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Income Tax - Case Laws
Showing 1 to 20 of 1911 Records
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2006 (12) TMI 574 - SC ORDER
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... ... ..... n the assessee’s case for the earlier assessment year in Tax Case No. 1428/2005 and a decision of the Calcutta High Court reported in 179 ITR pg. 8. Learned Additional Solicitor General very fairly concedes that the against aforesaid decisions, Department has not filed any appeal. The special leave petition is dismissed.
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2006 (12) TMI 562 - MADRAS HIGH COURT
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... ... ..... n the balance sheet. The claim has to be determined only by the provisions of the Act and not by the accounting practice of the assessee. In the instant case, the Appellate Tribunal, finding that replacement of machinery is revenue expenditure, held that the claim of the assessee cannot be disallowed. 6. This Court, in COMMISSIONER OF INCOME-TAX v. JANAKIRAM MILLS LTD., referred supra, held that all plant and machinery put together amounts to a complete spinning mill which is capable of manufacturing yarn and hence, each replaced machine could not be considered as an independent one and no intermediate marketable product was produced. 7. The above view was also taken by this Court in Commissioner of Income Tax v. Loyal Textile Mills Ltd., 2006 284 ITR 658. In view of the ratio laid down by this Court in the decisions cited supra, the substantial questions of law are answered in favour of the assessee and against the Revenue and accordingly, the appeal is dismissed. No costs.
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2006 (12) TMI 557 - GUJARAT HIGH COURT
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... ... ..... ra) has been distinguished and the case of Ormerods (India) Pvt. Ltd has been applied, which has been approved by the Hon'ble Supreme Court, in view of these facts, we hold that the assessee's case is covered in favour of the assessee by the ITAT judgment in the case of Ataku Holdings Pvt. Ltd., a group concern, respectfully following the same, we uphold the order of the CIT(A) allowing interest as business expenditure. Since we allow the claim of assessee, there is no necessity to go into alternate plea of the assessee. 7. In the result, Revenue's appeal is dismissed.” The CIT (Appeal) as well as the Tribunal both have found that borrowings were for the purpose of business. Whether the borrowings were for the purpose of business or not, is basically based on the finding of fact. Considering the concurrent finding of fact, we see no perversity in the order. No case is made out for admission of this appeal. The appeal stands dismissed at the admission stage.
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2006 (12) TMI 556 - PUNJAB & HARYANA HIGH COURT
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... ... ..... ant. Once the assessment orders for both the years were set-aside, that included the order passed by the revenue under Section 271-D of the Act, would not survive. Therefore, to say that the order, which has been passed by the revenue were independent proceeding under Section 271-D, is not correct. The order which has been passed by the department under Section 271-D of the Act would practically submerge, in view of the order passed by the CIT (Appeals), vide which the original assessment order was set-aside and the case was remanded for denovo assessment. Learned counsel for the respondent contended that after the direction of the CIT(Appeals), fresh assessment orders in relation to the two assessment years have also been passed. No reference in those orders have been made to the order passed by the revenue under Section 271-D of the Act. We are of the view that no substantial questions of law arise for our consideration in this appeal. Thus, the appeal is hereby dismissed.
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2006 (12) TMI 554 - DELHI HIGH COURT
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... ... ..... te. For the Respondent None ORDER No substantial question of law arises. Dismissed.
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2006 (12) TMI 550 - DELHI HIGH COURT
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... ... ..... nt entered into between the assessee and the Sumitomo Corporation. We have perused the various clauses of the agreement and the correspondence relied upon by the appellant. We are in agreement with the view taken by the ITAT that the arrangement was in the nature of an agency which would not attract the provisions of Section 80-O of the Income Tax Act. Dismissed.
