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Income Tax - Case Laws
Showing 341 to 360 of 743 Records
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2012 (9) TMI 664 - SC ORDER
Whether the assessee was entitled to investment allowance under Section 32A(2)(b) - Held that:- The AO came to the conclusion that the assessee claimed to be in the business of mining & the only activity undertaken by it was removal of overburden/earth excavation work carried out for facilitating mining at lignite project site at Rajpardi and Pandhro and that the assessee was merely a labour contractor. These findings of fact have been upheld by the Income Tax Appellate Tribunal and they have not even been discussed in the impugned judgment of the High Court [2006 (8) TMI 144 - GUJARAT HIGH COURT] - against assessee.
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2012 (9) TMI 663 - ALLAHABAD HIGH COURT
Dismissal of Appeal - non deciding the Department's appeal by treating it infructuous being duplicate - Held that:- Tribunal was not correct in observing that the department had filed duplicate appeals. The department had challenged two different orders one passed under Section 143 (1) (a) and other under Section 154 separately.
The apparent mistake, which was sought to be corrected, before the Tribunal by an application dated 11.5.2000, Tribunal committed error in law in failing to take into consideration the application dated 11.5.2000, for correction of the mistake - The matter is remanded back to the Tribunal to consider the Appeal on merits after deciding the application dated 11.5.2000 for correction of the mistake - in favour of Revenue.
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2012 (9) TMI 662 - ITAT LUCKNOW
Penalty u/s. 271(1)(c) - held that:- the assessee's was well aware of the amendment to section 80P - assessee files its tax return only at ₹ 20.16 lakhs, i.e., at less than 1/3rd the income for which it pays advance-tax. - Clearly, some adjustments were made (to the book profit) either at the time of calculating and depositing advance-tax or while finalizing and filing the tax return. - a person can not take the advantage of its own wrong - penalty to be confirmed.
The return of income, as it appears, was prepared merely by adopting the figure of net profit as per the profit & loss account without any adjustments. Why, even the simple exercise of examining the details of various expenses, furnished before the Assessing Officer during the course of assessment proceedings, and which would exhibit it to bear sums which are clearly not allowable; rather, do not even qualify as expenditure, was not undertaken. It is rather, as we see it, a case of gross negligence and dereliction of duty and by more than one person, and would thus qualify to be a conscious disregard of its obligations. - Benefit of section 273B not extended - penalty confirmed.
Taxability of interest 'accruing' on the non-performing asset (NPA) - whether non-recognizing interest income on NPAs by the assessee-bank following RBI guidelines, as a matter of accounting policy, would by itself constitute a valid ground for not recognizing the said income on the basis of its non-accrual; the adopted method of accounting being admittedly mercantile? - held that:- even section 43D gives primacy to the bank's accounts, so that where interest stands credited to the profit and loss account for a particular year, the same is to be treated as its income for that year even where not received. - Decided against assessee.
Accrual (or otherwise) of an income (or expenditure) is matter of fact, to be decided separately for each case, on the basis of the assessment of the obtaining facts and circumstances. The same cannot be stated as an accounting policy - which by its very nature is to be applied uniformly, except where it is stated in broad terms, bearing the necessary ingredients of the qualifying criterion, i.e., existence of a reasonable certainty as to ultimate realization at the time of raising the claim or even as at the end of the accounting period.
The adopted accounting policy, i.e., recognizing income on NPA accounts only subject to realization, does not serve as a valid qualifying category as there could be other mitigating factors, making it reasonable to expect realization despite the account being a NPA.
Where there is a difference in the provision (for bad and doubtful debts) in accounts and that allowable or allowed u/s. 36(1)(viia), the assessee shall tabulate a parallel provision statement u/s. 36(1)(viia), annexing it as a part of its computation of income with the return of income, each year, explaining the difference/s therein with reference to its accounts. The assessee's claim qua ₹ 19.23 lacs on the basis of non-receipt of interest income, thus, stands rightly rejected by the Revenue - against assessee.
The assessee would only be entitled to a 'provision for bad and doubtful debts' u/s. 36(1)(viia) qua its total advances, including interest debited to the borrower's account and, therefore, forming part of its asset base - The A.O. shall, however, while giving effect to this order, verify and allow the assessee's claim u/s. 36(1)(viia) as eligible under law, seeking the relevant, primary details from the assessee as deemed fit by him.
