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Income Tax - Case Laws
Showing 401 to 420 of 695 Records
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2012 (11) TMI 548
Whether rectification carried out under section 154 of the Act was both illegal and void, without serving any intimation under section 143(1) and also notice under section 154 of the Act and second grievance was that the issue being debatable was outside the purview of section 154 of the Act
Held that:- Where any tax or interest was found due on the basis of return of income after allowing adjustment of tax paid, then an intimation shall be sent to the assessee specifying the same so payable and such intimation shall be deemed to be a notice of demand issued under section 156 and the provisions of the Act shall apply accordingly. Where any refund is due on the basis of such return, the same shall be granted to the assessee and and intimation to the effect shall be sent to the assessee provided that no intimation under sub-section shall be sent after the expiry of one year from the end of the financial year in which the return was made.
Rectification under section 154 of the Act was carried out by the Assessing Officer suo motu on 26.3.2009 without any notice to the assessee whatsoever - no merit in the proceedings carried out by the Assessing Officer in this regard - appeal of assesse is allowed. In the interest of justice and in the entirety of the facts and circumstances, issue of adjudication of application moved by the assessee under section 154 of the Act vis-à-vis the claim of set off of brought forward losses for computing book profits under section 115JB of the Act and the tax thereof, restored to the file of the Assessing Officer after affording reasonable opportunity of hearing – appeal is allowed for statistical purposes.
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2012 (11) TMI 547
Exemption u/s 10A - Freight/telecom/insurance/technical services - revision u/s 263 - Held that:- As the assessee was not engaged in the business of rendering technical services outside India. The foreign travel expenses incurred in foreign currency are not required to be excluded from the export turnover for the purpose of computing the deduction allowable u/s 10A. It was stated that the assessee was in fact engaged in carrying out call centre activities and back office operations and the same does not amount to rendering technical services outside India. Total turnover is the sum of the export turnover and domestic turnover. If the concerned charges do not form part of the export turnover as per the definition, then there is no scope to include such charges in the total turnover The CIT thereafter, proceeded to hold that there was non-application of mind by the AO on this aspect and therefore, the order of AO was erroneous and prejudicial to the interest of revenue.
The CIT also held that what is excluded from the export turnover need not be excluded from the total turnover as contended by the assessee and set aside the order of the AO for fresh consideration by the AO on the aspects discussed by the CIT in his order u/s 263 . AO has taken a possible view and the CIT cannot in exercise of powers u/s 263 seek to substitute his view with that of the AO. On this basis order u/s 263 cannot be sustained and the same is quashed – Appeal of assessee is allowed.
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2012 (11) TMI 546
Non deduction of TDS - payment for using the transmission lines of power owned by KPTCL and PGCIL - interest u/s. 201(1A) - Held that:- The words ‘managerial’ and ‘consultancy’ involve a human element. And, both, managerial service and consultancy service, are provided by humans. Consequently, applying the rule of noscitur a sociis, the word ‘technical’ as appearing in Expln. 2 to section 9(l)(viz) would also have to be construed as involving a human element. But, the facility provided by MTNL/other companies for interconnection/port access is one which is provided automatically by machines. It is independently provided by the use of technology and that too, sophisticated technology, but that does not mean that MTNL/other companies which provide such facilities are rendering any technical services as contemplated in Expln. 2 to section 9(1 )(vn) of the said Act. This is so because the expression ‘technical services’ takes colour from the expressions ‘managerial services’ and ‘consultancy services’ which necessarily involve a human element or, what is now a days fashionably called, human interface. In the facts of the present appeals, the services rendered qua interconnection/port access do not involve any human interface and, therefore, the same cannot be regarded as ‘technical services’ as contemplated under section 194J of the said Act.