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2006 (12) TMI 549 - GUJARAT HIGH COURT
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... ... ..... se of the assessee as we have already pointed out that the subsidy was given by the State Government to set up the industry in the backward area, therefore, we are of the view that the judgment of Hon'ble Supreme Court in the case of Sahney Steel and Press Works Ltd. (supra) will help the assessee and will not help the Revenue. We accordingly, in view of the scheme and the decision of Sahney Steel and Press Works Ltd. (supra), hold that the subsidy received by the assessee is capital in nature and accordingly set aside the order of the authorities below and direct the Assessing Officer to delete the addition of ₹ 10,00,000/. This appeal on this issue is allowed. ” In spite of time granted, learned counsel for the appellant has failed to show that the subsidy was given to run the business. When the subsidy was not given to run the business, we see no infirmity in the order of the Tribunal. No substantial question of law does arise. The appeal stands dismissed.
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2006 (12) TMI 537 - ITAT DELHI
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... ... ..... t, rest with the Settlement Commission in view of sub-section (2) of section 245F of the Act. 8. We are, therefore, of the considered view that during the pendency of the proceedings before the Settlement Commission and in the absence of express direction of the Settlement Commission, the authorities below have erred in invoking the provisions of section 147/148 of the Act against the assessee for the assessment year 1995-96. The remedy, if any, available to the Department was to mate appropriate submission before the Settlement Commission in accordance with the laid down procedure. 9. We, therefore, set aside the impugned order and allow the assessee’s appeal on this ground. 10. In view of the fact that we are allowing the assessee’s appeal on the ground of jurisdiction, we do not consider it necessary to deliberate on other issue raised in this appeal. 11. In the result, the appeal filed by the assessee is allowed. 12. Pronounced in the open Court on 8-12-2006.
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2006 (12) TMI 534 - DELHI HIGH COURT
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... ... ..... r under Section 142 (2A) of the Income Tax Act, 1961, learned counsel for the parties are agreed that the matter is squarely covered by the decision of the Supreme Court referred to above and that a notice would have to be issued to the Petitioner in accordance with the law laid down by the Supreme Court. Since this issue is no longer res integra, we need not dilate any further on this. As far as the other issues that have been canvassed before us are concerned, we reserve orders.
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2006 (12) TMI 531 - DELHI HIGH COURT
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... ... ..... We accordingly hold that, in so far as the FE receipts of the assessee (for the purpose of the numerator of the multiplier) excludes the FE received on behalf of other hotels and in respect of which the assessee has issued DCs under Form 10 CCAE, the ?total receipts? in the denominator of the multiplier must also exclude the FE received on behalf of other hotels. 19. Returning to the case on hand, the CIT (A) has rightly computed the profits derived from services rendered by the assessee to foreign tourists by not permitting the deduction of the Nikko hotel receipts from the total receipts while at the same time permitting the FE receipts on behalf of other hotels (covered by certificates in Form 10 CCAE) to be so deducted. The concurrent views of both the CIT (A) and the ITAT in this regard require to be upheld. 20. Consequently questions (a) and (b) are answered in the affirmative and against the Revenue. These appeals are accordingly dismissed with no orders as to costs.
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2006 (12) TMI 528 - ITAT MUMBAI
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... ... ..... se of Vaneet Jain vs. CIT (2006) 205 CIT (PandH) 92. 3. We have carefully considered the rival submissions. We find that while there is divergence of judicial opinion, between the judgments of Hon'ble Delhi High Court and Punjab and Haryana High Court as mentioned above, Special Bench of ITAT supports the case of the assessee. Under these circumstances, respectfully following the decision of ITAT Special Bench (supra) and the judgment of Hon'ble Delhi High Court (supra) we allow assessee's grounds of appeal No.1 to 5 and direct the assessing officer to allow the loss on sale of units of mutual funds incurred by the assessee to be set off against the other income of the assessee. 4. Ground of appeal No.6 is directed against the disallowance of interest and other expenditure to the extent of ₹ 1 lakh. During the course of hearing before us this ground of appeal was not pressed. Accordingly the same is rejected. 5. In the result, this appeal is partly allowed.
