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2011 (10) TMI 700
... ... ... ... ..... is ground of appeal taken by the assessee. 11. Coming to the second ground also, it has not been disputed that the expenses of the assessee's husband, who is managing director of the paper mill, has been allowed as business expenditure in that case. Besides, this company has offered to tax the expenditure attributable to assessee as companion to her husband and has been added back in the hands of the company. The presence of wife will be of help to the Managing Director, whose expenses are held to be for the purpose of business. Since the assessee accompanied her husband on their request, it cannot be held that the amount of ₹ 88,320/- is casual or non-recurring income in the hands of the assessee. In view thereof, this addition also deserves to be deleted. Consequently, this ground of appeal taken by the assessee is also allowed. 12. In the result, revenue's appeal is dismissed and assessee's appeal is allowed. Order pronounced in open court on 14-10-2011.
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2011 (10) TMI 699
Reopening of assessment - reasons to believe - Held that:- There is no live link between the reasons recorded by the AO and the addition made and also in the absence of any tangible material to show that the transactions of 8200 shares of Rashel Agro Tech. Limited amounting to ₹ 3,89,050/- are not genuine, we are of the view that the assessment completed by the AO is bad in law, the same is, therefore, quashed.
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2011 (10) TMI 698
... ... ... ... ..... 313 ITR 340 held that if there are funds available both interest free and over draft then a presumption would arise that the investments would be out of interest free funds generated or available with the company and if the interest free funds are sufficient to meet the investment there is no need for disallowing any interest. Without examining the facts of diversion of borrowed funds, the legal principle can not be applied. In view of this, the matter regarding disallowance under section 36(1)(iii)/14A in both the years is restored to the file of the A.O. to examine the facts and decide accordingly. The A.O. is also directed to keep in mind the years of investment made by assessee, source of fund and the orders of the CIT(A)/ITAT in the respective years and decide the issue accordingly. Grounds are treated allowed for statistical purposes. 8. In the result, appeals of the assessee are allowed for statistical purposes. Order pronounced in the open court on 31st October 2011.
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2011 (10) TMI 697
Exemption under sec. 11 denied - hiring of the auditorium and providing space for rent are commercial activities and there is nothing charitable about the activities carried on by the assessee - Held that:- CIT(A) correctly decided the issue in favour of the assessee after following the order of the Tribunal for Assessment Years 1986-87 to 1988-89 as held the predominant object of the letting out of the auditorium and furniture and fixture is for carrying out of the object of the trust. The learned CIT(A) also observed that his predecessor, while deciding the issue in Assessment Year 2007-08, has also followed the order of the Tribunal and decided the issue in favour of the assessee. The learned CIT(A), therefore, held that the assessee is entitled to exemption under sec. 11 of the Act. Appeal filed by the revenue is dismissed.
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2011 (10) TMI 696
... ... ... ... ..... e-tax v. Gwalior Rayon Silk Manufacturing Co. Ltd. AIR (1992 SC 1782 (SC); • Bajaj Tempo Ltd v Commissioner of Income-tax 196 ITR 188 (SC); • Capsulation Services P. Ltd. v. Commissioner of Income-tax 91 ITR 566 (Bom.) ; • Phagoo Mal Sant Ram v. Commissioner of Income-tax 74 ITR 734 (P&H); • Arun Foundations (P) Ltd. v. ACIT 108 TTJ 710 (Chennai) ; • ACIT v. Bengal Ambuja Housing Development Ltd. 39- D BCAJ 546 (Kol. Bench); • Saroj Corporation v. ITO 115 TTJ 485 (Mum. Bench) Thus, the issue before us stands covered by the decision of this Bench in the case of the assessee and following that decision, we uphold the order of the learned Commissioner of Income- tax(A)." 06. Since the facts and circumstances are the same, following the above decision of the Tribunal, we decide the issue in favour of the assessee. 07. In the result, Revenue's appeal is dismissed. Order pronounced in open court on 11th day of October, 2011, at Bangalore.