Respectfully following the decision of the Tribunal in the case of Bangalore Electricity Supply Co. Ltd. Versus Income Tax Officer (TDS), Ward 16(1), Bangalore [2012 (11) TMI 385 - ITAT BANGALORE] the applicability of Sec. 194J would come into effect only when by making payment of fee for technical services, assessee acquired certain skill/knowledge/intellect which can be further used by him for its own purpose/research. Where facility is provided by use of machine/robot or where sophisticated equipments are installed and operated with a view to earn income by allowing the customers to avail of the benefit by user of such equipment, the same does not result in the provision of technical service to the customer for a fee. Therefore, the assessee was not liable to deduct tax at source on payments of transmission charges to KPTCL as the provisions of Sec. 194J are not attracted thereon
The order of the CIT(A) so far as it relates to transmission charges and reverse the order of the CIT(A) with reference to SLDC charges. In view of the above conclusion, the issues regarding levy of interest, the question whether (SLDC) was Government within the meaning of section 196 and the question whether the liability of the person making payment will stand extinguished on payment of taxes by the recipient of the payment and the question of period of levy of interest u/s. 201(1A) do not require any consideration - in favour of assessee
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2012 (11) TMI 545
Unaccounted investment in property - search and seizure - Held that:- The consideration payable for the property was Rs.36 lacs cash over and above the consideration payable by cheque. The Assessee does not dispute this fact. The Assessee claims that the sum of Rs.36 lacs paid by cash was returned back by the seller to the Assessee. This plea of the Assessee has not been substantiated. The further plea of the Assessee was that the Assessee declared substantial income on account of unexplained investments cannot be accepted as the unexplained investment is in AY 03-04. The declaration of income in the subsequent AY can be explained as out of the amount declared in AY 03-04. In the case of the Assessee there has been no declaration of undisclosed income for AY 02-03, therefore the addition in AY 03-04 has to be made. No grounds to interfere with order of CIT(A) - against assessee.
Undisclosed Investment in financial business - Held that:- Assessee pleaded that the disclosure made in the returns of income would be sufficient and no separate addition was called for is not acceptable as the disclosure made of Rs.23,77,949/- was specific and did not cover the undisclosed income evidenced by the seized document which is the basis of this addition. Therefore, we confirm the order of CIT(A) and dismiss ground raised by the Assessee - against assessee.
Undisclosed Agriculture income - Held that:- The search had taken place on 28.12.2007. Even prior to the search, the order u/s.143(3) for AY 04-05 has been passed in which, out of Agricultural income declared by the Assessee a sum of Rs.1,04,190/- was treated as Income from other sources. Thus the very same addition cannot be made in assessment u/s.153A and doing so would amount to taxing the same income twice. Therefore direct that the addition so made be deleted - in favour of assessee.
Difference in Chit Commission received - Held that:- Assessee who could not substantiate as to how a sum of Rs.69,000 was expenditure incurred in relation to chit commission income therefore confirm the order of CIT(A) and dismiss ground raised by the Assessee - against assessee.
Excess cash found as undisclosed income - Held that:- CIT(A) was justified in rejecting the claim of the Assessee with regard to cash found at the time of search, as it was too general and vague. While working out the actual cash the AO has duly taken even expenditure not recorded in the books which would have been met in cash. Thus the action of the AO is very reasonable and the CIT(A) was right in confirming his action - against assessee.
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2012 (11) TMI 544
Revenue expenditure versus capital expenditure - application of AS-11 - foreign exchange loss on conversion of rupee term into foreign currency loan - Held that:- Foreign Exchange Loan was taken in connection with conversion of a rupee term loan into a foreign currency loan. The purpose of the loan was for purchase of machinery which is on capital account. Therefore, the sum in question cannot be claimed as deduction. The sum in question cannot also be capitalised to the value of the machinery for the reason that the machinery has already been put to use - Decided against the assessee.
The decision of the Hon’ble Supreme Court in the case of Woodward Governor India Pvt.Ltd. [2009 (4) TMI 4 - SUPREME COURT] would apply only in respect of exchange fluctuation on loans taken for revenue purposes.
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2012 (11) TMI 543
Set off of Losses in case of Amalgamation – Following the decision of Supreme Court in the case of [Marshall Sons & co. (India) Ltd. v. ITO 1996 (11) TMI 6 - SUPREME COURT] Held that:- Amalgamation takes effect on the date of transfer specified in the scheme and not on the date of court’s order. The court further held that the income of the transferor company from the date of transfer would be the income of transferee company. Assessing Officer expressing doubts regarding the scheme of amalgamation being a device to avoid taxes are all without any basis and are in the realm of suspicion and surmises.
With regard to the non-filing of revised return of income, provisions of section 72A are applicable, notwithstanding anything contained in other provisions of the Act and the set off of accumulated losses and unabsorbed depreciation of the amalgamating company is deemed to be the loss or unabsorbed depreciation of the amalgamated company for the previous year in which the amalgamation has taken effect. In the present case, amalgamation is deemed to have been effected on 31.03.2008 and consequently the claim of the assessee for set off had to be allowed. The objections of the revenue as projected in the grounds of appeal in this regard therefore are devoid of any merit. The fact that TAPL filed the return of income for A.Y. 2008-09 is also of no consequence - Order of the ld. CIT(A) does not call for any interference - appeal by the revenue is dismissed.
