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Showing 501 to 520 of 914 Records
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2010 (7) TMI 684
Conducting inquiry and rejection of certificate issued by tax auditor - FBT on free and concessional tickets provided to staff - FBT on diem allowance - FBT on payments made to hotels to provided layover to its crew members - Held that: - In respect of certificate issued by tax auditor, AO was within her realm to cause an inquiry into the contents of the certificate of the tax auditor. In respect of free tickets - AO was justified in bringing to tax net (FBT), the fringe benefit value of Rs.1,10,73,197/- - the total value of free tickets issued by the assessee. In respect of diem allowance and payment made to hotels - The assessee itself taking sanctuary under Query No.87 of Circular No.8 and pleaded that the salary and other allowances paid to the pilots were expenses in the nature of running and maintenance expenses of the aircraft. - (i) per diem allowances paid to pilots and (ii) payments made to hotels would be liable to FBT.
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2010 (7) TMI 679
Search and seizure - Inability to pay requisite fees - A plain reading of Order XXXIII of the Civil Procedure Code indicates that the said provision is essentially to safeguard the interests of indigent persons who do not have the means to pay for fees to seek legal remedies available to them - It is thus clear that the benefit of 'pauper provisions' under Order XXXIII is confined to the underprivileged class of public which does not have means to pay the costs of litigation - Learned assessee wanted to take a rain check on our offer, by making a prayer that in the event of our formally holding so in the order, she should be given liberty to pay the fees and seek restoration of appeal - In any event, it is for the assessee lawyer, who is apparently well versed with the intricacies of law, to take the call whether she wants to pay the appropriate fees, and file fresh appeals along with condonation of delay, or to seek restoration of these appeals -as may be permissible in accordance with the law - Decided against the assessee
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2010 (7) TMI 678
Penalty u/s 271(1)(c) - Disallowance - it is noticed that the assessee has paid commission to the 14 concerns without any services rendered by them - assessee has not been able to prove that actual services have been rendered by the sister concern for which the commission have been paid - assessee did not filed any petition before us to admit additional evidence as per Rule 29 of the ITAT Rules - The particular of a commission furnished by the assessee are inaccurate in the sense that the assessee claimed the commission expenditure against which no services rendered - The heavy burden is on assessee particularly when the commissions were paid to sister concerns. The assessee has failed to discharge its burden as no materials were produced to show that the commission paid against the services rendered - Once the case is covered by section 271(1)(c) penalty is leviable - Decided against the assessee
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2010 (7) TMI 677
Addition - Reassessment - Undisclosed income - The Assessing Officer has recorded that the assessee had not been cooperative during the proceedings and had been deliberately and knowingly evading the reassessment proceedings - Once there was material to justify the addition made on merits, no error could be noticed in the re-assessment proceedings. Again the assessee does not deserve any lenient view from the court of law on the issue of additional evidence produced by the assessee before the appellate authority - This evidence was very much available with the assessee during the course of assessment but the assessee could not establish the circumstances and the reasons as to why he has not produced the same before the Assessing Officer - Therefore, the ld. first appellate authority has rightly rejected the same - Secondly, the assessee could not establish that the additional evidence produced by the assessee before the ld. CIT(A) is very much essential for just and proper decision in the case of the assessee." the assessee could not establish that the additional evidence produced by the assessee before the ld. CIT(A) is very much essential for just and proper decision in the case of the assessee Thus, the appeal is dismissed.