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2006 (12) TMI 527 - ITAT NEW DELHI
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... ... ..... x liability, it was possible the share profit had been taken as an accommodation entry to build up capital. In our view, the order of the A.O. was erroneous and prejudicial to the interest of revenue for lack of inquiry in relation to share capital, share profit and production account which were required to be made on the facts of the case. The order of CIT(A) is upheld to that extent. As regards the electricity expenses and the excise duty, no error has been pointed out before us. The assessee had clearly stated that the excise duty was included in the closing stock and there is no material before us to controvert the said claim. Complete details of electricity expenses had also been filed and no material has been brought to our notice to show that any contingent liability had been claimed. Action u/s 263 on these grounds is therefore not upheld. 4. In the result, the appeal of the assessee is partly allowed. 5. This decision was pronounced in the open court in 29 Dec. 2006
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2006 (12) TMI 526 - ITAT DELHI
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... ... ..... epting such income will be erroneous and prejudicial to the interest of revenue. Therefore, even though the assessee had declared income from commission, the matter on the facts of the case, required inquiry to find out whether it was a genuine case of commission or it was an attempt to help others to reduce their tax liability. But no such inquiry was made. The A.O. had also not examined as to why the assessee was selling goods below cost price. He only called for details of various expenses and accepted the same without conducting inquiries which in our view, were called for on the facts of the case to see whether the purchases and other expenses were really genuine. We therefore, agree with CIT that the assessment order was erroneous and prejudicial to the interest of revenue. The order of CIT is, accordingly upheld. o p /o p 4. In the result, the appeal of the assessee is dismissed. o p /o p 5. This decision was pronounced in the open court on 29 December, 2006. o p /o p
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2006 (12) TMI 523 - PUNJAB AND HARYANA HIGH COURT
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... ... ..... not approach it expeditiously for relief and who stand by and allow things to happen and then approach the Court to put forward stale claims and try to unsettle settled matters. The petitioner's petition should, therefore, have been dismissed in limine. Entertaining such petitions is a waste of time of the court. It clogs the work of the Court and impedes the work of the Court in considering legitimate grievances as also its normal work. We consider that the High Court was right in dismissing the appellant's petition as well as the appeal.” Similar view was taken by the Hon'ble Supreme Court in State of Maharashtra Vs. Digambar AIR 1995 Supreme Court 1991. In this petition, disputed questions of facts have been raised by the petitioner seven years after the date of final order of assessment. For the above reasons, we do not find any reason to adjudicate upon the disputed questions of facts in a belated petition, accordingly,this writ petition is dismissed.
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2006 (12) TMI 508 - ITAT BANGALORE
Tax liability arising out of the investments in Zero Coupon Bonds - scheme of deemed income - Book profit u/s 115JA - inadequacy of total income computed - difference between book value and acquisition price - HELD THAT:- The CBDT by its circular opined that interest on zero coupon bonds is not an interest in strict sense as it encompasses over certain period of time. The circular issued by CBDT are binding upon the authorities working under it. Similar view has been adopted by Hon’ble Supreme Court in the case of UCO Bank v. CIT [1999 (5) TMI 3 - SUPREME COURT], in the case of CCE v. Dhiren Chemical Industries [2001 (12) TMI 3 - SUPREME COURT] and in the case of Commissioner of Customs v. Indian Oil Corpn. Ltd.[2004 (2) TMI 66 - SUPREME COURT]. The entry by way of crediting the profit and loss account in respect of interest on zero coupon bonds is of notional credit and not in respect of interest accruing during the year. The bonds are maturing over long period of time and the entire income by way of difference between acquisition price and redemption price do not accrue to the assessee during the financial year.
