|
Advanced Search Options
Income Tax - Case Laws
Showing 61 to 80 of 9210 Records
-
2016 (12) TMI 1800 - ITAT CHENNAI
Disallowance u/s 14A read with Rule 8D - HELD THAT:- When the income of the assessee was from the companies which situated outside India and the assessee claims that the money was invested in other companies, which are said to be subsidiary companies, why the expenditure incurred by the assessee should not be disallowed was not examined by this Tribunal for assessment year 2000-01. Therefore, this Tribunal is of the considered opinion that the matter needs to be reconsidered. Accordingly, the orders of both the authorities below are set aside and the issue is remitted back to the file of the Assessing Officer to re-examine the matter afresh and bring on record shareholding pattern of the companies in which the investment was made by the assessee and how the companies outside India are subsidiary companies of the assessee and thereafter decide the issue in accordance with law, after giving a reasonable opportunity to the assessee.
Disallowance while computing profit u/s 115JB - HELD THAT:- Explanation 1(c) to Section 115JB of the Act clearly says that other than ascertained liability, it has to be increased over and above the book profit. The assessee now claims that mere pendency of writ petition before the High Court cannot be said that the liability is not an unascertained liability. The fact remains that the liability to pay the electricity tax would depend upon the decision that may be taken by the Madras High Court in the writ petition said to be pending. As on today, even though there was a liability and demand raised by the concerned authority, the High Court stayed the recovery and the payment of electricity tax would depend upon the decision that may be taken by the High Court. Therefore, as on today, it is not an ascertained liability. Hence, it has to be increased as provided in Explanation 1 to Section 115JB of the Act. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.
Disallowance of proportionate interest expenses on the funds diverted to associate companies - HELD THAT:- The assessee claims that interest free funds were diverted to the companies at Dubai and Jordon. The assessee also claims that they are sister concerns of the assessee. However, the shareholding pattern of so-called companies at Dubai and Jordon are not available on record. Therefore, it is not known how the assessee claims that the advances were made to sister concerns. Moreover, the balance sheet and other financial documents were not available on record. Therefore, it is not known whether the assessee has advanced funds out of interest free funds or borrowed funds. It is not in dispute that the assessee borrowed funds for business purpose and the same remain outstanding during the year under consideration. Therefore, we have to examine how much funds were borrowed and whether there was any nexus between borrowed funds and investment made in Dubai and Jordon. The shareholding pattern of those companies is also not known. Since these facts were not available on record and the same were also not examined by earlier Bench of this Tribunal during the assessment year 2000-01, this Tribunal is of the considered opinion that the matter needs to be reexamined.
-
2016 (12) TMI 1799 - ITAT DELHI
Disallowance of claim loss due to fall in value of investments, held as stock in trade - HELD THAT:- As decided in own case disallowance [2015 (11) TMI 861 - ITAT DELHI] we decide this issue in favour of the assessee by deleting the additions.
Disallowance u/s. 14A - HELD THAT:- Sufficient funds are available to make the investments and the appellant's submission that the investments were made out of interest free funds available, therefore, AO is required to indicate cogent reason on the basis of the accounts that the claim of the appellant is not correct. In the absence of any finding on the basis of accounts that interest expenditures are incurred in relation to exempt income and considering the fact that sufficient interest free funds are available, therefore, no disallowance of indirect interest expenditure can be made under Rule 8D(2)(ii).
Disallowance of software expenses and AMC expenses - HELD THAT:- AMC expenses mentioned are to be treated as revenue expenditure and the remaining expenses are capital in nature. AO is directed to recompute the depreciation allowable on the above items of capital expenditure on acquisition of software.
Assessee claimed depreciation @ 60% on LAN, WAN as applicable to the block of computers - It is not in dispute that the ITAT in the case of assessee itself for A.Y. 2006-07 has considered the LAN and WAN as integral part of computer and eligible for higher depreciation @ 60%.
Addition of interest on overdue deposits - HELD THAT:- Claim of assessee, in our opinion, is not acceptable until it is ascertained that the actual payment of the provision has been made to the customers or not. We, therefore, restore this issue to the file of AO for the limited purpose to verify whether actual payment of the provision has been made to the customers or not and to decide the same accordingly as per law. Needless to say, the assessee shall be given reasonable opportunity of being heard.
