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- 2020 (10) TMI 1218 - ITAT CUTTACK
Addition on account of provision for dam maintenance - allowable expenditure - assessee follows mercantile system of accounting as per which liability for expenses can be recognized and claimed only when the liability crystallizes - HELD THAT:- CIT-A observed that though the expenditure have been incurred by the assessee for dam maintenance, it was kept under provision account for settlement with the government against amounts receivable from the Government - CIT(A) relying on the decision of this Bench of the Tribunal in assessee's own case allowed the provision for dam maintenance. - Decided against revenue. Disallowance of depreciation - assessee did not produce the details of the assets on which depreciation has been claimed @ 25% - HELD THAT:- Assessee company appearing before the Ld. A.O. vide its written submission explained th....... + More
- 2020 (10) TMI 1205 - ITAT DELHI
Taxation of intermediary services - taxable as ‘fees for technical services’ - appellant company is registered and incorporated under the laws of Sweden and is a non-resident and tax resident of Sweden - CIT-A observed that the said intermediary services rendered by the appellant to BTIN does not satisfy the ‘Make Available’ clause and does not amount to FTS - HELD THAT:- Technical or consultancy services rendered should be aimed at and result in transmitting technical knowledge, etc., so that the payer of the service could derive an enduring benefit and utilize the knowledge or know-how on his own in future without the aid of the service provider. Technology will be considered 'made available' when the person acquiring the service is enabled to apply the technology. Provision of the service that may requir....... + More
- 2020 (10) TMI 1204 - ITAT BANGALORE
Unexplained cash credit u/s 68 - professional fees received - HELD THAT:- Action of the AO in treating the sum shown as income in the form of professional fees received as unexplained credit u/s. 68 of the Act cannot be sustained. There is no dispute with regard to the identity and capacity of VHPL. The genuineness of the transaction cannot be disputed merely on the basis that no services were rendered. The basic presumption u/s. 68 is that the sum treated as unexplained has to be assessee’s money. TDS has been deducted on the sum payable by VHPL. The AO himself has found that VHPL does not have employees and assessee catered to the needs of VHPL. In these circumstances, the addition of ₹ 6 lakhs u/s. 68 was not justified. Disallowance of expenses - Rental expenditure treated as unexplained expenditure u/s. 69C - HELD THAT:- T....... + More
- 2020 (10) TMI 1203 - ITAT BANGALORE
Assessment u/s 153A - incriminating material found during search or not - HELD THAT:- Without there being a clear finding in respect of their being incriminating material/unaccounted money unearthed during the course of search, validity of assessment order passed under section 153A cannot be ascertained. Hence we feel it proper to remand the issue back to Ld.CIT(A) for fresh consideration on this aspect about validity of invocation of section 153A in the light of decision of CIT vs Sinhagd Technical Education Society [2017 (8) TMI 1298 - SUPREME COURT] - In the event assessee succeeds on this aspect then nothing remains to be decided on merits. But if assessee fails on this aspect, then the issue on merits should be decided by Ld.CIT(A) afresh, in accordance with law. CIT(A) remanded certain issues to Ld.AO to consider in accordance with ....... + More
- 2020 (10) TMI 1202 - ITAT MUMBAI
Disallowance u/s 14A r.w.r. 8D - CIT(A) deleting the disallowance - HELD THAT:- CIT(A) has decided the issue on the basis of the decision of Hon’ble ITAT in the assessee’s own case for the A.Y. 2012-13 & 2013-14. It is specifically mentioned that the AO had recorded the similar reason while disallowing the expenditure to earn the exempt income in all the three years. The assessee filed an appeal before the CIT(A) who confirmed the order of the AO but the assessee filed an appeal before the Hon’ble ITAT in which the expenditure was restricted to the extent of expenditure which has been declared by assessee. CIT(A) has reproduced the judgment of the Hon’ble ITAT in his order. The CIT(A) has also discussed the several law including the India Advantage Securities Ltd [2015 (6) TMI 140 - BOMBAY HIGH COURT] and Maxop....... + More
- 2020 (10) TMI 1201 - ITAT MUMBAI
Revision u/s 263 - prohibition by law within the meaning of Explanation 1 to Sec.37(1) on claiming sales promotion expenses as deduction u/s.37(1) - providing freebies by pharmaceutical companies is a natural corollary violation of the provisions of MCI Regulations, 2002 - HELD THAT:- When the order passed by the Pr.CIT-2, Mumbai, under Sec. 263 of the Act, dated 31.03.2017 had been quashed by the Tribunal, and thus, is no more in existence, therefore, the consequential assessment framed by the A.O under Sec.143(3) r.w.s 263 cannot be sustained and has to meet the same fate. In the backdrop of our aforesaid deliberations, we herein, finding no infirmity in the view taken by the CIT(A) who in our considered opinion had rightly vacated the assessment framed by the A.O under Sec.143(3) r.w.s 263, dated 29.09.2017, therefore, uphold his order. The Ground of appeal No.1 filed by the revenue is dismissed.
