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Income Tax - Case Laws
Showing 481 to 500 of 695 Records
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2012 (11) TMI 396
Penalty u/s. 271(1)(c) - excess deduction u/s. 80HHC - Held that:- As decided in CIT vs. S. Dhanabal [2008 (8) TMI 15 - HIGH COURT DELHI] in respect of penalty imposed for disallowance u/s. 80HHE that explanation offered by appellant is bona fide since appellant claimed deduction on the basis of auditor as per statutory requirement and further appellant disclosed all material facts, hence penalty is not applicable.
As decided in U.O.I. vs. Dharmendra Textiles Processors [2008 (9) TMI 52 - SUPREME COURT] at penalty proceedings are separate than assessment proceedings and in the case of Income tax proceedings, these penalty proceedings are not automatic. Since issue involved for disallowance is debatable hence penalty cannot be imposed - in favour of assessee.
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2012 (11) TMI 395
Registration u/s. 12A - rejection of application as assessee trust admitted no activities of commencement - Held that:- As decided in Panna Lalbhai Foundation Versus The DIT (Exemption), Ahmedabad [2012 (11) TMI 293 - ITAT AHMEDABAD] at the stage of registration satisfaction on genuineness of activity is not a pre-condition. Thus in this view of the matter DIT(E) ought to have granted registration when he was satisfied about the objects of the assessee-trust - in favour of assessee.
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2012 (11) TMI 394
Assumption of jurisdiction u/s 153 C - rejection of Additional Ground - Held that:- From the findings of CIT(A), it is evident that he has not disposed of the additional grounds as raised by the assessee. He has not given a reason for rejection of additional grounds submitted by assessee
Therefore, in the interest of justice this matter is remitted back to the file of CIT(A) to admit and decide the additional grounds as raised by the assessee in accordance with law by way of a speaking order giving a sufficient opportunity to concerned parities in the interest of natural justice - in favour of assessee for statistical purposes.
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2012 (11) TMI 393
Unaccounted expenditure u/s 69 C - Held that:- Even though, the assessee has reasoned out in various ways but he has not produced the actual and accurate working for the valuation of work in progress - further, to justify the assessee’s claim that it has valued the work in progress on the basis of market value the assessee has not submitted any valuation report. Therefore, the decision of the cases relied upon by the assessee are not applicable to its facts of the case.
Looking at the complexity of the issue & on an overall examination of the facts an addition of Rs.30,00,000/- as against Rs.61,44,189/- done by CIT(A) requires to be sustained to meet the end of justice - partly in favour of assessee.
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2012 (11) TMI 392
Penalty u/s. 271(1)(c) - Held that:- It is evident from the assessment order that the AO had unearthed certain documents to establish that the assessee had made investment of Rs.15 lacs in gold. At the time of search initially the assessee had agreed for such investment made which was not from accounted income of the assessee, however, the assessee had retracted from his statement subsequently. The learned CIT(A) confirmed the order of the learned AO for the reason that the assessee had failed to discharge the prima facie onus cast upon him to establish that he had not made such investment outside his books of accounts.
As the assessee had also again and again reiterated before the revenue that he had enough holding of gold due to the disclosure made in VDIS Scheme in the year 1997. As from the facts of the case it is apparent that no gold was found at the time of search and the entire episode revolves round the existence of gold based on certain documents found at the time of search, thus as decided in COMMISSIONER OF INCOME-TAX Versus RAVI KUMAR [2007 (7) TMI 45 - HIGH COURT, PUNJAB AND HARYANA] that though addition could be sustained based on certain documents found during the course of search, penalty cannot survive unless and until some more cogent evidence of concealment of income is revealed - in favour of assessee.
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2012 (11) TMI 391
Stay filed for monthly remittance - assessee had paid outstanding tax of Rs.3,57,12,514/- against the disputed demand of tax for Rs.10,84,45,192/- and provided security of Rs.7,84,45,192/- - Held that:- The assessee has paid approximately 30% of the outstanding tax and has voluntarily provided security to the revenue as per the requirement of Schedule II Rule 34 of the Act
As it appears that the issues involved in the appeals are complicated and requires substantial deliberations in the interest of justice and to avoid hardships to the assessee the monthly installments required to be paid of Rs.50,00,000/- is to be reduced to Rs.15,00,000/- to be paid before the end of every month starting from 12th of October, 2012 - partly in favour of assessee.
