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Case Laws
Showing 161 to 180 of 664 Records
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2005 (8) TMI 586 - ITAT BANGALORE
Penalty - For concealment of income ... ... ... ... ..... n the case of K.P. Madhusudanan v. Commissioner of Income-tax 251 ITR 99, wherein the Supreme Court after distinguishing Sir Shadilal Sugar and General Mills Ltd. rsquo s case (1987) 168 ITR 705, and after noticing the Explanation appended to section 271 of the Act, has held that if an addition is made and if there is no proper explanation for such addition, it would amount to concealment of income and the authorities under the Act are justified in levying penalty under section 271(1)(c) of the Act. In view of the law declared by the Apex Court in the case of K.P. Madhusudanan v. Commissioner of Income-tax 251 ITR 99, we are of the opinion that the question of law referred for our opinion requires to be answered in the negative. The facts of the said case will also apply to the present set of facts. In view of the discussion above and in view of the decision of Hon rsquo ble Karnataka High Court, we do not find any merit in this appeal. In the result, the appeal is dismissed.
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2005 (8) TMI 585 - ITAT BANGALORE
Charitable or religious trust - registration u/s 12AA - Activity of letting out the choultry is "charitable activity or commercial activity" - HELD THAT:- We have carefully considered the relevant facts and the agreements advanced. Though various objects are stated in the trust deed, yet the assessee has not done anything in furtherance of such objects. All the activities so far have been only towards construction of a choultry. As per the finding of learned DIT (Exemptions), the choultry is let out on hire on commercial basis. The hiring of choultry is not for attainment of other objects, but seems to be the main object so far pursued by the appellant. The mere spending of Rs. 2,000 on yoga classes and Rs. 5,000 on feeding poor people out of the total receipt of over Rs. 62 lakhs, do not establish that the assessee is pursuing wholly charitable activities. We accordingly do not find any merit in this appeal.
In the result, the appeal is dismissed.
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2005 (8) TMI 584 - ITAT CHANDIGARH
Penalty - For concealment of income ... ... ... ... ..... aised for the first time before the Tribunal, we are of the view that it is as legal issue and it can be raised at any time because under section 254 of the Act, the Appellate Tribunal after giving both the parties to the appeal an opportunity of being heard, can pass such orders thereon as it thinks fit. The power of the Tribunal in dealing with appeals is expressed in the widest possible terms as was held by the Hon rsquo ble Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT 1998 229 ITR 383. Reliance put forth by the learned AR like K.P. Madhusudhanan v. CIT 2001 251 ITR 99, ITO v. C.D. Joseph 2004 266 ITR 609 (Ker.) are distinguishable being on different facts specially in the light of the decision of the Hon rsquo ble Apex Court which we have discussed in the preceding paras. 12. In view of these facts, the penalty so imposed deserves to be deleted. The order of the learned CIT(A) in both the appeals is reversed. The appeals of the assessee are allowed.
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2005 (8) TMI 583 - ITAT AHMEDABAD
Deduction of tax at source ... ... ... ... ..... of receipt from the exhibition of films with the Distributor. Accordingly, we quash the orders passed under section 201(1) and 201(1A). ITA Nos. 1438 to 1440/Ahd./05 7. In these appeals the only common ground raised by the assessee is against the levy of penalty under section 271(1)(c)-C amounting to Rs. 1,93,160, Rs. 1,23,100 and Rs. 1,19,254 for Assessment years 2002-03, 2003-04 and 2004-05 respectively. The Assessing Officer has levied the penalty for failure of the assessee to deduct the tax on the payment to Distributor. While considering the assessee rsquo s appeals against the orders under section 201, we have already held that the assessee was not required to deduct the tax on the payment of Distributor rsquo s share by the assessee. Since we have already cancelled the orders of Assessing Officer under section 201(1)/201(1A), the penalty based upon such order cannot be sustained. The same are also cancelled. 8. In the result, the assessee rsquo s appeals are allowed.
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2005 (8) TMI 582 - ITAT MUMBAI
Depreciation, Written down value ... ... ... ... ..... sideration quantum-wise. The treatment adopted by the assessee-company is to be seen, therefore, perfectly in accordance with the normal concept of accounting and normal concept of income. Even in a case of computing capital gains, consideration is always adjusted to incurring of any expenses incidental to the transfer. In fact, the assessee-company has followed the said principle provided in the statute with reference to the computation of capital gains. That principle should apply in the present case also. Further, there is no reason in the finding of the assessing authority that those expenses were in the nature of capital expenditure. Those expenses were not incurred in the course of acquiring any capital asset. Therefore, the CIT(A) was justified in allowing the incidental expenses to be reduced from the gross consideration received by the assessee on sale of four ships. 34. This ground also, therefore, fails. 35. In result, this appeal filed by the revenue is dismissed.
