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Income Tax - Case Laws
Showing 41 to 60 of 421 Records
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2012 (4) TMI 763
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... ... ..... ent of ‘Will’ filed by the assessee without recording any statement of Dr.Murli M.Ratnani. In this view of the matter and keeping in view that the AO has accepted part of the jewellery as explained and no contrary material has been placed on record by the Revenue to show that the part of the explanation given by the assessee was found to be false and untrue, we are of the view that the addition made by the AO and sustained by the Ld.CIT(A) is not sustainable and accordingly the same is deleted. 36. Ground No.4 is against the levy of interest u/s 234A,234B and 234C. 37. After hearing rival parties and perusing the material available on record and in the absence of any plea, we direct the AO to allow consequential relief in respect of levy of interest charged u/s 234A, 234B and 234C of the Act. The ground taken by the assessee is, therefore, partly allowed. 38. In the result, all the appeals are partly allowed. Order pronounced in the open court on 18th April, 2012.
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2012 (4) TMI 762
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... ... ..... 1 in their appeals for the AYs 2004-05 & 2005-06 are allowed. 40. Ground no. 3 in the appeal of the assessee for the AY 2003-04 & ground no.2 in their appeals for the AY 2004-05 & 2005-06, being general in nature nor any submissions having been made before us on these grounds, do not require any separate adjudication while no additional ground having been raised before us in terms of residuary ground no.8 in the appeals of the Revenue for the AY 2003-04 & 2005-06 as also residuary ground no. 7 in their appeal the AY 2004- 05 & residuary grounds in the appeals of the assessee for the AYs 2003-04 to 2005-06,accordingly,all these grounds are dismissed. 41. No other plea or argument was made before us. 42. In the result , appeal of the assessee for the AY 2003-04 is partly allowed, but for statistical purposes while their appeals for the AYs 2004-05 & 2005-06 are allowed and all the three appeals of the Revenue are dismissed. Order pronounced in open Court
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2012 (4) TMI 761
Expenditure on Lease premium - Capital or Revenue Expenditure - Assessee entered in agreements with different authorities for obtaining land on long term lease thereon and lease period varies from 10 years to 95 years - Claimed proportionate amount of lease premium paid as advance payable and claimed the expenditure as revenue expenditure u/s. 37 - Allowed by CIT(A) as revenue expenditure following assessee's own case - Thus, Revenue Appeal
HELD THAT:- In the issue before Special Bench in the case of JOINT COMMISSIONER OF INCOME-TAX, SPECIAL RANGE 25, MUMBAI VERSUS MUKUND LTD. [2007 (2) TMI 358 - ITAT MUMBAI], the assessee company entered into exactly similar agreement with MIDC as in the present case before us. It was held that "Assessee terminated the lease agreement prior to the expiry of lease period of 99 years. There was also no material on record to show that the assessee had made the advance payment of rent for future years to secure any reduction in the rent payable for the future years or for any other business consideration. Hence, the consideration of amount paid by the assessee for obtaining the leasehold rights from the MIDC in its favour for a period of 99 years was capital in nature and, therefore, not allowable as deduction to the assesse"
In assessee’s own case for AY 2003-04, the decision of Special Bench in the case of Mukund Ltd was never cited even though it was available at that time. In such circumstances, we are of the view that now we have alternative except to follow the ratio laid down by Special Bench of this Tribunal in the case of Mukund Ltd.
Respectfully following Special Bench in the case of Mukund Ltd we reverse the order of CIT(A) and restore that of the A.O - Decision against Assessee
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2012 (4) TMI 758
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... ... ..... of survey action under sec.133A, which has been later on retracted. The decision of the Tribunal, Ahmedabad Bench is squarely on this point. In that case, a statement was obtained in the course of survey and thereafter that was retracted and on that basis the Tribunal held that no addition can be made in the hands of the assessee. 15. Therefore, in the facts and circumstances of the case, we hold that the substratum to give a reason to believe that income chargeable to tax has escaped assessment, is vitiated in these cases. Therefore, the impugned reassessments are not sustainable in law. They are accordingly set aside. 16. As the income escapement assessments themselves have been vitiated, the revision orders passed under sec.263 for assessment years 2000-01 and 2003-04 in the case of Dr. J. Mohan do not survive. Those orders are also set aside. 17. In result, these appeals filed by the assessees are allowed. Order pronounced on Monday, the 23rd of April , 2012 at Chennai.