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2011 (10) TMI 695
... ... ... ... ..... ate submission was not made while submitting the written submissions at the time of hearing of the appeal of the department. Nevertheless, when he was asked whether he has no objection if the benefit of reduction of penalty can be extended in the interest of justice and fairness, he fairly agrees and says he has no objection. 5. In view of the above, if the Cenvat credit amount demanded, interest thereon is paid with 25 of Cenvat credit demanded towards penalty within thirty days of the receipt of this order, the assessee shall not be required to pay the balance 75 of the penalty. It is made clear that if duty and interest and penalty to the extent of 25 of duty is not paid within thirty days of the receipt of this order, the assessee shall be required to pay the Cenvat credit amount demanded, interest thereon and penalty equal to Cenvat credit amount demanded by the original adjudicating authority. ROM application is decided as above. (Dictated and pronounced in Court)
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2011 (10) TMI 694
... ... ... ... ..... ting the addition of ₹ 6,45,817/made on account of disallowance of depreciation? Counsel for the Revenue submitted that insofar as question (A) is concerned, this Court has admitted similar issue in Tax Appeal No.1791/2010. Insofar as question (B) is concerned, in view of decision of tribunal in case of CIT v. Sheth Manilal Ranchhoddas Vishram Bhavan Trust reported in 198 ITR 598, no question of law arises. Tax Appeal is admitted for consideration of only question(A) as substantial question of law. To be heard with Tax Appeal No.1791/2010.
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2011 (10) TMI 693
Capital gain computation - FMV adoption - AO proceeded to rework the fair market value of this land as on 01.04.1981 - Held that:- egarding the fair market value as on 01.04.1981. The Sub-Registrar cannot do that. He can only tell about a guideline value on a given date. But, astonishingly, he has given two distantly divergent values and arrived at an Arithmetic Mean, which is not in his domain. Moreover, it is a common factor that the guideline values were not updated in earlier period. The valuer’s report has taken into account all the relevant factors. Therefore, we left with no option but to accept the valuer’s report. The Assessing Officer could confront the chartered valuer, if he was not satisfied with the valuer’s report. The Assessing Officer has not done anything in this direction and has simply rejected the report without any reasons and rhymes. To our great chagrin, when the fair market value has to be ascertained on the date of sale, the Department itself refused to rely on guideline value and it is only when the cost of asset (land) is being ascertained, the Assessing Officer usually try to take shelter under the guideline value. On the contrary, the approved valuer in his report has relied on the market value, which is based on local enquiries made from the surroundings and he has also relied on the local status of this land existing in that year. Hence, we accept the computation given by the assessee and delete the entire addition made in this regard.
TDS u/s 195 - Disallowance under section 40(a)(i) non-deduction at source on the amount paid to FSC for the time charter hire - Held that:- Section 172 is a complete code by itself. Thus, the amount paid by the assessee to the FSC on time charter agreement would not amount to ‘royalty’ neither under Explanation 2 or under section 9(1)(b)(ii) or under the DTAA and in this case only section 172 applies. This, no tax is needed to be deducted at source under section 195 as the amount paid does not amount to ‘royalty’. Therefore, the disallowance under section 40(a)(i) for non-deduction at source on the amount paid to FSC for the time charter hire is erroneous and the same is set aside.
Disallowance under section 40A r.w. Rule 8D has been correctly held by the ld. CIT(A) to be applicable from the assessment year 2008-09 onwards and not for the earlier assessment years. Therefore, he has rightly restricted the disallowance under section 40A of the Act.
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2011 (10) TMI 692
... ... ... ... ..... assessment year 2007-08 in ITA No.1427(Mds)/2010. 6.1. The first issue raised by the assessee is against the disallowance of non recoverable deposits written off by the assessee. This issue has already been considered by us for the earlier assessment year 2006-07 in the above paragraph and decided against the assessee. Therefore, this ground fails. 6.2. The second ground raised by the assessee is against the set off of carried forward loss/depreciation. This issue has already been decided against the assessee by the Tribunal while considering the matter for the assessment year 2000-01. Therefore, this ground also fails. 6.3. The assessee fails in its appeal in ITA No.1427(Mds)/2010. 7. In result, the appeals filed by the assessee are dismissed. The appeal filed by the Revenue for the assessment year 2005-06 is also dismissed. The appeal filed by the Revenue for the assessment year 2006-07 is partly allowed. Order pronounced on Thursday, the 13th of October, 2011 at Chennai.