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2012 (11) TMI 390
Recalling of Tribunal's Order - non filing of the copy of judgement of Hon’ble Gujarat High Court - Held that:- The issue was not decided by ignoring the judgement of Hon’ble Gujarat High Court rendered in the case of Radhe Developers [2011 (12) TMI 248 - GUJARAT HIGH COURT] but in fact, it was restored back to the file of CIT(A) to decide the matter afresh in the light of this judgement as the same was not made available till the order was dictated - no apparent mistake in the tribunal order.
No sale of any flat with terrace alleged area of 1700 sq. ft in two years under consideration - no verification is called for on this issue as has been directed by the Tribunal - Held that:- This issue was very much before the CIT(A) in AY 2006-07 as to whether if one of the flats is having built up area of 1700 sq. ft and 1480 sq. ft or has been noted by CIT(A) in his order and he directed the A.O. to verify this aspect and to decide the issue as per law & in 2005-06 it is noted by CIT(A) of his order that the next ground which has been stressed by the A.O. is that there were 2 flats with built up area of 1700 sq. ft. each which disentitled the assessee for deduction, thus no merit in the assessee's contention that no issue in dispute regarding built up area of the flats existed - no apparent mistake in the tribunal order on this aspect also - misc. applications of the assessee dismissed - against assessee.
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2012 (11) TMI 389
Unexplained Cash Credit u/s 68 – Held that:- When the assessee could not prove the sundry creditors, the same was liable to be added. further Purchase has been supported by bill and payments having been made, just because the sundry creditors for the supply of goods did not respond to the notices from the Assessing Officer, no addition was liable to be made nor accounts of the assessee was liable to be rejected and estimated addition by disallowing of purchase was liable to be made – Order of Commissioner of Income-tax (Appeals) was liable to be reversed.
Rejection of books of account u/s 145 – Held that:- Rejection of Books by CIT(A) is on right footing and does not call for any interference. The revenue has also not been able to dislodge the reasons given by the learned Commissioner of Income-tax(Appeals) for rejection of books of account, which has resulted in estimation of addition @ 25% of the total purchases - AO has made the addition of sundry creditors, but the sundry creditors are, in fact, the trade creditors of the assessee on account of purchases made by the assessee, which the assessee is unable to substantiate with the proof. In the circumstances, the finding of the CIT(A) is liable to be upheld - In the circumstances, both the appeals of revenue and assessee stand dismissed.
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2012 (11) TMI 388
Undisclosed investments – assessee submitted that amount of Rs.15,45,000/- received from Manju Enterprises not considered as a source for making undisclosed investments – Held that:- During the course of search, several slips relating to the deposit of cheques into the bank account of the concern M/s Manju Enterprises were found. The aggregate amount of the said deposits stood at Rs.15,45,000/-. The AO added the entire amount of Rs.15,45,000/- in the hands of the assessee in the original assessment order - AO has excluded both the unexplained deposits of Rs.15,45,000/- as well as the source of Rs.15,45,000/- from the computation of undisclosed income - except in the first assessment order passed on 29.11.1996, the net effect of computation pertaining to Rs.15,45,000/- was that the amount of Rs.15,45,000/- was never considered as the undisclosed income of the assessee - AO has properly dealt with the issue and rightly rejected the said claim of the assessee. Accordingly we dismiss all the grounds raised in this regard.