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2012 (4) TMI 757
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... ... ..... ling foods (supra) has been rightly applied by the Bombay High Court, in the case of CIT vs. Sterling Food (Goa) (1995) 127 CTR (Bom.) 30 (1995) 213 ITR 851 (Bom.) to a claim under s. 80HH of the IT Act and it has been held that the activity of processing of prawns is not an activity of manufacture or production. We are of the view that the judgment of this Court aforementioned in Sterling Foods (supra) is apposite to the question that we have to decide and, upon the material that is before us, we must reverse the view taken by the High Court in the judgment under appeal.” 7. In view of the decision of the Hon’ble Apex Court cited above, we hold that the processing of marine products does not involve production and hence, the assessee is not entitled to additional depreciation u/s. 32(1)(iia) of the Act. Accordingly, we set aside the order of the Ld. CIT(A) on this issue. 8. In the result, the appeal of the Revenue is allowed. Pronounced accordingly on 27-04-2012
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2012 (4) TMI 756
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... ... ..... incing enough to imply that the assessee had incurred material and labor expenses essential for completion of the building, then he should have allowed the assessee’s claim and not sustained any portion of the disallowance. However, we are unable to concur with the view that the entire expenditure claimed be allowed as in normal construction activity, labour charges / expenses are generally made through self made voucher and bills and therefore the likelihood of claiming such expenses excessively cannot be ruled out. In these circumstances and after overall consideration of the factual situation of the case, we feel it would be fair and serve the interest of justice if the disallowance of ₹ 10,20,355 be sustained to the extent of ₹ 4,00,000 thereby granting the assessee further partial relief of ₹ 2,10,315. It is ordered accordingly. 4. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open court on 27th April, 2012.
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2012 (4) TMI 755
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... ... ..... absent in this case. As such while considering the entirety of facts, circumstances and material on record, we find it just and appropriate to set aside the order of the CIT(A) and restore the matter back on his file with the direction to re-decide the appeal afresh after giving due opportunity to the assessee well as to the Assessing Officer and to pass a speaking order in accordance with law. We hold and direct accordingly. 9. Assessee is found to have also filed a stay application which is registered at No.33/Del./2012. It has been fixed for hearing on 20th April, 2012. Since, we have decided the main appeal, therefore, the stay application of the assessee becomes in fructuous and the same is, as such, closed resulting in dismissal. 10. As a result, the appeal of the assessee gets accepted for statistical purposes and the stay application of the assessee is dismissed being in fructuous. Order pronounced in open court soon after the conclusion of the hearing on 09.04.2012.
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2012 (4) TMI 752
Expenditure on Advertisements - Revenue or Capital Expenditure? - The AO stated that the advertisement expenditure resulted in creating benefit of enduring nature, thus is capital in nature where as CIT(A) treated it as revenue expenditure - HELD THAT:- In the case of CIT VERSUS M/S. GEOFFREY MANNERS & CO. LTD. (NOW KNOWN AS WYETH LIMITED) [2009 (2) TMI 13 - BOMBAY HIGH COURT], it was held that the expenditure was incurred in respect of promoting ongoing products of the assessee and, therefore, the expenditure is for promotion of the products of the assessee which is revenue in nature.
In the present case, the expenditure has been incurred by the assessee for production of ‘ad-films’, advertisement in electronic and print media, in respect of promotion of its ‘on-going products’. Hence, we hold that the said expenditure has rightly been treated as revenue in nature by CIT(A), which was incurred by the assessee wholly and exclusively for the purpose of its business - Decision in favour of Assessee.
TP Adjustment - Computation of Arms Length Price in respect of Business Activities - TNMM or RPM? - Assessee is a 100% subsidiary company of L’Oreal SA France and is engaged in the business of manufacturing and distribution of products. In respect of business of distribution, the TPO while rejecting the Resale Price Method (RPM) as adopted by assessee, has suggested some adjustment by applying Transactional Net Margin Method (TNMM) - HELD THAT:- We agree with ld CIT(A) that there is no order of priority of methods to determine ALP. RPM is one of the standard method and OECD guidelines also states that in case of distribution and marketing activities when the goods are purchased from AEs which are sold to unrelated parties, RPM is the most appropriate method. Accordingly, the appellant’s international transaction in respect of imports of finished goods can be said to be at arm’s length. Therefore, RPM method is accepted - Decision in favour of Assessee.