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2010 (7) TMI 672
Taxable u/s 44BB or fees for technical services - The receipts have admittedly been earned by ARC for carrying out a feasibility study on implementation of Cyclic Steam Stimulation, or CSS - CSS helps in improving recovery of oil from oil fields by thinning of oil, reducing its viscosity or density or specific gravity, so that the oil moves from the oil formation to the bore of the oil well - The feasibility study carried out by ARC was undisputedly solely in connection with the implementation of CSS - Hence, this study was solely “in connection with extraction of mineral oil - Thus it is taxable u/s 44B whether prospecting for, or extraction or production of, mineral oil can be termed as ‘mining’ operations, was referred to the Attorney General of India for his opinion - The service rendered by ARC is a service directly and substantially connected with the extraction of mineral oil The Explanation 2 does not exclude the consideration for providing services in connection with the construction project. Instead, it excludes consideration for construction project which means that exclusion is only in respect of consideration paid for actual carrying on construction activities - Payments for such services to a foreign company, therefore, will be income chargeable to tax under the provisions of section 44BB of the Income Tax Act, 1961 and not under the special provision for the taxation of fees for technical services contained in section 115A, read with section 44D of the Income Tax Act, 1961 - Therefore, even though the assessee has no PE in India, the receipt under this contract is assessable under section 44BB - Decided in the favour of the assessee
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2010 (7) TMI 671
Disallowance - Long term capital loss - Slump sale u/s 50B - where the assets and liabilities of an undertaking are sold as a group or lumped together, such a sale would qualify as a slump sale - On consideration of various stipulations and provisions stated therein the agreement, it is clear that the intention of the parties was to sell the subsidiary company i.e., VST NPL to GGCL and purchaser’s intention is to purchase the VST NPL for a consolidated price, which is nothing but slump purchase price - assessee sold the entire undertaking with all its assets and liabilities together with al licences, permits, approvals, registration, contracts, employees and other contingent liabilities also for a slump price - This kind of sale falls under the purview of sec.50B Regarding bad debts - To claim debt as bad debt and as a deduction, the debt should be in respect of business, which is carried on by the assessee in the relevant assessment year, should have been taken into account in computing the income of the assessee for the accounting year or should represent money lent in ordinary course of its business of banking or money lending - The debt arises out of investment activities of the assessee or associated with the capital field, not on account of revenue cannot be allowed as a bad debt - The assessee company neither a banker nor a money lender, the advance made by the assessee as an investment not to be said to be incidental to the trading activity of the assessee and merely money handed over to someone in the capital field and that person failed to return the same, that amount cannot be claimed as deduction as bad debt Regarding write off of the secondment charges and other expenses - These amounts are advanced to subsidiary company for the purpose of incurring the business expenses of the subsidiary companies and the consideration for the sale of the subsidiary company is worked out after considering the amount receivables - it is presumed that the amounts due were already considered while arriving at the sale price of the subsidiary company represents an advance made to the subsidiary company and not an expenditure Regarding irrecoverable amount spent on agronomy and marketing rights - Since the subsidiary company is sold, this amount which is not realizable, is claimed as expenditure - The assessee company is making a claim u/s 37(1) as expenditure or u/s 36(2) as a bad debt - This expenditure cannot be allowable under this provision where this expenditure is not an expenditure incurred for the purpose of assessee’s own business and also this is loss of capital and cannot be allowed as a bad debt - Accordingly all the appeal made by assessee is decided against the assessee
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2010 (7) TMI 670
Deductions u/s 37(1) - Assessee is a consulting agency in manufacturing and engineering Industry - They have sponsored the candidature of Sri Arun Srinivasan(son of the Managing Director), to pursue his post-graduation course in engineering - In that regard, they have entered into a written contract - While pursuing the studies, the student has rendered services, which is acknowledged by the assessee - Merely because in the agreement there was a clause that in default of his rendering services, he would return the sponsored money with interest, the genuineness of the agreement cannot be doubted - On the contrary, it only shows that the assessee had taken precaution to see that the interest of the assessee was protected by imposing such a condition on the student - Even otherwise, when the assessee is running an Engineering and Consulting Services, earning profits and in pursuance of its business or profession, it laid out certain monies for education of a student in the very same field, such an expenditure cannot be held to be unlawful or prohibited by law - Having regard to the quantum of amount spent it cannot also be said that it is a devise to avoid payment of tax or to reduce the tax by such a device of sponsoring a student's studies abroad - Decided in favour of assessee.
