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Income Tax - Case Laws
Showing 441 to 460 of 515 Records
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2013 (8) TMI 191 - GUJARAT HIGH COURT
Disallowance on depreciation on intangible asset - Tribunal deleted disallowance - Held that:- installation of software could be checked by the technical person whether it was loaded in the system or not. Therefore, the finding in the survey cannot be relied upon. Even the AO has accepted the fact that some of the software were developed locally and installed in the system - valuation report of assets prepared by Dalal Mott Macdonald which was found in survey which indicated that software developed and installed by the assessee in the system. The assessee produced all the vouchers and receipt for the same which was also examined by learned CIT(A). Nothing is produced during the course of arguments to rebut the findings of learned CIT(A) - Decided against Revenue.
Disallowance of interest u/s. 36(1)(iii) - Tribunal deleted addition - Held that:- advances made to the different concerns were for the purpose of purchase of raw material or for the purchase of plant-machinery. On having found from the record that there was sufficient fund available with the assessee-respondent, it had held that there was no question of diversion of interest bearing funds by way of loan and advances - Following decision of S.A. Builders Ltd. Vs. Commissioner of Income-tax(Appeals) and another [2006 (12) TMI 82 - SUPREME COURT] - Decided against Revenue.
Disallowance of loss on sale of raw materials - Tribunal deleted addition - Held that:- assessee had provided the requisite details elaborately before the CIT(A) and based on that the remand report was called for from the Assessing Officer. It was noted by the Tribunal that the assessee suffered a loss and this basic fact was not even challenged by the Assessing Officer in the remand report submitted to the CIT(A) - Decided against Revenue.
Difference in balance - Tribunal deleted addition - Held that:- In absence of any difference in details and reconciliation statement furnished by the assessee, the CIT(A) deleted the addition and the same came to be confirmed by the Tribunal. There being no material to take a contrary view & as both the authorities have concurrently held to delete the said addition - Decided against Revenue.
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2013 (8) TMI 190 - GUJARAT HIGH COURT
Validity of notice u/s 158BD - Search operation done against petitioner's husband - Certain income found belonging to petitioner - Held that:- When notice under Section 158BD was issued against the petitioner, assessment order of petitioner's husband was not in existence - On the date of issuing notice under Section 158BD of the Act, there was no satisfaction recorded by the Assessing officer of the searched person - The conditions precedent for invoking the provisions of section 158BD, thus are required to be satisfied before the provisions of the said Chapter are applied in relation to any person other than the person whose premises had been searched or whose documents and other assets had been requisitioned under section 132A - Following decision of Manish Maheshwari Vs. Asst. Commissioner of Income-tax and another [2007 (2) TMI 148 - SUPREME COURT OF INDIA] - Decided in favour of Assessee.
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2013 (8) TMI 189 - ALLAHABAD HIGH COURT
Depreciation on nursing home - Tribunal treated nursing home as plant and machinery and allowed depreciation - Held that:- if it was found that the building or structure constituted an apparatus or a tool of the taxpayer by means of which business activities were carried on, it amounted to a "plant" ; but where the structure played no part in the carrying on of those activities but merely constituted a place wherein they were carried on, the building could not be regarded as a plant - assesses nursing home is equipped to enable the sterilisation of surgical instruments and bandages to be carried on which cover 250 sq. ft. and that nursing home is also equipped with an operation theatre. Therefore the plant and nursing home stated as plant and machinery and the depreciation should be allowed on it accordingly - Following decision of CIT Vs. Dr. B. Vankata Rao [1999 (2) TMI 11 - SUPREME Court] - Decided against Revenue.
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2013 (8) TMI 188 - ITAT MUMBAI
Addition u/s 68 - Portfolio Investment in Shares - CIT(A) deleted the addition - Held that:- The impugned investments are not related to the previous year to the assessment year under consideration. When the fact being so the provisions of Section 68 is not applicable to the said investments for the year under consideration as the provision is applicable only when the sum is found credited in the books of the assessee in the previous year relevant to the assessment year. Also find merit in the contention of the assessee that the assessee has not been required to maintain any books of account in the earlier years as the only source of income is out of her salary. It is also found that the past investments made by her are duly incorporated during the F.Y. 31/3/2007 - the impugned addition u/s 68 is not sustainable in law and in facts. In favour of assessee.