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2005 (8) TMI 581 - ITAT AMRITSAR
Receipt of non-compete fee - Nature of receipt "Capital or Revenue" - Taxable under u/s 28(ii)(a) - Business income - protective assessment - compensation received under the agreement - HELD THAT:- We find that the Assessing Officer considering all the three agreements was of the view that the compensation received by the assessee through agreement dated 25-2-1999 not a non-compete fee which was essentially a part of the cost price paid by M/s. Hindustan Coca Cola Pvt. Ltd. for the purchase of business and other rights of M/s. Jammu Bottling Co. The Assessing Officer was also of the view that it should be added in the hands of the company M/s. Jammu Bottling Co. as it was a part of the sale consideration of the business by the said company. The Assessing Officer was also of the view that the amount paid by way of non-compete fee was, in fact, the sale consideration and was paid in the guise of this method to accommodate profits of the company.
The Assessing Officer also tried to move before the CIT(A) in the case of M/s. Jammu Bottling Co. to prove that the aforesaid amount has, in fact, belong to the company. The Assessing Officer, however, observed that the CIT(A) vide order dated 9-1-2001 did not make addition of the amount of Rs. 1 crore, i.e., the amount received by the directors in the hands of the assessee-company. The findings of the CIT(A) were confirmed by the ITAT, Chandigarh Bench vide order dated 16-7-2004. Therefore, the whole case of the Assessing Officer is demolished. The facts above clearly show that the view of the Assessing Officer was erroneous and as such it was not accepted in the case of M/s. Jammu Bottling Co.
The facts in this case clearly show that the assessee has restricted himself from doing business or profession nature because of the experience as explained above in the business of M/s. Jammu Bottling Co., therefore, it was independent restrictive covenant for a specific period. The assessee in lieu of restrictive covenant was paid a sum of Rs. 1 crore and as such the compensation which was attributable to the restrictive covenant was a capital receipt and hence was not taxable. The compensation in the case of the assessee is very specific from his independent agreement. The very object of the agreement was to avoid competition in all matters between the assessee and M/s. Hindustan Coca Cola (buyers). Therefore, the assessee lost earning assets for specified period. The decision of the Hon’ble Supreme Court in the case of Best & Co. (P.) Ltd.[1965 (11) TMI 23 - SUPREME COURT] is, therefore, directly applicable to the above case alongwith other decisions referred to above in this order.
In the present case, the authorities below took the view that the amount of Rs. 1 crore was part of the sale proceeds of on going concern M/s. Jammu Bottling Co. In that garb it was observed that because of execution of the agreement for sale of business concern and goodwill, M/s. Jammu Bottling Co. had nothing to sale further. The authorities below, therefore, were of the view that the amounts should be taxed in the hands of M/s. Jammu Bottling Co. However, the findings of the authorities below were not approved by the CIT(A) and the Appellate Tribunal in the case of M/s. Jammu Bottling Co. The authorities below as such even on giving adverse finding against the assessee could not find out other meaning of the agreement against the assessee.
Thus, following rule of consistency, we are of the view that the authorities below have failed to prove that it was a case of collusive transaction. The receipt in the hands of the assessee is treated as capital receipt and as such the findings of the authorities below are set-aside, addition is deleted.
As a result, the appeal of the assessee is accordingly allowed.
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2005 (8) TMI 580 - ITAT DELHI
Capital gains ... ... ... ... ..... 9. The Assessing Officer also noted that the assessee had also advanced substantial interest-free funds to sister concerns. He, therefore, disallowed the interest excluding the interest paid to the bank, totalling Rs. 22,11,296. 6.1 We have heard both the parties. Ld. AR brought to our notice that similar issue relating to disallowance of interest on account of interest-free advances to sister concerns has been set aside and matter restored to the file of the Assessing Officer by ITAT in assessment years 1990-91 to 1992-93 for fresh examination and orders. Both the parties have no objection if the issue is restored to the file of the Assessing Officer this year also. We, therefore, set aside the issue and restore it to the Assessing Officer for fresh order after detailed examination in the light of direction given by ITAT in the earlier years and after allowing opportunity of being heard to the assessee. 7. In the result, both the appeals are allowed for statistical purposes.