Thus, though the assessee has credited the income, the same is not strictly in accordance with Part II and Part III of Schedule VI to the Companies Act, 1956. Hon’ble Supreme Court in the case of Apollo Tyres Ltd. v. CIT[2002 (5) TMI 5 - SUPREME COURT] held that the Assessing Officer has no power to rework the book profit if the profits are computed in accordance with Part II and Part III of Schedule VI to the Companies Act, 1956. In the case of CIT v. Veekaylal Investment Co. (P.) Ltd. [2001 (2) TMI 117 - BOMBAY HIGH COURT] held that if the profit is not computed in accordance with Part II and Part III of Schedule VI to the Companies Act, 1956, the Assessing Officer has power to recompute such book profits. Thus, it can be held that if the Assessing Officer can amend the book profit if it is not in accordance with Part II and Part III of Schedule VI to the Companies Act, 1956, likewise, the assessee also can recompute the book profit for the purpose of section 115JA.
Since in the present case, the entire income by way of interest on zero coupon bond has not accrued during the year, the same cannot be considered as "to disclose the result of working of the company during the financial year" as provided under Part II and Part III of Schedule VI to the Companies Act, 1956. We accordingly hold that the notional income by way of interest on zero coupon bonds has to be excluded while computing book profits as per section115JA of the Act.
In the result, the appeal is partly allowed.
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2006 (12) TMI 507 - ITAT BANGALORE
TDS u/s 195 - consideration received on sale of computer software programme - Commercial income under Article 7 Or Royalty under Article 12 of the Treaty - No Permanent establishment in India - DTAA between India and US - HELD THAT:- According to learned counsel for assessee, Reference was drawn to the commentary on Article 12 (royalties) of model treaties issued by OECD with regard to payments for computer programmes. By reading that, It can therefore be noted that under the OECD model commentary also, payments for acquiring a copy of a computer programme will not be treated as payments for rights to use the copyright in the computer programmes. Accordingly, such payments are to be considered as commercial income under Article 7 and not as royalty under Article 12 of the Treaty.
Further, it is to be noted that computer programme may be copy-rightable as intellectual property does not alter the fact that once in the form of a floppy disc or other medium, the programme is tangible, movable and available in the market place. The fact that some programmes may be tailored for specific purposes need not alter their status as 'goods' because the code definition included 'specially manufactured goods'. In yet another decision in the case of Tata Consultancy Services v. State of Andhra Pradesh [2004 (11) TMI 11 - SUPREME COURT] held that the purchaser of a computer programme does not receive mere knowledge but receives an arrangement of matter which makes his computer perform a desired function. This arrangement of matter recorded on a tangible medium constitutes a corporeal body. A software recorded in physical form becomes inextricably inter-wined with or part and parcel of the corporeal object upon which it is recorded, be that a disc, tape or hard drive or other device.
Apex Court has also noted its earlier decision in the case of Associated Cement Co. Ltd. [2001 (1) TMI 248 - SUPREME COURT] and held that once a computer programme embodied in a medium, it takes the character of goods even under the narrow definition of the said term under the Customs Act. The Apex Court further held that a software programme, which is put in a medium like a disc or floppy, takes the character of goods. The medium and the programme become inseparable and cannot be split up. The Apex Court had relied on the definition of the term 'goods' as used in Article 366(2) of the Constitution of India and held that the term is very wide and covers all types of movable properties. The Apex Court further held that acquisition of a copy of such computer programme, which is a copyrighted article, amounts to sale of such article.
Therefore, considering all the judicial pronouncements and relevant provisions of law we find much force in the stand taken by the assessee. Therefore, the payments are not in the nature of royalty but are subject-matter of Article 7 of the India-USA Tax Treaty. Further it is an admitted fact that Hewlett Packard Co., USA does not have any permanent establishment in India. Therefore, the assessee had no obligation to deduct tax at source on such payments made to Hewlett Packard Co., USA. Therefore, the claim of the assessee has to be accepted and it is ordered accordingly.
In the result, the appeals filed by the assessee are allowed.
