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Income Tax - Case Laws
Showing 341 to 360 of 695 Records
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2012 (11) TMI 667 - JHARKHAND HIGH COURT
Whether an amount can be taxed in hands of firm as well as in the hands of the partners - held that:- Appeals succeed on this point and the matter is required to be remanded to the Assessing Officer for finding out about the fact of the assessment of partners as the appellant has placed on the record only assessment order made by the Assessing Officer and whether that order attained the finality or not is not known - allowing the appeal of the revenue for taxing the amount in question in the hands of the firm is set aside and the matter is remanded to the Assessing Officer.
Deletion of Addition of Rs.23,74,842/by the C.I.T. (A) - held that:- Revenue was right in seeking remand in view of the fact that during the course of assessment proceeding, the assessee submitted revised return and the statement of the account audited by the Chartered Accountant and the Tribunal though observed that earlier also audited accounts were submitted and both the accounts are running altogether in contrast then in that situation, it was a fit case for remanding the matter to the Assessing Officer for recording its finding of fact with respect to the pleas of the parties.
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2012 (11) TMI 666 - ITAT HYDERABAD
Penalty under section 271(1)(c)– Concealment of Income and furnishing of inaccurate particulars - held that:- The addition made in the assessment cannot ipso facto lead to the inference that there has been concealment of income or furnishing of inaccurate particulars of such income by the assessee. In the aforesaid context, the acceptance of addition by the assessee for buying peace with the department will not lead to an inference that the assessee has admitted concealing particulars of its income or furnishing inaccurate particulars of income.
Further Held that:- Contention of assessee that he is following the same method of valuation of closing stock consistently from its very inception and the department has never raised any objection with regard to the method of valuation of closing stock adopted by the assessee. In the aforesaid background, it cannot be said that the assessee has furnished inaccurate particulars of its income. Similarly, with regard to the addition made on account of cash payments above Rs.20,000/- which was disallowed u/s 40A(3) and also the claim of expenditure in the Profit & Loss A/c towards stamp duty the finding of the CIT (A) that such additions cannot lead to the conclusion that the assessee has furnished inaccurate particulars of income is quite acceptable - appeal of revenue is dismissed - in favour of assessee.
Decision of Supreme court in case of [COMMISSIONER OF INCOME-TAX Versus RELIANCE PETROPRODUCTS FVT. LTD 2010 (3) TMI 80 - SUPREME COURT], followed.
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2012 (11) TMI 665 - ITAT HYDERABAD
Reopening of a concluded case u/s 153A - assessment in case of search / requisition - The AO ultimately completed the assessment u/s 143(3) allowing the claim of loss. In course of search assessment proceedings u/s 153A, the AO again considered the loss claimed of Rs.77,50,000 and made the addition only on the basis of the books of account of the assessee and not on the basis of any search material found as a result of search and seizure operation.
Held that:- it is clear that there is no incriminating material found as a result of search on the basis of which the addition has been made. The AO has considered materials which is the subject matter of regular assessment. - in absence of any incriminating material found as a result of search, the addition made u/s 153A cannot be sustained - Decided in favor of assessee.
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2012 (11) TMI 664 - ITAT AHMEDABAD
Rectification of order u/s 254 - Reassessment - notice u/s Sec. 148 - amendment made to section 143(2) with retrospective effect – issuance of notice within 12 months from the end of the month in which the return in response to notice under section 148 was submitted. - Held that:- On account of the said amendment, as long as a notice u/s.143(2) is issued before the expiry of the time limit as prescribed in 2nd proviso(b) for making the re-assessment, even if had been issued beyond the one year time limit from the date of the filing of the return, the effect of this amendment is to validate all those notices. In the result, since these provisos retrospectively made with effect from 1/10/1999 that would indicate that the provisos are transitional in character merely validating those notices in respect of re-assessment proceedings but otherwise not disturbing the law being limited upto 30/09/2005 but nothing to apply a return furnished on or after 1st day of October-2005.