Receipt of services and benefit from AEs in lieu of the marketing fee payments - Assessee has paid to its overseas AEs some amount as cost contribution, wherein certain common marketing services were rendered by group entities. TPO stated that in the absence of any direct evidence to indicate the benefit to the assessee, it is concluded that the assessee has not benefited at all from the cost sharing arrangement and has considered the cost sharing arrangement at ALP for the same at Nil.
HELD THAT:- We consider it prudent to set aside the orders of authorities and restore the matter to the file of the AO with a direction that he will get it examined from TPO as to whether the assessee has received any benefit under cost sharing arrangement for which assessee made the payment. In case assessee is able to produce requisite documents to the satisfaction of the TPO that the assessee received benefit under cost sharing arrangement, he will decide the claim of the assessee accordingly - Matter Restored back.
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2012 (4) TMI 751
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... ... ..... purchases made by the assessee. 7. The Ld AR argued that the addition was made by the Assessing Officer only on the basis of report of DIT investigation and no further material was brought for making addition and that the CIT(A) has rightly deleted the addition. 8. We have heard the rival parties and perused the material on record and we are of the considered opinion that without bringing anything specific on record regarding purchases, the purchases cannot be termed as bogus purchases. The addition was made by the Assessing Officer merely on the basis of the report of DIT (Inv.), even though the monthly purchase bills pertaining to the purchases, nor the factum of payment through cheque did not stand disproved by anything brought by the Assessing Officer. Hence, the CIT(A)’s order does not call for any interference and it is confirmed. 9. In the result, the appeal filed by the revenue is dismissed. 10. Order pronounced in the open court on the 9th day of April, 2012.
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2012 (4) TMI 750
Rejection of Books of Accounts u/s 145(3) - Estimation of Net Profit - Fair Estimation u/s 44AD - AO opined that the books of account of the assessee are not reliable, accordingly, rejected the same and calculated the income of the assessee at 8% of the total receipts. CIT(A) upheld the action of AO on the issue of rejection of books of accounts. Further, on the basis of income assessed in previous assessment year estimated the net profit rate of 5% - HELD THAT:- AO has not given any reasonable explanation while applying 8% net profit rate on the assessee’s gross receipts for the assessment year. The income assessed in the previous year in assessee’s case was apparently 3.6% of its net receipts. But in the present assessment year, the AO has pointed out various defects in the assessment order. The Ld. CIT(A) considering all the defects pointed out by the AO and finally, validly and reasonably determined the net profit rate at 5% after allowing depreciation and interest to the partners on the assessee’s turnover. CIT(A)'s order upheld - Revenue Appeal Dismissed.
Carry Forward of Losses - Assessee has filed original return on due date but has filed revised return of loss after due date. Thus, loss was not carry forward u/s 139(1) - HELD THAT:- Revised return was filed by the assessee after due date, thus he is not entitled for any carried forward losses - Decision against Assessee.
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2012 (4) TMI 749
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... ... ..... on of the lower authorities to the effect that the date of completion shall be taken the date on which certificate is physically issued by the Local Authorities. 8. In view of the above discussion, we restore the matter back to the file of AO and assessee is at liberty to procure the required letter/certificate from the Local Authority clearly mentioning therein the date of completion of the project. The AO is to decide the issue afresh as per law after considering the letter of completion if any furnished by the assessee. We direct accordingly. 9. In the result, the appeal of the assessee is allowed for statistical purposes.” 8. In view of the above, we restore the matter to the file of the AO for deciding the same afresh in terms of our above decision after giving due opportunity of being heard to the assessee. 9. In the result, the appeal of the assessee is partly allowed for statistical purposes only. This order was pronounced in the open Court on 25th April, 2012.