Disallowance of sale of agricultural land as 'short term Capital Gain' - Held that:- It is not disputed by the Revenue at any stage of the assessment proceedings that the subject matter of transfer is agricultural land and also the sale deed clearly indicates that the sale pertains to agricultural land. In view of that matter, no infirmity in the order of the CIT(A) in holding the immovable property as agricultural land. Thus no merit on in the contention of the Revenue that the assessee has not discharged her onus of proving the subject matter of sale as agricultural land. Agricultural land sold by the assessee is not a 'capital asset' since it is in rural area within the meaning of section 2(14)(iii), the impugned receipt cannot be brought to tax as capital gain by invoking section 54B. As the provisions of section 54B are not applicable to the facts of the case, the issue of holding period of the land for less than 2 years does not arise at all in the instant case - no reason to sustain the addition made by the AO. In favour of assessee.
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2013 (8) TMI 187 - ITAT MUMBAI
Re opening of assessment - disallowance of deduction u/s 10B and correctness of the interest charged u/s 234B and 234C - Held that:- It is not in dispute that the reassessment proceedings were initiated after expiry of four years from the end of the relevant assessment year and in a case where the original assessment was completed under section 143(3) two conditions have to be satisfied to issue a notice under section 148 of the Act, i.e., (a) failure on the part of the assessee to make a return under section 143 or to a notice issued under sub-section (1) to section 147 or section 148 or disclose fully and truly all material facts necessary for assessment, and (b) income chargeable to tax has escaped assessment.
In the instant case computation of total income alongwith annexures as well as the details furnished during the course of regular assessment proceedings clearly indicate that the assessee furnished all the details necessary for the purpose of making an assessment and in the absence of recording a reason that reassessment proceedings were on account of failure on the part of the assessee to furnish true and correct particulars of income, reopening of assessment cannot be said to be valid in law. Under these circumstances we quash the reassessment proceedings. Since the notice issued under section 148 is held to be bad in law, other issues urged by the assessee in its appeal as well as the grounds urged by the Revenue in the cross appeal do not survive for consideration. In favour of assessee.
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2013 (8) TMI 186 - ITAT DELHI
Transfer pricing adjustment - Rejection of MacMillan India Ltd as comparable as the financials of Macmillan India Ltd were for the year ended 31st December 2005 whereas the Financials of the tested party are for 31st March 2006 - whether DRP/AO erred in upholding/making an addition under Chapter-X of the Income Tax Act, 1961 - DRP not granted the benefit for adjustment of the Arms Length Price by +/- as per the proviso to section 92C(2) - Held that:- Reiterating the annual closure of the companies it can in no way hamper the comparability of the results as long as the results are for a uniform period. In the case of selection of MacMillan India Ltd as comparable the Annual results of both the Companies are for a period of 12 months as such both the companies have gone through the normal annual business cycle. MacMillan India ltd. operates in 3 major segments. The operating Margin of MacMillan in the publishing segment for the 12 month period ending 31st Dec 2005 is 5.67%. If the TPO's logic is used for comparing results, then the results of no international Company can be used as a comparable, since all the international Companies close their accounts on dates other than 31st March each year & most international Companies use calendar year as their year end. Based on the above, financial data of MacMillan India Ltd. can be used as a comparable.
On a perusal of the order of the DRP it has to be set aside as finding support from the judgement of Vodafone Essar Ltd. which has very categorically held that when a quasi Judicial Authority like the DRP deals with lis u/s 144C then it is obligatory on its part to ascribe cogent and germane reasons as reasons are the heart and soul of the matter and facilitate the appreciation of the order when the order is called in question either before a superior forum or an Appellate forum. It is an admitted position on record that in support of its comparables various assertions and facts have been made which has been not dealt with by the DRP. Accordingly, the DRP's order along with the impugned order is set aside and the issue is restored back to the file of the DRP with the direction to pass a speaking order in accordance with law - in favour of assessee for statistical purposes.
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2013 (8) TMI 185 - ITAT AHMEDABAD
Software development and upgradation charges - Revenue v/s Capital expenditure - Held that:- As decided in Asahi India Safety Glass [2011 (11) TMI 2 - DELHI HIGH COURT] the treatment of a particular expense or a provision in the books of accounts can never be conclusively determinative of the nature of the expense. An assessee cannot be denied a claim for deduction which is otherwise tenable in law on the ground that the assessee had treated it differently in its books - decided in favour of assessee.