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2012 (11) TMI 542
Disallowance of Bad debts – Whether claim for provision for bad and doubtful debts under section 36(1)(viia)(c) on its activity relating to providing infrastructure facility be allowed.
Held that:- deduction under section 36(1)(vii) on the basis of write-off and provision under section.36(1)(viia) can both be claimed as long as there was no duplication. Since assessee here was not allowed its claim under section 36(1)(viia)(c) for the provision for bad and doubtful debts, there was no threat of any double deduction being availed by it. There is no dispute that for the amount claimed under section.36(1)(vii), there was an actual write off effected in its books. Claim of Revenue that there was violation of Rule 46A, is without any basis, since assessee has not been given the benefit of provision under section 36(1)(viia)(c) of the Act. Hence, the question of bifurcation of activities becomes redundant. It is to be noted that the assessee is not in appeal before us against disallowance of its claim for provision for bad and doubtful debts under section 36(1)(viia)(c). We therefore, do not find any reason to interfere with the order of the CIT(A). The appeals of the Revenue for all the three years stand dismissed - In the result, appeals filed by Revenue are dismissed.
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2012 (11) TMI 541
Deferred revenue expenditure - Disallowance of expenditure on advertisement - AO found that expense was shown as a deferred revenue expenditure in the asset side of the Balance Sheet – And claim whole sum revenue expenditure in computing taxable income - Whether the benefit accrues in the same year itself or in the subsequent years, as long as the expenditure was incurred in the course of business and was expended in the current year, the same ought to be allowed in the current year – Held that:- As far as corporate advertisement expenses, exhibition expenses, public relation expenses, cultural programme expenses, quota expenses and sales promotion expenses were concerned, since said expenses did not result in creation of any tangible or intangible asset and, moreover, there was no evidence regarding accrual of any specific revenue in years under consideration or subsequently over a defined period with incurring of said expenditure, those expenses could be allowed entirely in year in which they were incurred. In the present case it is not the case of the Revenue that the assessee has not incurred the expenditure as followed in the case of Ashima Syntex Ltd. (2000 (8) TMI 22 - GUJARAT HIGH COURT). In favour of assessee
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2012 (11) TMI 540
Tax deducted at source u/s 194C – Whether non deduction of tax at source from payments to the agents of the truck-owners resulted in the impugned disallowance under section 40(a)(ia) - Held that:- it is not even the case of the Assessing Officer that the assessee was a sub contractor, and rightly so because the assessee required these trucks on hire, from the middlemen or subcontractors, so as to fulfil the obligation of transporting the goods in the course of his business. The payments were not made for transporting the goods but for the hire of the trucks - at the material point of time, this tax withholding requirements did not extend to 'individuals' and that, it was only as a result of the amendment by the virtue of Finance Act 2008 w.e.f 1st June 2008, that individuals were imposed tax deduction obligations under section 194 C(1).
so far as pre June 2008 position is concerned, tax withholding obligations under section 194 C in respect of an individual only in cases where the payments were made to a sub contractor for carrying out a part off work, or the work itself, undertaken by the assessee and that too when such individual's turnover from business or profession exceeded threshold specified in section 44AB.
When it is not a case of sub contracting, it is wholly immaterial that assessee's turnover exceeded the specified threshold under section 44AB. - the assessee did not have any tax withholding obligation in respect of truck hire payments in the pre-amendment period. - Decided in favor of assessee.