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2012 (4) TMI 748
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... ... ..... o establish the genuineness of the gift during the course of assessment proceedings. Affidavits were filed from the donors. The Assessing Officer has not disputed any of these documents and in fact he has not made addition u/s.68. On the contrary, the Assessing Officer has recorded at Page-4 of his order that the assessee has produced documentary evidence to confirm the very high network status of the donor. When it is not the case of the Assessing Officer that an addition could be made u/s.68, the submissions of the learned Counsel on this issue are uncalled for. Thus, grounds Nos.2 and 3 of the Revenue are dismissed.” 7. We find that facts, arguments and circumstances of both the cases are identical. Except the name of the assessee rest all facts, including the addresses of both of the assessee are similar. 8. Respectfully following the order of the coordinating bench, we dismiss the appeal filed by the Revenue. Order pronounced in the open court on 18th April, 2012.
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2012 (4) TMI 747
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... ... ..... ehalf of the Revenue and after going through the decision of the Supreme Court in the case of RELIANCE PETROPRODUCTS (P) LTD, supra , we are of the view that in the absence of any incorrect, wrong or untrue material or suppression/concealment of materials or non-disclosure of full particulars inspite of demand by Assessing Officer, if the claim made by an assessee is only 'untenable' in view of a prohibition contained in the Act itself, such claim may be held to be 'not permissible' but penalty under section 271(1)(c) of the Act cannot be imposed for making such a claim. If we accept the contention of Mr. Bhatt that even an 'untenable' claim would attract penalty, then no assessee will dare to raise any new question in support of his claim of any benefit available under the Act lest ultimately if such claim is held to be 'untenable', it would lead to imposition of penalty. The appeal is, thus, devoid of any merits and is accordingly dismissed.
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2012 (4) TMI 744
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... ... ..... nd any infirmity in the order of CIT(A) for allowing assessee’s claim of depreciation. 25. With regard to assessee’s claim for set off of carry forward of excess expenditure, the issue has been decided by the I.T.A.T., Indore Bench in the case of Gujarati Samaj (supra) vide its order dated 31.1.2011 and the decision of the Tribunal has been duly approved by the Hon'ble Jurisdictional High Court vide its order dated 8.7.2011 reported at 64 DTR 76, various other judicial pronouncements of Rajasthan High Court reported at 164 ITR 439, Gujarat High Court 211 ITR 293, Madras High Court 242 ITR 20 and 248 ITR 368 also support the view. 26. In view of the above judicial pronouncements, we do not find any infirmity in the order of CIT(A) for allowing set off of carry forward of excess expenditure. 27. In the result, both the appeals of the Revenue are allowed in part in terms indicated hereinabove. This order has been pronounced in the open court on 25th April, 2012.
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2012 (4) TMI 743
Disallowance u/s 40(a)(i) for payments made to CRO’s - HELD THAT:- The Hon’ble Bombay High Court in the case of CAT Vs. Kotak Securities ltd.,[2011 (10) TMI 24 - BOMBAY HIGH COURT] held that transaction charges paid by the assessee to the stock exchange constituted fee for technical services covered U/s. 194 (J). It further held that from the year 1995 to the year 2005, the assessee as well as the revenue, proceeded on the footing that the assessee is not liable to deduct tax at source and hence no fault can be found with the assessee for not deducting tax at source, as it was under a bonafide belief that no tax need be deducted at source on this payment.
In the case on hand, the assessee paid charges for testing at laboratories of CRO which used their own skills and equipments etc., to prepare the report. The Tribunal came to conclusion that there is no parting of skills or know-how by CRO and hence the service is not technical in nature, but was only a commercial service. Consisting with the view taken therein, we up-hold the finding of the first appellate authority and dismissed this ground of revenue. In the result the appeal of the revenue is allowed in part.
Thus, the appeal of the assesse is dismissed and that of revenue is allowed in part.
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2012 (4) TMI 742
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... ... ..... ind the A.O in his remand report after making necessary enquiries had reported that low quality of raw material was used as compared to the immediately preceding Assessment Year. So far as the issue relating to suppression of sales is concerned, we find nothing has been brought on record to suggest that assessee has received any extra money over and above what has been shown in the audited books of account. The Ld. D.R. also could not controvert the findings given by the Ld CIT(A). Since the CIT(A) has decided the issue on the basis of remand report of the A.O and since the Ld. D.R. was unable to point out any mistake in the order of the CIT(A), therefore, in absence of any contrary material brought to our notice, we do not find any infirmity in the order of the CIT(A) and accordingly, uphold the same. The grounds by the revenue are accordingly dismissed. 8. In the result appeal filed by the Revenue is dismissed. The order is pronounced in the open Court on 26th April, 2012.