-
2016 (12) TMI 1798 - ITAT MUMBAI
Exemption u/s 10AA - disallowance of claim as assessee did not carry out any manufacturing activity in the SEZ premises - AO has disallowed the exemption on the ground that since the assessee failed to establish genuineness of electricity and labour charges - CIT-A allowed the deduction - HELD THAT:- In this case the assessee has placed on record the copy of letter dated 12.3.2014 from the then officer on special duty, addressed to the ITO14(2)(4) Mumbai, vide which certain information u/s 136 were supplied. From the contents of the said letter, it can be inferred that the unit was in operation on 28.3.2011 as contended by the assessee.
AO has also mentioned in assessment order that on perusal of details it revealed that the assessee had carried out its business activities from its SEZ unit, Sachin, Surat from 27.3.2011 to 29.3.2011. As per the assessee the process of manufacturing gold medallions from gold bars require few heavy machines and apart from other expenses, it requires two types of direct expenses i.e., labour charges and electricity charges.
AO has disallowed the exemption on the ground that since the assessee failed to establish genuineness of electricity and labour charges the particulars furnished to substantiate its contention that gold medallions were manufactured from gold bars during the relevant period, cannot be accepted.
As during assessment proceedings the assessee furnished the whereabouts of the firm from whom the assessee had hired generator set to fulfill the requirement of electricity in manufacturing process and the concerned person was examined by the AO. Similarly, AO has examined the person who made available the manpower to the assessee. So, in our considered opinion the assessee has discharged the onus on it to prove that during the relevant previous year, it carried out the business activities from SEZ unit, Sachin to avail the claim of deduction u/s 10AA
AO has not accepted the evidence adduced by the assessee to establish that since there was no electricity connection generator was hired and manpower was also arranged to carry out the manufacturing activities. Therefore, no legal or factual infirmity in the order passed by the Ld. CIT(A), we uphold the same and dismiss the grounds of appeal of the revenue.
-
2016 (12) TMI 1797 - ITAT INDORE
Disallowance of deduction of interest expenses - holding that transaction of sale and purchase of the house as not assessable as income from Business and Profession but was a transaction assessable under the head Income from Capital gain - HELD THAT:- We find from the assessment order that the assessee is a contractor dealing in construction business, which is also evident from the form 30CD audit report. We also find that no separate books of accounts were maintained in respect of business of trading in property nor any opening or closing balance in respect of the said property is shown. Therefore, this is an isolated transaction of purchase of a house, which, ofcourse, purchased in the name of individual capacity after obtaining housing loan for the said purchase. The house property is registered in his name on which stamp duty payment has also been made. Therefore, the assessee has purchased a capital asset, which has been sold in a very short span of time. Therefore, in the light of these facts, we are of the considered opinion that the lower authorities has rightly treated the same as short term capital gain transaction. Accordingly, the action of the lower authorities are confirmed. This ground of appeal is, therefore, dismissed.
Income from house property after allowing deduction of interest u/s 24 - HELD THAT:- Assessee has claimed this purchase and sale of this house property and shown business income thereon at ₹ 3964/- by computing separate trading account. However, the lower authorities have found that the assessee is not engaged in the business of real estate, as this was a solitary transaction conducted by the assessee. Therefore, the income from this property was assessable as income under the head Capital Gain. Accordingly, short term capital gain of ₹ 19,61,000/- was worked out and assessed accordingly. We also find that the assessee has raised his alternative plea before the ld. CIT(A). However, the same was not found acceptable by the ld. CIT(A) on the ground that no such claim was made before the AO and the issue under consideration was not working of income from house property, but the issue of income is assessable under the head Capital Gains. In view of these facts, we find that the issue has not been examined by the AO and by the ld. CIT(A) . Therefore, in the interest of justice, we are of the considered opinion that this issue may be restored to the file of the AO for reconsideration the entire claim as income from house property. Ground No. 2 is, therefore, allowed for statistical purposes.
-
2016 (12) TMI 1795 - ITAT MUMBAI
Unexplained cash credit u/s 68 - Addition merely on the ground that the assessee has not furnished the loan confirmation from the above parties, whereas as per learned AR, no such confirmation was asked by AO during assessment proceedings - HELD THAT:- We found that these loans have been repaid in subsequent accounting year 2007-08.
The assessee has also filed copies of ledger account of above three parties. The assessee has also filed the copies of bank statements of the assessee wherein these loans are received, the copies of bank statements of assessee's account in ICICI Bank wherein these payments are reflected and a statement of name and address of these parries. By filing all these documentary evidences, the assessee had discharged its primary onus. However, even after furnishing all these details, the AO failed to issue notice to above parties u/s.133(6).