Apparent mistake so as to rectify u/s.254(2) - held that:- while deciding this appeal the Tribunal had only limited scope and ought to remain confined to the observation of the Tribunal as expressed vide an earlier order dated 22/03/2005. Firstly, those directions were meant for the A.O. and secondly, the applicable provisions of section 148 were not either referred or considered hence tantamount to per incuriam in nature. - We therefore re-call our order dated 31/12/2010 so that the relevant dates of issuance of notice u/s.148 and the returns filed in compliance of the said notice be examined in the light of the 2nd proviso to section 148(1) of the Act. The order is recalled and the Registry is directed to fix the appeal for hearing in due course as per law. - Decided against the assessee.
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2012 (11) TMI 663 - ITAT AHMEDABAD
Deduction u/s. 10B of the Income-tax Act - CIT(A) granted deduction u/s 10B after excluding the additional income surrendered by the assessee during search proceedings u/s 132 – Held that:- Since the seized paper was connected with the business activity of the assessee i.e. exports and the AO added the additional business income in the business income of the assessee from exports and also granted deduction u/s 10B of the IT Act to the assessee, would prove that the assessee was also entitled for deduction u/s 10 B of the IT Act on additional business income also. Considering the facts and circumstances noted above in the light of the above discussions and the case laws referred to above, we are of the view the assessee is entitled for deduction u/s 10 B of the IT Act on pro-rata basis. - Decided in favor of assessee partly.
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2012 (11) TMI 662 - ITAT AHMEDABAD
Addition on account of alleged sundry creditors u/s. 41(1) of the Act - cessation of liability – Held that:- matter requires reconsideration at the level of the learned CIT(A). The AO made protective assessment by following the order for assessment year 2003-04 in which the Tribunal has restored the matter to the file of the learned CIT(A) for reconsideration. According to the learned Counsel for the assessee the matter is still pending before the learned CIT(A) for his consideration.
Addition of gross profit at 7.43%. Revenue challenged the order of the learned CIT(A) in restricting the addition made by the AO on account of low gross profit from 15% to 7.43%. - held that:- The assessee has not challenged the rejection of the book results u/s 145(3) of the IT Act. - considering the history of the assessee we are of the view the learned CIT(A) rightly and reasonably applied the gross profit rate of 7.43% for computing business income of the assessee.
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2012 (11) TMI 661 - ITAT AHMEDABAD
Condone the delay - appeal before CIT(A) – delay of 1 year 10 months and 16 - The assessee had submitted before the ld. CIT(Appeals) that the reason for delay in filing the return was because of the wrong advise given by the assessee’s counsels that not to pursue the additions/ disallowances before the ITAT and therefore the assessee had proceeded to pay the demand as per CBDT’s circular no.2/2006 dated 17.01.2006. However, in view of the decision of the Special Bench of the ITAT in the case of M/s. Topman Exports and Others in ITA No.5769/Mum/2006, the assessee realized that it had a fool proof case in its favour for seeking deduction under section 80HHC.
Held that:- assessee remained under good faith and bonafide impression of the given legal position and did not proceed to indulge in cost prohibitive protracted litigations by availing the remedy before the chain appellate authorities starting with learned CIT(A)- Mere fact that the assessee cooperated with the Revenue based on the circular issued by the CBDT should not put the assessee on in a weaker footing - The subsequent decision by the Special Bench of the Tribunal has enlightened the assessee to knock the doors before the appellate authority for justice. In these circumstances, the request of the assessee for the delay of condonation for all the assessment years seems to be reasonable and justifiable. Therefore, in the interest of justice, we hereby condone the delay in filing the appeals before the ld. CIT(A) by the assessee and remit back the issues before the ld. CIT(A) to decide the case as per law and merit. - appeals of the assessee are allowed
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2012 (11) TMI 660 - ITAT AHMEDABAD
Allocation of administrative and general expenses – Held that:- Actual direct expenses are to be allocated directly and the common expenses, has to be apportioned on a reasonable basis, which has been done by the AO in the present case and hence, no interference is called for - allocation of administrative expenses and general expenses amounting to Rs.3.86 Lakhs and Rs.438.79 lakhs towards Daman & Baddi units respectively for computation of deduction u/s 80IB is upheld – against assessee
Disallowance u/s 14A of the Act in respect of the Director’s Remuneration – alleged that appellant has received dividend from mutual fund which is exempt u/s 10(35) of the I.T. Act – Held that:- matter remitted back to AO for fresh decision.