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2013 (8) TMI 184 - ITAT AHMEDABAD
Forward contract cancellation loss - whether be treated as business loss or speculation loss - Held that:- As decided in CIT vs. Friends and Friends Shipping Pvt. Ltd [2013 (5) TMI 458 - GUJARAT HIGH COURT] as relying on Badridas Gauridu (P) Ltd. [2003 (1) TMI 61 - BOMBAY High Court] & Soorajmull Nagarmull case [1980 (9) TMI 69 - CALCUTTA High Court] the expenditure would not be covered under section 43(5) of the Act as speculative transaction.
Assessee was not a dealer in foreign exchange therefore, foreign exchange contracts were booked only as incidental to the assessee's regular course of business. Under section 43(5) “speculative transaction” has been defined to mean a transaction in which a contract for the purchase or sale of commodity is settled otherwise than by the actual delivery or transfer of such commodity. However, as state above, the assessee was not a dealer in foreign exchange.
In order to hedge against losses, the assessee had booked foreign exchange in the forward market with the bank. However, the export contracts entered into by the assessee for export in some cases failed. Thus the assessee was entitled to claim deduction as a business loss. In favour of assessee.
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2013 (8) TMI 183 - ITAT MUMBAI
Trust v/s Association Of Persons (AOPs) - provisions of section 161(1A)invoked enhancing total income chargeable to tax at the maximum margin rate - whether assessee has a prima-facie case for grant of stay? - Held that:- As decided in one of the beneficiaries' case i.e., UIT Mutual Funds [2013 (3) TMI 350 - BOMBAY HIGH COURT] that on these facts and circumstances, the assessee has a prima-facie case for grant of stay of the demand and there are various issues which warrant adjudiction and in such a situation, stay should be granted.
The observations of the Hon'ble Jurisdictional High Court as given in case of UTI Mutual Fund (supra) and also in the similar W.P., [2012 (3) TMI 333 - BOMBAY HIGH COURT] are still applicable and relevant in case of the assessee even after passing of the Commissioner (Appeals)'s order. Therefore, in the interest of justice this is a fit case for grant of stay. The Registry is directed to fix the appeal on out-of-turn basis on 26th June 2013, for hearing of appeals on merit.
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2013 (8) TMI 182 - ITAT HYDERABAD
Deduction towards self- supervision allowed in the hands of the assessee - whether assessee eligible for the same when the assessee has not supervised the construction? - Held that:- There is no merit in the revenue's appeal as the building is constructed by a builder and the assessee obtained 60% share in the said building constructed, in lieu of surrender of the land for development. Therefore, whatever is cost incurred by the builder can only be the basis for arriving at the capital gains. Further, whenever the matter was referred to the DVO, allowed 7.5% towards self-supervision to the builder and arrived at the entire value of the building. There is no dispute with reference to the estimation made by the DVO, which is more or less the same as the cost incurred by the builder, as returned by the assessee. It is not the assessee's building which is being valued, but the building constructed by the developer in which assessee got 60% share. Since the building was constructed on the land given by the assessee, naturally the cost of the building has to be estimated in the hands of the M/s. Lumbini Constructions alone and proportionate share of the assessee therein, will have to be considered as price for surrendering the land. As informed that no action has been taken in the hands of M/s. Lumbini Constructions no merit in the Revenue's appeal.
Capital gains - assessment arise in the year in which the assessee entered into agreement or in which the assessee took possession of the developed property - Held that:- CIT(A) considered the term 'transfer' with respect to capital asset under S.2(47) and also provisions of S.53A of Transfer of Property Act, held that there is only one transaction which took place with reference to the capital gains and that is the sale of 40% of the land in the financial year relevant to assessment year 2007-08 and the sale consideration in respect thereof was worked out at Rs.6.30 crores at Rs.997 per sq. ft. towards 63226 sq. ft. of built up area surrendered in the building constructed. Therefore, the CIT(A) held that there is no transfer which took place in assessment year 2004-05 and capital gains arose only in assessment year 2007-08. This order of the CIT(A) was accepted by the Revenue, and there is no second appeal. Since the order of the CIT(A) became final for assessment year 2007-08, respectfully following the same, CIT(A) deleted the addition made in this year. Since the order of the CIT(A) for assessment year 2007-08, giving rise to the reopening of the assessment for the assessment year 2004-05, has become final, there is no merit in the Revenue's contentions for contesting the impugned order of the CIT(A) for this assessment year, in which simply the findings of the CIT(A) for assessment year 2007-08, which attained finality, are followed.
