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Income Tax - Case Laws
Showing 401 to 420 of 421 Records
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2012 (4) TMI 89
Indo-German DDTA - Appeal by revenue – CIT(A) stated assessee's income from ground handling and technical handling services is not taxable in India as the same is held to be covered by Article 8 of DTAA India and Netherlands - The Tribunal has observed that such services are to be considered part of business of assessee from operation of aircraft in international traffic – assessee stated that Article 8(1) of DTTA propound that profit from the operation of aircraft in international traffic shall be taxable only in the contracting state in which the place of effective management of the enterprise is situated - Accordingly "international traffic" means, transport by aircraft operated by an enterprises which has its place of effective management in a contracting state except when the aircraft is operated solely between places in the other contracting state – Held that:- that any receipt received by the assessee due to participation in the pool as provided in IATP manual and also explained in sub-article 4 of Indo-German DTAA will not be taxable in India under sub Article 1 of Article 8- The Indo-Netherlands treaty is similar to that of Indo-German and not in parity with Indo UK Treaty - appeal of revenue dismissed.
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2012 (4) TMI 88
Appeal against the order passed by the CIT(A) that the appellant is a Govt - institution established for public charitable purposes and ought to have considered exemption u/s 11 of the IT Act - the expenditure incurred by the appellant in the light of the provisions of section 36(1)(xii) of the Act – delay of filing of return for 2003-04 and 2004-05 - The assessee filed petitions for condoning of delays - reasons for delay communicated were that assessee income was assessed under 143 and 147 being aggrieved filed an appeal and ld. CIT(A) disposed of the said appeal and the Secretary was not working at the relevant time - the matter was entrusted to other lawyer who not in the knowledge of the Income-tax matters, Commissioner and Director of Agriculture, Hyderabad advised to claim exemption u/s 11 of the IT Act and for this purpose seek registration of the AMC under section 12AA of the IT are required to file the returns of income, the Secretary was under the bonafide impression that once the registration is granted, it could claim exemption u/s 11 of the IT Act. Therefore, no appeal was filed before the Hon'ble ITAT against the appellate order of the ld. CIT(A) – Held that:- the reasons advanced by the assessee do not show any good and sufficient reason to condone the delays of more than 1500 days - The delays are not properly explained by the assessee – appeals filled by assessee dismissed
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2012 (4) TMI 87
Exemption u/s 54F - The assessee sold the property on 8-6-2006 and immediately thereafter, on 5-7-2006, purchased a landed property to construct a house for a consideration of ₹ 33,88,160 - the Civil Court granted injunction to the owners of the property and ordered status quo, which prevented the assessee from proceeding further in constructing the residential house - The expiry of the three-year-period from the date of sale of the property was on 8-6-2009 - Even though these circumstances were explained before the assessing authority, the claim of exemption made by the assessee under section 54F was rejected on the ground that the assessee has not constructed the residential house within the period of three years, which is mandatory as per the provisions of the Income-tax Act, 1961 - the learned counsel appearing for the assessee, argued that the sale proceeds were straightaway utilized by the assessee in purchasing the landed property to construct a residential house and it was on that basis that exemption was claimed under section 54F - intention of the assessee is very clear from the fact that within days of the sale of her old property, the assessee had purchased the new site for constructing a residential house - The purchase value of the property is more than the long-term capital gains taxable in the hands of the assessee - Held that: the entire amount spent by the assessee in purchasing the land should be construed as amount invested in purchase/construction of residential house - Decided in favor of the assessee
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2012 (4) TMI 86
Assessment under scrutiny - assessee had transferred as per the agreement goodwill to client which AO contested that it cannot be treated as a capital receipt and be treated as a revenue receipt and brought to tax under the head "Profit and Gains of Business'' – Held that:- :- if the entire agreement is read as a whole there is no transfer of Goodwill at all - acquirer has not acquired the business name/brand name which is the main ingredients of Goodwill - said consideration is paid for sale, transfer and assigning the business, the network and benefits and obligations of pending contracts of the business and commercial rights associated with - consideration paid is not for the goodwill but it is for the assets, properties and rights of the transferor hence treated as capital receipt - in favour of assessee.
Loss on shares disallowed by the assessing officer by invoking the explanation to Section 73 of the Act as the same amounted to speculative loss - Held that :- Section 73 deals with loss and speculative business - If a Company whose gross total income consists mainly of income which is chargeable under the heads "Interest on securities", the "Income from house property", "Capital gains" and "Income from other sources" and if such Company indulges in purchase and sale of shares then by a deeming provision that it is carrying on the speculation business is not attracted - Section 73 is not attracted and the assessing authority committed an error in disallowing the said deduction claimed by the assessee – in favour of assessee.
