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Income Tax - Case Laws

Showing 141 to 160 of 667 Records

• 2013 (10) TMI 1232 - KERALA HIGH COURT
  

  Interest on refund u/s 244A of the Income Tax Act – Interest to be computed from which date i.e. from the date when self assessment tax paid or from the date of deposit in pursuance of demand u/s 156 - Held that:- No differentiation can be made to the provision of section 244A(1) and explanation does not give a different meaning at all. Any amount due to the assessee under the Act mentioned in section 244(1) clearly takes in all forms of refund, either self assessed tax or tax paid as per notice under Section 156 of the Act – Decided against the Revenue.

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• 2013 (10) TMI 1231 - KERALA HIGH COURT
  

  Depreciation on amount paid to retiring partner as goodwill from the partnership firm - During the course of its business new partners were introduced and all partners, one after the other, retired from the partnership firm in the successive years - Held that:- When one partner retires from the business, there is no severance of status so far as the partnership is concerned, as the retiring partner would take his capital investment and retire from partnership and the others continue to carry on the business. By adopting this method, four partners, who decided to go out of the business, have not transferred the entire business concern to the new partners, but have chosen to continue for some time and at their leisure, they retired from partnership one after the other. Therefore, the assets and liabilities of the firm continued as such without any change including tangible and intangible. Share of the capital came to be paid to the retiring partner and it cannot be treated as cost paid to the retiring partner towards acquisition of any right from him.

  Partner who retire from the partnership firm takes its initial investment and profit, if any, payable to him. Similarly, if he is accountable for any loss in a particular assessment year, that would also be worked out at the time of retiring from partnership business - In view of the matter, there is no transfer of any interest and the money paid is only towards the share of the capital invested by that partner along with some profit - Therefore, the question of each year some money paid towards the goodwill would not arise in the facts of the present case, therefore, the Income Tax Appellate Tribunal was justified in disallowing goodwill claimed by the appellant assessee – Decided against the Assessee.

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• 2013 (10) TMI 1230 - MADRAS HIGH COURT
  

  Best judgment assessment u/s 144 of the Income Tax Act - Assessee not maintaining any books of accounts nor filing profit and loss account and balance sheet – Held that:- Assessment does not suffers on account of the absence of any opportunity granted to it by the Assessing Officer before passing the order under Section 144 of the Act - Profit margin in the earlier years to refix the income at 5% of the gross turnover. Consequently, no any justification in the Tribunal straightaway restoring the assessment at 8% of the gross turnover without any discussion on the merits of the Commissioner of Income Tax (Appeals) order – Matter restored to the Commissioner(Appeals) – Decided in favor of Assessee.

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• 2013 (10) TMI 1229 - HIMACHAL PRADESH HIGH COURT
  

  TDS to be deducted u/s 194C - payment to contractor during the course of business of plying, hiring or leasing goods carriages in the event the contractor furnishes his Permanent Account Number - The Income Tax Officer (TDS) relying on Section 44AE, in particular second explanation there-under, has held that the petitioner, in law, will have to be treated as owner and was, therefore, liable to set apart the requisite amount as has been demanded in terms of order dated 28th March, 2013. – Held that:- Since the demand is in respect of subsequent period after 1st October, 2009, prima-facie, there can be no difficulty in accepting the stand of the petitioner that the petitioner was bound by the provisions of Section 194C(6) of the Act. Reliance, placed by the department on Section 44AE, seems to be inapposite as that provision is independent provision and moreso the non-obstante clause is with reference to Sections 28 to 43C and not 194C(6) of the Act as such - Section 194C(6) is an independent provision which was binding on the petitioner and prohibition from deducting the amount from the account of the contractor

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• 2013 (10) TMI 1228 - MADRAS HIGH COURT
  

  Whether demurrage and dead freight are to be allowed while calculating the relief under Sec.80 HHC for the assessment year 1996-97 – Held that:- Revenue does not dispute the fact that the assessee had exported molasses worth Rs.6,14,87,164/-. The Revenue also does not dispute the fact that there was an agreement between the assessee and the foreign buyer as regards the liability of either of the party on demurrage, as per which, the demurrage and dead freight was payable by the assessee on account of its delay in boarding of Molasses and consequently, the charges payable thereon were to be paid by the assessee. Accordingly, the foreign company deducted the amount towards demurrage and dead freight and remitted the balance amount to the assessee. This does not mean that the sale consideration was anything less than Rs.6,14,87,164/- for the purpose of claiming deduction under 80 HHC of the Act. There is nothing on material to show that the parties had agreed that the balance after adjusting demurrage and dead freight charges alone would be the safe consideration – Decided against the Revenue.

