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Income Tax - Case Laws
Showing 301 to 320 of 743 Records
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2012 (9) TMI 730 - ITAT AHMEDABAD
Disallowance of payment of incentive to the drivers - the liability was contingent in nature for the year under consideration - Held that:- As decided in Bharat Earth Movers Versus CIT [2000 (8) TMI 4 - SUPREME COURT] if an assessee is maintaining accounts on mercantile system and a liability accrued, though discharged at a future date, held to be an allowable deduction while working out the profit and gains. The Hon’ble Court has held that having regard to the accepted principle of commercial practice and accountancy such deduction is permissible, so the liability was held as not a contingent liability.
Decision of the AO was nothing but simply following the past history of the disallowance. Meaning thereby, even after the extreme step of search was taken by the Revenue Department, but the genuineness of the payment of the incentive to the drivers was not doubted - the liability of payment of incentive had definitely arisen during the accounting period under consideration and that liability was undisputedly discharged at a future date. The incurring of the liability was ascertainable for the year under appeal, therefore it is to be satisfied that it was not a contingent liability. In the result the findings of the authorities are reversed and direct to allow the claim - in favour of assessee.
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2012 (9) TMI 729 - ITAT AHMEDABAD
Addition on account of deemed dividend u/s 2(22)(e) - CIT(A) deleted the addition - Held that:- The deemed dividend can be assessed only in the hands of a person who is a shareholder of the lender company and not in the hands of a person other than a shareholder & the expression shareholder referred to in section 2(22)(e) refers to both a registered shareholder and beneficial shareholder. If a person is a registered shareholder but not the beneficial shareholder then the provisions of section 2(22)(e) will not apply - the similar issue in assessee’s sister concern for assessmentyear 2005-06, wherein clear finding is given in para- 14 that the assessee-company in which public is not substantially interest and one of the Director, Shri K.K. Bansal holds more than 20% share both in assessee- company and MMRML that assessee-company is not holding even a single share in MMRML and no shareholding is held by assesseecompany in MMRML - The perusal of the share holding indicates that the assessee company is not holding a single share in company lending advance, Accordingly, this issue is squarely covered in favour of the assessee.
Addition on account of the payment made to GMB as plot development fees - CIT(A) deleted the addition - assessee is engaged in the business of Ship Breaking - Held that:- As the assessee-company possessed plot No.96 and on request made to GMB, permission sought was granted for plot No.V-5. The original plot No.96 was acquired by paying premium of Rs.9,11,250/- for 30 months. Since the same was used for 8 months the previous year relevant to assessment year 2003-04 the value written off is Rs.2.43 lakh - as in the year under consideration the total premium for the period from 01.10.2004 to 30.09.2005 was Rs.16.20 lakh and the assessee has claimed a sum of Rs.8.10 lakh for this period. The balance amount of Rs.8,74,200/- was claimed for the period from 01.12.2002 to 30.09.2004 and Rs.1,82,250/- for the period ending 30th September, 2004. In view of this face the assessee has rightly claim deduction of Rs.18,66,460/-, which was allowed by CIT(A)- in favour of the assessee.
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2012 (9) TMI 728 - ITAT INDORE
Interest on FDRs made out of zero coupon convertible bonds - Business income OR income from other sources - Held that:- If accompany has not commenced business, there cannot be any question of assessment of its profits and gains of business. That does not mean that until and unless the company commences its business, its income from any other source will not be taxed. The company may keep the surplus funds in short term deposits in order to earn interest. Such interests will be chargeable under section 56.
As the assessee made FDRs of the funds, therefore, making such FDRs was not at all related to the construction activity or any other capital installation, therefore, earning of interest on FDRs, before commencement of business, is income from other sources as decided in Commissioner Of Income-Tax Versus Modi Rubber Limited [1994 (3) TMI 70 - DELHI HIGH COURT] - against assessee.