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2012 (9) TMI 661 - ALLAHABAD HIGH COURT
Additional tax u/s 143 (1) (a) on the difference of returned and assessed income - Denial of deduction u/s 80 IA for Unit I as assessee has taken benefit of Section 80IA on the gross total income by reducing the loss of Unit-II from Unit-I - SCN u/s 154 (1) (b) to assessee for rectifying the mistake - Held that:- The powers under Section 154 can be used to rectify the mistake. It is true that the mistake should not be such, which may allow debate or where two views are possible. In the present case there was no contentions issue or any legal issue on which two views are possible - The assessee had adopted a wrong method of calculation for the purposes of reducing income to 'Nil', and had also carrying the loss forward to next year. The computation was clearly impermissible and was against the provisions of Section 80A (2). The gross total income as defined under Section 80B (5) includes total income computed in accordance with the provisions of the Act, before making any deduction under the chapter. The assessee could not have made any deduction, from the gross total income for the purposes of claiming benefit to return the income as Nil, and carry forward the loss.
The intention of Section 143 IA was to discourage the misuse by unscrupulous tax payer, who might return lesser income by making obvious examination, or by claiming obvious incorrect deduction and taking a chance that if the same is deducted by the department, they would have to pay correct taxes only. In such cases while correcting the return, additional tax was payable. In the present case the provisions of Section 143 (I) (a) are clearly attracted. The respondent assessee claimed deduction, which were not permissible, and thereby not only tried to reduce the income to Nil, but also to carry forward the loss. The respondent assessee took chance, in which it did not succeed, and thus the A.O. and CIT (A) rightly imposed additional tax on him - in favour of Revenue.
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2012 (9) TMI 660 - BOMBAY HIGH COURT
Weighted deduction u/s 35B in respect of bank interest and bank charges - export packing credit facility from the State Bank of India - Held that:- As decided in M/s. KEC International Ltd. Versus CIT [2009 (1) TMI 5 - BOMBAY HIGH COURT] the very definition of the expression packing credit as advanced in the Export Credit (Interest Subsidy) Scheme, 1968, indicates that it is a loan or advance for the purpose of purchase processing and packing of goods. The Reserve Bank requires the lending bank to furnish it a declaration in writing that the loan was granted for pre-shipment activities. - That necessarily means that the activities for which the loan has been granted have to be carried out within India - Section 35B(1)(b)(viii) operates only when there is a performance of services outside India. Mere obtaining of a packing credit loan or payment of interest thereon in India cannot be said to entail the performance of any service outside India. The said expenditure would, therefore, not be deductible - against assessee.
Professional fees paid in respect of its cement project - Capital expenditure or Revenue expenditure - Held that:- As decided in CIT Versus J. K. Chemicals Limited [1992 (10) TMI 18 - BOMBAY HIGH COURT] & Trade Wings Limited v. Commissioner of Income-tax [1989 (9) TMI 21 - BOMBAY HIGH COURT] order to decide whether to acquire some profit-making assets for the purposes of its business which would be of an enduring nature. The expenses incurred for the project report have, therefore, to be viewed as being capital in nature. Simply because the assessee had a running business of manufacturing it cannot be said that the expense for obtaining such a project report was a part of the expenses incurred by the assessee for running its business. It was clearly an expenditure incurred for ascertaining whether to acquire new assets of some durability for the purpose of earning profits - against assessee.
Receipt from B.B.C. Limited, Switzerland under Memorandum of Settlement - Revenue receipt OR Capital receipt - Held that:- The termination of distributorship agreement and the compensation allegedly paid in respect thereof was only a part of the normal running of the business of the assessee - conclusion is based on the fact that the assessee has not established that the termination of the distributorship agreement has resulted in a loss of source of income or has affected its trading contract. This was not even the assessee's case before the authorities before whom it was contended that the receipt was in the nature of a gift or akin to a gift. The material on record, in fact, establishes that the distributorship agreement was but one of the many contracts that the assessee had entered into. - It was one of the many activities that the assessee had engaged in and that the assessee is not prevented in any manner whatsoever from continuing a similar line of business with other enterprises - Tribunal didn't erred in treating it as Revenue receipt - against assessee.