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• 2013 (10) TMI 1227 - DELHI HIGH COURT
  

  Reassessment under section 147 – Notice issued u/s 148 for the re-opening of assessment - payment of managerial remuneration in excess of the prescribed limit which was not approved by the central government - disclosure in the balance sheet – Held that:- Assessee/petitioner had disclosed full and true material particulars and had discharge its obligations under law. Material facts were stated and it is not a case where inference had to be deduced or some application of mind was required to understand and deduce any other fact. There was nothing hidden or imbedded in the document or the accounts.

  It is not the case of the Assessing Officer that any material had come to its possession or knowledge post the assessment under Section 143(3) of the Income Tax Act. The factual material was already before the Assessing Officer and had been fully and truly disclosed by the petitioner. The Revenue thus had to satisfy the additional requirement as mentioned in condition No. (v) as laid down by the judgment in Usha International case [2012 (9) TMI 767 - DELHI HIGH COURT] i.e. there was failure or omission on the part of the Assessee to disclose full and true material facts – In the present case, there is no such failure of disclosure – Decided in favor of Assessee.

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• 2013 (10) TMI 1226 - PUNJAB AND HARYANA HIGH COURT
  

  Power to reduce or waive penalty under section 273A - power of CIT to reduce penalty where income was surrendered voluntarily – Held that:- Perusal of Section 273-A of the Act, reveals that the case of the petitioner falls under Section 273-A(1)(ii)(a)(b) of the Act and, therefore, required the Commissioner of Income Tax to consider if the petitioner disclosed income prior to issuance of notice under Section 139(2) of the Act voluntarily and made full disclosure of her income in good faith etc. Section 273-A of the Act commences with the words "notwithstanding anything contained in this Act" thereby postulating that the Commissioner shall while considering an application under Section 273-A of the Act, confine his consideration to factors referred to in Section 273-A of the Act and to no other factor. Thus, if the Commissioner while exercising power under Section 273-A of the Act places sole reliance upon grounds that led to imposition of penalty and interest, such an exercise of power, would in essence, be contrary to power conferred by Section 273-A of the Act. While exercising power under Section 273-A of the Act the Commissioner is required to confine his consideration to factors set out in the sub-sections of Section 273-A of the Act and to no other factor.

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• 2013 (10) TMI 1225 - KARNATAKA HIGH COURT
  

  Nature of expenditure – Capital or revenue expenditure – Expenditure is made on acquisition of software – Held that:- When the life of a computer or software is less than two years and as such, the right to use it for a limited period, the fee paid for acquisition of the said right is allowable as revenue expenditure and these softwares if they are licensed for a particular period, for utilizing the same for the subsequent years fresh licence fee is to be paid. Therefore, when the software is fitted to a computer system to work, it enhances the efficiency of the operation. It is an aid in manufacturing process rather than the tool itself. Though certain application is an enduring benefit, it does not result into acquisition of any capital asset. It merely enhances the productivity or efficiency and, therefore, it has to be treated as revenue expenditure – Decided against the Revenue.

  Addition of provision made for doubtful debts while computing book profit u/s 115JA – Held that:- The Explanation to the section states for the purposes of this section, "book profit" means the net profit as shown in the profit and loss account for the relevant previous year prepared under subsection (2) as increased by the amount mentioned in the Explanation. One such amount is in sub-clause (c) the amount or amounts set aside to provisions made for meeting liabilities, other than ascertained liabilities – Reliance has been placed on the judgment in the case of COMMISSIONER OF INCOME TAX AND OTHERS VERSUS M/s WEIZMANN HOMES LTD. [2013 (5) TMI 123 - KARNATAKA HIGH COURT] - Said amount is to be added to the book profit – Decided in favor of Revenue.