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2005 (8) TMI 579 - ITAT CHANDIGARH
Interest on borrowed capital, Deductions - Exporters ... ... ... ... ..... -company to its sister concern i.e. M/s Manipur Vanaspati in the past and no disallowance on account of interest attributable to the said loan was made in the year when the loan was actually sanctioned. Moreover, the similar disallowance made in assessee rsquo s own case for assessment years 1992-93 to 1995-96 as well as for assessment years 1997-98 to 1998-99 has been consistently deleted by the Tribunal and the facts involved in the year under consideration being undisputedly similar to those years, we follow the said decision of the Tribunal rendered in assessee rsquo s own case to hold that the disallowance made on this count by the Assessing Officer and confirmed by the learned CIT(A) was not justified. Their orders on this issue are, therefore, set aside and the disallowance of Rs. 1,90,000 made out of interest is directed to be deleted. Ground No. 5 of the assessee rsquo s appeal is, accordingly, allowed. 11. In the result, the appeal of the assessee is partly allowed.
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2005 (8) TMI 578 - ITAT DELHI
Deduction of tax at source ... ... ... ... ..... has not conducted thorough enquiry required for adjudicating the issue nor has adjudicated the issue properly. The learned CIT(A) also repeated the course adopted by the Assessing Officer. In our opinion, a thorough probe is required for examining as to whether the provisions of section 194C(2) are applicable to the present matter or not. 7.5 In view of the above, we are unable to concur with the findings recorded by the learned CIT(A) and consider it proper to set aside the same. Accordingly, order of learned CIT(A) in all the five appeals on the issue in question is set aside and the matter is restored back to the file of Assessing Officer for proper adjudication, in the light of our observations made above and as per law, of course, after affording full opportunity of being heard to the assessee. 7.6. Consequently, the grounds taken in these appeals are allowed for statistical purposes. 8. In the result, all the appeals of the assessee are allowed for statistical purposes.
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2005 (8) TMI 577 - ITAT CHENNAI
Business expenditure ... ... ... ... ..... onduct their business even contrary to law and claim deduction of payments as business expenditure notwithstanding that such payments are illegal or opposed to public policy or have pernicious consequences to the nations rsquo life as a whole. 13. On a careful consideration of the facts and circumstances of the case and the above mentioned judicial pronouncements we are of the view that the payment made to the employees of the assessee-company and two firms were not incurred wholly and exclusively for the purpose of assessee rsquo s business. The payments made against public policy are not permitted as deduction under Explanation to section 37(1) of the Act. We therefore, set aside the order of the CIT(A) and restore that of the Assessing Officer. The revenue rsquo s appeal is accordingly allowed. 14. The cross-objection filed by the assessee is only to support the order of the CIT(A). In view of our finding in the revenue rsquo s appeal, the cross objection stands dismissed.
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2005 (8) TMI 576 - ITAT MUMBAI
Capital gains - sale of the house property - Indexation of Cost of acquisition of the property u/s 48 whether the amount of "first instalment paid or the total amounts" paid by the assessees for acquiring the properties. - HELD THAT:- A house property has got its own intrinsic/market value. The assessee might have ultimately purchased a property worth Rs. 22 lakhs. The first instalment paid by the assessee might have been Rs. 5 lakhs. The question is what is the original cost of acquisition of the houses whether it is Rs. 22 lakhs ultimately paid by the assessees or Rs. 5 lakhs initially paid by the assessees. According to us, the cost of the property is Rs. 22 lakhs and not Rs. 5 lakhs. As already stated, every property has got its own intrinsic/market value irrespective of the mode of payment negotiated between the concerned parties. A house property worth Rs. 23 lakhs might be sold for Rs. 21 lakhs against a lump sum payment or it might be sold for Rs. 23 lakhs against instalment payments.
Therefore, the maximum variation in the cost of the property depending upon the method of payment is only Rs. 2 lakhs i.e., the difference between Rs. 23 lakhs and Rs. 21 lakhs. If the first instalment paid in that case was Rs. 5 lakhs, it could never be held that the cost of the property was Rs. 5 lakhs which is far less than the real value of Rs. 22 lakhs. This illustration makes the matter very clear. The cost or the value of the property remains the same subject to minor variations of interest of discount factor, irrespective of the mode of payments. The cost or value of the property does not get diluted for the reason that the cost of acquisition was paid by instalments. The basic idea of bringing the principle of indexation is to give some sort of protection to the assessees from the on slaught of inflation. The effect of inflation could be measured only with reference to the total cost of acquisition of a property. If the effect of inflation is measured with the payment of the first instalment, the whole scheme becomes ridiculous. It is to be seen that the factor of inflation is not with reference to the payments made by the assessee but with reference to the value of the asset vis-a-vis the cost of acquisition of the sale consideration of the property.