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2012 (11) TMI 539
Disallowance of interest – Assessee has granted interest free loan to a company - AO disallow the proportionate interest on the said amount of loan - Assessee contended that the amount advanced to its sister concern is on account of business expediency - Held that:- After examine the fact whether the sister concern has been supplying raw material to the assessee and the advance was made at free of interest in the course of business transaction needs to be verify. Issue remand back to AO
Disallowance u/s 43B – Delay in deposit of Employees' Provident Funds – Held that:- Following the decision in case of AIMIL Limited (2009 (12) TMI 38 - DELHI HIGH COURT) that the employees' contribution is not deposited by the due date prescribed under the relevant Acts and is deposited thereafter, the employer not only pays interest on delayed payment but can incur penalties also, for which specific provisions are made in those Acts. In so far as the Income-tax Act, 1961, is concerned, the assessee can get the benefit of deduction of the payment, if the actual payment is made before the return is filed. In favour of assessee
Disallowance of provision for warranty charges - Provisions towards warranty expenses at 10% of the total sales turnover - The Department has the objection that the liability in respect of warranty is contingent in nature – Held that:- It is not disputed that the warranty clause is part of the sale document and imposes a liability upon the assessed to discharge its obligations under that clause for the period of warranty. Once an assessed is maintaining his accounts on the mercantile system, a liability is accrued, though to be discharged at a future date, would be a proper deduction while working out the profits and gains of his business. Therefore contention of revenue not accepted that the warranty provision is contingent liability. Appeal decides in favour of assessee
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2012 (11) TMI 538
Quantum of loans less than the investments made - Disallowance u/s 14A r.w.r. 8D is warranted - reopening of assessment - Held that:- AO had finalized assessment u/s 143(3) on 31.3.2005 wherein amount of loss claimed in return of Rs.3,73,69,044/- was modified to Rs.3,02,01,092/-. No doubt, in the assessment order, the issue of disallowance u/s.14A was not considered. However, the assessment was completed after considering assessee’s claim of Rs.1.55 crores as exempt u/s.10(33). The assessment finalized on 31.3.2005 was reopened by notice u/s 148 after more than five years from the end of relevant Asst. Year and it is evident that in the notice of reopening there is not even an iota of allegation that any income had escaped assessment attributable to failure on the part of the assessee in not disclosing full particulars.
Thus except bald reference, there are no such reasons forthcoming in reopening notice. The notice was based on the assumption that on the opening and closing dates of balance sheet quantum of loans turned out to be less than the investments made & it suggested that loans were obtained for purpose of meeting and sustaining investments leading to exempt income but it cannot be accepted as it can be easily implied in such circumstances that the assessee had its own funds available for investment. Thus mere escape of income is insufficient to justify the initiation of action after the expiry of four years from the end of the assessment year - in favour of assessee.
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2012 (11) TMI 537
Addition u/s 68 – Capitation fees – AO argued that any parent of the students was not traceable – Held that:- Out of 54 students, parents of 33 students have replied in affirmative confirming that they had given interest free refundable deposits to the assessee society. The majority of the parents have given testimony in support of the statements given by the assessee society. The reason that the remaining 11 parents have not given any confirmation, does not dilute the probative value of the material evidence available on record. Minority of the parents might not be available at that point of time at the addresses available on record and it might not be possible for them to give confirmation letters within the time frame given by the authorities. The Revenue fails in its appeal filed for the assessment year 2003-04. In favour of assessee
Addition on account of receipt of capitation fee – AO argued that purported admissions made by the functionaries of the assessee society in the statements furnished – Held that:- As the statements have been subsequently, retracted. The retractions of those statements made by the functionaries of the society are well supported by the books of account maintained by the assessee with supporting documents and evidences. All the basic details are very much available before the assessing authority, himself. Issue decides in favour of assessee
Addition on account of paper found in course of search - A sum of Rs. 23,52,000/- was stated to have been paid to the assessee – Held that:- The assessee explained that a sum of Rs.17,52,000/- had been received by cheque from Shri Amul John Jacob and it was not aware of any money received in cash. As already found in the appeal filed by the Revenue for the same assessment year 2006-07, the CIT(A) has deleted the addition of the said amount of Rs.17,52,000/- made by cheque. When the assessee had accounted for the amount received by cheque, there is no reason to go beyond, only for the reason that in the sheet of paper found in the course of search, the amount recorded was Rs.23,52,000/-. There is no direct nexus with the proposition made by the AO and the paper seized in the course of search. Therefore addition deleted. Issue in favour of assessee