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2010 (7) TMI 665
Penalty - Undisclosed income - Interest u/s. 234A, 234B & 234C - Search and seizure - It was the submission of the learned counsel that penalty cannot be levied as the assessee had filed return of income and the Department had accepted same in the order passed under section 143(3) r.w.s. 153A., hence, when there is no addition to the returned income penalty cannot be levied - whether immunity is available to the assessee when additional income was disclosed in the return u/s 153A was also considered by the Coordinate Bench in the case of ACIT vs. Kirit Dahyabhai Patel reported in 121 ITD 159 (TM) - since the assessee has filed returns after the search and has not disclosed the income in the original return, the Explanation 5 to section 271(1)(c) cannot give immunity to the assessee there is no explanation why the income earned by way of speculation profit was not disclosed in the original return - in this case no assessment or reassessment proceedings are pending on the date of search, hence, the original return filed has to be taken into consideration - Explanation 1 to Section 271(1)(c) can not be invoked as there is no bonafide explanation given why this income was not disclosed at the time of filing original return - Decided against the assessee
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2010 (7) TMI 664
Search and seizure - Block assessment - Undisclosed income - Time barred - The plain and reasonable construction that can be placed on the aforesaid provision would be that the recording of satisfaction for taking action against any other person under section 158BD of the Act has to be between initiation of proceedings under section 158BC and before completion of block assessment under section 158BC of the Act in the case of the person searched - It could not be read in the provision that where block assessment under section 158BC of the Act in the case of an assessee against whom action under section 132 or 132A of the Act had been carried out is finalized, the Revenue can take action at any time in the absence of any specific limitation prescribed in the statute - The satisfaction having been recorded and the proceedings initiated after finalization of the block assessment in the case of S. K. Bhatia's group on March 30, 2005, the same were bad in law - Decided in favour of the assessee
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2010 (7) TMI 663
Short term capital gain or business income - According to the Assessing Officer the nature of activity, the frequency and magnitude suggest that the profit declared by the assessee on account of transactions in purchase and sale of shares is business income - CBDT also wishes to emphasise that it is possible for a taxpayer to have two portfolios, i.e., an investment portfolio comprising of securities which are to be treated as capital assets and a trading portfolio comprising of stock-in-trade which are to be treated as trading assets - It is possible for an assessee to be both an investor as well as dealer in shares - the assessee is employed in Twin Earth Securities Pvt. Ltd. which is a stock broking company and member of the Bombay Stock Exchange Ltd - Purchase of shares during the year and selling them frequently in short period, in our opinion, do indicate that the assessee has purchased the shares with a motive to earn profit in a short period - Each case has to be decided on the basis of its own set of facts - The profit on account of purchase and sale of shares by the assessee in the instant case has to be treated as ‘income from business’ as held by the Assessing Officer - In the result, the appeal of the revenue is allowed and the appeal of the assessee is dismissed
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2010 (7) TMI 662
Disallowance - AO wanted to verify the expenses, assessee was duty bound to produce the books of accounts and other bills and vouchers for his verification - Merely because, records are voluminous, that cannot be a reason for non production of such records before the Assessing Authority - Decided in the favour of the assessee by way of remand Regarding bad debts - The bonafides of the assessee are further clear from the fact that in the earlier year only provision was created and no claim for bad debt was made -In any case, there was a fire in the assessee’s office and no further records were available to prove this point Capital loss - US-64 units had ceased to exist and in place of them and on the strength of those holdings, the assessee has been allotted new tax free bonds and, therefore, even the extended definition of relinquishment is not applicable - Thus, it is not a case of extinguishment but a simple case of conversion of one asset into another - transaction regarding surrender of US-64 units for converting the same into Unit Trust of India 6.75% tax free bonds in terms of the scheme of the Unit Trust of India which was guaranteed by the Government of India, would not amount to transfer - In the result, revenue’s appeal is partly allowed for statistical purposes
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2010 (7) TMI 653
