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Income Tax - Case Laws
Showing 61 to 80 of 783 Records
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2017 (3) TMI 1832 - ITAT MUMBAI
Disallowance u/s 14A read with Rule 8D(2)(iii) - indirect expenditure for earning exempt income - HELD THAT:- Calculation of disallowance as per Rule 8D(2)(iii) is erroneous, as the AO without assigning any reason did not reduce the investment in mutual funds and group concern which does not quire incurrence of major expenditure.We restore this ground back to the file of A.O. for fresh consideration.
As we have restored the appeals of the Assessee, we also restore the appeals of the revenue to the file of the Assessing Officer who shall consider the submissions of the Assessee that the dividend income from the investments in HDFC Mutual Fund (Growth Plan) is taxable when the dividend is received and also the capital gains is attracted for the gain received on sale of these investments.
AO should also consider as to whether investment in foreign subsidiary company is also taxable or not. In case, the return from these investments are taxable, the question of applying disallowance under section 14A does not arise. The Assessing Officer should examine all these aspects and decide the issue in accordance with law after providing adequate opportunity to the Assessee.
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2017 (3) TMI 1831 - ITAT AHMEDABAD
Levy of fee u/s. 234E in order u/s. 200A - appellant has filed TDS statement u/s. 200(3) beyond the prescribed due date - HELD THAT:- As case of Tanish Industries Pvt Ltd [2015 (11) TMI 1507 - ITAT AHMEDABAD] adjustment in respect of levy of fees under section 234E was indeed beyond the scope of permissible adjustments contemplated under section 200A.
The impugned levy of fees under section 234 E is unsustainable in law. We, therefore, uphold the grievance of the assessee and delete the impugned levy of fee under section 234E of the Act. - Decided in favour of assessee.
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2017 (3) TMI 1830 - DELHI HIGH COURT
Addition u/s 68 - statements made by the assessee’s Directors in the course of search under Section 132 - HELD THAT:- Following question of law arises for consideration in these appeals: -
“Did the ITAT fall into error in holding that the additions made under Section 68 of the Income Tax Act, 1961, on account of the statements made by the assessee’s Directors in the course of search under Section 132 of the Act were not justified.”
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2017 (3) TMI 1829 - RAJASTHAN HIGH COURT
Addition on account of retraction from income admitted as undisclosed and not recorded in the books of accounts in the statement of the Director of the assessee company recorded on oath - Survey operations u/s 133A - ITAT upholding the decision of CIT(A) of deleting the addition - HELD THAT:- The appellant and the other sister concerns are independent and merely on 133A statement the addition could not have been made. Therefore, the CIT (A) as well as the Tribunal have not committed any error in deleting the addition.- Decided in favour of assessee.
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2017 (3) TMI 1828 - ITAT JAIPUR
Excess stock found during the survey - partner of the assessee firm admitted that the investment had been made out of undisclosed sources - Suddenly in the books of accounts, the assessee has incorporated this transaction by debiting the purchase account and crediting the income from undisclosed sources - HELD THAT:- The net effect of this double entry accounting treatment is that firstly the unrecorded stock of rice has been brought on the books and now forms part of the recorded stock which can be subsequently sold out and the profit/loss therefrom would be subject to tax as any other normal business transaction. Secondly, the unrecorded investment which has gone in purchase of such unrecorded stock of rice has been recorded in the books of accounts and offered to tax by crediting the said amount in the profit and loss account. Had this investment been made out of known sources, there was no necessity for assessee to credit the profit/loss account and offer the same to tax. No infirmity in assessee’s bringing such transaction in its books of accounts and the accounting treatment thereof so as to regularise its books of accounts. In fact, the same provides a credible base for Revenue to bring to tax subsequent profit/loss on sale of such stock of rice in future.