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2013 (8) TMI 181 - ITAT AGRA
Rectification of mistake - application rejected - whether were there are two opinions, the rectification u/s 154 can be done? - as per assessee in column no.24 (Part B- computation of total income) has been left blank although information of exempted income has been shown in Schedule -F3(ii)/F3(ix) of the return - Held that:- It is a case of omission to claim exemption of income in the return of income, therefore, the case of the assessee does not fall in the definition of "incorrect claim" as is mentioned in Section 143(1)(a) of the Act read with its explanation.
Further the assessee claimed that in Schedule-F-3(ix) though exempt income is mentioned but no claim is made in computation of total income could not be accepted because there is no authenticity of Schedule-F under the law because the computation of total income in Part-B shall be subjected to verification which assessee has verified to be correct income. When the assessee has verified the total taxable income at ₹ 3,41,73,652/- to be correct and complete, there is no question of making any withdrawal from such statement.
Schedule-F is not subject to any verification therefore, as against unverified statement in Schedule-F, the preference to verified statement on oath shall have to be given precedents and preference. Therefore, the claim of the learned counsel for assessee that assessee made a claim of exempt income in Schedule-F cannot be accepted. The assessee has made claim in application under Section 154 of the I.T. Act that the taxable income of the assessee should be revised and the A.O. should hold that the entire income of the assessee to be exempt, however, the A.O. has no such power to make the claim of the assessee acceptable by making a long drawn process of reasoning. Since no claim of deduction of exempt income has been made in the return of income and A.O. accepted the return of income filed by assessee as it is, therefore, there was no mistake apparent on record of the Revenue Department. Thus, the rectification application under Section 154 was not maintainable - appeal of the assessee dismissed.
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2013 (8) TMI 180 - ITAT AHMEDABAD
Re opening of assessment - excise duty on finished goods not cleared as per factory and custom duty on stock lying at port estimated at ₹ 46.5 lacs was not provided for in the books and was also not considered in the valuation of Inventories - Held that:- As decided in Asian Tubes Ltd. case [2013 (6) TMI 115 - ITAT AHMEDABAD] as relying ACIT Vs Narmada Chematur Petrochemicals Ltd. [2010 (8) TMI 263 - Gujarat High Court] Tribunal was justified in excluding the excise duty at the time of valuation of the closing stock of finished goods as no deduction for the liability had been claimed by the assessee. The excise duty payable on the finished goods lying in the closing stock at the end of the relevant accounting period had been paid in the subsequent year before the due date of filing of the return of income and that was how the amount was available considering the fact that the assessment had been framed and the show-cause notice was issued much after the close of the accounting year. The assessment year being 1997-98 the provisions of section 145A inserted by the Finance (No. 2) Act, 1998 with effect from April 1, 1999 could not be invoked - In favour of assessee.
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2013 (8) TMI 179 - ITAT AHMEDABAD
Unexplained cash credit - CIT(A) deleted the addition - Held that:- CIT(A) has correctly appreciated the facts of the case as AO made additions merely on certain surmises and apprehensions. The AO has ignored the entries which were made in the cash book maintained by the assessee. Rather, he has proceeded on the premise that it was not normal for the assessee to redeposit the cash which was earlier withdrawn from the same bank without giving any reason. It is not the case of the Revenue that the cash, which was time and again, withdrawn by the assessee from the bank was otherwise utilized for some other purposes, therefore, the cash was not available with the assessee. Thus it was not justified on the part of the AO to presume that the cash, which was withdrawn earlier was not the same cash, which was re- deposited by the assessee. Against revenue.
Unexplained investment - CIT(A) deleted the addition - Held that:- No cogent or satisfactory reason has been given by the learned CIT(A) while granting relief to the assessee. In fact there was an adverse noting by the AO that the capital introduced in the "capital account" of the assessee in the books of the firm, source of which was not explained by the assessee, therefore, the impugned addition was made. As a part of the deposits belonged to the firm, then it is expected from the assessee to place on record the final outcome of those amounts in the hands of the firm, whether duly disclosed or not. It is also expected from the assessee to explain to the AO the availability of cash of Rs.1,15,000/- stated to be deposited out of the personal cash. Because of these two reasons, restore this ground back to the stage of the AO to be decided de novo - in favour of revenue for statistical purpose.