We restore the matter back to the file of the AO with a direction to the AO to issue 133(6) to the concerned creditor to find out their genuineness and for obtaining their confirmation. Accordingly, AO is to decide the issue afresh after giving due opportunity to the assessee. Appeal of the assessee is allowed for statistical purposes.
-
2016 (12) TMI 1794 - ITAT JAIPUR
Penalty u/s 271(1)(c) - trading additions - addition u/s 68 - HELD THAT:- Tribunal in quantum proceedings has confirmed the trading additions by estimating the net Profit @ 10% subject to interest and depreciation holding that once the books of accounts of the assessee are rejected, the AO is required to make an estimation of profits and such estimation though involves some guess work, the AO is not empowered to arrive at unrealistic figure of estimation. Looking at the past history of the assessee where the additions were again sustained on estimation basis @ 8% of N.P rate, N.P rate of 10% was determined. In the context of levy of penalty on such estimated additions, the ld AR has drawn our reference to earlier decision of the Coordinate Bench for AY 2005-06 where penalty was deleted on estimated additions - case of Mahendra Singh Khedia [2012 (3) TMI 568 - RAJASTHAN HIGH COURT] also supports the case of the assessee. In light of above, there is no basis for levy of penalty in respect of trading additions which have been sustained on an estimation basis.
Additions under section 68, since the entire additions have been deleted in the quantum proceedings by the Coordinate Bench, corresponding levy of penalty cannot be sustained. - Decided in favour of assessee
-
2016 (12) TMI 1793 - ITAT DELHI
Addition on account of cash deposit - evidences could not be placed before the AO because of pre-occupation of the assessee with illness of his spouse - HELD THAT:- Since in the facts of the present case due to his wife’s illness the assessee was prevented by sufficient cause from producing the evidences in support of its claim, it would be appropriate and in the interests of justice that in the peculiar facts and circumstances of the case, the impugned order is set aside and the issue is restored back to the CIT(A) with a direction to permit the assessee to produce the evidences in support of its claim. The CIT(A) after confronting the same to the AO and directing the AO to file a Remand Report shall confront the same to the assessee and thereafter pass a speaking order in accordance with law after giving the assessee a reasonable opportunity of being heard. Appeal of the assessee is allowed for statistical purposes.
-
2016 (12) TMI 1792 - ITAT AHMEDABAD
Transfer pricing adjustment - import of components as made by the lower authorities - HELD THAT:- We find that Rule 10B(e)(iii) hereinabove is regarding TNMM method only providing for various adjustments on account of the contemporaneous factors materially affecting the net profits. The above co-ordinate bench thereafter concludes that such capacity under utilization adjustments have to be made only in the hands of comparable entities instead of that in case of tested party itself. We thus accept assessee’s instant argument in principle and direct the TRO to proceed afresh as indicated hereinabove after affording adequate opportunity of hearing to the assessee.
We thus direct the Transfer Pricing authority to confine the impugned adjustments to the extent of assessee’s international transactions only in consequential proceedings. The assessee’s first substantive ground is accordingly accepted for statistical purposes.
Transfer pricing adjustment in respect of sale of cloth guiders to its associate enterprises - There is no dispute that it had sold cloth guiders no. KF 2020 and KF 2060 numbering 600 & 35 involving adjusted per unit price of ₹ 26180/- and ₹ 57849/- as against those numbering 30 & 3 sold to third parties involving adjusted per unit price of ₹ 26071/- & ₹ 56762/-; respectively. It had used CUP method in benchmarking the above transactions. TPO proceeded to make the impugned adjustment after noticing the above difference in the sale price involving assessee’s associate enterprises and third party customers. The DRP upholds the same as indicated in the instant ground.
The assessee’s next argument is that it has to provide warranties to local purchasers as calculated at the rate of ₹ 608/- which is not the case with respect to its associate enterprises. Learned counsel accordingly submits that the lower authorities ought to have included the above two factors for the purpose of making adjustments before arriving at the ALP adjustment in question.