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2012 (9) TMI 727 - ITAT INDORE
Income form lease rent - business income OR income from other sources - Held that:- Considering the main objects of assessee it is to develop residential and commercial complexes for the public at large and the ground rent was charged from immovable properties which were either sold or given on lease to various persons. Such land on which such development or construction activities were done by the assessee were made available by the Government on lease basis and such properties were also either sold on lease basis or leased out on rent fixed by the Government, therefore, such lease rent is directly connected with the objectives of the assessee, consequently, the character of such lease rent is business income, therefore, it was not income from other sources.
Income from rent/rental - CIT(A)'s direction to AO that the income from rent/rental is to be taxed as income from house property - Held that:- the amount of Rs. 41,04,721/- was received by the assessee from letting out of buildings of the assessee which was claimed as such earning of such rental income is not the regular business of the assessee. Our view is fortified by the ratio of the decision in the case of Potdar Cements Private Limited and others; 226 ITR 625 and CIT vs. Dhoompalam Commercial Complex Industry Pvt. Ltd [2003 (1) TMI 52 - KARNATAKA HIGH COURT] therefore, the learned CIT(A) rightly directed to treat such income as income from house property and not business income.
Interest from deposits in the bank - Held that:- As the surplus money deposited with the bank in itself is not sufficient to give it the character of business income. This interest income is the additional source to the assessee and is not “directly linked” with the business of the assessee. Surplus funds were deposited, therefore, such interest income is income from other sources.
Interest on delayed payment- Held that:- The interest on delayed payments is essentially connected with the main objects of the assessee which is obtained out of housing/commercial units/industrial units, as the case may be, and is not an independent source of income. It is also connected with the business activities of the assessee, therefore, the true character of such receipt is also part of business income.
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2012 (9) TMI 726 - ITAT AMRITSAR
Deduction u/s 54F - house was not constructed on the date of inspection by the Inspector - Held that:- As the assessee had invested the total sale consideration (net consideration) within three years after the transfer of the original asset. The words mentioned in section 54F are that the amount should be invested in the construction of a residential house. Therefore, once the assessee having been invested total sale consideration into construction of a residential house, then it is not necessary that the residential house should have been completed within three years of the transfer of the original asset. The residential house may be completed even after completion of three years of the transfer of the original asset. In such a situation, when a house is completed after expiry of three years from the transfer of the original asset, the assessee is entitled to exemption under section 54F as decided in CIT v. Sardarmal Kothari [2008 (6) TMI 15 - MADRAS HIGH COURT]
The assessee had submitted application under Rule 46A admitting additional evidence which in fact, could not be submitted by the assessee before completion of the assessment but on having completed the house, after the expiry of three years from the transfer of the original asset along-with electricity bill which was not accepted by the CIT(A) as the same should have been accepted by the CIT(A) - in favour of assessee.
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2012 (9) TMI 725 - ITAT AHMEDABAD
Denial of interest u/s. 244A - no interest on the refund of self assessment tax - rectification application u/s. 154 withdrawing interest granted u/s 244A - Held that:- As decided in CIT vs. Ashok Leyland Ltd. [2001 (10) TMI 71 - MADRAS HIGH COURT] it is trite of law that wherever the assessee is entitled to refund, there is a statutory liability on the Revenue to pay interest on general principles on general principles on sums wrongfully retained.
As decided in CIT vs. Gujarat State Warehousing Corporation [2001 (8) TMI 24 - GUJARAT HIGH COURT] assessee is entitled to interest u/s. 244A (1A) payment of tax made u/s. 140A and as in the present case undisputedly, the refund is on account of self assessment tax made u/s. 140A ssessee is entitled to interest u/s. 244A - in favour of assessee.
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2012 (9) TMI 724 - ITAT MUMBAI
Dis-allowance of commission expenses - alleged accommodation entries - survey u/s 133A undertaken at assessee's business premises on the basis of statement given by one Mr. Gupta alleging that the said Mr. Gupta was merely providing bills and entries and that he had been charging commission for his services @ 0.25% of the aggregate transactions - denial of cross examination of Mr Gupta - Held that:- In absence of any contrary material placed on record by the Revenue to show that the cross examination of Mr. K.K. Gupta was provided to the assessee, and keeping in view that the assessee had been showing profit ranging between 40 to 45% on the said purchases with Mr Gupta has not been uncontroverted by the Revenue even at this stage and also keeping in view the books of accounts have not been rejected, it is held that CIT(A) was not justified in sustaining the addition of commission and accordingly we delete the same.
