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Income Tax - Case Laws
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- 2020 (7) TMI 195
Assessment of trust - Carry forward of b/f losses - whether there is no provision in the statute to carry forward loss/excess application to subsequent years in case of charitable trusts being assessed under section 11 & 12? - CIT(A) set aside the action of the Assessing Officer and allowed the plea of the assessee for setting-off of carried forward amount of deficit of earlier years in order to compute the assessable income for the year under consideration - HELD THAT:- It was a common ground between the parties that the legal position laid down in the case of Raghuvanshi Charitable Trust [2010 (7) TMI 158 - DELHI HIGH COURT]continues to hold the field. In fact, the learned counsel for the assessee brought to the notice of the Bench that Hon'ble Supreme Court in the case of CIT(E) Vs. Subros Educational Society [2018 (4) TMI 1622....... + More
- 2020 (7) TMI 194
Validity of reopening of assessment u/s 147 - jurisdiction of the AO the ITO Ward 2(2) - notice in the name of wrong person - non approval of the prescribed authority - Notice issued after four years - disallowance of construction cost of building and disallowing the benefit u/s 54 - HELD THAT:- AO in spite of having information in his possession, he has merely gone by the information received from DIT (I&CI) and shows non-application of mind on his part and failure on his part to carry out preliminary enquiry on receipt of such information and thus, the reasons so recorded and the very basis, that the assessee has not filed the return of income and therefore, the income on sale of property has escaped assessment, is vitiated in the instant case. On perusal of the original return filed by the assessee, we find that in the said return,....... + More
- 2020 (7) TMI 193
Non granting deduction towards payment on account of Voluntary Retirement Scheme (VRS) relating to employees of its Calcutta unit - HELD THAT:- Assessee paid the above sum towards VRS of certain employees of Calcutta unit. It is noticed that similar issue came up for consideration before the Tribunal in assessee‟s own case for the immediately succeeding assessment year. Vide order [2010 (3) TMI 1171 - ITAT MUMBAI] the Tribunal has decided it in favour of the assessee. Revenue carried the matter before the Hon’ble Bombay High Court against the said order of the Tribunal. Vide judgment [2013 (6) TMI 227 - BOMBAY HIGH COURT] Hon’ble Bombay High Court dismissed the appeal of the Revenue. A copy of the judgment is available on record. It is seen that section 35DDA has been inserted by the Finance Act, 2001 providing for amort....... + More
- 2020 (7) TMI 192
Exemption u/s 80P(2)(d) - society has interest income on fixed deposits with Co-operative Banks and Karnataka State Co-operative Apex Bank Ltd. - as per AO interest earned on surplus funds are taxable and not eligible for deduction under Section 80P(2)(d) - society has invested/deposited funds which are not required for business being surplus funds and interest on deposits cannot be considered as income from other sources and observed that the interest income is not covered under Section 80P(2)(d) - HELD THAT:- As relying on M/S. THE JAYANAGAR CO-OPERATIVE SOCIETY LTD. [2019 (7) TMI 1219 - ITAT BANGALORE] we restore the disputed issue to the file of the CIT (Appeals) to consider the submissions of the assessee for fresh adjudication in light of the judicial decisions of Hon’ble Supreme Court in the case of Totgars Co-operative Sale ....... + More
- 2020 (7) TMI 191
Business connection/PE in India - Revenue earned from supply of soft ware taxed as ‘royalty’ - assessee has offered to tax only receipts on account of professional services in the tax return filed by it to be taxed @ 15% in terms of Article 12 of the DTAA between India and USA - HELD THAT:- On finding party that there is no change in the factual matrix in Assessment Year under consideration as compared to earlier years, which has also been accepted by the lower authorities, respectfully following the findings of the co-ordinate bench, being upheld by ASPECT SOFTWARE INC. [2015 (5) TMI 726 - ITAT DELHI] we are of the considered view that receipts would constitute business receipts and is to be assessed as such, subject to the assessee having business connection/PE in India. Installation and dependent agent/PE in India - HELD TH....... + More
- 2020 (7) TMI 190
TDS u/s 194A - interest provision credited to the interest payable account - non deduction of TDS - assessee company has provided interest on deposits collected under GFDA scheme floated by assessee and debited the same to the profit and loss account by applying the average rate of interest on the balance amount of deposits bypassing monthly credit entries in the interest payable account without crediting the corresponding interest accrued on each individual deposit to the individual depositors account - default u/section 201(1) and 201(1A) - HELD THAT:- Any sum credited to "suspense account" or "interest payable account" shall be deemed to be credited for the purpose of tax deduction at source. Therefore, if the individual account interest payments exceed ₹ 2500/- merely because they are credited to the differen....... + More
- 2020 (7) TMI 189
Provision for cost on completed contracts on completed contracts - expenses incurred between the stage of commissioning of the plant and final acceptance of the same by its customer - provision had been disallowed by them primarily for the reason that they were not made on a scientific basis and the estimation of the same was not backed by supporting documentary evidence - HELD THAT:- Revenue would be recognized by the assessee on commissioning of a plant, however, in the backdrop of the complex nature of its business certain expenditure would certainly be required to be incurred between the stage of commissioning of the plant and final acceptance of the same by its customer. Assessee had to carry out estimation of such future expenditure and create a provision for cost on the completed projects. A major portion of the provision was rever....... + More
