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Income Tax - Case Laws
Showing 121 to 140 of 654 Records
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2014 (2) TMI 1215
Transfer pricing adjustment - whether in case of availability of internal CUP method, TNMM could not be applied as per CIT(A) - Held that:- We are in agreement with the observations of Ld. CIT(A) that in case of availability of internal CUP method, TNMM could not be applied. What was necessary was that assessee should have been allowed the relief as per difference in the activities in the services rendered by it to related and unrelated parties. The said difference has been described in the tables submitted by the assessee to the TPO vide letter dated 29/11/2004. However, TPO did not discuss those figures in his order but these figures are discussed in the order of Ld. CIT(A). The TPO did not point out any defect in such calculation of the assessee. It has been described in the above submission that assessee had to incur additional cost to the tune of 0.29% in relation to services rendered by it to unrelated parties when the same is compared to the similar services rendered to the related parties. In view of these facts, we are of the opinion that Ld. CIT(A) was right in granting relief to the assessee and we decline to interfere in his findings on this issue.- Decided in favour of assessee
Disallowance under section 14A - CIT(A) deleted the entire addition - Held that:- Respectfully following the order of the Tribunal in assessee’s own case for A.Y 2001-02, we hold that ₹ 10,000/- should be disallowed under section 14A of the Act. Accordingly this ground of the revenue is partly allowed.
Disallowance in respect of Club Membership Fees - CIT(A) deleted the entire addition - Held that:- This issue is covered in favour of the assessee by the decision of Hon’ble Supreme Court in the case of CIT vs. United Glass Manufacturing Co. [2012 (9) TMI 914 - SUPREME COURT] holding that club membership fees for employees incurred by the assessee is business expense under Section 37 - Decided in favour of assessee.
Addition considered as capital in nature in respect of software, support services, repairs and maintenance - CIT(A) deleted the entire addition - Held that:- Similar disallowance was allowed in respect of assessment year 2001-02 to held that such expenditure was revenue expenditure.- Decided in favour of assessee.
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2014 (2) TMI 1214
Clubbing of Income - whether Punjab Timber Trading Company is a bogus proprietary concern? - Held that:- In the case before us, it has not been shown that any material was being purchased form M/s Punjab Plywood Industries or any amount has come from that firm. It is also not brought on record that business was conducted from the same premises. It is only on the statement recorded during the search where Smt. Meena Garg i.e the assessee has said that she was not running any business concern in the name of M/s Punjab Timber Trading Co but later on in respect of question No. 24, during the assessment proceedings she clearly stated that she was confused and nervous. Question No. 24 and its answer reads as under;-
“Q24. In the statement recorded on the date of search you have specified that you are not filing any return of income or have any business concern. Please clarify as to why you had stated so when today you are doing timber business.
Ans. I denied doing any business as I was nervous and thought the questions being asked related to my husband’s business.”
Every person during the search sometimes nervous. Further, we find that Revenue has not shown whether any capital has moved from Punjab Plywood Industries to M/s Punjab Timber Trading Company. In the absence of such nexus, there is no provision to hold that the firm i.e. M/s Punjab Timber Trading Co run by the assessee was ‘benami’ of M/s Punjab Plywood Industries. Therefore, we set aside the order of Ld. CIT(A) and hold that M/s Punjab Timber Trading Company is not a bogus proprietary concern. - Decided in favour of assessee.
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2014 (2) TMI 1213
Unexplained investment taxable u/s. 69 - CIT(A) deleted the addition - Held that:- We find that the FAA has given a categorical finding of fact that the property was not owned by the assessee in the year under consideration, whereas order of the AO is silent on this issue. DR could not controvert the fact narrated by the FAA. From the accounts of the assessee it is clear that amount in question was opening balance for the year under appeal. Therefore, no addition could have been made for the year. We are of the opinion that the order of the FAA does not suffer from any infirmity - Decided in favour of assessee
Addition made u/s. 23 - CIT(A) deleted the addition - Held that:- As assessee did not own three properties as alleged by the AO. As the order of the AO is not based on facts and the FAA has decided the issue considering the factual position, so confirming his order we decide ground no. 2 against the AO.