Dis-allowance of depreciation on certain P&M purchased from said Mr Gupta - Revenue contended such purchases of capital assets as fictitious - Held that:- It is not the case of the Revenue that the plant and machinery were not installed at the assessee’s business premises or the same were not used for the purpose of the business of the assessee or the rate of depreciation claimed by the assessee is not according to the Rules. Estimated disallowance of depreciation made by the A.O. is not sustainable in law and accordingly order of CIT(A) in deleting the same is upheld - Decided in favor of assessee.
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2012 (9) TMI 723 - ITAT MUMBAI
Rejection of application for grant of certificate u/s 80G on ground that applicant trust has not carried out any charitable activities during the last three years and has not incurred any expenditure on the same - contravention of the benevolent provisions of section 80G - Held that:- It is not the case of the Revenue that assessee has not satisfied all the conditions laid down in Clauses (i) to (v) of sub-section (5) of section 80G. Merely because the assessee has not carried out any charitable activity during the last 3 years does not mean that the assessee is not entitled to the certificate u/s 80G if other conditions as laid down under Clauses (i) to (v) of sub-section (5) of section 80G read with Rule 11 AA of the Income Tax Rules, 1962 are fulfilled.
In the absence of any material to show that the amount received by the assessee has been spent for any other purposes other than charitable purpose or not for construction of houses for poor and needy people as per object of the trust, DIT(E) has erred in not granting the approval u/s 80-G to the applicant trust. He is, therefore, directed to grant approval u/s. 80-G to the Trust - Decided in favor of assessee
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2012 (9) TMI 722 - ITAT MUMBAI
Misc application filed against ex parte and non-speaking order passed by Tribunal for non-prosecution - Held that:- There is no dispute that the applicant had engaged a counsel and was, therefore, justified in presuming that the counsel would attend the case. However, due to certain mistake in noting the date of hearing in the diary maintained by the assessee’s counsel, he could not attend on the date of hearing. In the absence of any contrary material placed on record by the Revenue, we are of the view that the lapse on the part of the assessee’s counsel appears to be bonafide. It is also undisputed that Tribunal while dismissing the Misc. Application filed by the assessee has not passed any speaking order and has dismissed it on the ground for non-prosecution only. there was a reasonable cause, therefore, it is held that the mistake of the counsel was bonafide and the applicant cannot be made to suffer for the mistake of the assessee’s counsel and accordingly the ex parte order for non-prosecution passed by the Tribunal is recalled - Decided in favor of assessee
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2012 (9) TMI 721 - ITAT MUMBAI
Dis-allowance of gift expenses, Chandla expenses, Diwali expenses, and business promotion expenses aggregating to ₹ 17,41,127 - partial relief provided by CIT(A) - assessee contending commercial expediency - Held that:- In the absence of any distinguishing features brought on record by the parties, respectfully following the order of the Tribunal in earlier year and keeping in view the rule of consistency, total disallowance sustained by the CIT(A) is reduced by 50%
Dis-allowance of sundry expenses - Held that:- In absence of any distinguishing feature brought on record by the Revenue, we respectfully following the consistent view of the Tribunal, restrict the disallowance of expenses at 25% of the sundry expenses.