The said gap is to the tune of 1/20th in case of former variety of cloth guider and almost 1/10th in latter category (supra). The Revenue further is unable to dispute the fact that assessee has been providing warranty cost to its local purchasers which has further shrunk its profit margins in question. We thus prima facie agree with assessee’s above two arguments in principle and leave it open for the ld. Transfer Pricing Officer to make appropriate adjustments as per law after affording adequate opportunity of hearing in consequential proceedings. The assessee’s latter substantive ground is remitted back to the TRO accordingly.
Both the learned representatives point out that assessee’s third substantive ground seeking ±5% tolerance margin in ALP determination is identical to that raised in preceding assessment year forming part of this order itself. We find that we have already held the same to be consequential in nature to be decided at the time of final computation.
-
2016 (12) TMI 1791 - ITAT KOLKATA
Disallowance u/s 14A read with Rule 8D - AO's non satisfaction with correctness of the claim of the assessee - HELD THAT:- For the purpose of provisions under section 14A read with Rule 8D of the Rules, it is a sine qua non that the AO is not satisfied with the correctness of the claim of the assessee in respect of such expenditure in relation to income which does not form part of the total income, which is conspicuous in this matter.
We, therefore, have no hesitation to hold that it is the satisfaction of Assessing Officer and Assessing Officer alone that infuses life into the order of Assessment in respect of disallowance of deductions, and none other much less the learned CIT(Appeals) can substitute his opinion for that of the Assessing Officer to validate otherwise invalid order of Assessing Officer. With this view of the matter we hold that the order of the authorities cannot be sustained and the additions made on account of invocation of Section 14A of the Act read with Rule 8D of the Rules shall be deleted. We accordingly allow the appeal of assessee.
-
2016 (12) TMI 1790 - ITAT KOLKATA
Deduction u/s. 80I & 80IB - appellant submitting return beyond due date - HELD THAT:- The undisputed fact is that the return of income for the year under consideration was not furnished on or before the due date as per the provisions of section 139(1).
In our considered opinion, provisions of section 80AC of the Act squarely apply on the facts of the case in hand, section 80AC reads as under - Where in computing the total income of an assessee of the previous year relevant to the assessment year commencing on the 1st day of April, 2006 or any subsequent assessment year, any deduction is admissible under section 80IA or section 80-IAB or section 80-IB or section 80-IC [or section 80-ID or section 80- IE], no such deduction shall be allowed to him unless he furnishes a return of his income for such assessment year on or before the due date specified under sub- section (1) of section 139]. - Decided in favour of revenue
-
2016 (12) TMI 1789 - ITAT CHENNAI
Validity of reopening of the assessment - HELD THAT:- CIT(A) has not considered the assessee's own case for the earlier assessment year where the re-assessment notice was issued u/s. 148 of the Act within four years due to change of opinion and cancelled and the Ld. AR drew attention to the order of CIT(A), where, there is no findings of re-opening proceedings. We also perused the orders of Assessing Officer and CIT(A) the reopening of assessment is not basic vital matter of assessment, and it has to be decided before adjudicating on the issues. CIT(A) has not passed the speaking order on the validity of the re-assessment proceedings and in the assessment year 2002-03 Tribunal quashed the reassessment being within the period of four years from the date of assessment. We are of the opinion the Ld. CIT(A) order has to clarify and pass a speaking order on legal issue. We are inclined to remit disputed issue of re-opening of assessment to the file of CIT(A) to give findings on legal issue and the assessee should be provided with adequate opportunity of hearing before passing the order and then comment on merits and allow the assessee appeal for statistical purpose.
Broken period interest to be allowed as Revenue expenditure
Claim of amortization charges as Revenue expenditure - AO is of the opinion that the assessee included the amortization amount in the book value of HTM Securities to arrive at cost of purchase. - HELD THAT:- CIT(A), observing that the issue is covered in favour of the assessee by the decision of the Hon'ble Jurisdictional High Court in assessee's own case [2007 (2) TMI 187 - MADRAS HIGH COURT] allowed the claim of the assessee
Chargeability of interest on NPA accounts - Provision of section 43D were the interest is chargeable to tax in the year of credit as such interest in Profit and Loss Account or in the year in which interest is actually received in NPA by the bank - HELD THAT:- Since, the Assessing Officer has made certain observations in the Assessment Order and also CIT(A) has directed for deletion of interest and issue of estimation of interest being first time made by the Assessing Officer. We are of the opinion, that the Assessing Officer has only estimated the income without giving any depth reasons on estimations. We are of the opinion that the disputed issue has to be re-examined by the Assessing Officer for limited purpose and we remit the issue to the file of the Assessing Officer and allow the ground of the Revenue for statistical purpose.