Whether the amount surrendered by way of investment in the unrecorded stock of rice has to be brought to tax under the head “business income” or “income from other sources”? - In the present case, the assessee is dealing in sale of foodgrains, rice and oil seeds, and the excess stock which has been found during the course of survey is stock of rice. Therefore, the investment in procurement of such stock of rice is clearly identifiable and related to the regular business stock of the assessee. The decision of the Co-ordinate Bench in case of Shri Ramnarayan Birla [2016 (9) TMI 1354 - ITAT JAIPUR] supports the case of the assessee in this regard. Therefore, the investment in the excess stock has to be brought to tax under the head “business income” and not under the head income from other sources”. In the result, ground No.1 of the assessee is allowed.
Addition of interest - assessee has given loan and advances to Smt. Rita Gupta and charged interest @ 10%, whereas assessee firm was paying interest @ 14%-17% on loans availed by it - HELD THAT:- It is noted that the advance was given to Smt. Rita Gupta in earlier years for construction of godown and the same was given on rent by the assessee. The test of commercial expediency for giving the advance having being established, the AO is not correct to challenge the rate of interest which has been charged by the assessee. Further, no nexus has been established between the borrowed funds and funds advanced to Smt Rita Gupta. In the result, the ground no. 2 of the assessee is allowed.
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2017 (3) TMI 1827 - ITAT CHENNAI
LTCG Computation under section 50C - Valuation of property - Additional capital gain made by invoking the provisions of section 50C - refer the matter before the DVO - value adopted by the DRO - HELD THAT:- Before confronting the fair market value adopted by the SRO as higher, the assessee has not directly approached the AO to refer the matter before the DVO to determine the fair market value, but against the value adopted by the SRO, the assessee has appealed before another authority i.e., District Revenue Officer (Stamps), Chennai.
Against the value determined by the District Revenue Officer (Stamps), Chennai, which was adopted as market value of the property by the SRO, neither the Department nor the Tribunal can alter or modify the value. The dispute over the valuation of market value ended with Revenue authorities of the State Government. Therefore, the value adopted by the DRO cannot be challenged before the Tribunal.
After challenging the value determined by SRO before the DRO (STAMPS) for assessing the market value, and paid the difference of stamp duty and got released the document on 16.08.2011, the assessee cannot confront the rate determined by the DRO before the Assessing Officer. Even though the Assessing Officer obtained DVO rates, which is similar to the value determined by the DRO, the Assessing Officer taken the difference in value of DRO and SRO for working out the long term capital gains and the actual difference was brought to tax. Under the above facts and circumstances, we sustain the addition made by the Assessing Officer and confirmed by the ld. CIT(A) and thus, the ground raised by the assessee is dismissed.
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2017 (3) TMI 1825 - ITAT CHENNAI
Monetary limit to file appeal - low tax effect - Revenue has filed the present Miscellaneous Petition on the ground that the Circular No.21/2015 of CBDT is not applicable to the appeal of the Revenue - Reopening of assessment on audit objection disallowing expenditure paid to Cochin Port Trust, for non-deduction of tax - HELD THAT:- AO reopened the assessment u/s 147 on the basis of audit objection and disallowed an expenditure being the sum paid to Cochin Port Trust towards port charges. Admittedly, the appeal was not filed on the basis of audit objection. The assessment was reopened on the basis of audit objection.
On perusal of the approval granted by the Principal Commissioner of Income Tax under Rule 15 of Appellate Tribunal Rules, 1963, it appears that the appeal was filed in the regular course and not on the basis of audit objection. Therefore, it is obvious that para 8 of Circular No.21 of 2015 issued by CBDT is not applicable. Hence, the Miscellaneous Petition filed by the Revenue has no merit at all.
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2017 (3) TMI 1824 - ITAT AHMEDABAD
Penalty u/s 271E - Non recording of satisfaction regarding initiation of penalty proceedings - HELD THAT:- Assessment Order there is no mention about initiation of any penalty proceedings in connection with the impugned penalty. In this view of the matter and respectfully following case of CIT vs. Jai Laxmi Rice Mills [2015 (11) TMI 1453 - SUPREME COURT] delete the impugned penalty. - Decided in favour of assessee.