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2012 (11) TMI 387
Capital gain – disallowance of loss assessed under Long Term Capital Gains suffered on transfer of investment in shares to J. K. Agri Genetic Ltd. – Held that:- AO while acting in section 154 of the Act on reappraisal of the facts were already available on record and upon change of opinion, considered the very same transaction as demerger of an undertaking and disallowed the Long Term Capital Loss as not chargeable to tax on the ground that transfer of shares was part of demerger u/s. 2(19AA) of the Act - this adjustment did not amount to mistake apparent from record because there is no jurisdiction for the AO to decide this issue while acting u/s. 154 of the Act as this issue is highly debatable - enhancement of capital gains income was based upon change of opinion on the part of the A.O. which was beyond the purview of Sec. 154 of the Act which permits rectification of mistake which is apparent from record - AO could not by invoking Sec. 154, enhance the capital gains – In favor of assessee
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2012 (11) TMI 386
Denial of exemption under section 10(10C) - rectification u/s 154 - amount received by the appellant under the VRS scheme – Held that:- No doubt in a normal situation, so far as matters capable of two views being taken will be outside the ambit of section 154. However, right now, we are dealing with interpretation of section 10(10C) and so far as this interpretation is concerned, law laid down by Hon'ble Calcutta High Court is that an interpretation in favour of the assessee is to be adopted. The real question, therefore, is whether or not these decisions of Hon'ble jurisdictional High Court can be subject matter of rectification under section 154.
The Assessing Officer disregarded Hon'ble jurisdictional High Court in the case of SAIL DSP VR Employees' Association, 1998 (2003 (2) TMI 46 - CALCUTTA HIGH COURT ), on the ground that this issue has already been decided in assessment order and, therefore, it cannot be reconsidered, even in the light of Hon'ble jurisdictional High Court's decision. learned CIT(A), on the other hand, referred to an aspect of the said decision. In our considered view, what ought to have been examined by the Assessing Officer was whether, in the light of the principles laid down by Hon'ble jurisdictional High Court, the interpretation canvassed by the assessee could be accepted as one of the possible views of the matter. That exercise has not been done. - AO directed to give relief. - Decided in favor of assessee.
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2012 (11) TMI 385
TDS u/s 194J - Fees for technical services – Whether payment of transmission charges by company engaged in supplying electricity is liable to TDS u/s 194J - The assessee was granted license for distribution and retail supply of power by KERC – AO argued that the payments of transmission charges and SLDC charges, were payments for technical services rendered - Held that:- Following the decision in case of Jaipur Vidyut Vitran Nigam Limited. (2009 (4) TMI 489 - ITAT JAIPUR-A) that 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. In favour of assessee
TDS u/s 194I – Whether transmission charges liable TDS u/s 194I – Held that:- The transmission lines are used not only for the transmission of electricity to the assessee but also for transmission to various other entities, and the assessee has no say in the manner in which such transmission lines can be controlled. Assessee has no control over the operations of the transmission lines and all that it gets from the arrangement is that it can draw electrical power from transmission lines in an agreed manner. In a situation in which the payment is made only for the purpose of a specific act, it cannot be said to be for the use of an asset even if an asset is used in the said process. Therefore, Sec. 194I has no application to the impugned payments for transmission of electricity. In favour of assessee
TDS u/s 194J - Whether payment for service by State Load Despatch Centre to company engaged in supplying electricity is liable to TDS u/s 194J – Held that:- As the functions these personnel of SLDC perform, may be of managerial and technical nature, the assessee or its employees do not receive OR derive any benefit in their sphere of work i.e. distribution and retailing of electricity and neither do they perform any of assessee’s work. What is paid by BESCOM as SLDC charges are only reimbursement of actual expenses. Hence not liable to deduct to TDS u/s 194J. In favour of assessee
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2012 (11) TMI 384
Applicability of Section 263 – condition – payment of royalty – capital or revenue – Held that:- If royalty has been paid on turnover basis, the same will be treated as revenue expenditure - royalty in the present case is based on turnover - Tribunal has clearly given the direction that if royalty has been paid on turnover basis, the same will be treated as revenue expenditure. Since the fact that royalty is paid on turnover basis is not disputed by the Assessing Officer in the order dated 30th December, 2009, issue is covered in favour of the assessee - payment of royalty by the assessee has to be considered in field of revenue - CIT has wrongly exercised his power u/s 263 and his order is liable to be quashed and is accordingly quashed – in favor of assessee