Therefore, we are of the considered view that the cost of acquisition of the houses for the purpose of long-term capital gains computation is the total cost incurred by the assessees and not the first instalment value as determined by the lower authorities. Accordingly, the contentions raised by the assessees are accepted and the appeals are allowed. The assessing authority is directed to adopt the cost of acquisition as directed by us and re-compute the long-term capital gains taxable in the hands of the assessees accordingly.
In result, these two appeals are allowed.
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2005 (8) TMI 575 - ITAT AGRA
Unexplained investments ... ... ... ... ..... ) proceedings. In the face of cogent evidence, relied upon to doubt the consistent stand taken by the assessee by ignoring the evidences filed by the assessee without any cogent reason is not proper. The rejection of assessee rsquo s version based purely on the basis that the said two concerns making sales in cash within a few months having shown huge availability of stock, which is a situation for which the assessee is not answerable, which both the parties owned up and the said amount invested in the purchase of draft, found at CCL, Ranchi does not lead to the conclusion that the assessee rsquo s version cannot be accepted. Accordingly, in the peculiar facts and circumstances of the case, for the reasons given hereinabove at length, I am of the view that the addition made on the basis of the material available on record deserves to be deleted. Ordered accordingly. The ground raised by the assessee as such is allowed. 28. In the result, the appeal of the assessee is allowed.
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2005 (8) TMI 574 - ITAT MUMBAI
Deduction of tax at source ... ... ... ... ..... ed from the payments made to the employees. 6.Where tax deducted either in full or short, has not been paid, interest under section 201(1A) will not be workable. 25. In view of the above, we find that the employee-assessee cannot be defaulted for holding an honest opinion that CA is not to be included in the computation of income of employees while making TDS. Hence, he cannot be declared as an assessee deemed to be in default. Therefore, interest under section 201(1A) cannot be charged from him. This view is further fortified from the fact that computation of interest in its case is not workable. Since the employer-assessee cannot be declared as deemed to be in default, deficient tax arising on account of short deduction cannot be demanded from him, more so, when the assessment of employees have been apparently completed. Therefore, we cancel the order of both the authorities below. 26. In the result, the appeals of the assessee are allowed but that of revenue are dismissed.
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2005 (8) TMI 573 - ITAT DELHI
Business expenditure, Income ... ... ... ... ..... w of this discussion, we are not inclined to delete the observations of the CIT (Appeals) as advocated by the learned counsel. 13. Next ground in the appeal is against not directing the Assessing Officer to set off the unabsorbed determined loss of Rs. 9,15,824. Since the CIT (Appeals) had given a finding that the income of Rs. 2,79,32,903 was assessable in assessment year 1997-98, he directed the Assessing Officer to consider the question of set-off in that assessment year. We direct that if the Assessing Officer chooses to assess the aforementioned income in assessment year 1997-98, he may consider the question of set-off in accordance with law subject to verification of the amounts. 14. Next ground in the appeal is against the levy of interest under section 234B of the Act. The Assessing Officer is directed to give consequential relief to the assessee. 15. In the result, the appeal of the assessee is partly allowed. 16. The decision of the court was announced on 30-8-2005.
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2005 (8) TMI 572 - ITAT MUMBAI
Free trade zone ... ... ... ... ..... quent years. From the bare perusal of para 21.2 of above circular, it emerges that even in earlier years, units were allowed to sell 25 of their production in DTA. As per para 21.3, it is noticed that in some cases units situated in FTZ were allowed to sell more than 25 of their produce in the domestic market and, therefore, to check this undue benefit an obligation has been cast upon new units, which begin to manufacture or produce an article or thing on or after 1-4-1995 to export at least 75 of their turnover. After taking into consideration above position, it is absolutely clear that there was no requirement of 100 export in the impugned year to avail the benefit of section 10A of the Act. 8. In view of above discussion, we are of the considered opinion that the learned CIT(A) rsquo s order is in accordance with law and, therefore, we decline to interfere in the same. Thus, this ground of the revenue is rejected. 9. In the result, appeal filed by the revenue is dismissed.