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2017 (3) TMI 1823 - ITAT MUMBAI
Disallowance of excess claim of depreciation - HELD THAT:- As decided in own case [2014 (5) TMI 926 - ITAT MUMBAI] direct the AO to allow the depreciation on the machinery that had been acquired from Bilag, and also include incidental expenses incurred on acquisition of assets.
Depreciation on goodwill - HELD THAT:- As decided in own case [2014 (5) TMI 926 - ITAT MUMBAI] relying on Smifs Securities Ltd. [2012 (8) TMI 713 - SUPREME COURT] - intangibles like goodwill are eligible for depreciation - non compete fee is in the nature of the payment and is now covered u/s 28(va) of the Act, it would be revenue in nature - AO is directed to allow the depreciation on goodwill as per law and consider the payment of non-compete fee, in terms of section 28(va) – Decided in favour of Assessee.
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2017 (3) TMI 1822 - ITAT COCHIN
Deduction u/s 80P - assessee was in the business of banking and section 80P(4) stood attracted and disallowed the claim of the assessee u/s. 80P(2)(a)(i) - CIT(A), by relying on the judgment of Hon’ble Jurisdictional High Court in the case of Chirakkal Service Co-operative Bank Ltd. v. CIT 2016 (4) TMI 826 - KERALA HIGH COURT accepted the claim of the assessee u/s. 80P(2)(a)(i) - HELD THAT:- Assessee having produced the certificate which clearly indicated its nature as a primary agricultural credit society, in our opinion, section 80P(4) could not have been invoked for denying the claim u/s. 80P(2)(a)(i) - We cannot find fault with the order of the CIT(A).
As for the judgment of Hon’ble Jurisdictional High Court in the case of Perithalmanna Service Co-operative Bank vs. CIT 2014 (6) TMI 184 - KERALA HIGH COURT relied on by Ld. DR, this was pronounced on 31st January, 2014 prior to the judgment of Hon’ble Jurisdictional High Court in the case of Chirakkal Service Co-operative Bank Ltd. v. CIT 2016 (4) TMI 826 - KERALA HIGH COURT Further the said case dealt with the revisionary powers of the CIT u/s. 263 of the Act when the Assessing Officer had failed to make necessary enquiries.
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2017 (3) TMI 1821 - KARNATAKA HIGH COURT
Proportionate deduction u/s.80IB - profits attributable to the units where the built-up area is below 1500 sq.ft. even when no such apportionment is prescribed under the provisions of the Act - Whether Tribunal was justified in law in holding that the assessee is entitled to claim deduction under section 80IB in respect of profits derived from the sale of residential units, wherein the built up area is below 1500 sq.ft. ? - HELD THAT:- Revenue is unable to dispute that the Tribunal in the impugned order has relied upon its earlier decision in the case of M/s. S J R Enterprises [2009 (8) TMI 953 - BANGALORE TRIBUNAL COURT] which has been not interfered with by this Court in the above referred [2012 (3) TMI 615 - KARNATAKA HIGH COURT], the present appeals are squarely covered by the decision of this Court - No substantial questions would continue to remain, but even if the questions are to be examined, they would stand answered against the revenue and in favour of the assessee
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2017 (3) TMI 1820 - DELHI HIGH COURT
Stay of demand - recovery proceedings - granted relief to the extent of 85% of the demand - AO demanded the amount rejecting the assessee’s explanation that the said sum was invested in Broadcast Audience Research Council (BARC) on account of Central Government’s policy, through the directives of the appropriate ministry - HELD THAT:- The Court notices that the AO applied the Board’s office memorandum dated 29.02.2016 and has granted relief to the extent of 85% of the demand. However, having regard to the materials on record, it is quite clear that the amounts were deposited with the BARC not by way of investment or choice, but on account of a Central Government policy.
This peculiar circumstance warrants adoption of the policy, spelt out in para 4(D) of the memorandum dated 29.02.2016. The petitioner’s appeal may, therefore, be decided by the concerned Appellate Commissioner within three months from today. Pending a final decision, no coercive steps shall be taken to enforce the demand. In the light of the above order, the petitioner shall ensure that the review application filed before the CIT(E) and the Chief Commissioner is withdrawn within a week.