Profit from sale of Terrace - Assessment on protective basis - CIT(A) deleted the addition - Held that:- CIT(A) has judiciously appreciated all the evidences, through which it was established that the amount in question was in fact belonged to the firm, M/s. Amardeep Associates. It could be possible that while completing the assessment of the assessee, the return of the firm was not made available to the AO, but established factual position was that a return of income was filed, and in the return the assessee has furnished the details of the sale of the terrace and also furnished the connected accounts. Presumably, that was the reason that the AO has also not made a substantive addition in the hands of the assessee, merely to safeguard the interest of the Revenue, it might have been thought, proper to assess the impugned amount only on protective basis. Thus CIT(A) has rightly deleted the addition. Against revenue.
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2013 (8) TMI 178 - ITAT MUMBAI
Jurisdiction power u/s 263 by CIT(A) - receipt method of accounting in respect of the refund of VAT - refund pertaining to AYs. 2005-06 & 2006-07 received during the relevant year was credited in its accounts and duly returned as income for the current year - as per CIT the assessee following mercantile method of accounting, the refund of VAT, which for the current year was omitted to be accounted for by the assessee for the current year thus, there was an escapement of income to that extent - Held that:- As it is impermissible for the assessee to follow cash method of accounting in respect of the sales tax/VAT refund due to it, it admittedly following mercantile method of accounting. As such, in terms of s. 5 r/w s. 145, income becomes chargeable to tax when the assessee acquires the right to receive such income. In fact, apart from the auditor’s report, to which reference has been made by the CIT, the notes to the assessee’s accounts itself state that the sales-tax (VAT) paid on purchases are included in the cost of the purchases, is, though refundable from the Sales Tax Department, not taken as income as the same is subject to acceptance by the Sales Tax Authority.
The assessee has throughout completely failed to exhibit the uncertainty that it claims to have prevailed, and which weighed with it in deferring the recognition of the said income, i.e., in its accounts. The assessee is rather, it is apparent, following the same, i.e., the said procedure, as a matter of course, regularly accounting for the VAT refund only upon receipt, and which, as explained, cannot hold in view of section 145 proscribing (w.e.f. A.Y. 1997-98) a mixed method of accounting in preference to a pure, i.e., either cash or mercantile, method of accounting;
As decided in CIT vs. Punjab Bone Mills [2001 (7) TMI 114 - SUPREME Court] that income by way of cash incentive accrued to the assessee at the time of filing of the claim in its respect (with the concerned authority). Thus as noted that the assessee has not stated any factual reason/s with regard to the uncertainty that is stated to exist with regard to the claim for VAT refund. In fact, where the difference in income followed a consistent though incorrect method of valuation of closing stock, so that its effect neutralized in the succeeding year, the argument was found not valid. The direction by the CIT, therefore, for including the amount of VAT refund accrued to it is to be upheld.
On the second aspect, the fact that the assessee has been before the AO able to exhibit that no difference to its returned income arises when reckoned in terms of section 145A, would not in any manner undermine the jurisdiction or the validity of the revisionary order on that score. The CIT could have examined the said issue himself, and it is quite within his competence to direct the AO to examine the assessee’s case, as stands done by him. In fact, all his order shows is that the issue had not been verified at the time of the assessment proceedings and, accordingly, directs the AO to pass a fresh order upon due verification and in accordance with the law. As such, on the merits of both the objections, it is find the revisionary order as sustainable in law. Against assessee.
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2013 (8) TMI 177 - ITAT BANGALORE
Disallowance of Wages - whether disallowance of 10% of the expenditure under wages is not excessive - survey in the premises of the assessee proposing to assess the assessee company at 4% of net work completed - Held that:- Rule 3(2)(m) of Karnataka Value Added Tax Rules permits allowance of 30% towards labour and like charges in case of Works Contract as permissible deduction even in a case where books of accounts are not maintained or not reliable in arriving the taxable turnover under the said Act.