Addition made on account of excess cash balance transferred in the suspense account in balance sheet as there is no claim or identity of person which belongs legally - AO found that there is unclaimed amount in the books and it was not brought to tax - HELD THAT:- AO has taxed unclaimed balance shown in the Balance Sheet as income of the assessee and it relates to stale drafts, pay orders and cheque which are shown as liability in the Balance Sheet and the assessee, as the banker has to owe the commitments of its customers without taking shelter of time limitation and we found the Hon'ble Kerala High Court in the case of Catholic Syrian Bank Ltd., Vs. ACIT, [2013 (4) TMI 140 - KERALA HIGH COURT] as held, "Excess cash received at counters of the bank represents for which there is no claimant can be considered as income of bank." We respectful following the Kerala High Court decision treat the unclaimed balance as the Revenue receipts irrespective of the fact that the bank is a custodian and set aside the orders of the CIT(A) and allow the ground of the Revenue.
Additional claim of bad debts as the assessee bank has claimed deduction - HELD THAT:- Deduction u/s. 36(1)(vii) of the Act was allowed and in respect of assessment year 1991-92, 1993-94 & 1994-95 reported in CIT Vs. City Union Bank Ltd. [2007 (2) TMI 187 - MADRAS HIGH COURT] and accordingly upheld the action of CIT(A) and dismiss the revenue ground.
Bank’s claim u/s. 36(1)(viia) of the Act on the amounts outstanding at the end of accounting year - HELD THAT:- We found the decision of the Hon'ble Supreme Court CATHOLIC SYRIAN BANK LTD. VERSUS COMMISSIONER OF INCOME TAX, THRISSUR [2012 (2) TMI 262 - SUPREME COURT]
in respect of provisions of section 36(1)(vii) is restricted to rural debts and the deduction has to be allowed based on the above decision and the Assessing Officer has restricted the claim based on the incremental advance made during the year by the rural branches. Since, the Co-ordinate bench of this Tribunal has considered the facts and also provisions of law in the above decision. We inclined to set aside the order of the CIT(A) and upheld the action of the Assessing Officer and allow the ground of the Revenue.
Deprecation loss on shifting of securities in the middle of the year - assessee Bank has not reduced depreciation from book value on securities at the time of sale of securities - HELD THAT:- As decided in CITY UNION BANK LIMITED. [2007 (2) TMI 187 - MADRAS HIGH COURT] the depreciation on transfer of securities loan AFS category to HTM category are accounted at depreciated value as per RBI guidelines
Interest accrued on Government Securities - HELD THAT:- We find similar issue in the assessee's own case for earlier assessment year is covered by High Court decision CIT Vs. City Union Bank Ltd. [2007 (2) TMI 187 - MADRAS HIGH COURT] and accordingly we upheld the order of CIT(A) and dismiss the ground of the Revenue.
Addition towards Broken Period Interest - HELD THAT:- We heard the submissions, perused the material on record and judicial decision, we find issue is covered by the decision of the co-ordinate bench of Tribunal Lakshmi Vilas Bank [2016 (4) TMI 572 - ITAT CHENNAI] , Karur Vysya Bank [2004 (7) TMI 52 - MADRAS HIGH COURT] and National Engineering Industries Limited [1993 (7) TMI 40 - CALCUTTA HIGH COURT] . Accordingly, we upheld the order of CIT(A) and dismiss the Revenue ground.
Addition of the stale draft, pay order and cheque disclosed as liability - CIT(A) observed that Ld. AO applying the provisions of section 41(1) of the Act of cessation of liability in respect of value of the stale draft cheque and pay orders as they were not en-cashed by the customers and remained with the bank for more than three years.
Deduction u/s. 37(1) of the Act in respect of donation instead of deduction u/s. 80G - AO has disallowed donation to the Government school for construction of class room and World Tamil Conference held at Coimbatore, Neighbourhood Health Care Trust. The Ld. AR explained that the donation to the school is wholly and exclusively for the purpose of business - HELD THAT:- We found that the expenditure incurred towards construction of school in nature of business expenditure and we upheld the decision of the CIT(A) and dismiss the appeal of the Revenue.