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2017 (3) TMI 1819 - ITAT CHENNAI
Interest accrued on NPA - Accrual of income - HELD THAT:- Assessee was bound to follow classification of NPA in accordance with prudential norms prescribed by Reserve Bank of India. It is not disputed that the assessee had not shown any income accrual of interest on non-performing assets in its accounts. Hon'ble Bombay High Court in the case of Deogiri Nagari Sahakari Bank Ltd. [2015 (1) TMI 1218 - BOMBAY HIGH COURT] held that Tribunal has rightly dealt with this issue and observed that, unclaimed dividend in question amounts to excess provisions for dividend made by the Assessee on an earlier occasion which has been reversed by the Assessee in the year under consideration and transferred to a reserve account. The provisions for dividend made earlier was not a charge action profits but it was appropriation of the profits available post-taxation.
It may be true that Section 43D of the Act would not be applicable to the assessee since it was a co-operative bank. However, by virtue of the judgment of Hon'ble Bombay High Court, reproduced above, primacy has been given to Section 45Q of the RBI Act. We are, therefore, of the opinion that interest on NPA could not have been added to the income of the assessee. In taking this view, we are also fortified by the judgment in the case of CIT v. Shri Siddeswar Co-operative Bank Ltd. [2016 (6) TMI 1129 - KARNATAKA HIGH COURT] where their Lordship had made an analysis of the provisions considering the importance of prudential norms of RBI based on Vol.I of Tannans Banking Law & Practice in India. We, therefore, delete such an addition.
Provision for bad debt - only pleading of the assessee is that it should be given a chance for working out average aggregate rural advance for the purpose of application of Section 36(1)(viia) - HELD THAT:- CIT(Appeals) himself noted at para 6.4 of his order that when figures of aggregate average advances are correctly furnished by the assessee, the deduction of provision can be re-worked and allowed. Considering these facts, we are of the opinion that the matter can be revisited by the Assessing Officer. We set aside the orders of the lower authorities with regard to disallowance of provision for bad and doubtful debts and remit the issue back to A.O. to consider afresh in accordance with law. Assessee is directed to furnish the information called for by the Assessing Officer with regard to average aggregate rural advances of its rural branches correctly.
Ex-gratia payment - HELD THAT:- It is not disputed that these payments were made to the employees of the assessee, who were not covered by payment of bonus under Bonus Act. It is also not the case of the Revenue that the employees of the assessee, who were paid the ex-gratia, were shareholders or persons entitled for share of profits or dividend. This being the case, in our opinion, such ex-gratia to employees who were not covered under the payment of Bonus Act, could not be considered as paid for a purpose which was not wholly for the purpose of assessee’s business. Section 36(1)(ii) of the Act has no applicability to payments made to employees who were not eligible for share of profits or dividend.
Disallowance of payment to Gratuity Fund of LIC - amount added back by the assessee in its computation is mentioned by the A.O. in the assessment order - HELD THAT:- As per the A.O., assessee could not give clarification details of the payment. Though a ground in this regard has been raised by the assessee before the CIT(Appeals), Ld. CIT(Appeals) had not given any specific finding. Assessment order itself was very cryptic on this issue and had not given any details regarding payment of Gratuity and why it was being disallowed. Question regarding allowance of Gratuity payment requires a fresh look by the A.O. We set aside orders of the authorities below in this regard and remit the issue regarding payment of Gratuity, back to the file of the AO for consideration afresh, in accordance with law.
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2017 (3) TMI 1818 - ITAT MUMBAI
Bogus purchases - CIT(A) upholding the adhoc addition being 40% - HELD THAT:- Materials were received and sold and duly accounted for and therefore it is not the case where the accommodation entries were taken to suppress the income of the assessee.
Purchases made by the assessee stand proved. Disallowance as sustained by the FAA appears to be unreasonable and excessive and therefore cannot be sustained. In order to plug the leakages of revenue due to the possibility of purchasing goods from the gray market as generally the case is and thus savings made on account of sales tax, octroi and other charges, some reasonable addition should be made.