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2012 (9) TMI 659 - ITAT MUMBAI
Disallowance of deduction u/s. 80IB(11A) - assessee did not have any storage of his own and no storage was taken by the assessee on rent - CIT(A) allowed the claim - Held that:- Section 80-IB(11A) targets for relief for the business of processing preservation and packaging of fruits and vegetables as newly added from A.Y. 2005-06, while the relief has been available w.e.f. 1.4.2002 for all undertakings, which have begun to operate on or after 1st April, 2001 for any income from "the integrated business of handling, storage and transportation of food grains - Literal interpretation of words "integrated business of handling, storage and transportation of food grains" will not lead to any absurdity or produce any manifestly unjust result. The Legislative intent is not to encourage transportation or handling of food grains but the Legislative intent is to encourage construction of go-downs and warehouses with a view to providing storage of food grains. If we consider the entire combat of the scheme relating to the tax holiday provided by the Legislature, we find that the deductions are available under various provisions when the assessee has contributed something towards the infrastructure development of the country
In the instant case, no find of any contribution towards the infrastructure by the assessee. The assessee is simply handling and transporting the food grains and storing at the godowns of the FCI which means that the assessee is using the existing infrastructure of the State whereas the main purpose of bringing this provision is construction of godowns specifically for stocking food grains for greater efficiency in the grain management system and minimize post harvest foodgrain losses. The assessee has not done anything towards these facilities - Even the tender participated by the assessee show that the assessee has been awarded the contract for handling and transportation of food grains to the places mentioned therein. The contention of the assessee that Sec. 80IB being a Benevolent provision liberal construction should be applied cannot be accepted because beneficial interpretation applies only where two views are reasonably possible whereas in the instant case no find of any other possible view on the facts of the matter where the law is clear and unambiguous, we cannot act contrary to it with a view to give benefit to the assessee - the conditions precedent for making assessee eligible for deduction u/s. 80IB(11A) is not satisfied - against assessee.
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2012 (9) TMI 658 - SC ORDER
Deduction in respect of profits retained for export business u/s 80HHC(3) - Whether excise duty and sales tax need to be included in the total turnover - Held that:- As decided in CIT Versus Lakshmi Machine Works [2007 (4) TMI 202 - SUPREME COURT] amendments to section 80HHC(3) indicate exclusion of book profits but reasoning in this judgment is confined to the workability of the formula in section 80HHC(3) as it stood at the material time - in favour of assessee.
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2012 (9) TMI 657 - ALLAHABAD HIGH COURT
Block assessment order u/s 158BD r.w.s. 143 (3) - undisclosed net profit - search - addition was made in the hands of the assessee firm on protective basis - CIT(A) deleted the addition - Held that:- The order of the AO is need to be set aside as before initiating proceedings under Section 158BD, he was required to record a satisfaction note to be served along with the notice to the assessee - CIT(A) did not agree with the AO that the reasons were duly recorded but the same was not readily traceable due to transfer of records. The CIT (A) also considered the explanation of the AO, that the sentence written in the third para of the assessment order i.e. "considering the nature of seized diaries, therefore, a notice u/s 158BC r.w.s. 158BD was issued to the assessee" indicate that reasons were recorded, was not very convincing because it was not clear as to what nature of the seized diaries were examined by the AO and how he satisfied himself that these diaries belong to the appellant firm.
As in the absence of satisfaction recorded by the AO, he did not have jurisdiction to proceed against the assessee under Section 158BC read with Section 158BD additions made on protective basis need to deleted - in favour of assessee.
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2012 (9) TMI 656 - ALLAHABAD HIGH COURT
Addition on undisclosed income u/s 158BC - Assessee contended that it was wrong on the part of the A.O not to accept his computerized books accounts - Held that:- Considering explanation given by the assessee for the absence of books of accounts at the hospital as well as the delay in filing the accounts as book the books of accounts were taken by the Chartered Accountant for preparing and filing return such circumstances could not be treated as adverse as the assessee had disclosed the income more than the receipt as per the seized record.
Revenue has not been able to point out any provisions in the Income Tax Act, 1961 which makes it mandatory for a person for maintaining the books of accounts at his residence or at his business premises & the AO was not justified in refusing to admit the books of accounts specially when the returned income was more than the receipts during the seizure - in favour of assessee.
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2012 (9) TMI 655 - ITAT INDORE
Assessee is an C&F agent - Incurred expenses on behalf of the company, which were claimed to be reimbursed by it Addition made on account of non-disclosure of receipt Held that:- On consideration of record and the assertion made by assessee, issue remand back to the file of AO to examine the correct nature of these expenses. Issue remand back to AO.
Addition on account of Same opening & closing balances of creditors in a FY - Assessee firm was having opening balance of Rs. 13,15,955/- as on 31.3.2006 of sundry creditors including debtors and the entire list of 31 sundry creditors in Schedule-C in the balance sheet (as on 31.3.2007) is exactly the same as on 31.3.2006 - These sundry creditors were owing to the trading activities with the assessee firm, carried out until the end of the preceding year Held that:- Assessee furnished the ledger accounts of the respective parties for the assessment year 2008- 09 wherein these were paid off. the opening balances have been duly explained by the assessee. These are not in agreement with the finding in the impugned order that new credits were introduced during the year which resulted into sustenance of addition. Appeal decides in favour of assessee.