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2012 (9) TMI 720 - ITAT INDORE
Validity of reassessment proceedings u/s 263 - deduction u/s 80P - cooperative society, not having primary object to provide loan or credit facilities to its members for operating agricultural activities - Held that:- An amendment was brought in by insertion of sub-section (4) of section 80P by Finance Act, 2006 w.e.f. AY 2007-08 which has specifically excluded certain cooperative societies from the purview of section 80P. This amendment was not considered by the AO while framing the assessment for the AY 2007-08. As per verdict of the Supreme Court in the case of Malabar Industries (2000 (2) TMI 10 - SUPREME COURT), incorrect application of relevant provisions of law will render the order of the AO as erroneous in so far as prejudicial to the interest of the Revenue. However, in present case, CIT has directed in the impugned order that the claimed deduction is not admissible to the assessee and at the same time set aside the matter to the file of the AO meaning thereby that the powers of the AO to examine the issue have been curtailed. Therefore, this direction of non-admissibility is modified and AO is directed to examine the assessee’s claim for eligibility in accordance with the amended provisions sub-section (4) of section 80P of the Act - Decided partly in favor of assessee for statistical purposes
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2012 (9) TMI 719 - ITAT MUMBAI
Penalty u/s 271(1)(c) for concealment of income in relation to unexplained jewellery found at the time of search conducted on 10.11.2006 - assessee filed the return of income for the relevant year after search on 21.4.2008 in which the jewellery was declared as undisclosed income - penalty levied on ground that assessee had not declared undisclosed income on account of jewellery in the statement recorded under section 132(4) - benefit of clause 2 to Explanation 5 of section 271(1)(c) - Held that:- The present case is not a case in which the transactions relating to the undisclosed income have been recorded in the books of account on or before the date of search. It is an established fact that at the time of search unexplained jewellery had been found and had also been seized. Thus, the assessee at the time of search and at the time of making statement u/s 132(4) was aware that the jewellery was unexplained and despite this the assessee had not declared it as undisclosed income. Penalty u/s 271(1)(c) is leviable in relation to unexplained jewellery because the same had been declared by the assessee as undisclosed income after it was detected during search and the assessee was not entitled to the benefit of clause-2 of Explanation-5 of section 271(1)(c) - Decided against assessee
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2012 (9) TMI 718 - ITAT MUMBAI
Income from purchase and sale of shares - Business Income as contended by Revenue or Short Term Capital Gains - Held that:- It is seen that the AO has primarily relied upon the finding of the AO in the immediately preceding AY i.e. AY 2005-06. Such a finding of the AO has been reversed by the CIT(A), wherein, it has been categorically held that the sale of shares and securities in the case of the assessee, amounts to short term capital gain and not business income. Against this order, no second appeal has been filed by the Department, and, hence, it has attained finality. This aspect of the matter has also been accepted by the AO in the subsequent year as evident from the copy of computation of income and the assessment order dated 8-12-2009 passed u/s 143(3).
Hence, no infirmity found in order of CIT(A) treating the same as short term capital gains on ground that intention of buying of shares was solely for the purpose of investment which is evident from the investment made in the shares during the year 2005-2006, most of the investments in securities was by way of mutual fund which cannot to be traded in the ordinary course, and assessee has earned a huge dividend income - Decided against Revenue.
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2012 (9) TMI 717 - ITAT MUMBAI
Dis-allowance u/s 40(a)(ia) - charter hire charges to sister concern SML - Revenue contended applicability of Section 194C and alternatively of Section 194I - period 01.04.2006 to 12.07.2006 - AY 07-08 - Held that:- Tribunal in assessment of AY 05-06 has held non-applicability of Section 194C on payment of charter hore charges. Same is followed in impugned AY and consequently no dis-allowance u/s 40(a)(ia) can be made on that account.
As regards the applicability of section 194-I, it is observed provisions, was substituted by Taxation Laws (Amendment) Act, 2006 w.e.f. 13.07.2006 extending the scope of “rent” to any payment by whatever name called for the use inter alia of machinery or plant or equipment. Such amendment cannot be applied retrospectively from 01.04.2006. In that view of the matter the ground raised by the Revenue for extending the amount of dis-allowance u/s 40(a)(ia) to the amount paid during the period 01.04.2006 to 12.07.2006, is dismissed.