In the instant case, the total expenditure claimed towards labour/wages is Rs.4,27,42,817/- on a gross contract turnover of Rs.19,00,15,348/-, which is below 30% of the labour and like charges permitted as allowable in absence of books of accounts and supporting documents. The assessee's books of account were audited u/s 44AB. The estimation of 10% for the purposes of disallowance is not made on any materials or comparative cases or there is any evidence that expenditure is not genuine, on the other hand, disallowance is made on adhoc basis. Thus AO is not justified in disallowing on an adhoc basis 10% of the total wages and the CIT(A) in sustaining the same. Therefore reversing the orders of the Income Tax authorities and direct that disallowance of 10% of total wages is uncalled for. In favour of assessee.
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2013 (8) TMI 176 - ITAT MUMBAI
Condonation of delay - Addition on account of unproved sundry creditors - during the pendency of appeal assessee has taken additional ground against the dismissal of appeal by the CIT(A) being barred by limitation - Held that:- It may be observed that in the authorities relied upon by the assessee, it has been held that the delay may be condoned by the courts when the same is non deliberate and when there is no gross negligence, inaction or want of due diligence or bona fide on the part of the assessee or his representative, but the case in hand, as observed is of gross negligence, inaction, want of due diligence and even no bona fides are attributable on the conduct of the assessee and as such the facts of the present case are quite distinguishable and the law cited by the assessee is not applicable in the present case.
Rather the law otherwise is against the assessee as assessee has to suffer for not filing appeal within the period of limitation when it was not prevented from any sufficient cause, as the substantive right accrued in favour of the other party cannot be taken away without any reasonable ground. CIT(A) has rightly dismissed the application for condonation of delay and thereby appeal of the assessee being barred by limitation. The finding of the learned CIT(A) in respect of the matter is hereby upheld.
Since the order of the CIT(A) on limitation point upheld it is not necessary to adjudicate on other issue on merit as the same is rendered academic - appeal of the assessee is hereby dismissed.
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2013 (8) TMI 175 - ITAT MUMBAI
Deduction of Staff costs and Specific expenses incurred by the head office on behalf of the assessee - whether such expenses were not covered by the expenses mentioned u/s 44C? - Held that:- These amounts ought to have been included in the overall Head office expenses deductible u/s 44C as canvassed on behalf of the Revenue is not acceptable as section 44C does not cover exclusive expenses incurred by the Head office for a particular branch. Rather, it embraces the allocation of common head office expenses defined in Explanation (iv) to section 44C amongst various branches. See CIT VS. Emirates Commercial Bank Ltd. (2003 (4) TMI 2 - BOMBAY HIGH COURT ), Addtl. DIT (IT) Vs. Bank of Bahrain & Kuwait (2011 (1) TMI 923 - ITAT, MUMBAI ) and JCIT VS. American Express Bank Ltd. (2012 (8) TMI 371 - ITAT MUMBAI). Since the claim of the assessee in the present case expenses were incurred by the head office exclusively for the Indian branch, could not be controverted on behalf of the Revenue, thus theses expenses have been rightly held to be allowable in full without being covered under head office expenses as provided for in section 44C. Against assessee.
Exemption u/s 10 in respect of tax free bonds - Departmental appeal against allowing exemption - Held that:- As the investment in tax free bonds was made in an earlier year and there is no current fresh investment in any bonds fetching exempt income no interest can be disallowed u/s 14A. In so far as the disallowance of Operating expenses made by the A.O. is concerned, the AO made it on a proportionate basis by taking the figure of operating expenses from Profit and loss account and then apportioning it in the ratio of total interest earned as to interest of 9.5% tax free bonds. This does not appear to be a correct basis for apportionment. At the same time, it is noticed that the CIT(A) has also not given any reasons for deleting such disallowance. As in the case of Credit Lyonnais (2012 (12) TMI 640 - ITAT MUMBAI ), the tribunal has directed to curtail the disallowance for operating expenses at the rate of 2% of the exempt income. Following the precedent, AO directed to restrict the disallowance accordingly.
Addition on account of transfer pricing adjustment - Revenue's appeal is against the deletion of addition - Held that:- Each LIBOR contributor panel bank formulates its own rate for a day which is put into the application which links directly to a rate setting team at Thomson Reuters. LIBOR is not a rate in itself which is charged or paid for the user of inter bank deposits. It is only an average' of the rates submitted by various panel banks, after exclusion of four each of highest and lowest responses, which is daily reported at 11:30 a.m.. It is required to be considered as arithmetical mean of such prices, thereby making available the option of plus minus 5% variation to the assessee. As the present addition of Rs.50,476 made by the AO was the outcome of not allowing plus minus 5% cushion, which is richly due to the assessee CIT(A) was justified in deleting this addition.