Deemed dividend u/s. 2(22)(e) - Held that:- Advance received by the assessee for purchase of flat could not be treated deemed dividend. We find that in the matter before us, amount received by the assessee was meant for purchasing a flat. Therefore, respectfully, following the order of the coordinating bench in the case of wife of the assessee, Mrs. Amisha B Koradia we reverse the order of the FAA and decided ground no. 1 in favour of the assessee.
Disallowance of interest - Held that:- There is no dispute about the fact that the assessee has overdrawn from the partnership firm M/s Sagar Construction; therefore, the interest paid to the Sagar Construction for the debit balance in the capital account is an allowable expenditure against the business income of the assessee and particularly against the interest/remuneration received from the partnership firm. - Decided in favour of assessee.
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2014 (2) TMI 1212
Capital gains from transfer of industrial property - Held that:- Section 50C of the Act applies only to capital asset being land or building or both but it cannot apply to lease rights in a land. Since the assessee has transferred the lease right for 99 years in the plot and not ownership in land itself, the provision of Section 50C cannot be invoked.
Therefore, full value of consideration in this case has to be taken at ₹ 42.25 lacs. The decisions relied on by the assessee in its written submissions also support our above finding. - Decided in favour of assessee.
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2014 (2) TMI 1210
Revision u/s 263 - Held that:- In the present case, from para 3 of the impugned order, it is noticed that the notice dt. 9th Jan., 2013 under s. 263 of the Act was issued only on receipt of the proposal under s. 263 of the Act from the ITO, Ward-1(2), Kota and the assessee explained, vide written submission which has been reproduced in para 4 of the impugned order, each and every objection raised by the ITO, Ward-2, Sawai Madhopur.
It is well-settled that the learned CIT while exercising the revisionary powers under s. 263 of the Act may call for and examine the records of any proceedings and thereafter if he considers that any order passed therein is erroneous insofar as it is prejudicial to the interest of the Revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify. Therefore, before taking any action, learned CIT himself shall apply his mind after examining the record of any proceedings and his satisfaction is must. However, in the present case, the satisfaction was of the ITO (Tech.) who proposed action under s. 263 of the Act, but not of the learned CIT. Therefore, issuance of notice under s. 263 of the Act on the basis of the proposal made by the ITO was void ab initio; We, therefore, set aside the same. - Decided in favour of assessee
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2014 (2) TMI 1209
Disallowance of interest u/s 14A read with rule 8D - CIT(A) deleted the disallowance in part - Held that:- CIT(A) observing that the facts are identical to the facts of the Assessment Year 2005-06, by following the order of the Tribunal passed in the case of the assessee itself in Assessment Year 2005-06 has restricted the disallowance u/s 14A to 2% of the dividend income and deleted the balance amount of disallowance. - Decided against revenue
Disallowance being 50% of payment made to related party towards fees and legal charges - CIT(A) deleted the disallowance - Held that:- The genuineness of the payment is not in dispute. The Assessing Officer after observing about the loss incurred by the assessee company has brought no material on record after making investigation to show that the assessee has not received the services for which payments were made by the assessee. Rather, on the other hand, the allowance of deduction at the rate of 50% shows that the Assessing Officer also agreed that services of the staff of the payee company were utilized by the assessee company for its business purpose. No material was brought on record to show that the consideration for services received by the assessee was so excessive as to warrant any disallowance out of the same. It is also observed that the amount of consideration paid was as per Memorandum of Understanding entered into by the assessee with the payee company. In view of the above facts and circumstances, we do not find any good reason to interfere with the order of the Ld. CIT(A) - Decided against revenue
Disallowance u/s 36(1)(va) read with section 2(24)(x) being the employees’ contribution to Provident Fund not deposited within the stipulated time - Held that:- Hon’ble Gujarat High Court in the case of CIT Vs. Gujarat State Road Transport Corporation (2014 (1) TMI 502 - GUJARAT HIGH COURT ) held that with respect to the sum received by the assessee firm from any of his employees to which provisions of sub-clause (x) of clause (24) of section (2) applies, the assessee shall be entitled to deduction in computing the income referred to in section 28 with respect to such sum credited by the assessee to the employees’ account in the relevant fund or funds on or before the “due date” mentioned in explanation to section 36(1)(va).the issue was covered in favour of the Revenue by the above cited decision of the Hon’ble Gujarat High Court. Therefore, we set aside the order of the Ld. CIT(A) and restore back the order of the Assessing Officer. - Decided in favour of revenue
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2014 (2) TMI 1208
Deemed dividend u/s 2(22) - Held that:- Thus issue is squarely covered in favour of assessee as in the case of Mr. Anil Bansal [2013 (8) TMI 514 - ITAT DELHI] under similar facts and circumstances, the Hon'ble Tribunal has considered similar transactions as Current Account transactions and has not as deemed dividend.