Addition on account of undisclosed income – AO on the ground that those receipts were not recorded by the assessee in the books of account – Held that:- As there are no materials available on record to show that the assessee society had received such amounts over and above what was recorded in its books of account. The AO has made a presumption that the assessee society might have received that much amount on the strength of students admitted for medical course. This is only an intelligent presumption. When there is no material available on record, it is not possible to presume that the assessee might have collected capitation fee for admitting students for medical course. In favour of assessee
Whether in case of trust addition u/s 68, was taxable at Maximum Marginal Rate or consider as applied u/s 11 – Held that:- Assessee has applied its entire funds in running the Hospital, Medical College and other Educational Institutions. Therefore, the additional amounts covered by sec.68 are treated as part of assessee’s income, still the amounts cannot be brought to tax, as those amounts have been applied for charitable purposes. Issue in favour of assessee
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2012 (11) TMI 536
Computation of eligible income for deduction u/s 10A – Treatment of misc. income, credit Balance written back – Held that:- Following the decision in case of EXTRUSION PROCESS PVT. LTD. (2006 (6) TMI 261 - ITAT MUMBAI), there is no decision to the contrary brought to its notice and finally decided the issue in favour of the assessee. In favour of assessee
Notice period salary for the purposes of arriving at the deduction u/s 10A – Held that:- Since the said amount represents recovery of the business expenses earlier incurred by the assessee in recruiting and training of the employees concerned, the income arising on account of such recovery also represents the business income of the assessee. Included in income. In favour of assessee
Eligible income u/s 10A - Foreign exchange fluctuation gain – Held that:- Following the decision in case of Renaissance Jewellery (P.) Limited. (2005 (5) TMI 246 - ITAT BOMBAY-G) held that the profit on account of foreign exchange gain is directly referable to the articles and things exported by the assessee. Such profits are, therefore, in the same nature as the sale proceeds and there is no reason while deduction u/s 10A should not be allowed in respect of such exchange gain. In favour of assessee
Interest income for purposes of computing eligible income u/s. 10A – Held that:- Following the decision in case of Navbharat Explosives Co. P. Ltd. (2010 (6) TMI 588 - CHHATTISGARH HIGH COURT) wherein it was held that the income by way of interest on fixed deposits is not eligible for special deduction u/s 10A. In favour of revenue
Deduction u/s 10A - Sales made to the branch office located in US – AO argued that it is merely a case of transfer – Held that:- Following the decision in case of Virage Logic International (2007 (1) TMI 299 - ITAT DELHI) held that the said exports constitutes sales. As the transfers between the HO and the Branch Office and vice versa with the approval of the STPI clubbed with satisfaction of other conditions like realization of proceeds in foreign exchange, constitutes exports for the purpose of the deduction u/s 10A. In favour of assessee
Disallowance made invoking Sec 195 r.w. Sec. 40(a)(ia) - DTAA with USA – Whether remittance made by the assessee to its branch office abroad subject to TDS provision - Assessee made payment to its US Branch on account of work sub-contracted to them – Held that:- Following the decision in case of GE India Technology Centre Private Ltd. (2010 (9) TMI 7 - SUPREME COURT OF INDIA) that these payments are outside the scope of Sec 195 for the reason that the branch office abroad is part and parcel of the assessee and it is a 'resident' in status and 'not non-resident', as made out by the Revenue. The provisions of Sec 195(1) mention clearly that only the payments to non-residents attract provisions of Sec 195. Issue is decided in favour of the assessee
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2012 (11) TMI 515
Refund of TDS - denial of claim on no TDS certificates were enclosed - Held that:- The return of income was filed beyond the time limit prescribed by Section 139(1) and even Section 139(4). Moreover, the petitioner has not enclosed the original TDS certificates along with the return of income and this is evident from the fact that in the column showing the enclosures to the return of income, the petitioner has not mentioned that any original TDS certificates were enclosed. Therefore, there is no acceptable evidence for the tax deducted at source. It would be contrary to law to grant refunds on the basis of the photocopies of the certificates without the originals being produced for verification or filed.
The reason advanced by the petitioner for the delay in filing the return of income that one Bhai Mohan Singh, the treasurer of the petitioner, who signed the belated return of income was out of the country is not found correct as the Form No.10, which was annexed to the return of income was dated 30.10.1998 and was signed by the treasurer himself. He had also signed the audited accounts attached to the return and these accounts were signed on 21.05.1999; therefore the reasons for the delay in filing the return of income were found to be factually incorrect. As regards the reasons given by the petitioner in its application dated 21.12.2006 ere was no supporting evidence to show that because of the differences in the family the concerned files and records could not be traced - against assessee.