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2012 (11) TMI 383
Business income or short term capital gain – sale of shares - company is having an investment portfolio and has held certain shares in stock-in-trade – Held that:- Company decided to convert trading portfolio into investments vide resolution of the Board in Annual General Meeting to convert the shares from stock in trade to investments - assessee has taken the market value on 31.3.2004 as the cost of the acquisition without taking the benefit of the indexation, the difference between the sales price and the cost of acquisition has been offered for taxation as short term capital gain – in favor of assessee
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2012 (11) TMI 382
Exemption u/s 10B of the Income Tax Act - assessee is a public limited company registered under the Companies Act engaged in the business of manufacturing and export of Telecom Transmission Equipments – Held that:- STPI registration granted to the assessee on 16.11.1998 is valid for allowing deduction to the assessee u/s 10B - in an earlier year, i.e., assessment year 2004-05, the AO himself has allowed deduction u/s 10B to the assessee in a scrutiny assessment - assessee is eligible for deduction u/s 10B, it cannot be denied in this subsequent year on the basis that the assessee is not an 100% EOU for the reason that necessary approval is not with the assessee - in favour of the assessee
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2012 (11) TMI 352
Exemption u/s 80G – Religious purpose versus Charitable purpose – CIT he took the view that since the expenditure on religious object exceeds 5% of the total income of the assessee trust, therefore, he did not approve the assessee u/s 80G(5)(vi). – held that:- CIT must be aware of that the Hindu consists of a number of communities having the different gods who are being worshipped in a different manner, different rituals, different ethical codes. Even the worship of god is not essential for a person who has adopted Hinduism way of life. Thus, Hinduism holds within its fold men of divergent views and traditions who have very little in common except a vague faith in what may be called the fundamentals of the Hinduism.
The word 'community' means a society of people living in the same place, under the same laws and regulations and who have common rights and privileges. This may apply to Christianity or moslem but not to Hinduism. Therefore, it cannot be said that Hindu is a separate community or a separate religion. Technically Hindu is neither a religion nor a community.
Expenses incurred for worshipping of Lord Shiva, Hanuman, Goddess Durga and for maintenance of temple cannot be regarded to be for religious purpose. - CIT directed to grant approval to the assessee-trust u/s. 80G(5)(vi) of the Act. – in favor of assesse.
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2012 (11) TMI 351
Non-charging of interest on non-performing advances on accrual basis - CIT(A) deleted the addition - assessee is a financial institution owned by the Government of Gujarat - Held that:- The interest on sticky loan which has accrued on the NPA were not accounted for in the profit and loss account by the assessee and as per the guidelines of the RBI such interest was chargeable in the accounting year in which it is credited to the P&L account for that year or when it was actually received by that institution whichever is earlier, as the provisions of the Act. In this case, the assessee neither have credited the interest to the profit and loss account of the relevant accounting period nor has actually received the same, and therefore the said addition was rightly deleted by the CIT(A) - in favour of assessee.
Rejection of books of accounts - Held that:- Various observations of the statutory auditors were mainly in respect of system of accounting, procedural lapses and internal checks and controls. The management of the assessee has claimed that it had complied with all such observations of the statutory auditors and the same were reflected in the directors’ report in point no.III at page no.8 of the annual accounts of the assessee. On similar facts, the accounts books of the assessee were accepted by the department in the earlier years as well as in the subsequent assessment year 2006- 2007 - AO without bringing any material deficiencies in the books of the accounts to show as to how the appellant’s profit for the relevant period cannot be ascertained correctly on the basis of the books of accounts maintained by wrongly invoking the provisions of section 145(3) - in favour of assessee.
Disallowance of depreciation - leased assets - Held that:- the Revenue have not gone into the terms and conditions of the lease agreements entered into by the assessee-company. There is no finding by the AO that these lease were only finance lease and not operating lease - set aside the issue to the file of the AO with direction to decide the issue afresh relying on Asea Brown Boveri Ltd. Versus AFCI [2004 (10) TMI 325 - SUPREME COURT OF INDIA] wherein held that in case of finance lease, it is the lessee who, for all practical purposes, is the owner of the assets - in favour of assessee for statistical purposes.