The facts in the present case are similar as in the present case also. Credit balances remained in the period 2.8.2005 to 27.8.2005. For the rest of the periods the account remained in debit and that too with much larger amounts than the amounts where account was in credit. Therefore respectfully following the order of the Tribunal we allow this ground of appeal. - Decided in favour of assessee
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2014 (2) TMI 1207
Revision u/s 263 - FCCB funds diverted to the M/s Reliance Info Investment without charging interest - Commissioner held that the interest free fund would be deemed to be transfer of an asset in view of the provisions of sections 60 to 63 of the Act - Held that:- Tribunal has considered all the contention of the department regarding applicability of section 60 to 63 of the Act to the interest income and then gave a finding that the issue was debatable and provisions of section 263 could not be invoked when the AO has already conducted an enquiry and taken one of the possible view. There is no quarrel on the point that for the year under consideration, the AO conducted an enquiry on the issue therefore we do not find any reason for distinguishing either the fact or the finding of the Tribunal on the issue for the A.Y. 2007-08.- Decided in favour of assessee
Mark to market loss/gain - AO disallowed the net loss after adjusting the gain on account of foreign currency derivatives for hedging - Held that:- It is clear that the Tribunal while decided the issue for the A.Y. 2007-08 has also considered the CBDT instruction no. 3/2010 which has been heavily relied upon by the Commissioner as well as the ld. DR. We further note that the AO has examined this issue and disallowed the net loss after adjusting the gain on account of foreign currency derivatives for hedging and therefore it is manifest from the record that the issue has been examined by the Assessing Officer and taken a possible view. The Tribunal on the identical facts has decided this issue by holding that the view of the Commissioner cannot be countenanced with. Accordingly, we do not find any reason to take a different view from that of already taken by the Tribunal for the A.Y. 2007-08 - Decided in favour of assessee
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2014 (2) TMI 1206
TDS u/s 194C - Non deduction of TDS - payment for sub-contract works - Held that:- Since the payees / recipients i.e. G. Ramesh and Ramesh Kotian have already shown these amounts in their respective books of account audited under section 44AB of the Act; declared and offered the same to tax in their returns of income for the relevant period, thus by virtue of the amendment to the provisions of section 40(a)(ia) of the Act by insertion of the second proviso to section 40(a)(ia) of the Act w.e.f. ;1.4.2013, the provisions of section 40(a)(ia) of the Act would not be attracted to the payments made by the assessee i.e. Sri G.Shankar of ₹ 2,69,21,500 and to Sri Ramesh Kotian of ₹ 1,54,75,000. This view of ours, is in accordance with the decision of the co-ordinate bench of this Tribunal in the case of Ananda Markala (2014 (12) TMI 613 - ITAT BANGALORE) wherein it was held that the insertion of the second proviso to section 40(a)(ia) of the Act should be read retrospectively from 1.4.2005 and not prospectively from 1.4.2013. In this view of the matter, the provisions of section 40(a)(ia) of the Act is not attracted to the payments made by the assessee to Sri G.Shankar of ₹ 2,69,21,500 and to Sri Ramesh Kotian of ₹ 1,54,75,000 since the object of introduction of section 40(a)(ia) of the Act is achieved for the reason that the payees / recipients have declared and offered to tax the payments received from the assessee in their respective hands.