  Interest u/s 234B of the Income tax act – Held that:- Reliance has been placed upon the judgment of the Hon’ble Supreme Court in the case of Rolta India Ltd. reported in [2011 (1) TMI 5 - SUPREME COURT OF INDIA] – Also, as per Circular No. 13 of 2001, it has been clarified that section 115JB is a self-contained code and thus, all companies were liable for payment of advance tax under section 115JB and, consequently, the provisions of sections 234B and 234C imposing interest on default in payment of advance tax were also applicable – Decided in favor of Revenue.

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• 2013 (10) TMI 1224 - PUNJAB AND HARYANA HIGH COURT
  

  Revision u/s 263 - technical educational trust - AO allowed the exemption - CIT revised the assessment order and disallowed the exemption o the ground that information collected by the Assessing Officer was not considered by him after due application of mind - Held that:- Families of the trustees have been paid interest whereas in terms of the deed of trust, the members of the trust are not to be paid any benefit or profit from the trust. It was also found that the Assessing Officer has failed to examine the issue of deduction of tax at source while crediting interest to the family members of the trustees. Similarly, it was found that 50 per cent. of the development fund has been utilised whereas the balance was to be utilised after ten years. The Commissioner found that there is no data of creation of development fund and the year-wise break up of opening balance is also not available – Therefore, no exemption u/s 11 – Decided against the Assessee

  The assessee has disputed the show-cause notice justifying the return filed. It was never the stand of the assessee that even if the said aspects are taken into consideration, still the income of the assessee would be nil. In the absence of any plea that the additions made will not cause loss to the Revenue, we find that the appellant cannot be permitted to raise such questions in appeal without there being any factual basis. - Decided against the assessee.

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• 2013 (10) TMI 1223 - CALCUTTA HIGH COURT
  

  Whether rebate under Section 88E in respect of securities transaction tax is admissible in a case where the income is assessed under the concept of minimum alternative tax under Section 115 JB of the Income Tax Act – Held that:- Reliance has been placed on the Commissioner of Income Tax vs. M/s. Horizon Capital Ltd.[ 2011 (10) TMI 489 - KARNATAKA HIGH COURT], wherein it was held that contention that this benefit is not available to the assessee whose total income is assessed under Section 115JB has no substance - When the total income is assessed and the tax chargeable is computed, it is from that tax which is chargeable, the tax paid under Section 88E is given deduction, by way of rebate, under Section 87 of the Act. This is the legislative intent. That is a promise to give deduction of the tax already paid – Decided against the Revenue.

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• 2013 (10) TMI 1222 - CALCUTTA HIGH COURT
  

  Disallowance u/s 40(a)(ia) – TDS deduction u/s 194C - payment to sub-contractors being transporters – filing of Form No. 15J on the basis of Form I - Held that:- The assessee was served with a show-cause notice as to why the amount paid to the sub-contractors on account transportation charges should not be disallowed. The assessee in reply never took the point that it did not or could not in law deduct the tax because Form No. 15-I had been submitted by the transporters. Therefore, the case that the assessee had submitted Form No. 15J on the basis of Form No. 15-I received from the transporters was inconsistent with the reply given to the show-cause notice by the assessee himself. In the absence of any satisfactory explanation as to why was this case not made out in reply to the show-cause notice, the contention that such Form 15J had been submitted on the basis of Form 15-I lost credibility.

  The Commissioner of Income-tax (Appeals) did not go into the relevant questions and straightaway proceeded to hold that Form No. 15-I were received by the appellant from the transporters and on the strength of those Forms he did not deduct the tax. This was not even the case of the assessee in reply to the show-cause notice. Under sub-rule 2, the Commissioner of Income-tax (Appeals) is required to record in writing the reasons for admission of the additional evidence. The Commissioner of Income-tax (Appeals) did not do so – Decided in favor of Revenue.