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2005 (8) TMI 571 - ITAT LUCKNOW
Revision - Of orders prejudicial to interest of revenue ... ... ... ... ..... he transactions of the gift and the capability of the donor for which the case was selected under scrutiny, the Assessing Officer has apparently ignored the interests of revenue, thus, making his order in respect of this issue prejudicial to the interests of revenue. He, therefore, cancelled the assessment made by the Assessing Officer under section 143(3) of the Act and directed the Assessing Officer to make fresh assessment after conducting enquiries and after giving the assessee reasonable opportunity of being heard. 26. We have considered the rival submissions. The facts of the case are similar to that of Shri Balram Manmani. In that case we have held the order passed by the ld. CIT under section 263 to be illegal. As the facts in the case of the assessee are similar, keeping in view our order in the case of Shri Balram Manmani, we hold that the order passed by the ld. CIT was illegal and the same is quashed. 27. In the result, the appeal filed by the assessee is allowed.
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2005 (8) TMI 570 - ITAT MUMBAI
Income from house property - Society charges paid from the annual letting value - Depreciation - claim regarding utilization of Nariman Bhavan property for business purpose - HELD THAT:- The said property was let out in the earlier years and income was being assessed likely under the head "Income from house property". Merely the said property was not let out during the year does not mean that it was kept ready for the use for the purpose of business of the assessee. Thus, The finding of ld. CIT(A) is upheld. The second ground of the assessee’s appeal is dismissed.
It is an admitted fact that the gross rent receipt by the assessee also include the society charges which are to be paid by the assessee. In our view while computing the annual value the amount of rent which actually goes to the hands of the owner in respect of leased property should be taken into consideration. As per the provisions of section 23 the annual value of any property is to be determined on the basis of actual rent received by the owner.
It is held that the society charges paid by the assessee in respect of its let out properties are allowable while computing the annual value. One of the objections of the Assessing Officer with regard to the claim of society charges of Janki Cooperative Society is that the receipt of society charges is issued in the name of Shri Prakash Jain and not in the case of the assessee-company. The Assessing Officer is directed to verify, if the payment has been made by the assessee-company or not. If it is found that the payment is made by the society then same should be allowed as deduction, irrespective of the fact that the receipt is issued in the name of the Director of the assessee-company. We direct accordingly.
In the result appeal is partly allowed.
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2005 (8) TMI 569 - ITAT DELHI
Depreciation ... ... ... ... ..... y between the Housing Board and the allottee. No third person intervenes. The part payments made by allottee are with the intention of acquiring title. The delivery of possession by the Housing Board to the allottee is also a step towards conferring ownership. Documentation is delayed only with the idea of compelling the allottee to observe the schedule of payment. This judgment is a direct authority that there cannot be two owners of a property simultaneously. Hence once Hon rsquo ble Delhi High Court have held that hirers to be treated as owners of the property for the purpose of depreciation allowance, the same position cannot be claimed by the assessee also. 16. In view of the discussion in the foregoing paragraphs, while the assessee rsquo s appeals in ITA Nos. 1754 and 1755 (Del.)/2001 are dismissed, the revenue rsquo s appeal in ITA No. 1948 (Del.)/2001 is allowed and the disallowance of depreciation as made by the Assessing Officer in the assessment order is restored.
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2005 (8) TMI 568 - CESTAT, KOLKATA
Confiscation of goods - Unaccountal of goods ... ... ... ... ..... ed Order passed by the Commissioner (Appeals). In the present case, the goods were not removed from the factory. They were lying on the floor of the factory. The Commissioner (Appeals) has observed, that the failure to comply with the provisions of the Rules attract the penal provisions, at best a penalty of Rs. 5,000.00 which has been imposed by the adjudicating authority. The Commissioner (Appeals) has passed an elaborate and reasoned order. I do not find any infirmity in the Order of the Commissioner (Appeals). Therefore, the appeal filed by the Revenue has no force. Consequently, I dismiss the same. (Pronounced in the open Court)
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2005 (8) TMI 566 - CESTAT, MUMBAI
Stay/Dispensation of pre-deposit - Demand ... ... ... ... ..... documents to determine such demand. We find that the importer is especially an actual user under Project Import Regulations and the duty, which was initially not calculated on the imported goods being registered under Project Import Regulation and on finalisation of the Project would call for need to determine the value, tariff classification, etc. How that has been arrived and duty demands have been made out without having ldquo Vital Document rdquo is not forthcoming. Prima facie it appears that the denial of project import concession was not called for as all ldquo Vital Documents rdquo to assess was available or that the demands arrived are based on assumption etc. in absences of ldquo Vital Documents rdquo . Either way, the duty demands are doubtful and deposits are required to be waived and recovery stayed. Therefore, full waiver of pre-deposit is granted in this case under Section 129E of the Customs Act and recovery stayed. The application is disposed of accordingly.
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