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2011 (10) TMI 691
... ... ... ... ..... the merits of appeal was looked into, it was found that there was no dispute while reading para 2 of the show cause notice that liability of appellant arose under statutory obligation as has been recorded by the notice issuing authority as well as audit party. 4. Service Tax was paid to avail service arising under statutory enactment. The appellant had not availed such service at its will and pleasure. Therefore, it should not be denied benefit of Cenvat credit of service tax paid on such service since the very liability is outcome of implementation of statutory enactment. Accordingly, it can be said that the expression “in relation to manufacture” extends to statutory liability that arises for ensuring welfare of workforce through insurance and mediclaims under labour welfare enacements. 5. When the legal position appears to be as above, waiving pre-deposit, appeal is allowed setting aside the impugned order. (Dictated and pronounced in the Open Court)
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2011 (10) TMI 690
... ... ... ... ..... Mr. D.L. Chidananda,Adv. Mr. B.V. Balaram Das,Adv. O R D E R None appears for the respondent, though served. Leave granted to the extent indicated in the order dated 15th January, 2008.
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2011 (10) TMI 689
... ... ... ... ..... parties and perused the material on record. We find that the assessee did not file complete details of the expenses incurred by him under the head “kharajat expenses”. Therefore, the AO made an addition of ₹ 9,98,331/- by disallowing 10 of the total expenses claimed by the assessee. Since before the ld. CIT(A) also the assessee failed to substantiate his claim of expenses by producing any evidence the addition made by AO was sustained by him. Before us also the situation remained the same and, therefore, we feel no need to interfere with the order of ld. CIT(A) on the issue and the order passed by him is hereby upheld. 26. In the result assessee’s appeal ITA No.1363/Ahd/2009 for Asst. Year 2004-05 is dismissed, assessee’s appeal in ITA No.1364/Ahd/2009 Asst. Year 2005-06 is partly allowed for statistical purposes and Revenue’s appeal in ITA No.2086/Ahd/2009 Asst. Year 2005-06 is dismissed. Order was pronounced in open Court on 21/10/2011.
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2011 (10) TMI 688
... ... ... ... ..... ave confronted the assessee as well as the purchaser with these seized documents. He should have examined the purchaser of the property and draw inferences only thereafter. It is well settled that no addition whatsoever can be made based mearly on arithmetic workings, jottings, notings, etc.on some papers without any corroborative material. In any event,as both parties have agreed that these grounds may be set aside to the Assessing Officer for fresh adjudication, after examining the purchasers of the properties, and other enquires etc. we do not go into the merits of the additions. 27. In view of the submissions made by both the parties for setting aside of the grounds no.1, 2, 4, 5 and 6, we set aside ground no.1, 2, 4, 5 and 6 of the impugned order passed by the Commissioner (Appeals) and restore these issue back to the file of Assessing Officer for denovo adjudication, in accordance with law. 28. In the result, assessee’s appeal is allowed for statistical purposes.
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2011 (10) TMI 687
Claim of deduction u/s. 80IB(10) - once the residential project has been approved by the local authorities - commercial establishment - receipts of TDR and sale of the TDR
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2011 (10) TMI 686
... ... ... ... ..... the case of DCIT vs. Ashika Stock Broking Ltd. vide ITA No.1255/Kol/2010 for assessment year 2007-08 and another decision of I.T.A.T., “A” Bench, Kolkata in the case of Banwari Lal Tulsyan vs. ITO vide ITA No.115/Kol/2011 dated 05.08.2011. The Tribunal in the identical set of facts in the case of Banwari Lal Tulsyan (supra), wherein the Tribunal has held that rectification proceedings under section 154 of the Act to recompute the rebate under section 88E of the Act by disallowing the claim of expenses as the issue is highly debatable and herein Tribunal observed that it is not clear how the business expenses can be disallowed by invoking the power of rectification. 7. Respectfully, following the above rectification relied by the Ld. Counsel appearing on behalf of the assessee, we have no hesitation to confirm the order of Ld. CIT(A) by dismissing the appeal of the revenue. 8. In the result, revenue appeal is dismissed. Order pronounced in the Court on 14.10.2011.