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• 2013 (10) TMI 1221 - BOMBAY HIGH COURT
  

  Whether penalty levied under section 271(1)(c) in respect of disallowance made on account of curtailment of deduction under section 80-IB of the Income-tax Act, is correct – Held that:- The Assessing officer curtailed the deduction claimed under section 80-IB of the Act and consequent thereto levied penalty on account of curtailment of deduction - It was an instance of disallowance of a claim and not a case of concealment of income or furnishing inaccurate particulars of income – Penalty not to be levied – Decided against the Revenue.

  Whether penalty levied under section 271(1)(c) in respect of disallowance made on account of duty draw back and dividend income from foreign companies offered to tax only when the case was selected for scrutiny is justified – Held that:- Amount of duty draw back and dividend income from foreign companies was offered to tax by the assessee voluntarily and not after detection on the part of the Assessing Officer – Penalty not to be allowed – Decided against the Revenue.

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• 2013 (10) TMI 1220 - MADRAS HIGH COURT
  

  Penalty u/s 271(1)(c) of the Income Tax Act – Claim of expenditure made in P & L A/c – Held that:- Reliance has been placed upon the judgment in the case of CITv. Reliance Petro Products P. Ltd. [2010 (3) TMI 80 - SUPREME COURT] - So long as the assessee had not concealed any material or the factual information given by him has not been found to be incorrect, there would be no imposition of penalty under section 271(1)(c) of the Income-tax Act. Even if the claim made by the assessee is unsustainable in law, so long as the assessee substantiated the explanation offered by him or the same is found to be bona fide, Explanation 1 to section 271(1)(c) would not stand attracted. However, when the assessee does not substantiate the explanation or the same is found to be lacking in bona fide, Explanation 1 to section 271(1)(c) would stand attracted – In the present case, there was no lacking in bona fides in the claim of the assessee originally made – Decided against the Revenue.

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• 2013 (10) TMI 1219 - KARNATAKA HIGH COURT
  

  TDS under section 194C - supply of sachets of specification to the effect that the sachets should have emblem, logo, name, quantity and price, etc., printed on the sachets - works contract or sales contract – Held that:- As per KPTCL's case [2012 (6) TMI 204 - Karnataka High Court], the amendment to the definition of "work" under section 194C(7)(iv) of the Act is clarificatory in nature and retrospective. In the light of the said ratio, if the facts of this case are read, the assessee has not supplied any material. However, the tenderer has secured the material from other source and has supplied the same to the assessee. May be, in the instant case, some of the features of works contract may overlap, but, however, that should not have been taken as necessary criteria to determine the nature of work. The Explanation "works contract" has a definite legal connotation. What is stated in the section 194C (1) is for "carrying out any works" between the contractor and specified person. The work is also defined to exclude the situation where the material is not supplied by the assessee. In view of the specific definition of work, it is to be held that contract amounts to sale and not works contract. - Decided against the Revenue.

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• 2013 (10) TMI 1187 - ALLAHABAD HIGH COURT
  

  Estimation of income - assessment u/s 158BC after search - Estimated G.P. rate - business of the Sarrafa – Held that:- From the record, it appears that the G.P. rate in the trade of the Saraffa in various cases was accepted by the A.O. @ 15% to 25%. So, the CIT (A) has taken the average G.P. Rate @ 20% on the estimated sale and deleted the addition of Rs.20/- lacs which was endorsed by the Tribunal - Estimation is a question of fact as per the ratio laid down in the case New Plaza Restaurant v. ITO [2008 (7) TMI 260 - HIMACHAL PRADESH HIGH COURT]; Sanjay Oil Cake v. C.I.T. [2008 (3) TMI 323 - GUJARAT HIGH COURT] - In view of above, it appears that the A.O. has made the addition of Rs.20.0 lacs on estimate basis. The CIT (A) has deleted the same on estimate basis and the Tribunal upholds the same - estimation is a question of fact – Decided against the Revenue.

  Investment in jewellery seized during the search – Held that:- Seized jewellery was claimed by three ladies namely Rupali Rastogi, Smt. Sunita Rastogi; and Smt. Kamni Rastogi. All the ladies belonged to the reputed families and they are married. As per the CBDT Circular discussed in the case of Smt. Pati Devi vs. ITO; [1999 (2) TMI 43 - KARNATAKA High Court], 500gm, jewellery is expected in the possession of a married lady and that much of ornaments cannot be seized. If we go with the CBDT Circular dated 11.05.1994 and the ratio laid down in the case of Smt. Pati Devi (supra), then each lady is expected to own 500gm. Ornaments – Decided against the Revenue.