Allocation of interest expenses - allocation of interest expenses to the Baddi unit in the ratio of turnover against the allocation made by the appellant on the basis of investment while calculating profit eligible for deduction u/s.80IC of I.T. Act – alleged that appellant has a common pool of funds as well as common bank accounts for its entire business being carried out from headquarters - A.O. therefore allocated interest proportionately to this unit on the basis of ratio of sales of the undertaking – Held that:- Appellant has claimed that since no other specific loans were taken for establishment of the said unit, no interest cost should be allocated to the said unit - total investment in Baddi Unit and Daman Unit is very low inasmuch as 0.28% and 0.09% respectively, as compared to investment in other unit - It is perfectly justified in making the interest allocation at Rs.3.60 lakhs in case of Daman Unit and at Rs.1.16 lakhs in case of Baddi Unit on the basis of ratio of investment in fixed assets and in directing the AO to modify the calculation accordingly - in favour of the assessee
Grant of relief to the extent of allocation of the salary already made by the assessee - allocation of salary expenses on the basis of the sales ratio on the Daman unit u/s. 80IB and Baddi unit u/s. 80IC of the Act – Held that:- To the extent of allocation of salary already made by the appellant, the same should be reduced to avoid double disallowance - direct the A.O. to grant relief accordingly - CIT(A) has in principle approved the stand of the A.O. but he has given direction to the A.O. that to the extent of allocation of salary already allocated by the assessee, the same should be reduced to avoid double disallowance. He has not given finding as to what extent, there is double disallowance - this aspect should be examined by the A.O - matter remanded back to the file of the A.O
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2012 (11) TMI 659 - ITAT AHMEDABAD
Rectification of error - erroneous order of AO or ITAT - held that:- in a situation when a Revenue Officer either do not follow an order of the Supreme Court or do not correctly apply the ratio laid down therein or if do not follow the law laid down therein, then he is the one who has committed the mistake. As far as the Tribunal is concerned, the appeal of the assessee was allowed following the cited decisions and once an appeal has been allowed, then consequential effect ought to have been given by the AO.
Due to this reason, there should not be any grievance against the order of the Tribunal but it should be, if at all, against the order of the AO while giving effect to the order of the Tribunal. That is why on enquiry, ld.AR Mr.Patel has made a statement at the Bar that against the order giving effect to the ITAT’s order, a remedial action has already been taken by filing an application u/s.154 of IT Act, as also an appeal has already been filed. Under these circumstances, we hereby hold that there was no mistake on the part of the Tribunal so as to rectify u/s.254(2) of IT Act - miscellaneous petition dismissed.
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2012 (11) TMI 658 - ITAT AHMEDABAD
Income from other sources- nexus between income and expenditure - Liquidator’s Account - held that:- there was no accrual of interest liability - though “mercantile system” of accounting was adopted by the assessee. - the assessee has to prove the basis on which the interest expenditure of Rs.34.80 lacs was claimed. - A.O. is hereby directed to proceed accordingly as per law. - matter remanded back.
Addition of interest income under the head rent income - held that:- First of all, Assessing Officer has to verify the exact nature of the earning of an income and then it is suggested to verify the nature of expenditure having any nexus with the earning of rental income. Only that portion of the expenditure which has connection with the earning of rental income is therefore an admissible deduction subject to the ceiling or limitation prescribed u/s. 23 & 24 of the I.T.Act. - matter remanded back for fresh decision.