As regards the issue of non-furnishing of Form No.26A, we are of the view that since the second proviso to section 40(a)(ia) of the Act is held to be retrospective in operation w.e.f. 1.4.2005, similarly, Form 26A was to be filed for an assessee not to be held as an assessee's in default as per proviso to section 201 of the Act. In all fairness, the assessee in the period under consideration i.e. Assessment Year 205-06 could not have contemplated that such a compliance was to be made and therefore in the interest of equity and justice we set aside the order of the learned CIT (Appeals) and remit the matter to the file of the Assessing Officer directing the Assessing Officer to consider the allowance or otherwise of the expenditure claimed amounting to ₹ 4,23,96,500; being the payments made by the assessee to Sri G.Shankar of ₹ 2,69,21,500 and to Sri Ramesh Kotian of ₹ 1,54,75,000 after affording the assessee adequate opportunity to file Form No.26A and only after due verification of whether the aforesaid two payees / recipients have reflected the same receipts in their books of account and have offered the same to tax. In these circumstances, we hereby set aside the order of the learned CIT (Appeals) to the file of the Assessing Officer only for the limited purpose as directed above. - Decided in favour of assessee for statistical purposes.
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2014 (2) TMI 1205
Addition u/s 68 - receipt of accommodation entry - Held that:- ITAT and CIT(A) concluded that AO failed to show that the transaction for purchase and sale of shares was bogus and the appellant paid cash to the broker for availing accommodation entry in the form of sale proceeds of shares. Suspicion, strange coincidences and grave doubts, how so ever strong it may be, cannot take place of legal proof. Therefore, the AO erred in treating the entire transaction of long term capital gains as a sham transaction and bring it to tax as unexplained cash credit u/s 68 of the Income tax Act, 1961.
The findings as concurrently recorded by the CIT(A) and the ITAT, that addition under Section 68 of the Act was not sustainable, remain essentially in the realm of appreciation of evidence. The Appellate Authorities have returned the finding of fact in favour of the assessee after due appreciation of evidence on record, on relevant considerations, and on sound reasonings. The finding neither appears suffering from any perversity nor is of such nature that cannot be reached at all. - Decided in favour of assessee.
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2014 (2) TMI 1199
Rejection of books of accounts on the basis of findings during the assessment proceedings and relying on the electricity consumption - Regular assessment v/s assessment u/s. 153A - Held that:- The finding is that nothing incriminating was found in the course of search relating to these assessment years. The additions, therefore, were not corresponding to the seized material during the course of search. The relevant income tax returns, in normal course, are disclosing the particulars. They were already on record. The returns have been accepted. In such circumstances, the Tribunal, as also, the Commissioner of Income Tax (Appeals) have in their orders, held that there are several factors which have to be taken into consideration and while arriving at a conclusion with regard to the alleged production calculated on the basis of electricity consumption. Rejection of books for these years only on the ground that there has been divergence in the consumption of electricity, therefore, was held not justified.
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2014 (2) TMI 1197
Eligibility of deduction under Section 10(1) - whether activity of development and marketing seeds is purely a commercial activity and does not fall under Agricultural activity - ITAT allowed claim - Held that:- We are unable to accept the far-fetched idea that artificial production of seeds can be sold or used for commercial purpose.
May be a few hybrid seeds could be produced by artificial method in a laboratory. The seeds so produced with non-agricultural activity again will have to be sown in the agriculture field to have a larger quantity for sale in the market. Accordingly, we hold that the seed is a product of agricultural activity. Therefore, the sale of the same cannot be brought under the provisions of the Income Tax Act. We, therefore, upheld the decision of the learned Tribunal in this matter. - Decided in favour of assesse.
