the result, the appeal of the Revenue in ITA No.513(Asr)/2011 is dismissed Order pronounced in the open court on 8th May, 2012.
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2012 (5) TMI 632 - ITAT DELHI
Addition u/s 92CA(i) - Held that:- We find that learned TPO while working out the alleged excess amount of interest paid by the assessee has considered the average LIBOR (London Inter-Bank Offered Rate) between the period of April 2001 to March 2002 plus arithmetic mean of the interest rate paid by the comparables in addition to LIBOR. Learned TPO has committed two errors. He considered the arithmetic mean of LIBOR between April 2001 to March 2002. The assessee entered into an agreement for the loan on 25.12.2000. What was the rate of LIBOR at that particular time has not been considered. Similarly, we concur with the finding of the Learned CIT(Appeals) that the comparables selected by the learned TPO are not comparables with the assessee in terms of their size quantitatively. Learned TPO also not compared the terms and conditions enumerated in the assessee’s agreement for the loan vis-ŕ-vis the terms and conditions of the five comparables. Thus, to some extent, learned TPO has compared the incomparable with the assessee. In view of the above discussion, we do not find any merit in this ground of appeal. It is rejected.
Cessation of liability - Held that:- Once it is factually established by the assessee that liability has not ceased, no addition can be made. Learned CIT(Appeals) has considered this aspect and we do not see any reason to interfere in his order. With regard to the two other creditors, we find that the Learned CIT(Appeals) has deleted the addition on the ground that these amounts have been written off by the assessee in the subsequent years and offered for tax. Assessing Officer has made the addition of these amounts in the present years on the ground that assessee failed to file the confirmation from these two entities. The case of the assessee was that a dispute was pending between the assessee and these parties and it was not possible for it to ask for a confirmation. The assessee has not written off these amounts in its books of account. Assessing Officer has not brought any positive evidence on the record indicating the liability to pay these amounts has ceased. On due consideration of the order of the Learned CIT(Appeals), we do not find any merit in the ground of appeal raised by the revenue. Hence, it is rejected.
Addition on employees contribution towards EPF - amount paid after the expiry of the due date provided in the EPF Act - Held that:- As the amount was paid before the due date of the filing of the return and the issue is squarely covered in favour of the assessee
Disallowance of expenditure - Low GP - Held that:- Since the assessee failed to submit the requisite details at the time of assessment proceedings, therefore, learned Assessing Officer has rightly made ad hoc disallowance out of expenses on the ground that genuineness of such expenses could not be verified. But we agree with the submissions made by the learned counsel for the assessee that out of certain expenses, there cannot be any disallowance. The nature of the expenses is such that no doubt on their quantification can be raised. Now, as far as difference in foreign exchange is concerned, it is to be computed based on straight formula. Similarly, depreciation could also be verified from details available on the record. Considering all these aspects, we set aside this issue to the file of the Assessing Officer for readjudication.
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2012 (5) TMI 631 - ITAT MUMBAI
Penalty u/s 271(1)(c) - Held that:- In order to expose the assessee to penalty, unless the case is strictly covered by the provisio, the penalty provision cannot be invoked. By no stretch of imagination can making an incorrect claim tantamount to furnishing inaccurate particulars. The Explanation given by the assessee in our opinion is bonafide and can not be held to be false. Thus, we uphold the order of the first appellate authority and dismiss this appeal of the revenue.
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