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Income Tax - Case Laws
Showing 501 to 503 of 503 Records
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2013 (1) TMI 13 - MADRAS HIGH COURT
Block assessment - Chapter XIVB
Matter of record – Opportunity of being heard - Tribunal set aside the assessment and remanded the matter back to the A.O – On completion of assessment, assessee contended that the revenue had not produced the assessment records as it would have gone against it – Revenue argued that assessee's representative categorically stated that he did not want copies of any statements or documents, since he was having them all – Held that:- The assessee had, in fact, made an endorsement through his representative that the assessee had all the statements and documents that he required. It is also a matter of record that the assessee was given an opportunity to cross-examine. Therefore, we set aside the order of the Tribunal and matter remand back to Tribunal to decides on merits.
Undisclosed income - Undisclosed investment found during search – Assessee had disclosed the income from properties in the return and that the assessee's wife and her son had no source of income – Held that:- During search did not reveal any material as regards the alleged investments of the assessee in the above-said properties. It is no doubt true that the said properties were in the name of the assessee's wife and his son and the assessee had filed returns admitting the rental income from these properties. In the assessment order that the materials were seized in the course of search, to make the investment made as part of the block assessment proceedings. Hence, unless and until the Revenue had had materials seized at the time of search, the income cannot be claimed as a block assessment. Against revenue
Undisclosed investment in shares – Held that:- Assessee accepted the ownership of the certificates to an extent of Rs.4,00,000/- and accordingly, the same was assessed for the assessment year 1995-96. As the assessee himself had conceded the investment then said sum liable to be deleted. Partly allowed in favour of revenue
Undisclosed investment in business – Assessee argue that investment was made out from income derived from the agricultural lands relating to assessee’s HUF – Held that:- If any investigation done, apart from the search, reveal certain state of affairs, it is always open to the Revenue to bring it under the regular assessment procedure. Hence, the question whether the assessee had an agricultural income for the purpose of investment in the wine business, certainly is not a subject matter of block assessment. Consequently, agreeing with the Tribunal's view, it is open to the Revenue to consider the said issue in the regular assessment procedure. Against revenue
Addition on account of investment in Tandal business – A.O. noted that apart from the assessee, there were also two other persons in the business without any capital contribution - Addition made on the basis of daily collection – Held that:- When the Revenue does not dispute the fact that the assessee had been doing the business along with two others. Therefore, questioning the inclusion in the block assessment procedure, the manner of assessment of Rs.27 lakhs is also without any basis. The income from thandal business could not be a subject matter of block assessment. Open to the Revenue to make such investigation as are necessary for the purpose of determining the income that the assessee might have earned in the thandal business. Against revenue
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2013 (1) TMI 12 - ITAT KOLKATA
Penalty u/s. 271(1)(c) - disallowance of provision for bad and doubtful debts - Held that:- The only rider would be where the condition(s) of section 36(2) are not satisfied.
The assessee, while divulging the primary facts during the course of assessment proceedings, submitted the details of its claim that while the amount of Rs. 2,69,706/- lacs pertains to earlier year (s), that for Rs. 6.25 lacs relates to the current year.
The assessee's only income (Rs. 2.40 lacs, P.Y. Rs. 3.60 lacs) is by way of rent received, besides a negligible amount as interest on FDR/s. A few questions spring immediately in the mind, and which would require being answered as to how could be the amount of 'suspense' and 'cheque in transit' qualify for inclusion as income, as required u/s, 36(2)(i)? How could Rs. 6.25 lacs pertain to the current year when its' gross income for the year is at Rs. 2.40 lacs only? The entire amount of provision forms part of the assessee's loans and advances portfolio and, thus, it is not clear as to how the same forms part of its income for any year, a prerequisite in terms of s. 36(2).
The premise of a claim for a bad debt, it may be appreciated, is that the same having already offered as income (for any year), its subsequent non-recovery would warrant a reduction in income (for the year of write off). Further, it could also be that the same (loan and advances) represent a part of the assessee's money lending business, to which the law draws an exception as the same represents a part of the stock-in-trade of such business (s. 36(1)(vii) r/w s. 36(2)(i)). However, there is nothing on record which indicates so, or even if the assessee is in money lending business. That is, there is an apparent non-satisfaction of the essential condition of sec. 36(2), and which clearly impacts not only the assessee's claim u/s. 36(1)(vii), which in any case stands disallowed, but also, concomitantly, the merits of its claim and, thus, that of its explanation in the penalty proceedings. How could then, under such circumstances, one may ask, the assessee's claim be, or considered to be, bona fide, or an explanation in its respect be so'?
The matter is restored back to the file of the AO to adjudicate the same afresh per a speaking order in accordance with law, allowing the assessee a proper opportunity to present its case as to how, despite an uncontested disallowance in its respect, the deduction claimed u/s. 36(1)(vii) does not suffer from lack of any bona fides or does not fall within either Explanation 1(A) or 1(B) of section 271(1)(c).
Whether ITAT in deciding this appeal has travelled outside its scope - Held that:- As decided in in the case of Kapurchand Shrimal v. CIT [1981 (8) TMI 2 - SUPREME COURT] it is well-known that an appellate authority has the jurisdiction as well as the duty to correct all errors in the proceedings under appeal and to issue, if necessary, appropriate directions to the authority against whose decision the appeal is preferred to dispose of the whole or any part of the matter afresh, unless forbidden from doing so by statute - Revenue's appeal is allowed for statistical purposes.
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2013 (1) TMI 11 - ITAT HYDERABAD
Income on sale of shares - Capital gain vs. business income - assessees contented that it always treated the shares as investment, and there is no business activity carried on by the assessees with reference to shares - Held that:- While deciding whether the sale of shares is income from business or income from capital gain, one has to go by the criteria as held in the case of PVS Raju v. Addl. CIT [2011 (7) TMI 818 - ANDHRA PRADESH HIGH COURT] that the character of a transaction cannot be determined solely on the application of any abstract rule, principle or test but must depend upon all the facts and circumstances of the case.
The frequency of buying and selling of shares, period of holding, quantum of turnover on account of frequency of transactions, intention of the assessee, No. of scrips shares held for fewer days or engaging in dealing in the same scrips frequently, indulgement in multiple transactions,Repeated transactions, coupled with the subsequent conduct of the assessee to re-enter the same scrip. Mere classification of these share transactions as investment in the assessee's books of accounts was not conclusive need to be looked.
Thus on perusal of the statements incorporated by the AO in the assessment order it is found that the assessees have made several transactions of purchase of shares during the relevant year under consideration, and if there high volume, frequency and regularity of the activity carried on by the assessees in a systematic manner, it would partake the character of business activities carried on by the assessee in shares, and it cannot be said that the assessees have merely made investments in shares. The findings of the CIT(A) cannot be sustained in the eyes of law, as he has not considered relevant facts to decide the issue. Thus reverse the order of the CIT(A) and restore the order of the AO - in favour of revenue.
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