Disallowance of penal interest - Held that:- Perusal of the Resolution no. JNV-1099-2023-A of the Govt. of Gujarat, Finance Department has prescribed rates of interest on loans for the public sector undertakings, which is clearly in the nature of “penal interest” and not in the nature of penalty. The assessee is in the business of finance and interest was paid by the assessee-company on account of late payment of amount payable to the State Government. There is no infringement of law and there is no act on the part of the assessee which can be said to be against the public policy. The penal interest in the nature of finance charges for late payment of instalment/amount could not be equated with penalty imposable due to some infringement of law. The use of the word “penal interest” as a nomenclature does not mean any penalty for infringement of law - in favour of assessee.
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2012 (11) TMI 350
GP addition - Survey u/s.133A - CIT(A) deleted the addition - Held that:- The GP rate worked out by the A.O. in year under consideration @16.04% which was 23.01% in immediate preceding year. As assessee was maintaining other books i.e. purchase register, sales register, details of manufacturing cash book and ledger etc. & the books of account are audited which has been accepted by the other departments. When A.O. had not brought on record any particular defects in the books of account no reason to intervene in the order of the CIT(A) - in favour of assessee.
Addition to stock - CIT(A) deleted the addition - Held that:- The discrepancy in stock of Rs.7,65,000/- had been included in the closing stock and credited in the P&L account by assessee - no reason to intervene in the order of the CIT(A) - in favour of assessee.
Unaccounted scrap sale - CIT(A) deleted the addition - Held that:- Held that:- The assessee has included scrap sale in sale of boxes and made part of P&L account of the year under consideration - no reason to intervene in the order of the CIT(A) - in favour of assessee.
Disallowance u/s.43B - Held that:- PPF amount had been paid within due date of filing return. Therefore, the A.O. is directed to verify the payment - in favour of assessee for statistical purposes.
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2012 (11) TMI 349
Deduction u/s. 80IB - whether to be calculated after reducing the deduction u/s. 80HHC or on stand alone basis - Held that:- Assessee relied on decision of Associated Capsules P. Ltd. Versus DCIT [2011 (1) TMI 787 - BOMBAY HIGH COURT] & CIT Versus Millipore India P. Ltd. [2011 (2) TMI 1210 - KARNATAKA HIGH COURT] wherein held that the tribunal was not right in holding that as per Section 80-IA(1) has to be reduced from the profits of the business of the undertaking while computing deduction under any other section under Chapter VI – A of the Income Tax Act, 1961. CBDT Circular No. 772 dated December 23, 1998 stated that section 80-IA(9) has been introduced with a view to prevent the taxpayers from claiming repeated deductions in respect of the same amount of eligible income and that too in excess of the eligible profits.
Bench has not considered two High Court decisions referred by the assessee which are in his favour & has relied on decision of Special bench of the Tribunal, thus when the judgments of High Court are available on this issue decision of Special bench of the Tribunal is no more relevant - This action of Hon’ble ITAT is against the principle of judicial hierarchy would constitute mistake apparent on record that requires to be modified - in favour of assessee.
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2012 (11) TMI 348
Exemption u/s. 11 - denial of claim as sum had been paid to founder members out of the corpus fund - Held that :- The amount was paid to the non-founder members on account of a dispute between the assessee society and them and there was a practical problem to keep these recipients of the amount within the committee of office bearers and the situation so warranted that had the assessee not paid this amount, the society could not have continued affecting the interest of larger number of students of the assessee. Being so, the assessee refunded this portion of money contributed by these two persons, and that refund of money cannot be considered as a benefit given to these persons - The fact whether defaulting office bearers are the founder members of the assessee trust or not has to examined.
Regarding allowability of exemption u/s. 10(23C)(iiiad)/(vi) there is no allegation that the assessee is not imparting education. Firstly, there is no evidence that such benefit has been given to the founder member of the trust. Secondly, even if it is so, such instances would only hit the case of the assessee within the meaning of sections 11 to 13 and cannot be imported to deny exemption u/s. 10(23C)(iiiad) provided a clear finding on the basis of material on record is given that the assessee trust is not solely for the purpose of imparting education. Some disallowances of expenses or payments claimed by the assessee cannot be held to be a separate object for which the trust is existing thereby holding that the trust is not existing solely for education purposes. Mere certain lapses and disallowances cannot become basis for denying exemption u/s. 10(23C)(iiiad) - matter is restored to the file of the AO to have a fresh look on the entire subject - in favour of assessee for statistical purposes.
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