Period 13.07.2006 to 02.11.2006 - assessee explained that no payment was made nor any amount was credited to the account of SML during the period 13.07.2006 to 02.11.2006 and certificate of tax exemption was granted u/s 197 by the competent tax authority permitting the deduction of tax at Nil rate in respect of charges credited after 03.11.2006 - Held that:- If there is neither the credit of income to the account of the payee nor payment thereof, the provisions of section 194-I cannot apply. Once the provisions of section 194-I are held to be not applicable, the question of disallowance u/s 40(a)(ia) is also ruled out. During the period 13.07.2006 to 02.11.2006, amount was neither credited to the account of SML nor were paid. Both the credit to the account as well as payment took place after 03.11.2006, being the date from which the assessee got certificate u/s 197 for deduction of tax at source at Nil rate. We, therefore, overturn the impugned order to the extent it sustained disallowance u/s 40(a)(ia) in respect of charter hire charges for the period 13.07.2006 to 02.11.2006 - Decided in favor of assessee
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2012 (9) TMI 716 - ITAT MUMBAI
Dis-allowance u/s 40(a)(ia) - royalty paid to the Court Receiver deemed to be covered u/s 194J - Held that:- It is impermissible for the parties to reargue the same matter time and again before the tribunal in an attempt to unsettle the settled position. The view taken by the tribunal in a preceding year (2011 (4) TMI 508 - ITAT, MUMBAI) deserves utmost respect in so far as the subsequent years involving the similar point before the tribunal are concerned, unless there is some change in the factual or legal position. - We, therefore, uphold the impugned order on this issue by holding that the amount in question is in the nature of royalty payment covered u/s 194J and resultantly disallowance u/s 40(a)(ia) is called for - Decided against assessee
Loan to relatives without Interest - held that:- As no nexus between the interest bearing loans and its utilization for the purpose of profession was shown, the A.O. disallowed proportionate interest attributable to interest free deposit of loan as being not wholly and exclusively for profession. - Decided in favor of revenue.
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2012 (9) TMI 715 - ITAT MUMBAI
Relief u/s 90 & 91 – Assessee company paid income tax in Japan & New Zealand on income earned in respective countries - AO & CIT(A) not allowed relief u/s 90 be allowed in respect of taxes paid outside India – CIT (A) decide against the appeal of assessee on the basis of decision given by Tribunal in assessee’s own appeal for earlier year – Appeal decides without the considering DTAA with these countries – Held that:- While deciding the issue, DTAA should also be considered and hence, this matter should go back to the file of the CIT (A) for deciding afresh after considering the issue in the light of these two DTAA of India with New Zealand and Japan and hence order is set aside. Issue remand back to revenue.
Disallowance of Income Tax paid outside India - Whether Tax paid outside India are deductible u/s 37(1) – Held that:- As the assessee’s appeal is squarely covered in favour of the revenue and against the assessee by the decision of the Tribunal in assessee’s own case for earlier AY. Therefore, taxes paid by the assessee outside India are not deductible u/s 37(1) r.w.s 40(a)(ii) and Sec. 2(43). Appeal decided in favour of revenue.
Deduction u/s 80HHC – Whether turnover is to be compute on prorata basis despite of that assessee has maintain separate books of account in respect of that unit, while computing deduction u/s 80HHC - Assessee engage in export of electronic hardware from its unit in EHTP – Assessee compute deduction u/s 80HHC by taking only the total turnover of one unit – Whereas AO takes total turnover of the assessee company – Assessee maintain separate books of accounts in respect of this unit and were duly audited – Held that:- When separate books of account are maintained by the assessee in respect of the concerned unit and profit eligible for deduction u/s 80HHC can be worked out directly on the basis of such separate books of account, the same needs to be preferred than the formula given in sub-section 3 which works out such profit only on prorata basis in absence of separate book of accounts following the decision in case of Rathore Brothers (2001 (10) TMI 72 - MADRAS HIGH COURT). Decision in favour of assessee