-
2016 (12) TMI 1788 - ITAT RANCHI
Levy of penalty u/s.271D - violation of section 269SS - HELD THAT:- Addition of ₹ 5 lakh was made u/s.68 of the Act for taking loan by the assessee in cash thereby violating the section 269SS of the Act was deleted in appeal by the CIT(A) which was confirmed by the Tribunal in the appeal filed by the revenue thereagainst. Thus, the transaction in violation of section 269SS was found to be genuine. Therefore, the decision of Hon’ble Jurisdictional High Court in the case of OMEC Engineers [2007 (9) TMI 27 - HIGH COURT , JHARKHAND] clearly applies to the facts of the case. Respectfully following the same, I delete the levy of penalty and allow ground of appeal of the assessee.
-
2016 (12) TMI 1787 - ITAT KOLKATA
Additions in assessments u/s 153A - as alleged absence of incriminating materials found in the course of search relatable to unabated assessments in the facts and circumstances of the case - HELD THAT:- We hold that the legislature does not differentiate whether the assessments originally were framed u/s 143(1) or 143(3) or 147 of the Act. Hence unless there is any incriminating material found during the course of search relatable to those concluded years, the statute does not confer any power on the ld AO to disturb the findings given thereon and income determined thereon, as finality had already been reached thereon, and those proceedings were not pending on the date of search to get themselves abated.
As relying on RAHEE TRACK TECHNOLOGIES PVT. LTD. VERSUS DEPUTY COMMISSIONER OF INCOME-TAX [2016 (10) TMI 969 - ITAT KOLKATA] the additions made in the assessments framed u/s 153A of the Act for the Asst Years 2007-08 and 2008-09 in the absence of incriminating materials found in the course of search relatable to those assessment years, deserve to be deleted.
Disallowance made u/s 36(1)(va) of the Act in respect of Employees Contribution to Provident Fund - delayed remittances - HELD THAT:- The said provident fund dues for July 2008 was remitted by the assessee on 16.8.2008 as against the due date of 15.8.2008 and since 15th August happened to be a bank holiday, the same was remitted on the immediately succeeding working day. Hence the same is allowable as deduction. He also argued that since the same was remitted before the end of the previous year, the same is allowable as deduction in the light of decision of the Hon’ble Jurisdictional High Court in the case of CIT vs Coal India Ltd [2015 (8) TMI 1451 - CALCUTTA HIGH COURT]
Disallowance u/s 14A read with Rule 8D - HELD THAT:- This tribunal had already held in the case of REI Agro Ltd vs DCIT [2013 (9) TMI 156 - ITAT KOLKATA] confirmed by HC [2014 (4) TMI 713 - CALCUTTA HIGH COURT] wherein it was held that only dividend bearing investments are to be considered for computing disallowance u/s 14A of the Act read with Rule 8D of the Rules. We find that the Circular of CBDT relied upon by the ld DR is binding only on the revenue authorities and not on the courts. We find that the decision relied upon by the ld DR on the special bench of Delhi Tribunal had been reversed by the Hon’ble Delhi High Court in the case of Cheminvest Ltd vs CIT [2009 (8) TMI 126 - ITAT DELHI-B]. Accordingly, we hold that the disallowance should be restricted only to ₹ 1,235/- and we direct the ld AO accordingly.
-
2016 (12) TMI 1785 - ITAT HYDERABAD
Delayed payment to the P.F. account (Employees Contribution) - CIT-A concluded that even if there is a delay in making payment to the P.F. Account, so long as it is paid before the date of filing of the return there cannot be any disallowance under the I.T. Act. - HELD THAT:- We accept the claim of the assessee and hold that the Ld. CIT(A) having set aside the disallowance by following the decision of the Hon’ble Delhi High Court AIMIL LIMITED, NIRMALA SWAMI, SPEARHEAD DIGITAL STUDIO, M/S. NET 4 INDIA LTD., MODIPON LTD., & M/S. EKTA AGRO INDUSTRIES LTD., [2009 (12) TMI 38 - DELHI HIGH COURT] which inturn, followed the ratio laid down by the Apex Court in the case of Vinay Cements Ltd. [2007 (3) TMI 346 - SC ORDER] the view taken by the Ld. CIT(A) do not call for any interference. Accordingly, ground No.2 of the Revenue (for the A.Y. 2010-2011) is dismissed.