Addition on account of Cash Credit u/s 68 In spite of opportunity given by the AO, no such confirmations was filed by the assessee - Confirmation was filed before CIT(A) - Held that:- Issue remand back to the file of the AO with a direction to examine the claim of the assessee.
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2012 (9) TMI 654 - ITAT AHMEDABAD
Addition on account of excess cash found in search u/s 132 - During Survey assessee made disclosure of Rs. 41 lacs comprising of excess cash of Rs 2 lac - In the profit and loss account the assessee had disclosed Rs. 41 lacs as IT declared stock and the same was offered for tax - AO had also made an addition on account of excess amount of cash of Rs. 2 lacs - Held that:- From the assessment order of the AO and the order of CIT(A) it is not clear as to whether the amount of Rs 41 lacs includes Rs 2 lac of excess cash found. In view of these facts, we are of the opinion that in the fairness of things and to meet the ends of justice this matter be remanded to the file of A.O for verification. Case remand back to AO.
Addition on account of difference in stock found during survey u/s 132 - Assessee submit stock statement on the basis of purchases worked out on FIFO method inclusive of transportation and loading charges AO made addition on basis of difference found in statement and stock shown in books of accounts Held that:- As the discrepancy could not be reconciled and satisfactorily explained by assessee. The Assessee could not demonstrate before CIT(A) that the closing stock was without transportation charges and loading charges. The Ld. A.R. before us also could not demonstrate with any tangible evidence the correct working of stock. Therefore appeal decides in favour of revenue.
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2012 (9) TMI 653 - ITAT, DELHI
Addition u/s 68 - alleged bogus accommodation entry based on information received from the Investigation Wing - rejection of additional evidence made under application under rule 46A - Held that:- Assessee contended that the said information was not before assessee and assessee had not opportunity to rebut the same. Hence, to meet ends of justice matter is remitted to the file of the AO to consider the issue afresh by giving a reasonable opportunity to the assessee of being heard - Decided in favor of assessee for statistical purposes.
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2012 (9) TMI 652 - RAJASTHAN HIGH COURT
Penalty u/s 271 FA - non maintainable of appeal u/s 246A (1) (q) to the Commissioner Appeals against order passed u/s 271 FA by the Director Income Tax, who holds the rank of a Commissioner in the Income Tax Department - Held that:- Section 246A (1)(q) provides for appeals before the Commissioner Appeals against an order of penalty passed under Chapter 21 of the 1961 Act & Section 271 FA admittedly falls within Chapter 21 of the 1961 Act, therefore on a plain reading of the said provision an appeal against an order passed by an officer of the rank of Commissioner Income Tax under Section 271 FA is maintainable before the Commissioner Appeals.
As against orders passed under Section 271 and 272A (also under Chapter XXI) before the ITAT, this court cannot on analogy hold that because the said orders passed by an officer of the rank of Commissioner of Income Tax are appealable before the ITAT under Section 253 of the 1961 Act, an order under Section 271 FA also passed by an officer of the rank of Commissioner Income Tax should also be appealable before the ITAT - it is an admitted fact that in the course of the demand notice under Section 156 following the order of penalty under Section 271 FA of the 1961 Act, the assessee was informed that the said order was appealable before the jurisdictional Commissioner (Appeals) - in the instant case Commissioner Appeals III Jaipur - in favour of assessee.
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2012 (9) TMI 651 - KERALA HIGH COURT
Non deduction of TDS on freight charges - disallowance by invoking Section 40(a) (ia) - Held that:- The assessee had made the payment towards freight charges directly to the transporter and it was not a case where such payments were debited to the supplier's account - as the assessee had not produced any material to establish the contention of the assessee, but from making a bald assertion, thus the disallowance was on facts - against assessee
Addition by Invoking Section 41(1) - Held that:- As with regard to the two sundry creditors where the assessee had not produced anything to show the subsisting liability towards the alleged creditors and there was no evidence placed with respect to the payments made and no consequent acknowledgment of such credits were proved by the assessee the said addition does not give rise to any question of law - against assessee
Addition on cash credits - Held that:- As the assessee had contended the cash credits to be advances from customers who had made orders for specified goods but in the same breath contented that the details of the persons who made such advances were not known to them and the said advances were cash infused by the assessee into the business to make up the short fall in cash was found by the Tribunal to be a fact evident and emanating from the assessee's books of accounts - against assessee.