Exemption u/s 10A – Whether exemption can be claimed when the relevant statute was not there i.e. on the first day of the Financial Year -Assessee claimed exemption u/s 10A for a period of five years from AY 1991-92 to 1995-96 - Sec.10A were amended by Finance Act, 1998 w.e.f. 1.4.1999 extending the benefit of exemption u/s 10A for a period of ten consecutive A.Y. - Assessee claimed exemption u/s 10A for the year under consideration i.e. 1998-99 on the basis that it was ninth year from the AY in which it’s eligible undertaking began manufacture or production – AO contented that since exemption was not claimed by the assessee in the preceding two years i.e. AY 1996-97 and 1997-98 and also extended period of exemption up to ten years was applicable only to those undertakings which were currently enjoying the benefit of Sec. 10A - Held that:- Following the decision in the case of M/s. DSL Software Ltd (2011 (10) TMI 423 - KARNATAKA HIGH COURT), the assessment year involved is AY 1998-99 and since the provisions of section 10A as amended w.e.f. 1.4.1999 were not there in the statute on the first day of AY 1998-99. Therefore, denying the claim of the assessee for exemption u/s 10A. Decision in favour of revenue
Deduction u/s 80HHE – Assessee computed the deduction u/s 80HHE by taking the relevant financial data only of the concerned unit which is related to export of software out of India - The AO and CIT (A) however adopted the relevant financial data of all the businesses of the assessee together to work out the profit eligible for deduction us/ 80HHE on prorata basis – Held that:- Following the decision in case of Rathore Brothers (2001 (10) TMI 72 - MADRAS HIGH COURT), allow the deduction to the assessee u/s 80HHE on the basis of separate books of account maintained in respect of the concerned undertaking / unit of the assessee. Decision in favour of assessee
Disallowance of Provision for pension – AO contended that same cannot be said that it is based on a reasonable certainty - Number of years for which a particular person is going to receive pension is not known with any certainty – Held that:- Deduction should be allowed if a business liability has definitely arisen in the accounting year, although the liability may have to be quantified and discharged at a future date. It was also held that it should also be capable of being estimated with a reasonable certainty, although the actual quantification may not be possible. Since the valuation was done on the basis of actuarial valuation, it cannot be said that the liability was not determined with a reasonable certainty. Decision in favour of assessee
Interest income taxable under head PGBP or Income from other sources – Held that:- On the basis of decision of Tribunal in assessee’s own case holding that interest income in the facts and circumstances of the assessee’s case was chargeable to tax under the head income from other sources. The Tribunal however accepted that only net interest income should be assessed under the head income from other sources after deducting expenses incurred for earning the said income. Therefore issue partly allowed.
Exclusion of Excise duty & Sales Tax from turnover for computing deduction u/s 80HHE – Held that:- Following the decision in case of Sudarshan Chemicals Industries Ltd (2000 (8) TMI 73 - BOMBAY HIGH COURT), to exclude excise duty and sales tax from the “total turnover” for the purpose of computing deduction u/s 80HHE. Decision in favour of assessee
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2012 (9) TMI 713 - ITAT, COCHIN
Addition on account of undisclosed purchase – Assessee engage in sandal wood business – During search u/s 132, AO found incriminating materials in respect of investment made in business – CIT(A) estimated profit @ 20% of business – Held that:- When the material found during the course of search operation, discloses the investment made by the assessee and the assessee has also accepted the statement found in the seized material then it must be used by CIT(A). CIT(A) made addition without referring the seized material. Therefore issue remand back to CIT(A)
Undisclosed investment u/s 69B – During search AO founds that assessee made investment in shares which is more than amount shown in books – Held that:- Since both the parties have not filed the copies of the document before Tribunal. Therefore, Tribunal unable to verify the entries in the seized document. Therefore, orders of the lower authorities are set aide and the issue relating to investment is remitted back to the file of the AO
Addition u/s 68 – AO made addition on account of unexplained creditors – Assessee submit the confirmation with CIT(A) – CIT(A) set aside the order of AO for reconsideration – Held that:- CIT(A) has no power to set aside the assessment for reconsideration. But the fact remains is that the assessee has filed the confirmation letters from the creditors which needs to be considered by the AO in accordance with law. Issue remand back to file of AO.
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2012 (9) TMI 701 - ALLAHABAD HIGH COURT
Additions in the block assessment - ITAT deleted the addition as no addition on the basis of facts declared in the regular return of income filed prior to the date of search - Reopening of assessment - Held that:- The search was not conducted at the premises of the respondent-assessee, and no incriminating material was found in the search conducted in the premises of Shri Narendra Kumar Khanna on the basis of which notices were issued to the respondent-assessee.