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• 2013 (10) TMI 1186 - ALLAHABAD HIGH COURT
  

  Reassessment u/s 147 - improper service of notice u/s 148 - validity of the service of notice under section 148 – Held that:- From the record, it appears that Sri O. P. Nehru has received the notice on 25.02.2004 at the assessee's premises and he was the legal officer of the assessee company and on earlier occasions, he has received the notices from the department. Similarly, Sri Dinesh Singh, who is the Chartered Accountant of the company has represented the assessee on many occasions. A notice was served at the registered office of the assessee company. The server of the department has served the notice in good faith and now by raising the technical ground, the assessment order cannot be set aside specially when the assessee has already voluntarily participated in the appellate proceedings.

  Inspiration may be drawn from the Section 292 BB, though the same is not applicable during the assessment year under consideration but the fact remains that the assessee has participated voluntarily in the appellate proceedings - In the instant case, the assessee is a company whose employees/consultant are the Members of the family. Thus, service of notice is sufficient as per the ratio laid down in the case of CIT vs. Smt. Kanti Devi Gupta; [2004 (9) TMI 41 - MADHYA PRADESH High Court] – Decided in favor of Revenue.

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• 2013 (10) TMI 1185 - ALLAHABAD HIGH COURT
  

  Unexplained cash credit u/s 68 of the Income Tax Act - creditworthiness of the creditors and genuineness of the transaction - ITAT Deleted the addition - Held that:- Transaction through bank is not sufficient as per the ratio laid down in the case of CIT Vs. Precision Finance Pvt. Ltd, [1993 (6) TMI 17 - CALCUTTA High Court]. Merely because the money is transferred through the bank account does not prove that the money is explained. The appellate authorities have not examined the creditworthiness of the persons or genuineness of the transactions - Restored the matter back to the Tribunal to examine the matter afresh in the light of above discussions.

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• 2013 (10) TMI 1184 - ALLAHABAD HIGH COURT
  

  Rate of gross profit on undisclosed sale - Assessee himself has admitted that unaccounted sales were affected – Held that:- The Assessing Officer has adopted the gross profit on the basis of gross profit shown by the assessee for the recorded sales. In most of the cases, the gross profit was shown by the assesse on recorded sales at 11.2% and the Assessing Officer had adopted the same at 13% - This order of AO is confirmed.

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• 2013 (10) TMI 1183 - ALLAHABAD HIGH COURT
  

  Reasons to be recorded for issuance of notice u/s 148 of the Income Tax Act – Income of the Trust belongs to the Assessee or not – Held that:- Trust was assessed for the year 1980-81 to 1983-84 and in respect of which assessment were set aside and were thereafter restored against which an application for reference was rejected. The additions, if any, could have been made in the hands of the Trust by way of rectification. The material available with the Income Tax Officer was not sufficient for initiating action under Section 148 on the ground that income of the assessee has escaped assessment. There was no findings in the case of the Trust that same was not genuine and that income belongs to the assessee - Income Tax Officer could not have assessed income in the hands of the assessee unless the Trust, which was assessed to which income was not found to be genuine. Once the Trust was assessed and that the order setting aside the assessment was restored and the application was also dismissed, the income could not have been assessed in the hands of the assessee and in this regard notice, which did not spell out whether it was issued under Section 147 (a) or 147 (a) (b) was not valid – Decided against the Revenue.

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• 2013 (10) TMI 1182 - DELHI HIGH COURT
  

  Claim of exemption u/s 10(38) on sale of share on capital gains earned on it - Conversion of stock in trade of shares into investment - Held that:- statute did not reject or frown upon conversion of stock in trade into investment and the said conversion was permissible – Reference is made to the Circular No. 4/2007 dated 15th June, 2007 issued by the Central Board of Direct Taxes, which stipulates that two portfolios one for stock in trade and one in respect of investments could be maintained by the same assessee – benefit of exemption u/s 10(38) allowed - Decided against the Revenue.

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