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2012 (11) TMI 657 - ITAT AHMEDABAD
Addition on account of low G.P. - alleged that during the year under consideration the gross profit was 7.37 % as against the gross profit at 7.79% in the last year – Held that:- the Revenue authorities must have come across the case of other assessee’s whereby securing similar or more turnover the assessee suffers a loss in the business or secured lesser profit than the assessee. - In the instant case, as no specific defect in the various expenses claimed by the assessee in the P&L A/c. could be pointed out by the Revenue, the Ld. CIT(A) was not justified in arbitrarily applying the rate of net profit of 3%. As the additions are found to be not based on cogent and relevant material and are based merely on the surmises and conjectures, the same are found unsustainable on the facts of the instant case. We, therefore, delete the addition
Addition on account of unaccounted sale of diamond powder expenses - As per AO, no proof was given by the assessee for excessive consumption of the diamond powder for the year under consideration – Held that:- Consumption of diamond powder was excessive and appeared to be unreasonable considering the overall circumstances of the case. The assessee has also failed to establish the reasons for abrupt enhancement in consumption of diamond powder – addition upheld – against assessee
Disallowance on account of foreign travel expenses – alleged that no bill was available in respect of foreign exchange purchase – Held that:- Foreign exchange was purchased in the names of relatives. Assessee’s argument was that those persons had gone for market survey. As per AO, no report about the work carried out by those persons was furnished. It was also pointed out by the AO that those relatives had no professional qualification or any experience of the business – matter remanded to AO
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2012 (11) TMI 656 - ITAT AHMEDABAD
Cancellation of registration u/s.12AA of the Income Tax Act - Held that:- When under the Act a specific provision for cancellation of registration is prescribed and the cancellation is possible under specific condition then fulfillment of those conditions are necessary for invoking the jurisdiction u/s.12AA(3). - In the present case the reason for cancellation for registration was that the definition of charitable purpose u/s.2(15) has been amended therefore the assessee has not carried out the activity as per the definition of “charitable purposes” – direction not to cancel the registration u/s.12AA(3) of IT Act – In favor of assessee
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2012 (11) TMI 655 - ITAT COCHIN
Hypothetical / imaginary income. - accrual of interest – alleged that assessee advanced loan/s to M/s. Trivandrum Rubber Works Ltd. - advance to a company under the same management by way of an unsecured loan, repayment of which was not regular – Held that:- Merely because the balance-sheet classifies the amount as an unsecured loan, and in our view not incorrectly, without anything more, would not by itself clothe the assessee with the right to receive interest, considering that there is, as aforesaid, no other legal or contractual basis for contending so - It is also not the Revenue’s case that any interest has been received on the said loan even on a subsequent date, so as to consider it as having been accrued, including for the relevant year - no legal or factual basis to confirm any interest as receivable from the lendee company, so as to consider it as having accrued, and the impugned income only represents a hypothetical/imaginary income - Addition deleted – In favor of assessee
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2012 (11) TMI 634 - MADHYA PRADESH HIGH COURT
Appeal u/s 246 - stay of demand - appeal and stay application both are pending since January, 2011 - held that:- Petitioner to file an application for expeditious hearing of the stay application, stated to be pending along with the appeal - On filing of such an application, the respondent No.3 shall consider and decide the application for stay, expeditiously, as far as possible, within a period of 30 days, from the date of filing of such application - So far as appeal is concerned, the respondent No.3 shall make an endeavour to hear and decide the appeal expeditiously, as far as possible, within a period of 4 months - Till the application for stay is decided or for a period of 30 days, whichever is earlier, it is directed that no coercive steps be taken against the petitioner for enforcing recovery in question - Considering the facts of the case, there shall be no order as to costs.
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2012 (11) TMI 633 - MADRAS HIGH COURT
Deduction u/s 80IB – Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in holding that the assessee was eligible for deduction under Section 80IB(10) in pro-rata basis for housing unit having less than 1500 sq.ft., even though it would defeat the intention behind enacting the said provision, which was only for providing housing facilities for middle income group?
held that:- Assessee was entitled to pro-rata deduction in respect of Units which have built-up area less than 1500 sq.ft. Thus, there could be no disallowance of the entire claim – Order of the Tribunal is confirmed, thereby rejecting the Revenue's appeals - In the result, Tax Case Appeals stand dismissed. No costs.