Reasonable to sustain the addition @5% of the total purchases to cover and compensate for the saving made by the assessee by making purchases from grey market. Accordingly, we set aside the order of the ld.CIT(A) and direct the AO to made the addition @ 5% in place of 40% by the ld CIT of bogus purchases. - Decided partly in favour of assessee.
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2017 (3) TMI 1817 - ITAT MUMBAI
Revision u/s 263 - as per CIT assessee could not have claimed depreciation on plant and machinery given on lease and since the assessee has not reduced the lease value of plant and machinery from block of assets, therefore, the assessee has claimed excess depreciation - HELD THAT:- Not only specific query was raised by the AO but also detailed reply has been made on the basis of which the AO has framed the assessment and allowed the depreciation on the leased asset . It cannot be held that in the light of this record, the AO has not applied his mind or there is any lack of inquiry made by the AO on the impugned issue.
When, the AO has applied his mind on the given facts and material on record which has been specifically required by him, then it cannot be held that the AO has passed the assessment order without any application of mind. Once, a particular view has been taken by the AO which is a possible view in facts and in law, then unless the Ld. PCIT points out that, such view is not tenable either on law or on facts, then such an assessment order cannot be cancelled within the scope and ambit of section u/s 263. See MAX INDIA LTD. [2007 (11) TMI 12 - SUPREME COURT]
and MALABAR INDUSTRIAL CO. LTD. [2000 (2) TMI 10 - SUPREME COURT].
AO has applied his mind and taken a view therefore, such an order of assessment cannot be held to be “erroneous in so far as prejudicial to the interest of revenue‟, unless it is shown that the view of the AO, itself is untenable in law and on facts. Here the ld.PCIT has not even specified as to what kind on enquiry is to be conducted by the AO. Thus, such an assessment order cannot be cancelled u/s 263 - Decided in favour of assessee.
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2017 (3) TMI 1813 - ITAT MUMBAI
Deduction claimed u/s 24(a) disallowed - Rent income should be treated as income from house property OR Business income - HELD THAT:- No details were furnished by assessee till 17/07/2014. Some statements regarding the queries raised by ld CIT(A) were filed by assessee on 28/08/2014, from which the facts were not verifiable as to which are the asset used for Marine training.
CIT(A) concluded that assessee company executed two agreements , one in respect of buildings and other in respect of furniture and fixture. The assessee company derived the benefits claiming depreciation all the years and now has changed the head the income only to claim standard deduction u/s 24(a) which is higher than the depreciation comparative to repairs and maintenance. Assessee has not filed copy of Memorandum of Association of Assessee Company for the reasons best known to them. The Audit report filed by the assessee reveals that nature of ‘business or profession’ is Boat pleasure, Cruising, renting of properties [para 8(a)] and there is no change in the nature of business or profession. The ratio of the various decisions is not applicable as the facts of the present case are at variance. We have seen that the order of ld CIT (A) is reasoned one and does not require any interference at our end. Appeal of the assessee is dismissed.
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2017 (3) TMI 1808 - ITAT INDORE
Disallowance of interest on advances given treating it to be non business expenditure - Sufficiency of own funds - AO found that the assessee has advanced interest bearing funds to some of persons from which either no interest is charged or the same is charged at lesser rate whereas the assessee has paid interest @ 12% on loan taken - HELD THAT:- Interest-free advance were given out of interest-free funds available with the assessee during the year for which sufficient interest-free funds were available. Therefore, we are of the view that the Ld. A.O. has failed to establish that interest free advances to above stated four parties were out of interest bearing funds. We find that the AO has not been able to establish the nexus between interest bearing funds utilized for non business purpose
In the present case, the sufficient interest free funds were available at the disposal of the assessee. Therefore, presumption would go in favour of the assessee that the interest free funds were given out of interest free funds available at the disposal of the assessee as per balance sheet of the assessee. We further rely on the decision in the case of CIT vs. Hero Cycles Ltd. [2009 (11) TMI 33 - PUNJAB AND HARYANA HIGH COURT]wherein it was held that no disallowance out of interest payment is permissible if AO does not establish nexus between the expenditure incurred and income generated. - Decided in favour of assessee.