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2012 (4) TMI 80
Indo-Japan Treaty – Japanese Banking company having branch offices in India – loan advanced by HO to PE on which interest has been provided by the PE - deductibility of interest payable to the H.O. and other Overseas Branches in the hands of branch offices in India - taxability of interest payable by PE in the hands of Head Office in India – deduction of tax at source from interest payments – Held that:- Although interest paid to the H.O. of the assessee bank by its Indian branch which constitutes its PE in India is not deductible as expenditure under the domestic law being payment to self, the same is deductible while determining the profit attributable to the PE which is taxable in India as per the provisions of article 7(2) & 7(3) of the Indo-Japanese treaty read with paragraph 8 of the protocol which are more beneficial to the assessee. The said interest, however, cannot be taxed in India in the hands of assessee bank, a foreign enterprise being payment to self which cannot give rise to income that is taxable in India as per the domestic law or relevant tax treaty. Accordingly, no liability for deduction of tax at source. Same is held for interest payments made to overseas branches – Decided in favor of assessee.
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2012 (4) TMI 79
Depreciation on intangible assets being “business and commercial rights” - assessee, vide slump sale agreement, acquired power transmission and distribution business as a going concern for a total sale consideration of ₹ 44.7 crores out of which ₹ 16.58 crores were paid for acquisition of “business and commercial rights” being business claims; business information; business records; contracts; skilled employees; know-how described as “goodwill” –dis-allowance of depreciation on the amount described as goodwill by Revenue – Held that:- Addition of the words “business or commercial rights of similar nature” after the specified intangible assets clearly demonstrates intention of Legislature to provide depreciation to other categories of intangible assets which are not exhaustively enumerated. It is observed that in case of the assessee, intangible assets being Business claims; business information; business records; contracts; skilled employees; knowhow were invaluable and resulted in carrying on the transmission and distribution business by the assessee, without any interruption. Therefore, specified intangible assets acquired under slump sale agreement were in the nature of “business or commercial rights of similar nature” specified in Section 32(1)(ii) and were accordingly eligible for depreciation. It is not necessary to decide the alternative submission made on behalf of the assessee that goodwill per se is eligible for depreciation u/s 32(1)(ii) – Decided in favor of assessee.
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2012 (4) TMI 78
Charitable Institution - Trust registered u/s 12A engaged in conducting coaching classes for open university/distance education – dis-allowance of exemption u/s 11 by A.O. - CIT(A) set aside dis-allowance on the ground that the assessee is entitled for exemption u/s 10(23C)(iiiad) – Held that:- Mere conducting of classes for open university/distance education cannot be construed as charitable activity within the meaning of section 2(15) of the Act. See Sole Trustee, Loka Shikshana Trust vs CIT (1975 - TMI - 6453 - Supreme Court), Bihar Institute of Mining And Mine Surveying v. CIT (1993 - TMI - 20160 - Patna High Court) Furthermore, when no approval was granted u/s 10(23C), CIT was not justified in holding that assessee is a charitable institution and eligible for exemption u/s 10(23C)(iiiad) – Order of CIT(A) is set aside. Also, cancellation/rejection of registration u/s 12A and completion of assessment under 'AOP' by the A.O. is without jurisdiction. Hence, it is open to the Commissioner to consider the case of the assessee and pass necessary order u/s 12AA(3). - Decided in favor of Revenue.
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2012 (4) TMI 77
ITAT deleted the addition of Rs. 1.50 crore made by AO invoking the provisons of Section 40(a)(ia) read with section 194C - During the course of assessement proceedings in the case of the assessee, it was noticed by the Assessing Officer that the assessee had claimed that it had carried out work worth Rs. 4.92 crores for PGF Ltd. but the TDS certificate issued by PGF Ltd. was only in respect of Rs. 4.55 crores - In the present case payments has not been made by the respondent assessee to M/s. Rishikesh Properties Pvt. Ltd. for carrying out any work for it as sub contractor, secondly it is claimed as an expenditure under the head “profits and gain of business and profession” - Tribunal while deleting the addition made under Section 40(a)(ia) of the Act has made out altogether a new case and accepted the stand of the assessee that they had not paid Rs. 1.50 crores and the said work was not sub-contracted by them to Rishikesh Properties Pvt. Ltd - Held that: the order of the Tribunal is perverse and this Court should interfere with the said order - Decided against the assessee
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2012 (4) TMI 76
DTAA between India and UAE - there is no dispute that tax has been assessed upon the assessee as agent of a shipping Company situated at UAE - Circular No. 333 dated February 2, 1982 issued by the Board which states that the provisions made in DTAA would prevail over the general provisions of the Act - Held that: the owner of the ship being admittedly a resident of UAE, there was no scope of taxing the income of the ship in any of the ports in India. - once it is found that the ship belongs to a resident of the other contracting country and such position has also been clarified by the Circulars issued by the Board as indicated above. - Appeal is dismissed
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2012 (4) TMI 75
Writ petition - learned counsel appearing on behalf of the petitioner had submitted that it would suffice, if this Court is pleased to permit the petitioner to make a representation to the second respondent - the petitioner is permitted to make a representation to the second respondent, with regard to the return of the sale deed, dated 22.1.1973, registered on 13.2.1996, along with the other relevant documents, within a period of two weeks from today and on receipt of such representation - Petition is disposed of
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2012 (4) TMI 74