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2011 (10) TMI 685
... ... ... ... ..... same either before the AO or before the learned CIT(Appeals). He has urged that in view of the said notification issued subsequently by the CBDT, one more opportunity may be given to the assessee to support and substantiate its claim for deduction u/s 80IB(10) before the AO. Since the learned DR has also not raised any objection in this regard and the assessee, in our opinion, deserves one more opportunity to justify its claim for deduction u/s 80IB(10) in view of the notification issued subsequently by the CBDT on 3rd August, 2010, we set aside the orders of the authorities below on this issue and restore the matter to the file of the AO for deciding the issue relating to the assessee’s claim for deduction u/s 80IB(10) afresh in the light of the said notification and after giving opportunity to the assessee of being heard. 4. In the result, the appeal of the assessee is treated as allowed for statistical purposes. Order pronounced in the open court on 14th Oct., 2011.
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2011 (10) TMI 684
... ... ... ... ..... in exercise of power of judicial review interfered with the punishment of dismissal on the ground that it was disproportionate. In Union of India vs. R.K. Sharma (AIR 2001 SC 3053), this Court has taken the view that the punishment should not be merely disproportionate but should be strikingly disproportionate to warrant interference by the High Court under Article 226 of the Constitution and it was only in an extreme case, where on the face of it there is perversity or irrationality that there can be judicial review under Articles 226 or 227 or under Article 32 of the Constitution. Since this is not one of those cases where the punishment of dismissal was strikingly disproportionate or where on the face of it there was perversity or irrationality, the Division Bench of the High Court ought not to have interfered with the order of dismissal from service. 10. We, accordingly, allow this appeal and set aside the impugned order of the Division Bench of the High Court. No costs.
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2011 (10) TMI 683
... ... ... ... ..... d, JJ. ORDER The Civil Appeals are dismissed.
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2011 (10) TMI 682
Capital gain - "transfer" of property under the Development Agreement - Held that:- The agreement in question does not establish that a transaction of sale of property was completed in terms of provisions of Section 2(47)(v) of the I.T. Act read with Section 53A of the transfer of Property Act as neither the entire consideration was paid nor the possession of the property was handed over to the vender, and so, the capital gain worked out by the A.O and added to the income of the assessee in the A.Y. was not justified. The amount received out of the agreed consideration during the year, at best can be treated as advance received towards the agreed consideration of the transaction. It is also an established proposition of the law that the A.O is required to make just and proper assessment as per the law based on the merits of the facts of the case before it. Just assessment does not depend as to what is claimed by the assessee but on proper computation of income deduced based upon the provisions of law. An A.O. can not allow the claims of the assessee if the related facts and provisions of law do not approve it and similarly it is also the duty of the A.O to allow even those benefits about which the assessee is ignorant but otherwise legally entitled to. The issue raised in Ground No. (1)(b) is thus decided in favour of the assessee.
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2011 (10) TMI 681
... ... ... ... ..... ment of section 80-IA(7) would be met. The Tribunal was also right in holding that the Commissioner did not even call for any explanation of the a and the issue of fulfillment of the conditions of section 80-IA had not been part of the showcause notice. Therefore, it could not form the basis for revision of the assessment order under section 263. No substantial question of law arose.” 6. Since the admitted factual position is that the impugned Audit Report was furnished by the assessee during the assessment proceedings, therefore the reason assigned by the authorities below for rejection of the claim cannot be approved by respectfully following the above decisions. We hereby reverse the findings of the authorities below and direct to allow the claim to the extent it was admissible as per law. Ground is allowed. Rest of the grounds are consequential in nature, hence needs no independent adjudication at this stage. 7. In the result, the appeal of the Assessee is allowed.
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