Addition u/s 41(1) - cessation of liability - there is a one creditor M/s Mahima Porsepun in whose case an amount was outstanding for last three years - HELD THAT:- there was no basis by treating the said amount as remission or cessation of a trading liability of the assessee when it was not unilateral written off by the assessee. We find that the AO has made this addition merely on the basis of expiry of limitation to file the suit by creditor, where he cannot who come up with a proceedings for enforcement of debt. However, we find that this amount was subsequently settled by the assessee in the succeeding years therefore, the assessee has not derived or obtained any benefit in respect of such trading liability. Therefore, the addition made on the basis of presumption cannot be sustained in the eyes of law.
Provision of Section 41(1)(a) of the Act can only be invoked when the assessee has written off the liability in its books of accounts by unilateral act. Since, the assessee has not written off the aforesaid amount in its books of accounts and the payment has been settled in the subsequent year, therefore, the addition so made by the AO, is not sustainable in the law. Accordingly, the same is deleted. This grounds of appeal is therefore allowed.
Addition u/s 14A r.w.r. 8D - assessee has invested the capital in the form of share capital for which he is earning his share income from the firm and has shown share of profit - HELD THAT:- As relying on DAGA CAPITAL MANAGEMENT (P.) LTD. [2008 (10) TMI 383 - ITAT MUMBAI] there is no dispute that there cannot be any doubt, that some expenditure incurred in making of earning of income for dividend in case of maximum accounting the expenditure is not identified as such it directly relates to earning of dividend but that cannot be granted to say that no expenditure is incurred for earning dividend income for that or no expenditure could be related to that income. Therefore, in the light of aforesaid decisions and the provision of Rule 8D(iii) we are of the view that the assessee must have incurred the some expenditure in relation to earn exempt income therefore, the disallowance made by the AO and as confirmed by the CIT(A) are upheld. Hence this ground of appeal is dismissed.
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2017 (3) TMI 1807 - ITAT KOLKATA
Interest subsidy received by the assessee under TUFS - Revenue or capital receipt - HELD THAT:- Identical subsidy under the West Bengal Incentive Scheme 2000 was held to be capital receipt not chargeable to tax by this tribunal in the case of DCIT vs PWC Pvt. Ltd. [2016 (7) TMI 1052 - ITAT KOLKATA] . Following the aforesaid decisions we hold that the receipt of subsidy under the West Bengal Incentive Scheme 2000 is a capital receipt not chargeable to tax. Accordingly ground no.1 raised by the revenue is dismissed.
Set off of loss being unabsorbed depreciation of 100% EOU eligible for deduction u/s. 10B against profit on non-eligible unit - HELD THAT:- Admittedly under the provision of section 10B(8) of the Act the assessee had not claimed the benefit of deduction u/s 10B of the Act and the letter of the Assessee in this regard filed in the course of Assessment proceedings for AY 2005-06. For an assessee who was opted out of the provision of section 10B of the Act, the profits of EOU unit have to be regarded as any other business profits and the computation provision of section 70 to 72 of the Act would be applicable. In such an event the claim of set off as claimed by the assessee deserves to be allowed. Apart from the above in the light of the decision of the Hon’ble Supreme Court in the case of Yokogawa India Ltd. [2016 (12) TMI 881 - SUPREME COURT] provision of section 10B have to be regarded as deduction provision, the provisions of section 70 to 72 of the Act will be applicable. In view of the above we uphold the order of CIT(A) on this issue and dismiss ground no.2 raised by the revenue.