- 2020 (7) TMI 188
Addition u/s 56(2)(vii)(b) - Whether property acquired by the assessee was not a capital asset? - nature of immoveable property which has been purchased by the assessee - difference between the sale consideration as per the sale deeds and the stamp valuation determined by the Stamp Valuation Authority - As contended that the assessee had purchased two pieces of agriculture land during the year and the agriculture land not being a capital asset, the provisions of section 56(2)(vii)(b) are not applicable - HELD THAT:- Only those immovable properties which are held as capital assets and is in nature of land or building or both are only covered u/s 56(2)(vii). We agree with the contention of the ld AR that where the term “property” has been defined to mean a capital asset as so specified and where an immoveable property as so spec....... + More
- 2020 (7) TMI 187
Disallowance u/s 14A r.w.r. 8D - investment in shares - Addition partly sustained by the Ld. CIT(A) - HELD THAT:- Entire investment in shares was made by the assessee out of her own funds and it is observed that this position was accepted by the AO as well as by the CIT(A) thus disallowance made on account of interest u/s 14A as worked out by applying Rule 8D(2)(ii) thus is not sustainable and direct the AO to delete the same. Disallowance on account of other expenses u/s 14A r.w.r. 8D(2)(iii) - assessee has contended that the same is required to be worked out by taking into consideration only the value of investment in shares which actually fetched the exempt dividend income to the assessee and not the value of entire investment as done by the AO - HELD THAT:- Since this contention of the assessee is duly supported by the decision of Hon....... + More
- 2020 (7) TMI 176
Penalty u/s. 271(1)(c) - deduction on expenditures - HELD THAT:- All the facts were disclosed and the claim was made for deduction on expenditures incurred by the assessee. As per record the assessee has made a bona-fide claim. AO as well as CIT(A) have not challenged the genuineness / bona-fides of the expenditures so incurred. The claim of the assessee is also supported by various decisions and documentary evidences placed on the record. Thus, penalty cannot be levied where a bona-fide claim of the assessee was rejected by the tax department. We observe that the instant case of the assessee is akin to the decision of the Hon'ble Supreme Court in the case of Price Waterhouse Coopers (P) Ltd vs. CIT [2012 (9) TMI 775 - SUPREME COURT]. In that case, the crux of the issue for consideration was whether there was a bona fide and inadverte....... + More
- 2020 (7) TMI 175
Reopening of assessment u/s 147 - addition u/s 69A - as per CIT-A even if the above addition is deleted, it is still liable to be taxed u/s 2(22)(e) - HELD THAT:- The assessee had stated that she is the Managing Director of the SPRIIL and that advance to the extent of ₹ 30,89,000/- was received for purchase of plot by the said company from the assessee and, therefore, provisions of section 2(22)(e) are not applicable. CIT(A), thereafter, did not examine the business exigency or the purpose for which the assessee has received the advance from SPRIIL, but, has given a finding that the amount is liable to tax u/s 2(22)(e) of the Act also. Since the evidence filed by the assessee before the Tribunal is additional evidence and it goes goes to the root of the matter, I deem it fit and proper to admit the same and since the additional evid....... + More
- 2020 (7) TMI 174
Disallowance of professional and legal expense, miscellaneous expenditure and travelling expenses - provision of expenses payable - concept of accounting on accrual basis - HELD THAT:- The provision of expenses payable account is naturally shown under the head sundry creditors/ expenses payable/ liabilities etc in the balance sheet at the close of the year. On the first day of next year, this account of Expenses payable is credited to the respective Expenses account of the next year. As and when those bills are received for, which provision was made in the last year, for which provision of Expenses payable reversed by crediting expenses account of next year, assessee debits the amount of invoices to that respective expenditure account. Thus, there is no impact on the profit and loss account of the next year. Reversal of the provision is m....... + More
- 2020 (7) TMI 173
Addition u/s 68 - cash deposit in bank account - HELD THAT:- It is pertinent to note that the assessee has not maintained books of account and it’s an admitted position. The other relevant fact is that the assessee has not mentioned the agricultural income while filing the returns. But during the course of assessment proceedings, the assessee produced the evidence of holding of agriculture land and confirmation from brother regarding receipt on 02.03.2013 as share in the agriculture income of HUF. As regards to explanation the same was submitted as family savings by the assessee. These aspects were not at all taken into account by the Assessing Officer as well as by the CIT(A). The contention of the Assessee that in absence of maintenance of books of accounts, no addition can be made u/s 68 of the Act on account of cash deposit in b....... + More
- 2020 (7) TMI 172