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2012 (9) TMI 650 - ITAT AHMEDABAD
Addition on account unexplained investment Assessee introduced fresh capital in a firm AO had given reasonable opportunity of being heard Held that:- The assessee had not additional evidence in form of affidavits before the A.O. or before the CIT(A). Therefore, in the interest of justice and giving reasonable opportunity to the A.O. on fresh evidence. Case remand back to AO
Disallowance of Interest expense u/s 57(iii) - The interest was paid for the purpose the earning of income - Assessee had filed PAN nos. of all the recipients of interest income & their ROI Held that:- The assessee undisputedly borrowed the money which was utilized for the purpose of income from other source. The borrowings were made through bank account cheque. A.O. had not brought on record any evidence that these borrowings were used for personal purposes. Therefore, addition not justified. Decision in favour assessee.
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2012 (9) TMI 649 - ITAT INDORE
Penalty u/s 271(1)(c) - Assessee has taken advance against Deep Discount Bonds Assessee claim interest expense in P&L without deducted TDS During reassessment u/s 147, AO disallow the same AO levy penalty u/s 271(1)(c) on concealment of income Held that:- As the assessee is under bonafied belief of CBDT circular no. 4/2004 dated 13.5.2004, TDS was required to be deducted only at the time of redemption. The assessee has bonafied belief not to deduct the same during the intervening period. Therefore, mere non-deduction of tax on the interest will not amount to concealment of income by the assessee. Appeal decide in favour of assessee
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2012 (9) TMI 648 - ITAT INDORE
Addition on account of unexplained cash credit u/s 68 in bank account - Assessee has deposited huge cash in various bank accounts of his family members The assessee claims that he was LIC agent, the cash was deposited out of the payment received from the respective LIC customers Confirmation from these customers was not furnished before the AO - Held that:- As the onus lied on the assessee to explain the source of cash and, therefore, the confirmation from persons from whom cash was received was required to be furnished before the Revenue Authorities. The assessee also show before CIT(A) that the amount of cash so received and deposited in the personal bank account of assessee was ultimately utilized for issuing cheque in favour of LIC with respect to the payment due from such clients. Therefore issue remand back to AO for fresh consideration.
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2012 (9) TMI 647 - BOMBAY HIGH COURT
Addition on up front appraisal fees - India-UK DTAA - Article 13(4)(c) v/s Article 7 - CIT(A) deleted the addition - Held that:- The entire appraisal process was to enable the respondent to take a decision as to whether the credit facilities ought to be advanced to the applicants or not. The respondent did not thereby or even while doing so, impart any technical or consultancy services to the applicants. Thus the upfront appraisal fee constitutes fees for technical services within the meaning of Article 13(4)(c) is unsustainable as said fees did not constitute payment in consideration of the respondent rendering any technical or consultancy services to the applicant/borrowers.
Submission of the appellant that the upfront appraisal fees fall within the definition of "interest" under Section 2(28A) is not well founded as the fee is not payable in respect of any moneys borrowed or debt incurred. It is the debt itself. If any money was payable in respect thereof, it could have been held to be interest. However, admittedly, no amount was paid by the applicants in respect of the said fee.
As the income on account of the upfront appraisal fees was business income and as the respondents did not have a permanent establishment in India, the same could not be charged to tax in India under Article 7 of the DTAA - against revenue.
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2012 (9) TMI 646 - KERALA HIGH COURT
Deduction u/s 80HHC when loss is derived from the export of goods and merchandise - Held that:- Issue is no longer res integra. Supreme Court in IPCA Laboratories Ltd. vs. DCIT (2004 (3) TMI 9 - SUPREME COURT ) held that on an assessee suffering net loss in export business, the entitlement for deduction u/s 80HHC is not available - Decided in favor of Revenue
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2012 (9) TMI 645 - BOMBAY HIGH COURT
Re-assessment proceedings u/s 148 - profit on sale of investment should be credited to P/L A/C for the purpose of computing the book profit u/s 115JA - Held that:- Power to reopen an assessment is not a power to review an assessment as held in CIT Vs. Kelvinator India Limited [2010 (1) TMI 11 - SUPREME COURT OF INDIA]. The power to reassess has to be exercised only on fulfilment of certain pre conditions such as tangible material to come to a conclusion that there has been escapement of income.
In the present notice, it is an admitted position that facts had been disclosed and the AO passed his order of assessment on 28/3/2003 for the assessment year 2000-01, thus the issue on which the assessment is being sought to be reopened was considered by the AO and accepted by his order dated 28/3/2003. The present proceedings emanating from the notice dated 28/12/2004 under Section 147/148 is bad in law as the same is based on mere change of opinion - no failure to disclose fully and truly all material facts on the part of the assessee and due consideration of the same was done before passing the assessment order dated 28/3/2003 - against Revenue.
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