DTAA - No PEs - Fees for technical services - Whether, on the facts and circumstances of the case, the payments received/receivable in connection with following costs incurred/proposed to be incurred for and on behalf of X India, are chargeable to tax in India - the payment received/receivable by the applicants in connection with the IVTC services are in the nature of technical services and taxable as FTS under section 9(1)(vii) of the Income-tax Act and that the exception provided in section 9(1)(vii)(b) is not available to the applicants - applicants have opted for and are entitled to avail the beneficial provision of the DTAA entered into by India with the respective countries of their residences - Technical services rendered by the affiliates do not “make available” technical knowledge, experience, skill, know-how or process while preparing these reports for their clients, X India / Indian customers - Held that: The payments received / receivable by the applicants in connection with IVTC Services are chargeable to tax as FTS under section 9(1)(vii) of the Act, but not under the provisions of Article on “Royalties and fees for technical services” under the respective DTAAs or when the said Article is read with the MFN clause, which has to be taken as part of the Convention In the absence of a provision on FTS, the amount received by the applicants would be taxable as business income under Article 7 of the DTAA. As the applicants do not have a PE in India, the amount received would not be taxable as business income - FTS shall be governed by Article 22 of the Tax Treaty and not as per Article 7 of the Tax Treaty that deals with taxation of business profits - Rulings are given
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2012 (4) TMI 73
Deduction u/s 80-IC - Rule 8 of the ITAT's Rules - the assessee has pleaded two more issues in ground Nos. 7 & 8, wherein it has challenged the selection of its case for scrutiny assessment and non-service of notice under sec. 143(2) of the Income-tax Act, 1961within the statutory time period - Whether manufacturing of fragrances, fragrant compound, attar and other floral waters at its undertaking at Bhimtal amounts to manufacture within the meaning of definition of expression "manufacture" provided in section 2(29)(BA) of the Income-tax Act, 1961 - In order to avail deduction under section 80IC, an assessee has to fulfill the conditions contemplated in the section - The assessee has not manufactured any article or thing, which provided in thirteenth schedule. It is situated in Industrial Estate, thus it falls in section 80IC(2)(ii) of the Act - it is concluded that as far as geographical location of the assessee is concerned, it falls within the industrial estate specified for the purpose of admissibility of deduction under sec. 80-IC of the Act Regarding manufacture - The stand of the revenue authorities is that at the most activity carried out by the assessee is of blending one. It has just mixed the floral distillate from Kannouj and no new or distinct product has emerged out - learned counsel for the assessee has placed in the written submissions a flow chart exhibiting the activities carried out by the assessee before producing altogether distinct saleable commodity which has its own identification in the commercial world - he moment there is transformation into a new commodity commercially known as a distinct and separate commodity having its own character, use and name, whether be it the result of one process or several processes 'manufacture' takes place and liability to duty is attracted - assessee contended that its undertaking is registered with Excise Department, however, excise duty is exempt by virtue of notification Nos. 49 and 50 of 2003 - Decided in favor of the assessee by way of direction to allow the deduction
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2012 (4) TMI 72
Recovery of arrears of tax and interest - learned counsel had further submitted that the petitioner would pay a sum of Rs.3 lakhs, which is about 1/3 of the amount said to be payable by the petitioner, as arrears of tax and interest - The attachment of the bank account of the petitioner, made by the second respondent, if any, in respect of the above mentioned dues, shall be raised, on the petitioner paying the amount of Rs.3 lakhs
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2012 (4) TMI 71
Interest under Section 220(2) - Application u/s 220(2A) - learned standing counsel appearing for the respondents submit that from the pleadings itself it is obvious that this is a case where the grounds mentioned in section 220(A) were not cumulatively made out and that in spite of it partial waiver has been granted - the order does not contain any reason why the first respondent has limited the waiver only to 1/3rd of the interest levied - Held that: the interest should be limited 1/3rd of what is levied on the petitioner - petition is disposed of
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2012 (4) TMI 54
Deduction u/s 80IB - Housing projects – assessee constructed buildings A, B, C and D and did not claimed deduction on ground of approval being granted prior to 01.10.1998 – approval for additional 'E' building received on 11.10.2002 - Revenue contended that 'E' building being continuation of A, B, C and D buildings, the project must be held to have commenced prior to 1st October 1998 hence no deduction – deduction also denied on ground of area of plot and size of the flats – Held that:- Construction of 'E' building constitutes an independent housing project and, therefore, the date on which the earlier housing project had commenced construction could not be applied to the housing project consisting of 'E' building merely because the conditions set out while granting approval to the earlier housing project have also been made applicable to the housing project in question. In present case, total area of plot for 5 buildings is 2.36 acres – Revenue contending proportionate vacant area for E building would be less than one acre – Held that:- Section 80IB(10) does not suggest that the plot of land must be vacant. Deduction is available on construction of a housing project on a plot having area of one acre, irrespective of the fact that there exist other housing projects or not. Further, as contended by Revenue that two flats were merged and size of flat exceeded 1000 sq ft – It is found that there was no merger of flats. Therefore, Tribunal rightly allowed deduction u/s 80IB – Decided in favor of assessee.