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2012 (11) TMI 514
Non-genuine interest - CIT(A)approved the Creditworthiness and identity of cash creditors - Held that:- Circular dated 27th March, 2000 issued by the Central Board of the Direct Taxes was binding upon the Department and, therefore, the appeal preferred by revenue against the order of the CIT(A) dated 26.7.2006 wherein tax effect was less than rupees two lac ought not to have been filed.
Appeal is dismissed as not maintainable.
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2012 (11) TMI 513
Non deduction of TDS - transportation charges - reimbursement of expenses - security expenses, courier fees, bus hire charges, consultancy fees and accounting charges - Held that:- The said expenditure stands incurred only for and on behalf of the principal, who was obliged to reimburse the same in full, and indeed did so, so that there is no claim in respect to the same by the assessee per its return of income. As decided in ITO v. Dr. Willmar Schwabe India (P.) Ltd. [2005 (3) TMI 398 - ITAT DELHI-D] the reimbursable expenses, separately billed, would not be subject to tax deduction at source. Thus even though the assessee may be liable for tax deduction, which has not been deducted, where the same, whatever be the method of accounting or methodology employed, is not claimed as expenditure, there is no question of any disallowance in its respect - in favour of assessee.
Transportation charges of Rs. 28,63,254/- Held that:- As it is not in the nature of payment to any third party, but only represents the deduction made by the principal on account of short delivery of stock and, therefore, is by way of transportation shortage, thus no question of application of sec. 40(a)(ia) - in favour of assessee.
Transportation charges of Rs. 3,07,98,732/- Held that:- Even though the privity of contract may be between the assessee (whose obligation it is for the transportation of goods) and the transporter, rather, irrespective of whether the contract is between the assessee and the transporter or the principal and the transporter - the payment in either case being only in pursuance to a contract, the liability u/s 194C being on the person responsible for making the payment and not on the one who may finally bear it, so that it (the payment) could be on account of a different person, as the assessee's principal in the instant case, the disqualification and the consequential disallowance under section 40(a)(ia) would apply only where the claim for expenditure is preferred in its respect by the assessee. The matter, therefore, as in the case of other expenses forming part of the assessee's appeal, is restored back, on identical terms and scope, to the file of the Assessing Officer - in favour of revenue for statistical purposes..
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2012 (11) TMI 512
Capital gain for sale of rosewood and silver oak trees - computation of cost of acquisition and indexation - Held that:- It is not in dispute that the trees are held to be the capital asset and part of the fixed structure of a coffee or tea plantation. When the trees have been cut and removed, the capital gain has to be assessed on the basis of Section 48 but in the instant case, the cost of acquisition of the assets has not been properly examined by the authorities below. Solely on the basis of some letter written by the Officer of the Government Department, the cost of acquisition of the assets cannot be assessed.
Accordingly, the CIT (Appeals) while setting aside the order passed by the Assessing Authority directed the Assessing Authority to work out the market value of the assets as on 01-04-1981 after obtaining the specific notification from the office of the Conservator of Forests with regard to market value in respect of rosewood and silver oak trees as on 01-04-1981 and to work out the capital gain by working out the indexed market value. Except the letter dated 31-3-1981, no other materials has been produced before the authorities. Thus the order passed by the ITAT in setting aside the order passed by the CIT (Appeals) wherein the Commissioner has directed the Assessing Authority to reconsider the matter is contrary to law. The Appellate Tribunal has also not examined the market value of the assets as on 01-04-1981 the order passed by the Appellate Tribunal cannot be sustained. The matter has to be re-examined by the Assessing Authority by working out the indexed market value in respect of rosewood and silver oak trees - in favour of revenue by way of remand.
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2012 (11) TMI 511
Registration u/s 12AA - rejection of application as the objects of the assessee - trust were for a specific community - Held that:- The fee concessions extended to the non-Anglo Indian and non-Christian students comprised were of Hindus and Muslim students for the academic years 2007-08, 2008-09 and 2009-10. Further, in the academic year 2009-2010, fifteen students of disabled category irrespective of their caste, creed and religion have been extended fee concessions. None of the students were belonged to Anglo Indian community. Moreover, the benefit derived by the Anglo Indian community did not exceed even 5% of the total expenditure incurred by the assessee trust. The above statistics furnished by the assessee has not been dispelled/controverted by the revenue, thus it unambiguously testify that the assessee trust's objects were NOT for the benefit of a particular community as alleged by the DIT (E) and as a result of which, he had invoked the provisions of s. 13(1)(b).