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2014 (2) TMI 1186
Entitlement to benefit of deduction u/s 80IA - CIT(A) allowed benefit on power division on the premise that the same constitutes an independent unit de hors its existing sugar plant - Held that:- The issue in dispute is squarely covered by the decision of the ITAT in assessee’s own case for preceding AYs 2007-08 to 2009-10 [2012 (2) TMI 483 - ITAT HYDERABAD] wherein observed that the Tribunal while considering the issue of disallowance of assessee’s claim of deduction u/s 80IA by AO on the allegation that the power generation unit is a continuation of the old business and has been set up by splitting up of business in existence, negatived the finding of AO and allowed assessee’s claim of deduction observing that even if the undertaking is established by transfer of building, plant or machinery, it is not formed as a result of such transfer, in our considered view; the assessee could not be denied the benefit. We also find that a new undertaking for manufacture of power with steam as by-product was formed out of fresh funds, in separately identifiable premises, under a separate license with manifold increase in capacity with new machinery and buildings without transfer of any portion of the old buildings or machinery which pre-existed. To constitute reconstruction, there must be transfer of assets of the existing business to the new industrial undertaking. In our opinion, generation of power unit is separate and distinct undertaking for which separate approval was obtained and recognised by the IREDA and it cannot be said that splitting of existing business structure. Therefore, in our considered opinion, the lower authorities are not correct in denying the deduction under section 80IA of the Act. - Decided in favour of assessee.
Deduction u/s 80IA claimed by assessee on cost of steam sold to sugar unit - CIT(A) delted addition - Held that:- The issue in dispute is squarely covered by the decision of the ITAT in assessee’s own case for preceding AYs 2007-08 to 2009-10 [2012 (2) TMI 483 - ITAT HYDERABAD] lower authorities did not dispute that the profit credited to Profit and Loss Account in respect of steam is only ₹ 11.43 Lakhs. Thus, even assuming that steam is not power as held by the Assessing Officer, at best the department could have treated only ₹ 11.43 lakhs as ineligible profits for the purpose of claiming the deduction under section 80IA of the Act. To hold otherwise, would be a gross error as the expenditure debited to the profit and loss account of the power unit is still being retained by the department while making the computation. The CIT [A] also agrees that steam has no value as no price was charged for the same in the earlier year but ignores the fact that in the absence of gross total income in the earlier year no exemption could have been claimed. Therefore, we direct that only ₹ 11.43 lakhs is to be treated as ineligible profits for the purpose of deduction under section 80IA of the Act and for the balance sale amount of steam to sugar division, the assessee company is eligible for deduction under section 80IA of the Act. However, the calculation of value of the steam produced by the power plant has to be determined after considering the cost and production record of respective unit and thereafter quantification of deduction has to be done in accordance with the order of the Tribunal cited supra. This issue is remitted back to the file of the Assessing Officer with a direction to the assessee to furnish necessary records for the purpose of determining the value of the steam produced and transferred to sugar unit. - Decided in favour of revenue for statistical purposes.
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2014 (2) TMI 1184
Eligibility of deduction u/s. 80P(2)(a)(i) - CIT(A) allowed claim - the assessee is a cooperative bank - whether profits derived by it from the business of providing credit facilities to its members? - Held that:- As relying on case of CIT Vs. Jafari Momin Vikas Co-op Credit Society Ltd. [2014 (2) TMI 28 - GUJARAT HIGH COURT] subsection( 4) of section 80P will not apply to an assessee which is not a co-operative bank. In the case clarified by CBDT, Delhi Coop Urban Thrift & Credit Society Ltd. was under consideration. Circular clarified that the said entity not being a cooperative bank, section 80P(4) of the Act would not apply to it. In view of such clarification, we cannot entertain the Revenue’s contention that section 80P(4) would exclude not only the cooperative banks other than those fulfilling the description contained therein but also credit societies, which are not cooperative banks. In the present case, respondent assessee is admittedly not a credit co-operative bank but a credit cooperative society. Exclusion clause of sub-section(4) of section 80P, therefore, would not apply. - Decided against revenue.