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2012 (4) TMI 53
Reopening - Set off of business loss ignoring the provisions of section 90(2) - held that:- From the prescription of section 71, it is palpable that there is no bar in allowing set off of loss under the head "Profits and gains of business or profession" against income under the head "Income from other sources". This section applies to all assesses, whether resident or non-residents, so long as income of non-resident assesses is computed under the provisions of the Act. The present assessee has also chosen to be covered under the Act. It is seeking loss under the head 'Profits and gains of business or profession' to be set off against 'Income from other source'. There is hardly any difficulty in holding that the Assessing Officer was not justified in taxing 'Income from other sources' amounting to Rs. 12.57 crore without allowing its set off against the business loss of Rs. 48.80 crore. - Decided in favor of assessee.
Regarding reassessment - it is abundantly clear that where an assessment order is passed u/s 143(3), no action can be taken under this section after the expiry of four years from the end of the relevant assessment year unless any income chargeable to tax escaped assessment by reason of failure on the part of the assessee inter alia to disclose fully and truly all material facts necessary for his assessment - The reassessment has been initiated on the score that the loss so declared by the assessee was liable to be considered as 'Capital gain' and not 'Business income' and hence its set off was not permissible against income from other sources - It is a trite law that change of opinion cannot be a reason to reopen the completed assessment - Appeal is allowed
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2012 (4) TMI 52
Nature of DEPB credit and premium received on transfer of DEPB – impact on eligible profits for section 80HHC – alleged non-satisfaction of conditions prescribed in the third proviso to Section 80HHC(3) - Held that:- DEPB credit falls under Clause (iiib) of Section 28, whereas the premium received thereon on transfer will represent profits chargeable u/s Clause (iiid) and the deduction u/s 80HHC has to be computed accordingly. It was held that only 90% of the “profits” can be excluded by applying Explanation (baa) below Section 80HHC – Decided in favor of assessee. Applicability of third proviso to Section 80 HHC(3) is not examined and have been referred back to the Assessing Officer.
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2012 (4) TMI 51
Method of accounting - works contract – denial of project completion method – rejection of books of account – addition made - assessee have shown running payment and expenses against WIP in Balance sheet and excluded it from P/L A/c - Held that:- CIT(A) while confirming addition made contradictory statements – on one hand allowed project completion method & on other hand denied it. Accordingly, it is clarified that in case assessee had not claimed loss in the P/L A/c, the same will not be reduced. In case he had claimed this loss, it will be disallowed. Also, amounts related to payments received/bills raised and the expenditure incurred will be excluded from P/L A/c. Further, Completed contract method is not contrary and can be adopted and applied when an assessee follows mercantile system of accounting. However, we remand the matter to the tribunal to examine the other aspects relating to computation of taxable income on the basis of completed contract method – Decided partly in favor of assessee.
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2012 (4) TMI 50
DTAA between India and Netherlands - Capital gain - release and relinquishment of tenancy rights - The applicant is a Dutch citizen since 1984 and holds a card of Person of Indian Origin since 6.10.2003 - As regards the amount received on release of tenancy rights, the tenancy rights are in respect of real estate and would be gains derived from alienation of immovable property. As the immovable property is situated in India, the gains are taxable in India under Article 13.1 of the DTAA Regarding capital gain - since the value of the shares is derived principally from immovable property situated in India, the same are taxable under Article 13.4 of the DTAA in India - TDS already paid on the sale of shares is to be allowed credit against any tax demanded by the Revenue, upon its proper verification - Ruling is given
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2012 (4) TMI 49
Refund of the tax amount with interest - the petitioner submitted that petitioner's applications submitted on 06.06.2008, 06.10.2008, 25.11.2008, 16.12.2009 and 27.04.2011 are pending consideration before the authority under Section 132B(4) of the Income Tax Act, 1961 - If the authorities have not decided these applications for such a long time, then it is a serious matter but we are not taking immediate action and in future there may be harsh order against the officers who have not decided the applications - Petition is allowed
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