Disallowance by applying the provisions of Section 40(a)(ia) - Addition set aside by CIT(A) on the ground that the said Section applies only in the case of amount “payable” and not in respect of the amount already paid - HELD THAT:- Admittedly identical issue was decided by the ITAT, Hyderabad Bench, in number of cases, in favour of the assessee and against the Revenue in the light of observations of the Hon’ble jurisdictional High Court [in the case of CITII, Hyderabad vs., M/s. Janapriya Engineers Syndicate [2015 (5) TMI 309 - ANDHRA PRADESH HIGH COURT] ] wherein the Court observed that until and unless the decision of the Special Bench is upset by this Court it is binding on smaller Benches and Coordinate Benches of the Tribunal.
In ACIT, Central Circle-2, Hyderabad vs., M/s. Janapriya Properties Pvt. Ltd., Hyderabad [2015 (1) TMI 1208 - ITAT HYDERABAD] wherein one of us is a party] the Tribunal has analysed the issue and concluded that Section 40(a)(ia) cannot be invoked where the payments were already made. - Decided against revenue
-
2016 (12) TMI 1783 - ITAT HYDERABAD
Rebate of 15% from the cost of construction determined by the valuation officer by following the CPWD rates - variation between the CPWD and State PWD rate - HELD THAT:- CIT (A) has adopted the CPWD standard rate as against the rates prescribed by the State PWD for valuation of the cost of construction and taking into consideration various decisions relied upon by the assessee, he allowed the rebate of 15%. We have also gone through the decision of the Coordinate Bench of the Tribunal in the case of Sri Krishna Ventures P Ltd vs. Income Tax Officer [2013 (11) TMI 1366 - ITAT HYDERABAD] and find that the Tribunal has analyzed the difference between the CPWD rate and the State PWD rate and has given justification for allowing 15% rebate on account of rate variation between the CPWD and State PWD rate.
Assessee is entitled for deduction of 15% on account of rate variation between CPWD and State PWD and 10% towards self supervision. If the aforesaid deductions are allowed, then the cost of construction shown by the assessee would be more than the cost of construction determined by the DVO and there will be no case for addition on account of excess cost of expenditure incurred by the assessee. In aforesaid view of the matter, the additions cannot be sustained, hence we direct for deleting the same. - Decided against revenue
-
2016 (12) TMI 1781 - ITAT VISAKHAPATNAM
Non prosecution of appeal by assessee - HELD THAT:- In this case, notice was issued fixing the case for hearing on 24/06/2016 and the notice of hearing was duly sent by Regd. post. However, on 24/06/2016, neither assessee attended nor there was any request for adjournment, even today also. In these circumstances, we are of the view that the assessee is not interested in prosecuting his appeal.
As held in the case of B.N. Bhattachargee & Anr. [1979 (5) TMI 4 - SUPREME COURT] that appeal does not mean only filing of Memo of Appeal but also pursuing it effectively. In cases where the assessee does not want to pursue the appeal, Court/Tribunal have inherent power to dismiss the appeal for non-prosecution, as held by Hon’ble High Court of Mumbai in the case of M/s Chemipol Vs. Union of India [2009 (9) TMI 177 - BOMBAY HIGH COURT] - we dismiss the appeal of the assessee for want of prosecution.
-
2016 (12) TMI 1779 - ITAT BANGALORE
Condonation of delay - delay of 5 months and 24 days - eligible reasons for delay - assessee had stated that his mother had expired on 22.1.2011 after a short span of illness - HELD THAT:- In the instant case, we noticed for AY 2008-09, the assessee has given the reason of demise of his mother for the delay in filing the appeal. For the AY 2009-10, apart from the demise of his mother, the assessee has stated that he is a partner of firms and director of certain companies which had incurred losses on account of closure of mining activities consequent to which the business activity was stopped, and lending banks had pressurized for payment of instalments, which led the assessee to great mental pressure.
As relying on COLLECTOR, LAND ACQUISITION VERSUS MST. KATIJI AND OTHERS [1987 (2) TMI 61 - SUPREME COURT] assessee in the instant case was having sufficient/reasonable cause for filing appeals before the CIT(A). Therefore, condone the delay in filing the appeals before the CIT(A) for AYs 2008-09 and 2009-10 - delay in filing the appeals before the CIT(A) has been condoned, the issue on merits necessarily has to be adjudicated by the CIT(A). Therefore, the matter is remitting to the CIT(A) to decide the issue on merits. Appeal of assessee allowed for statistical purposes.