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2006 (12) TMI 505 - PUNJAB AND HARYANA HIGH COURT
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... ... ..... tances. The order may be hypothetically a nullity, but the court may refuse to quash it because of the plaintiff' s lack of standing, because he does not deserve a discretionary remedy, because he has waived his rights, or for some other legal reason. In any such case the " void" order remains effective and is, in reality, valid. It follows that an order may be void for one purpose and valid for another, and that it may be void against one person but valid against another' ." 21. The assessee having not raised objection as to the jurisdiction before the Assessing Officer, was debarred from raising the same before the appellate authority and the appeal filed by the assessee on the question of jurisdiction was not maintainable. 22. Question No. (i) is, thus, answered in favour of the Revenue and against the assessee. 23. In view of the above, question No. (ii) has been rendered academic and need not be gone into. 24. Reference is disposed of accordingly.
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2006 (12) TMI 499 - PUNJAB AND HARYANA HIGH COURT
Allowed/disallowed of Interest on interest-free loans - Interest on interest-free loans advanced by the assessee-company to its subsidiary and associate companies in which the directors were interested? - interest on investment in shares by the assessee company in its subsidiary and associate companies - HELD THAT:- Tribunal has followed its own decision in the case of the assessee for the earlier assessment years, which view has also been upheld by this Court vide CIT v. Industrial Cables (India) Ltd. on the ground that the Tribunal had only followed its view in the case of the assessee, which had become final.
We may notice that although the principle of consistency is applicable and the decision on the issue having been taken in favour of the assessee for the previous year, the same has to be followed, but each assessment year being an independent one, in view of conscious judgment of this Court on the issue after referring to other judgments and in absence of any direct judgment of the Hon’ble Supreme Court in New Jehangir Vakil Mills Co. Ltd. v. CIT [1963 (4) TMI 60 - SUPREME COURT], we are of the view that the earlier order of this Court dismissing appeal of the revenue in limine cannot be taken to be conclusive.
Thus, we partly allow this appeal in relation to question No. 1 and set aside the finding of the Tribunal and uphold the order of the Assessing Officer. As far as other issues are concerned, the appeal is dismissed.
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2006 (12) TMI 498 - ALLAHABAD HIGH COURT
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... ... ..... h and to our mind this was not sufficient material before them to believe that the assessee has not or would not disclosed the income. 12. The decision in the case of Praful Chunilal Patel (supra) is not applicable to the facts of the present case. That case related to re-assessment of an assessee on discovery of mistake in the assessment where it was held that if the Assessing Officer has a cause or justification to think or suppose that Income had escaped the assessment, he can be said to have a reason to believe that such income had escaped assessment. 13. In the result, the writ petition succeeds and a writ in the nature of certiorari is issued quashing the proceedings initiated by the respondents by issuing warrant of authorization dated 21-12-2006 in Form No. 45 under section 132 of the Income-tax Act against the petitioner and a writ in the nature of mandamus is issued directing the opposite parties to refund the amount of ₹ 10 lakhs forthwith to the petitioner.
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2006 (12) TMI 497 - DELHI HIGH COURT
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... ... ..... erits of the matter, the impugned order is set aside. The Revenue is granted one week's time to issue the assessee a show cause notice as envisaged by Rajesh Kumar. If the notice is so issued the assessee shall file its reply within 2 weeks of receipt of such notice. It is expected that the assessee shall co-operate fully with the Revenue after issuance of the notice. Mr. Jolly states that the assessee will be heard and a final decision whether or not to order a special audit shall be taken by the Department within a fortnight of submission of the reply by the assessee to the show cause notice. It is made clear that the time schedule laid down under the Act shall thereafter apply if the special audit is ordered. The time spent in prosecuting this petition shall stand excluded while computing the time for completion of the assessment. With these directions, the writ petition is disposed of. Order be given dasti to both the parties under the signatures of the Court master.
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