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2012 (4) TMI 741
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... ... ..... Revenue is allowed in part. Order pronounced in the open Court in the presence of ld. representatives of both the sides at the conclusion of the hearing on 15th June, 2011.” If the totality of facts is analysed we find that since for the assessment year 2006-07 the net profit rate was directed to be applied at the rate of 1.77% on the disclosed turnover of the assessee, therefore, unless and until different facts are brought on record, there is no reason to deviate from that net profit rate. In the impugned order the Commissioner of Income Tax (Appeals) has directed the Assessing Officer to adopt the net profit rate of 1.43%, therefore, the order of the Commissioner of Income tax (Appeals) is modified to this extent resulting into partly allowing the appeal of the revenue. Finally, the appeal of the revenue is partly allowed. This order was pronounced in the open Court in the presence of ld. Representatives from both sides at the conclusion of the hearing on 11.4.2012.
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2012 (4) TMI 731
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... ... ..... ho reiterated the stand of the revenue as reflected in the grounds of appeal. We have considered his submissions and we find that under the provisions of section 244A (2) of the Act, if AO wants to exclude from the period for which interest is payable under section 244A(1) of the Act, he has to seek the opinion of the Chief Commissioner. The AO has not done so. The revenue cannot therefore, question the jurisdiction of the CIT(A) not to exclude the period for which interest has to be granted under section 244A of the Act. For this reason and also for the reason that the amount in question was tax deducted at source and there was no delay on the part of the Assessee, we are of the view that the order of the CIT(A) should be sustained. We order accordingly. 24. In the result, the appeal of the revenue is dismissed. 25. In the result, appeal by the assessee is partly allowed and appeal by the revenue is dismissed. Order pronounced in the open court on the 20th day of April 2012
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2012 (4) TMI 727
Annual Letting Value of the properties u/s.23 - Held that:- A.O. was not justified in estimating the ALV of those flats in both the assessment orders on arbitrary basis. Accordingly, direct the A.O. to adopt standard rent as determined as per the Maharashtra Rent Control Act, 1999 if available or latest valuation made by the local authority Brahanmumbai Municipal Corporation (BMC) for the payment of the property tax whichever is higher, as ALV to be determined u/s.23(1)(a) of the Act in both the financial years relevant to A.Y's. 2005-06 and 2006-07. Ground no.2 in the A.Y. 2006-07 is allowed for the statistical purposes.
Determination of ALV u/s.23(1)(a) - Held that:- A.O. should determine the ALV of the said flat as per our directions in respect of ground no.2 and if the actual rent received by the assessee is higher as u/s.23(1)(b) then the same should be adopted. In our opinion, law is clear if the actual rent received by the assessee is more than the ALV determined u/s.23(1)(a) and in view of clause (b) to sec.23(1) actual rent received is to be adopted. In the present case, actual rent received by the assessee is more than the municipal rateable value and in view of clause (b) to sec.23(1) the A.O. has rightly adopted the said value. Accordingly, confirm the order of the Ld. CIT (A) on one flat at EL-DORDO Mumbai and dismiss ground no.3 for A.Y. 2005-06.
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2012 (4) TMI 725
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... ... ..... not be held responsible and liable for the source and funds of Pankaj Aggarwal. Once and when there is no allegation that Pankaj Aggarwal is not an accommodation entry provider or Hawala operator, it is for Pankaj Aggarwal to explain the funds. The compromise application itself shows that there was a serious dispute between the respondent assessee and Pankaj Aggarwal. Even an FIR was registered against Pankaj Aggarwal, which was withdrawn on the said settlement. Every case cannot be put in a strait jacket and Section 68 invoked when the transaction itself is genuine and has been entered for business consideration between two parties. 11. In view of the aforesaid position we do not find any merit in the present appeal and the Tribunal has correctly allowed the appeal of the respondent-assessee holding that the conditions mentioned under Section 68 are not satisfied in the present case. The contentions and issues raised are basically factual. The appeal is dismissed. No costs.
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