-
2016 (12) TMI 1778 - ITAT INDORE
NP determination - estimation of profit - HELD THAT:- Net profit for the A.Y. 09-10 and A.Y. 10-11 has been shown by the assessee at 5.28% and 5.75% respectively. Therefore, if 2% increase is considered, the net profit for the relevant assessment year with go upto 7.14% which is much higher than the average net profit in the above mentioned assessment years.
Estimation of profits by the A.O. has not been found based on some cogent and relevant material. CIT(A) was reasonable in increasing the profit by 1% which will take the net profit for the relevant year at 6.14% which will still be much higher than 5.5%, the average of two preceding assessment years. In view of the above discussion and the facts and circumstances of the case, we hold that CIT(A) was justified in directing the AO to recompute the profits by increasing the same @ 1% as against 2% applied by the Assessing Officer. We, therefore, confirm the order of the learned CIT(A).
-
2016 (12) TMI 1775 - ITAT VISAKHAPATNAM
Penalty u/s 271(1)(c) - claim made on account of deduction u/s 80P(2)(a)(i) and denial of provision made for overdue interest - HELD THAT:- In the present case, the assessee neither concealed the income nor filed inaccurate particulars. The assessee has only made a claim. According to the assessee, it is eligible for deduction under section 80P(2)(a)(i) and filed return of income by disclosing all the facts. AO denied the claim, which was confirmed by the Commissioner of Income Tax (Appeals).
This is not automatically amounting to neither concealment of income nor filing of inaccurate particulars. Hon'ble Supreme Court in the case of Reliance Petroproducts Pvt. Ltd. [2010 (3) TMI 80 - SUPREME COURT] held that a mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars.
Provision of overdue interest - It is not the case of the Commissioner of Income Tax (Appeals) that the assessee neither concealed the income nor filed inaccurate particulars. The case of the assessee is that he made a provision on sticky loans by following the RBI guidelines by filing all the details before the Assessing Officer. Once, the assessee filed all the details in his return of income and made a provision, if the Assessing Officer has denied the provision made by the assessee, it cannot be said that the provision made by the assessee is neither concealment nor filing inaccurate particulars of income. It is only a legal claim made by the assessee. This aspect has already been considered while dealing with section 80P(2)(a)(i) (supra) and by following the judgment of the Hon'ble Supreme Court, the penalty levied by the Assessing Officer is to be cancelled - it is not a fit case for imposing penalty under section 271(1)(c) - Decided in favour of assessee.
-
2016 (12) TMI 1772 - ITAT CHENNAI
Deemed dividend addition u/s 2(22)(e) - assessee is a Director and having more than 10% share holding in M/s.Shree Velu Builders (P) Ltd., a company in which public are not substantially interested was having accumulated profits of ₹ 84,51,787/- as on 31.03.2007 and it has transferred the flat constructed by the company valued at ₹ 38 lakhs to the assessee. After transfer of the flat of ₹ 38 lakhs, the outstanding balance in the current account maintained by the assessee was at ₹ 32,25,049/-(Dr.), which means that the assessee owe the company an amount of ₹ 32,25,049/- as at the end of the year.
HELD THAT:- The amount of ₹ 31,57,569/- is outstanding as a loan/advance being the amount excess drawn in the current account, which is nothing but a loan/advance because of the transfer of the company asset to the assessee. Though, the amount paid is not in cash, the asset of the company (money’s worth) was transferred to the assessee resulting into reduction of the assets of the company and the ultimate result is outstanding as a loan from the assessee. Therefore, the transfer of assets which resulted in a advance/loan is held to be payment by the company to the assessee and falls within the four corners of the deemed dividend as per the provisions of the Sec. 2(22)(e) of the Income Tax Act . See KANTILAL MANILAL AND OTHERS VERSUS COMMISSIONER OF INCOME-TAX, BOMBAY NORTH, KUTCH AND SAURASHTRA, AHMEDABAD [1960 (11) TMI 11 - SUPREME COURT]
Dividend need not be distributed in money; it may be distributed by delivery of property or right having monetary value. The resolution, it is true, did not purport to distribute the right amongst the shareholders as dividend. It did not also take the form of a resolution for distribution of dividend; it took the form of distribution of a right which had a monetary value. But by the form of the resolution sanctioning the distribution, the true character of the resolution could not be altered. Payment made to the assessee by the company is rightly brought to tax by the AO as deemed dividend and the addition made by the AO is confirmed. - Decided against assessee.
........
|