Additional depreciation on plant and machinery only in the year of acquisition and installation u/s 32 - CIT(A) allowing assessee's claim of additional depreciation of plant and machinery on original cost in the year subsequent to the year of acquisition and installation - Additional depreciation was rejected by CIT(A) for the reason that additional depreciation is available only in respect of new plant and machinery acquired and installed after 31.03.2005 - only objection of the AO is that the provisions refer to “new machinery or plant” and therefore the machinery will cease to be a new machinery after the end of the first year in which it is installed or put to us - HELD THAT:- In our view this stand taken by the revenue is not supported by the language of statutory provision. The condition imposed by the relevant provisions is that Plant and Machinery must be new at the time of installation to be eligible for additional depreciation u/ s 32(1)(iia) and not new in subsequent years. The expression “new machinery” is therefore to be construed as referring to the condition that at the time of acquisition or installation the machinery or plant should be new. Going by the legislative history of the relevant provision, we are of the view that the condition for allowing additional depreciation only in the initial assessment year ceased to exist as and from 01.04.2006. The plain language of the section warrants such an interpretation. We therefore uphold the order of CIT(A) and dismiss ground no.3 raised by the revenue.
MAT - Deduction on account of profit from sale of fixed asset while computing book profit u/s. 115JB - whether CIT(A) has erred in allowing assessee's claim of deduction ignoring the provision introduced by the Finance Act, 2008 with retrospective effect from 01.04.2001 and thereby has erred in deleting the addition? - HELD THAT:- Decision of the Mumbai Bench of the ITAT in the case of Frigsales [2005 (6) TMI 478 - ITAT MUMBAI] based on which the CIT(A) held that profit on sale of fixed assets cannot be included as part of book profits for the purpose of Sec.115JB of the Act is applicable to the facts of the present case.
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2017 (3) TMI 1806 - ITAT CHENNAI
TP Adjustment - downward adjustment made by the Ld. TPO in respect of the international transactions - assessee to justify its claim for having received services from Associated Enterprises, whereas it was observed that many of the services were duplicative in nature as the assessee failed to explain how payments were made to its employees as well as its Associated Enterprises - DRP emphasized that the assessee company has failed to produce any documents to substantiate the claims and the Ld. TPO has consider the information and observed that the assessee has not cooperated in submitting the correct data - HELD THAT:- We are in consonance with the facts that the Associated Enterprises rendered services and the payments have been made by the assessee company though assessee could not substantiate it due to various reasons on the claim, we find strength in the arguments of the Ld. AR, that these expenditure being genuine and incurred wholly and exclusively for the purpose of business and we are of the opinion that if the assessee produced the details of expenditure for availing the services from the Associated Enterprises and prove the genuineness of transaction.
We having considered the factual aspects, judicial decisions and also the facts of claim of expenditure by the assessee and cannot be overlooked and an opportunity may be provided to substantiate the claim supporting the details of expenditure in the nature of management fees paid to the Associated Enterprises. In the interest of justice, we provide an opportunity to the assessee and remit the disputed issue to the file of the DRP which has considered these facts in its order and further direct the assessee to produce the claim of expenditure with supporting evidence and accordingly the assessee appeal is allowed for statistical purposes.
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2017 (3) TMI 1805 - ALLAHABAD HIGH COURT
No notice u/s 143(2) was issued by competent authority - jurisdiction transferred to the DCIT - HELD THAT:- Income Tax Officer for the reason he had jurisdiction up to ₹ 5,00,000/- and PAN also. Since return was filed without showing any income, therefore notice was issued by Income Tax Officer, but subsequently jurisdiction was transferred to the DCIT.
We inquired from learned counsel for appellant as to how jurisdiction was transferred to the DCIT and what happened in the meantime, which caused change of jurisdiction from Income Tax Officer to the DCIT to which he replied that there was no change at all and Income Tax Officer on its own forwarded assessment record to DCIT mentioning the reason as change of jurisdiction in its letter dated 09.11.2010. He admitted that there was no change of jurisdiction between 30.09.2010 and 09.11.2010. That being so it is evident that even on 30.09.2010 when notice under Section 143(2) was issued by Income Tax Officer, he had no jurisdiction in the matter.
The issue answered in favour of Assessee and against Revenue.
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