Exemption u/s 10(20) - It is to be independently seen whether the assessee is covered under section 10(20) of the Act as a Municipality - there cannot be duplication of municipalities one like Nagar Panchayat, Municipal Council or Municipal Corporation and other like industrial establishment (like notified areas as the assessee is), if one type is already providing municipal services - State Government can create, by notification in Official Gazette, a notified area and provisions of Gujarat Municipalities Act would be applicable to such notified areas under section 16 of GIDA - Once provisions of Municipalities Act are applicable to notified area and they are treated as a separate class of self-governing institution then they have all the ingredients of a municipality and, therefore, they are covered by clause (ii) of section 10(20) - Accordingly decided in the favour of the assessee
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2010 (7) TMI 652
Disallowance of depreciation - The assessee is a partnership firm carrying on business as Stevedor, Clearing & Forwarding Agent and Contractor of Commercial Vehicles and leases out Earth Moving Vehicles - Assessee claim depreciation @ 30% - CIT directed the AO to disallow and add back to the total income of the assessee, the excess depreciation claimed @ 15% i.e. Rs. 39,02,625/- out of Rs. 78,05,251 - was submitted that a mobile crane or an excavator which is registered as a heavy motor vehicle with the RTO would clearly fall within the expression “motor lorries” in entry IIIE(1A) of Table in Appendix I under Rule 5 of the Income Tax Rules, 1962 - Therefore in the instant case, the Tata, JCB and 400V wheel loaders are covered within the expression “motor lorries” which are used in business of running them on hire and the AO had correctly allowed the claim of depreciation u/s. 32 in the sum of Rs. 78,05,251/- applying the rate of 30% - Appeal is allowed
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2010 (7) TMI 651
Residential status - assessee was a ‘Resident’ as he satisfies one of the conditions for arriving the status of the assessee for this assessment year under appeal - it clearly showed that the emigration entries specify the assessee as a “tourism visa” and “short visit” with an endorsement “not valid for employment - Thus, on this issue Revenue succeeds Regarding unexplained deposit - there was a difference in the statement given earlier and subsequently - assessee has explained the source, identity and capacity of the donor for remitting the amounts and also convincing explanation has been furnished regarding the nature and source with supporting evidences and therefore assessment u/s. 68 is incorrect and unwarranted and therefore deserves to be deleted If the Department wants to probe further there must be some material to be with the Department to brush aside the well founded explanation offered by the assessee - In the result, appeal of the Revenue and the Cross Objection of the assessee are partly allowed
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2010 (7) TMI 644
Correctness and sustainability of Ext.P2 notice - There is no case for the petitioner that, the petitioner has challenged fixation of tax liability, after the disposal of the statutory appeal on 21-12-2006, by resorting any procedure known to law and this being the position, the challenge raised against Ext.P2 does not stand the test of law - More so, when the respondent has asserted in the statement, that the amount sought to be recovered from the petitioner is 'not penalty' but the 'tax' element - With regard to the amount demanded in respect of the assessment year 2005-06, it is only a sum of Rs. 3,855 - With regard to this extent as well, there is no such challenge raised in the Writ Petition - Accordingly, the Writ Petition is dismissed.
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2010 (7) TMI 643
Disallowance - The assessee claimed that the expenditure on the clubs is merely for the promotion of the business - Hon’ble Delhi High Court in the case of CIT vs Samtel Color Ltd (180 Taxman 82(Del) - Held that for qualifying of the deduction u/s 37 is that expenditure incurred should not be on capital account and it should be incurred for the purpose of the business - Accordingly decided in the favour of the assessee Regarding addition on account of debts’ become time barred under the Limitation Act - No such condition is there in sec. 41(1) for considering the cessation of any liability and in respect of any expenditure, even if within the period of limitation of three years, the assessee unilaterally write off the liability within one year then also the provision of sec. 41(1) is applicable - Decided in the favour of the assessee Deduction u/s 80IB - The ITAT in AY 2001-02 had examined the years in which the borrowing had been made and year of setting up of qualifying units and found that no borrowing had been made after the setting up of the qualifying units and therefore held that no allocation of fresh borrowing was to be made to the 80IB qualifying units - Accordingly the addition is deleted Regarding deduction u/s 80HHC - High Court in the case of Godrej Agrovet Ltd vs ACIT & others (2007 -TMI - 13282 - BOMBAY High Court) - Decided in the favour of the assessee Regarding addition u/s 92CA - Arms length price - TNMM requires comparison of net profit margins realised by an enterprise from an international transaction or an aggregate of international transactions and not comparisons of operating margins of enterprises - Tribunal in the case of UCB India P. Ltd. vs. ACIT 121 ITD 131 (Mum.) - Decided in the favour of the assessee by way of remand Regarding book profit u/s 115JB and added back the profit for doubtful debts of Rs. 1,49,80,000 - the provision for bad debts is not the liability; but it is diminution in the value of the assets as the recoverable debts partake the character of the asset - Decided against the assessee The sums clamed in P&L A./c by the assesee are ascertained liability, therefore, they are out of purview of clause (c) of sec. 115JB of the Act - Decided in the favour of the assessee by way of remand