Also while analyzing the list containing the fee concessions extended to the disabled students is that they were belonged to either Hindu or Muslim community but, none were from the Christian or Anglo Indian community. This clearly exhibits the secular character of the assessee-trust that the educational institution has been serving the masses irrespective of their caste, creed and religion - in favour of assessee.
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2012 (11) TMI 510
Shipping business of non-residents - occasional shipping business or regular shipping business - CIT(A) held the order passed u/s 172(4) is null and void - income from 40 voyages - Held that:- Tax effect in a "case" means overall tax effect in respect of disputed issues in a particular assessment year in the case of the assessee himself. Tested on the aforesaid basis, tax effect in respect of disputed issues in the assessment year under appeal in the case of respondent-company is more than ₹ 3 lakhs and hence all the 40 appeals filed by the Department are held to be maintainable.
Looking to the magnitude of the voyages undertaken by the freight beneficiary and the fact that the respondent-company has been, as observed by the CIT(A), regularly filing its return of income at Mumbai and being assessed to tax at Mumbai, the finding of the CIT(A) that the freight beneficiary is not engaged in occasional shipping business but in regular shipping business and hence would be outside the scope of section 172 cannot be said to be untenable on facts and in law. His finding in this behalf is therefore confirmed.
Similarly, the Department has not placed any material on record to rebut the finding recorded by the CIT(A) that the respondent-company has already filed its return of income at Mumbai. That being the position, the provisions of section 172(7) would apply to the respondent-company. Besides, as rightly observed by the CIT(A), the Income-tax Act does not permit multiple assessments in the hands of the same taxable entity and that too in respect of income from the same business. On these facts, unable to disturb the finding recorded by the CIT(A) that the respondent-company is liable to be assessed on the basis of return filed u/s 139(1) for its entire income is therefore confirmed. His further order quashing the order passed by the AO u/s 172(4) is also resultantly confirmed.
Perusal of the order passed by the CIT(A) shows that he has taken a view that the case of the respondent falls u/s 172(7) and not u/s 172(4). The respondent-company has also accepted the liability to be dealt with u/s 172(7). The jurisdictional AO may therefore verify the position and take such action as may be warranted in law in terms of section 172(7) to ensure that the income of the assessee from the aforesaid 40 voyages does not escape assessment as per the normal provisions of the I-T Act - in favour of assessee.
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2012 (11) TMI 509
Penalty u/s 271(1)(c) - revised return admitting nil income claiming set off of losses - Held that:- As gain and loss of sale of PSL shares are concerned, there are more or less cancel each other. As far as the loss of LNG project is concerned, AO himself accepted the claim even though assessee has not originally claimed but, offered along with the capital gain on MISEZ shares.
Out of two major amounts of disallowance, one was expenses of Rs. 30/- lakhs disallowed on adhoc basis. This amount cannot be a basis for levy of penalty as it was adhoc disallowance. The other amount is disallowance under section 14A and the disallowances under section 14A was considered by the Hon'ble Supreme Court in the case of CIT v. Reliance Petroproducts (P.) Ltd. [2010 (3) TMI 80 - SUPREME COURT] wherein furnishing of 'inaccurate particulars' was examined and cancellation of penalty was upheld. Therefore, disallowance under section 14A also does not call for penalty.
Capital gain on the sale of MISEZ shares - there is a bonafide belief on the part of assessee that the capital gains arising on sale of MISEZ shares are exempt from taxation as the application under section 10(23G) was pending with CBDT. The argument of the learned DR that the provision itself was withdrawn from 1/4/2007 cannot be accepted as relevant provisions was applicable for the year under consideration and assessee did make an application in time which was pending by the time the return was filed. In fact the application is still pending as no decision has been taken as yet by CBDT. Since the entire amount of capital gain ultimately brought to tax was arising out of sale of shares in MISEZ alone, there is a bona fide belief on the part of assessee in not offering capital gains. Therefore, section 271(1)(c) cannot be attracted and accordingly allowing the grounds of assessee.
The order of AO does not indicate whether this loss was set off in earlier years or still available for set off. There is no mention about the carry forward losses. However, after setting off to the capital gain, as net computation under the head business was a loss, the total income determined at Rs. 4,43,14,513/- was only arising out of the long term capital gain, out of which if the amounts of disallowances were excluded the net amount of Rs. 2,98,97,272/- comprises only of long term capital gain - in favour of assessee.
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