In the block assessment, the undisclosed income is required to be computed on the basis of evidence found during the search, or being directly relatable to the evidence found in the search. When nothing was found during the search, which may suggest that the books maintained by the assessee were unreliable or doubtful, the Assessing Officer cannot rely upon the material disclosed by the assessee in the return of the relevant year for the purpose of computation under Section 158BB - As decided in CIT v. Ravi Kant Jain [2001 (3) TMI 52 - DELHI HIGH COURT] Chapter XIV-B is intended to provide a mode of assessment of undisclosed income which has been detected as a result of search. It is not intended to be a substitute for regular assessment. Its scope and ambit is limited in that sense to materials unearthed during search. It is in addition to the regular assessment already done or to be done. The assessment for the block period can only be done on the basis of evidence found as a result of search or requisition of books of account or documents and such other materials or information as are available with the Assessing Officer. Evidence found as a result of search is clearly relatable to Sections 132 and 132A - no substance in the contention of the revenue, that those assessments, which were not subjected to scrutiny, can be reopened and that the assessee may require to prove the source of income all over again, even if no incriminating material has been found in the search - against revenue.
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2012 (9) TMI 700 - GUJARAT HIGH COURT
Denial of claim of deduction under Section 80IB (10) - non-fulfillment of the condition of limitation for built up area - whether the amendment to Section 80IB(10)(d) having been made effective from 1.4.2005 is to be held retrospective or prospective - Held that:- Section 80IB(10) originally indicated 100% deduction on the profits derived from housing projects approved by local authority subject to certain conditions set out in the provision. By virtue of the amendment having come into effect from 1.4.2005, deduction is permissible to housing project having residential units with commercial units to the extent permitted therein.
As is very apparent form the record, there was no criteria for making commercial construction prior to the amended Section and the plans are approved as housing projects by the local authority for both the projects of the appellant. Permission for construction of shops has been allowed by the local authority in accordance with rules and regulations, keeping in mind presumably the requirement of large townships. However, the projects essentially remained residential housing projects and that is also quite apparent from the certificates issued by the local authority and, therefore neither on the ground of absence of such provision of commercial shops nor on account of such commercial construction having exceeded the area contemplated in the prospective amendment can be made applicable to the appellant assessee whose plans are sanctioned as per the prevalent rules and regulations by the local authority for denying the benefit of deduction of profit derived in the previous year relevant to the assessment year as made available otherwise under the statue.
The entire object of such deduction is to facilitate construction of residential housing project and while approving such project when initially there was no restriction and by amendment as stated permissible ratio for construction is 5% of the total built up area, reduction of this ratio to 3% of the total built up area has to be necessarily on prospective basis - Criteria to hold this amendment retrospective are are absent as there is no as explicit and specific wording expressing retrospectivity and even if it is assumed for the sake of arguments that the same is to be read by implication the same does not appear to be reasonable but, in fact emerges to be harsh and unreasonable when it comes to implementation and as as held in the case of Mysore Minerals Ltd. vs. Commission of Income- Taxreported in [1999 (9) TMI 1 - SUPREME COURT] with two possibilities of interpretation of a taxing statute, one which is favourable to the assessee should be always preferred - in favour of the assessee
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2012 (9) TMI 699 - PUNJAB AND HARYANA HIGH COURT
Delay in 251 days of filing appeal - addition on undisclosed income - Held that:- The counsel who had filed the appeal before the Tribunal having furnished his affidavit accepting the cause of delay and the explanation being plausible leads to the conclusion that there was sufficient cause for delay in filing the appeal. Once that was so, the application for condonation of delay ought to have been allowed.
As the appeal order as given to the Councel by the party was inadvertently placed in some other file because during that time there was heavy rush filing the income tax returns for the assessment year 2010-11 & due to great efforts, the said order to the CIT(A)- II Ludhiana was traced from the office in the second week of June, 2011 and therefore, the appeal is now being filed - The substantial question of law is answered by holding that there was sufficient cause for condonation of delay in filing the appeal before the Tribunal - matter is remitted to the Tribunal to adjudicate the dispute on merits - in favour of assessee.
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