Entitlement to interest on deposits with banks u/s. 80P(2)(a)(i) denied - Held that:- In the present case, as stated above, assessee-society regularly invests funds not immediately required for business purposes. Interest on such investments, therefore, cannot fall within the meaning of the expression "profits and gains of business". Such interest income cannot be said also to be attributable to the activities of the society, namely, carrying on the business of providing credit facilities to its members or marketing of the agricultural produce of its members. When the assessee-society provides credit facilities to its members, it earns interest income. As stated above, in this case, interest held as ineligible for deduction under s. 80P(2)(a)(i) is not in respect of interest received from members. In this case, we are only concerned with interest which accrues on funds not required immediately by the assessee(s) for its business purposes and which have been only invested in specified securities as "investment". Further, as stated above, assessee(s) markets the agricultural produce of its members. It retains the sale proceeds in many cases. It is this "retained amount" which was payable to its members, from whom produce was bought, which was invested in short-term deposits/securities. Such an amount, which was retained by the assessee-society, was a liability and it was shown in the balance sheet on the liability side. Therefore, to that extent, such interest income cannot be said to be attributable either to the activity mentioned in s. 80P(2)(a)(i) of the Act or in s. 80P(2)(a)(iii) of the Act. Therefore, looking to the facts and circumstances of this case, we are of the view that the AO was right in taxing the interest income, indicated above, under s. 56 of the Act. - Decided against assessee.
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2014 (2) TMI 1183
Diversion of JV receipts - whether the income of the Joint Venture (JV) is to be taxed in the hands of JV and not in the hands of its members - Held that:- The consistent and concurring opinions of CIT (A) and ITAT were that the JV was formed only to secure the contract, in terms of which the scope of each JV partner’s task was distinctly outlined. Further, the entire work was split between the two JV partners; they completed the task, through sub-contracts and were responsible for the satisfaction of the NHAI. Therefore, ITAT did not fall into error of law, in holding that the JV was not an association of persons and liable to be taxed on that basis. Decided in favour of the assessee.
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2014 (2) TMI 1176
Eligibility of deduction u/s 80IB(5)(i)- whether the assessee is not involved in manufacturing or producing activity but is only carrying out the activity of assembling at its Silvassa Unit? - Held that:- We are not inclined to interfere with the finding of CIT(A), who has allowed the claim of assessee u/s.80IB(5)(i) by holding that assembling of various components amounts to manufacturing. See case of Jackson Engineers [2009 (12) TMI 649 - Delhi High Court] wherein held that the activity of assembling gensets from various components amounts to manufacture or production for the purpose of deduction under s. 80-IA - Decided in favour of assesse.
Artificial inflation of profit of Silvassa Unit in order to claim higher deduction - Held that:- there is no concrete evidence that the assessee has shifted the profit of Chakan Unit to Silvassa Unit at such a magniture and hence, the addition sustained by CIT(A) could not be sustained, as such, at the same time, the objection of revenue authorities on this point cannot be rejected as in toto. Taking into all the facts and circumstances in to consideration, the deduction of claim u/s.80IB(5)(i) is restricted to 15% as against done by the CIT(A). As a result, this issue is partly allowed in favour of assesse.
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2014 (2) TMI 1173
Penalty u/s 271E - cash payment of ₹ 33,26,960 to the firms M/s. Chetan Grass Trading Company and M/s. ABC Grass Company were not reflected in the capital account of the assessee and as per the audit report submitted by the assessee cash payments were treated as repayment of loans - CIT(A) deleted penalty levy - Held that:- In the present case, it is an admitted fact that the assessee is a partner in the firms M/s. Chetan Grass Trading Company and M/s. ABC Grass Company from whom he received a sum of ₹ 2,00,000 and ₹ 31,26,960 respectively. These transactions were treated by the Assessing Officer as repayment of loan in cash. Thus there is no independent legal entity of the firm apart from the rights and liability of the partners constituting it and if any amount is given or taken from the firm by the partners that cannot be treated as giving or taking of a loan. In the instant case, the assessee being a partner gave the money to the partnership-firm when it was in need of business exigencies, later on the amount was received it back if the said amount had been routed through the capital account, there could have been no disallowance by the Department because a partner can deposit cash in his capital account and also he has a right to receive it in cash. Therefore, the penalty levied by AO under section 271E was not justified - Decided in favour of assesse.