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2010 (7) TMI 642
Depreciation - Whether routers and switches can be classified as computer entitled to depreciation at 60% or have to be classified as general plant and machine entitled to depreciation only at 25% - Section 32, which grants depreciation allowance, does not define the word ‘Computer - As per the General Clauses Act, 1897, if a particular word is not defined in the Central statute then meaning given to such expression under General Clauses Act may be considered for guidance and adoption in the former enactment - Thus in order to determine whether a particular machine can be classified as a computer or not, the predominant function, usage and common parlance understanding, would have to be taken into account - In the case of ITO Vs. Samiran Majumdar [(2006) 280 ITR (AT) 74 (Kol.)] ITAT, Kolkata Bench - Held that when a device is used as part of the computer in its functions, then it would be termed as a computer - In the result, both the appeals stands dismissed
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2010 (7) TMI 641
Revision - the record was examined and after examination of record it was considered a prima facie case of order deserving revision under section 263 of the Act - It is not necessary that Assessing Officer should write a lengthy order discussing all the details filed on behalf of the assessee, but the necessity is that Assessing Officer should have applied his mind - The Assessing Officer has mentioned that various details were filed and were test checked - This fact is also mentioned in the order of Assessing Officer that assessment for claiming deduction under section 10B which is in line with deduction in the past and accordingly the same was allowed - Decided in the favour of the assessee
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2010 (7) TMI 640
Search and seizure - The Punjab & Haryana High Court in Jagmohan Mahajan & Ors. vs. CIT, Punjab & Ors., (1976) 103 ITR 579, held that a search authorized in the absence of material necessary to form the requisite belief under Section 132(1) on the basis of blank warrant of authorization signed by the CIT was illegal and no order under Section 132(5) on the basis of such a search could be made - in absence of any search warrant in the name of an assessee, search conducted in its premises is not a valid search as contemplated under Section 132 of the I.T. Act, 1961 to exercise powers under Section 153A in case of a person the mandatory requirement is that there must be initiation of a search as contemplated under Section 132 or requisition under Section 132A of the I.T. Act, 1961 in respect of such person - if the Tribunal comes to the conclusion that there was no search warrant in the name of the appellant as contended by the appellant - assessee, then it would be open to the Department to make assessment in a manner other than Section 153A, if permissible under the law - Appeals are disposed of
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2010 (7) TMI 631
Deduction u/s 80HHC - excise duty and sales tax - apex court in the case of CIT v. Lakshmi Machine Works (2007 -TMI - 6557 - SUPREME Court) has held that: Commission, interest, rent, etc. do yield profits, but they do not partake of the character of turnover and, therefore, they were not includible in the `total turnover - Decided in the favour of the assessee Regarding the receipts by way of commission to be reduced in the profits of business is concerned - the income from commission is concerned, if any expenses is expended in earning the said income under section 37 of the Act, the said expenses is deductible and after such deduction, the amount arrived at would become part of the profits and gains of business - The very basis for computing section 80HHC deduction was "business profits" as computed under section 28, a portion of which had to be apportioned in terms of the above ratio of export turnover to total turnover - If the assessee has two incomes with "one common pool of expenses" and since "principle of attribution" has been retained in the scheme of section 80HHC, both in terms of section 80HHC(3) - Decided in the favour of the assessee Regarding bad debt - Supreme Court in the case of T. R. F. Ltd. v. CIT (2010 -TMI - 76626 - SUPREME COURT) has held that after April 1, 1989 it is not necessary for the assessee to establish that the debt, in fact, has become irrecoverable; it is enough if the bad debt is written off as irrecoverable in the accounts of the assessee - Decided in the favour of the assessee
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