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2012 (11) TMI 632 - JHARKHAND HIGH COURT
Discontinuance of business - Taxable Income - ITAT restricted the nett profit at 12.5% of receipt of Arbitration Award when it held that income had to be computed in accordance with Section 176(3A) - held that:- Assessee has received a sum of Rs.1348095/- after discontinuance of business and in view of Section 176(3A) of the Act, this income is required to be added to the total income of assessee. The rate of 12.5% on this income is not the only taxable income but whole of receipt is the income to be taken into consideration and by indirect interpretation the receipt which is required to be taken into total income of the assessee under Section 176 (3A), can not be reduced to 12.5% as net taxable profit of the assessee which is contrary to the provision of Section 176(3A). Therefore, the question is answered that in the facts and circumstances of the case, the I.T.A.T. was not justified in restricting the net profit at 12.5% of receipt of money under Arbitration Award which was received after discontinuation of the business by the assessee and that income had to be computed in accordance with Section 176 (3A) of the Income Tax Act - appeal is allowed, accordingly.
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2012 (11) TMI 631 - MADRAS HIGH COURT
Deduction U/S 80IA - Insurance money received on loss of production - held that:- in the absence of any nexus shown between the compensation received and the business activities of the industrial undertaking, the compensation could not be held as derived from the undertaking for the purpose of inclusion under Section 80-IA of the Act.
Assessee is unable to produce the details regarding the fire accident and the policy before this Court to substantiate its contention, and there being no material to substantiate the contention of the assessee linking the loss to the fire accident, there is no justifiable ground to accept the order of the Tribunal which is not based on factual findings - Order of Tribunal is set aside in allowing deduction - In the result, the above Tax Case (Appeal) is allowed in favour of Revenue.
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2012 (11) TMI 630 - MADRAS HIGH COURT
Revision u/s 264 - Unexplained Income u/s 68 - Advance received for Sale of Agricultural land - held that:- There is no violation of the provisions of law or procedural irregularity alleged. On the other hand, the petitioner has failed to pursue the statutory remedy of filing the appeal and instead chose to file this writ petition challenging the order passed under Section 264 of the Act, which is not maintainable in view of the alternative remedy available under the statute - Court in exercise of power under Article 226 of the Constitution of India, is not inclined to entertain this writ petition against the order passed under Section 264 of the Income Tax Act, 1961, holding that the order is not prejudicial to the petitioner since the revisional authority has only declined to modify the order of the Assessing Authority. The petitioner has an alternative remedy under the statute - writ petition is dismissed. No costs.
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2012 (11) TMI 629 - MADRAS HIGH COURT
Deduction u/s 80HHC – Export of cut and trimmed granite blocks - held that:- Assessee's contention that the word 'rough' was wrongly typed in the invoice is totally unbelievable and cannot be accepted as it appears to be an after thought. When that being the position, the Assessing Officer as well as the Tribunal had rightly rejected the case of the assessee by holding that the assessee was not entitled to relief under Section 80 HHC of the Income Tax Act as per CBDT's circular No.729 dated 01.11.1995, as admittedly, rough blocks were exported and not dimensional blocks insofar as the remaining claim of the assessee in respect of the total sales export of Rs.2,09,48,250/-. The assessee had already given deduction in respect of Rs.19,52,965/- in respect of dimensional blocks of granite export is concerned , there is no reason to interfere with the order passed by the Tribunal - Tax Case (Appeal) is dismissed answering the questions in favour of the Revenue. No costs.
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2012 (11) TMI 628 - MADRAS HIGH COURT
Revenue Expenditure - Expenses relating to Issue of Share Capital - held that:- Order of CIT (A) wherein and whereby the Commissioner has allowed the claim of deduction, except in the case of printing expenses, lead manager fees and advertisement expenses, totalling to Rs.3,08,791/-, said expenses are capital in nature, the same has been rightly rejected by the Commissioner of Income Tax (Appeals) - Commissioner has given categorical finding in respect of other expenses that the nature of the expenses is only revenue, as those expenses are to meet out the day today transactions of the business of the assessee - Order of CIT(A) based on the report received from the Assessing Authority, which has been accepted by the Tribunal and there being no contradiction in the finding of the Tribunal, no reason to interfere with the order - In the result, appeal is dismissed and questions of law raised are answered against the Revenue.
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