Allowance of deduction of head office expenses - Held that:- As there is sufficient material justifying the payment made to head office to the tune of Rs.2.12 crore attributed by the head office to the Indian branch, against which the assessee claimed deduction to the permissible extent u/s 44C of Rs.98.98 lakh, we are of the considered opinion that no interference is warranted in the impugned order on this issue.
Charging of interest u/s 234D - selection of date from which it will be charged - Held that:- Legislature cannot be considered as oblivious of the fine distinction between "the date of grant of refund" and "the date of receipt of refund" as the first refers to the date on which refund is issued, the second refers to the date on which it is actually received by the assessee. The legislature in its wisdom has employed the expression "date of receipt" in several sections, such as section 155(8A) before its omission and certain sections providing exemption under the head Capital gains'. To claim that the date of receipt of refund should be reckoned as a starting point instead of the date of grant of refund would amount to doing violence to the unambiguous language of the provision. As it is the expression date of grant of refund' which has been employed u/s 234D, which in the present case is 29.10.2004, the interest has been rightly charged from this date. This ground is, therefore, not allowed.
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2013 (8) TMI 174 - ITAT MUMBAI
Profit on sale of shares and securities - capital gain/loss v/s business income - Held that:- It is pertinent to mention that it is not disputed that the assessee has purchased the shares out of its own funds. As regards the LTCG claimed by the assessee on account of sale of shares of TCS and Infosys Tec, the perusal of the details of sale and purchase clearly indicates that the holding period of the shares is more than one year and the entire LTCG is on account of these two scripts only. The perusal of volume of trade and frequency also clearly suggests that the impugned activity of the assessee is in the nature of investor and not as a trader.
As regards the STCG it is relevant to note that the assessee has made the investments through Port-folio Management Scheme (PMS). As decided in ITO Vs Radha Birju Patel [2010 (11) TMI 145 - ITAT MUMBAI] the transactions carried out via Portfolio Management Scheme are clearly in the nature of transactions meant for maximization of wealth rather encashing the profits on appreciation in value of shares. Where the assessee is engaged in systematic activities of holding portfolio through a PMS Manager, it cannot, by any stretch of imagination, be said that the main object of holding the portfolio is to make profit by sale of shares during the course of maintaining the portfolio investment over the period. The high number of transactions shown in the statement is misleading because these are computer-split transactions and not independent transactions - relying on the decision of CIT Versus Gopal Purohit [2010 (1) TMI 7 - BOMBAY HIGH COURT] said profits on the sale of shares necessarily qualify for the treatment as investment and consequently a STCG - appeal filed by the Revenue is dismissed.
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2013 (8) TMI 144 - GUJARAT HIGH COURT
Penalty u/s 271(1)(c) - Unexplained expenditure - Rejection of books of accounts - Tribunal deleted penalty - Held that:- merely because account books of assessee were rejected and that profit was estimated on the basis of fair gross profit ratio, no penalty can be imposed - No evidence was brought by the Revenue to suggest that assessee had retained a portion of sales tax with it - Decided against Revenue.
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2013 (8) TMI 143 - GUJARAT HIGH COURT
Disallowance of rent - CIT allowed expenditure u/s 37 - Tribunal upheld order of A.O. and disallowed expenditure - Held that:- as per the agreement dated 13.9.1991, the assessee company was obliged to make payment for godown space which the assessee committed to hire from M/s. Coastal Roadways Ltd irrespective of whether such godowns utilised by the assessee or not - M/s. Coastal Roadways ltd made a false representation in the agreement to the assessee of owning or possessing godowns at four different locations for which it went on charging the assessee company full rent for the entire period of six months without even having acquired such space for a single day during the entire period of six months.
Tribunal viewed the entire expenditure not from the angle of prudence but from the question of genuineness thereof. It is true that such genuineness was examined on the basis of normal conduct of a business man and in such context the Tribunal did make some observations with respect to what in the opinion of the Tribunal a prudent business man would do. However, such observations cannot be seen in isolation losing the background in which same was made - assessee was to execute its export contracts latest by 15.2.1992. Assessee however, rented the godown for more than a full month thereafter till 31.3.1993 - No substantial question of law arises - Decided against assessee.
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