Rejection of books of accounts - estimation of gross profit - AO proceeded to estimate the gross profit of the assessee at 12.78% as against actual gross profit ratio of 11% claimed by the assessee in its books of account - HELD THAT:- Earning of GP/NP ratio at any business house is not a mechanical process to be consistent in all the years as it depends upon numerous factors prevailing during the particular assessment year. When we examine net profit ratio earned by the assessee during the AYs 2007-08 to 2011-12 as depicted in table in preceding para no.5 of this order, it has never been consistent and is at variance. Even during the year under assessment, assessee’s turnover has gone up and has shown GP ratio of 11% as against 8.22% of AY 2010-11. In case, we follow the decision rendered by coordinate Bench of the Tribunal in asse....... + More
- 2020 (7) TMI 171
Exemption u/s 11 - approved/notified institution for the purpose of section 10(23) - charitable within the meaning of section 2(15) - declining the registration u/s 12AA - exemption / approval u/s 80G - Bar Council of Delhi / Body of Advocates - HELD THAT:- Hon’ble Delhi High Court in case of DIT vs. Foundation of Ophthalmic & Optometry Research Education Centre [2012 (8) TMI 777 - DELHI HIGH COURT] has held to the extent that even if there is no commencement of charitable activities, registration u/s 12AA of the Act cannot be denied because the statute does not prohibit or enjoin the Commissioner from registering a trust solely based upon its objects without any activity in case of a newly registered trust. We are of the considered view that the CIT(E) has erred in declining the registration u/s 12AA of the Act on the ground th....... + More
- 2020 (7) TMI 170
Deduction u/s 80IA(4) on miscellaneous receipts - HELD THAT:- Miscellaneous receipts can be sub-grouped into three lots i.e. (i) the receipts covered by the earlier Tribunal’s order; (ii) the receipts, assessee never claimed deduction; and, (iii) the business connected receipts or otherwise. So far as sub-group one is concerned, we find the receipts is covered by the order of the Tribunal in the assessee’s own case for the assessment year 2008-09 [2012 (6) TMI 316 - ITAT, PUNE]. Assessing Officer is directed to follow the said order of the Tribunal scrupulously. When it comes to the balance of receipts, we find in respect of few receipts, the assessee never claimed the deduction. The Assessing Officer is directed to consider the same. Finally, regarding the rest of the receipts, if any, Assessing Officer shall examine each of ....... + More
- 2020 (7) TMI 169
Disallowance u/s 14A - 10% of dividend income earned during the financial year - HELD THAT:- It is not in dispute that Rule 8D of the Rules is not applicable for the year under consideration. However, some reasonable expenditure needs to be allowed for earning exempt income. The ld. CIT(A) has restricted the disallowance to 10% of the dividend income. In our considered opinion, restriction by the ld. CIT(A) seems to be reasonable and, therefore, no interference is called for. Ground No. 1 is accordingly, dismissed. Adjustment of foreign currency expenditure and tele-communication charges for working out the deduction u/s 10A - main contention of the appellant is that the ld. CIT(A) erred in exceeding his jurisdiction u/s 251(1) of the Act in restoring the matter back to the file of the Assessing Officer - HELD THAT:- As decided in own cas....... + More
- 2020 (7) TMI 161
Power to transfer cases u/s 127 - Stay on transfer of case - Period of limitation for passing an assessment - intra-Court appeal - This is a case where the assessment files are being transferred from one city to a neighbouring city hardly 158 kms. away, in the same State. What inconvenience can this cause to V.V. Minerals No.2, especially when they have business and offices in several cities? Held That:- We are aware that Section 127 of the IT Act does not create any geographical classification. Nevertheless, the judgments of Courts should not be read as Euclid's theorem, but, should be understood in the context in which they were rendered, and a blind and pedantic following of precedents is not expected of Constitutional Courts. First submission of Mr. Lakshmi Narayanan, Mr. Senthil Kumar submitted that V.V. Minerals No.2 had challen....... + More
- 2020 (7) TMI 160
No adjudication on the appeal - Counsel appearing for the Income Tax Department submits that there would not be an aversion to the Commissioner of Income Tax Appeal, in case an appropriate direction is issued for the adjudication of the appeal - HELD THAT:- Dispose of this writ petition with a direction to the 1st respondent to take a call on the appeal Ext.P2 or interim application preferred against the assessment order as expeditiously as possible, within a period of one month from the date of receipt of a copy of this judgment, after affording an opportunity of hearing to the petitioner in accordance with law. Till such time, coercive action if any pertaining to Ext.P1 order is ordered to be kept in abeyance. It is made clear that the interim direction shall be operative only till the adjudication of the appeal.
- 2020 (7) TMI 159
Exemption u/s 11 - proof of charitable activity - Assessee was granted registration under section 12AA by order dated 20/06/1988 - non applicability of provisions of sec.2(15) - HELD THAT:- As decided in assessee's own case [2015 (7) TMI 169 - KARNATAKA HIGH COURT] referring to the provisions of the KIDA Act [Karnataka Industrial Areas Development Act, 1966], and principle laid down in the aforesaid decision of the HonbIe Delhi High Court in the case of India Promotion Organization [2015 (1) TMI 928 - DELHI HIGH COURT] in our view, will clearly show that the Assessee does not driven primarily by desire or motive to earn profits but to do charity through advancement of an object of general public utility. The assessee is operating on no profit basis. This is substantiated by the actual income received on operations of the Assessee and ....... + More
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