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2014 (2) TMI 1172
Registration granted under section 12A denied - DIT coming to the conclusion that the appellant is directly hit by the proviso to section 2(15)which was inserted with effect from the assessment year 2009-10 - Held that:- The charitable purposes include the objects of artistic or historic interest. In the instant case also the assessee-trust was founded to acquire art museum and art theatre for the promotion of art and culture amongst the members of the general public. Therefore, the activity of the assessee are charitable in nature is as per the provisions contained in section 2(15) of the Act. In the instant case, as we have already mentioned, that the assessee-trust was established to make it available the art museum and art theatre for the members of the general public, irrespective of their caste, community or religion, therefore, the activity of the assessee-trust is charitable in nature as per the provisions of section 2(15) of the Act.
Whereas, the proviso inserted by the Finance (No.2) Act, 2009 by the Central Board of Direct Taxes Circular No. 1 of 2011 dated April 6, 2011, shall not be applicable in the instant case for the year under consideration. We, therefore, considering the totality of the facts as discussed hereinabove, are of the view that the learned Director of Income-tax (Exemption) was not justified in cancelling registration already granted to the assessee-trust under section 12A of the Act by invoking the provisions of section 12AA(3) of the Act. In that view of the matter, the impugned order is set aside and the registration under section 12A already granted to the assessee is restored. - Decided in favour of assesse.
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2014 (2) TMI 1169
Reopening of assessment - as the provision towards an unascertained liability is not allowable under the Act, it should have been disallowed and taxed - Held that:- In the present case, the "reasons to believe" nowhere highlight what, if at all, was the material which the Assessing Officer came up or became aware of subsequent to the original assessment. In other words, what triggered the Assessing Officer's curiosity to impel him to re- examine the files and documents pertaining to a completed assessment is unknown. Nor does the materials placed in the assessment show that the petitioner had unjustifiably suppressed valid or relevant information which was otherwise available.
The advertence to the disallowance of a provision for an unascertained liability points to the Assessing Officer indulging in what amounts to nothing but a masked review. What appears to have excited the Assessing Officer's mind was that the original assessment order was not framed properly as it overlooked certain materials which led to loss of revenue. The Assessing Officer in the first instance did not perform his job properly for which the assessee cannot be faulted with. In Calcutta Discount Co. Ltd. v. ITO [1960 (11) TMI 8 - SUPREME Court] pointedly observed that the assessee is required to fairly disclose what is expected of him "the primary facts" while submitting the returns. It is up to the Assessing Officer to draw the necessary inferences. In the present case, the Assessing Officer's omission appears to have been the sole basis for issuing the reassessment notice and, consequently, proceeding to make the impugned demand. - Decided in favour of assessee.
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2014 (2) TMI 1168
Validity of assessment u/s 158BD r.w.s. 158BC(c) - no satisfaction was recorded by the Assessing Officer having jurisdiction over the non-searched person - Held that:- For taking recourse to the block assessment under section 158BC in relation to the person not searched, whenever search has been conducted under section 132 or the documents have been requisitioned under section 132A, the Assessing Officer of the searched person needs to record his satisfaction that undisclosed income belongs to the person other than the person with respect to whom search was carried out under section 132 of the Act. He is also required to hand over the books of account or other documents or assets seized to the Assessing Officer having jurisdiction over such non-searched person and, thereafter, the Assessing Officer who has jurisdiction would proceed under section 158BC, against the person who has not been searched.
In the instant case the Tribunal committed no error in upholding the version of the assessee-respondent. Recording of satisfaction under section 158BD being absent, without assigning separate reasons in this case, order impugned is upheld. - Decided in favour of assessee.
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