- 2020 (10) TMI 1200 - ITAT DELHI
Exemption u/s 10A - As per AO assessee has bifurcated the expenditure against the domestic income as well as export income AND profit from domestic sale does not qualify either adjustment of loss from export business u/s 10A - assessee explained that it has entered into a Master Outsourcing Agreement with C&S, USA to provide ITES and also entered into an agreement called Master Outsourcing Agreement with GHCL - CIT-A allowed deduction - HELD THAT:- Provisions of section 10A(4) of the Act have been explained elsewhere. In our understanding of the present facts and law, as both the export sales and domestic sales were done by the same undertaking, therefore, profit or loss of the undertaking needs to be calculated as a whole and profit from domestic sales cannot be charged separately to tax and adjusted against loss from export business....... + More
- 2020 (10) TMI 1199 - ITAT PUNE
Income declared in the survey carried out u/s 133A - Disallowance of salary to partners claimed u/s.40(b) - income declared in the survey and also offered for taxation - whether the income offered by the assessee is covered u/ss 69/69A of the Act as held by the AO or can be classified as `Business income’ as claimed by the assessee? - HELD THAT:- Amount of investment is only a measure for quantifying the amount of addition. Raison d’etre for the addition is not giving any satisfactory explanation about the source of income, which was used for investment. If source is explained, there can be no addition on account of investment. We are confronted with a situation, in which both the source and destination are business inasmuch as the source of the income is business and the destination of such income is again in the nature of bu....... + More
- 2020 (10) TMI 1198 - ITAT JAIPUR
Levy of penalty u/s 271(1)(c) - Reopening of assessment - estimation of income by the Assessing Officer - HELD THAT:- Where there is no positive evidence or material beyond doubt of assessee having concealed the particulars of income or furnishing inaccurate particulars of income, mere addition in the quantum proceedings is not sufficient to hold assessee liable for levy of penalty. Additions made by the AO were based on estimation only. A fact or allegation based on estimation cannot be said to be correct only, it can be incorrect also. Therefore, in the facts and circumstances of the case, penalty was wrongly levied by the Assessing Officer. The basis for levying penalty in the present case is only estimation, which is purely a question of fact and there is a concurrent finding of fact recorded - Decided in favour of assessee.
- 2020 (10) TMI 1197 - ITAT PUNE
Benefit of exemption u/s.54B(1) - AO denied the assessee’s claim on the ground that the she did not deposit the amount of capital gain in the designated capital gain account maintained with a bank before the due date of filing return u/s.139(1) - HELD THAT:- It is more than clear that section 139 is to be read here as section 139(4) and not to be confined to section 139(1) alone. As per the facts obtaining in this case, it is observed that the time u/s.139(4) was available up to 31-03-2014. The assessee opened a bank account under the designated Capital gain account scheme on 03-08-2013 and purchased a new property on 26-08-2013. It is evident that the assessee complied with the requirement of section 54B(2) seen in the light of the time limit as per section 139(4) of the Act. It is relevant to take note of the judgment of Hon&rsquo....... + More
- 2020 (10) TMI 1196 - ITAT JAIPIUR
Estimation of income - unverified purchases - Book results have been rejected by invoking the provisions of section 145(3) of the Act and the G.P estimation @ 30% has been done and the trading addition has been made by the AO - HELD THAT:- Regarding the challenge to the rate of G.P estimated by the AO @ 30% as against declared by the assessee @ 13.82%, we find that in the first round of appellate proceedings, the matter has been considered by the Hon’ble High Court wherein in respect of appeal filed by the Revenue, the matter has been decided in favour of the assessee and the G.P rate as sustained by the Tribunal @ 17% has been confirmed and the matter has attained finality. Similar is the finding recorded by the ld CIT(A). Therefore, the AO is directed to apply G.P rate of 17% and separate addition in respect of unverified purchases is hereby deleted. In the result, the grounds of appeal are disposed off.
- 2020 (10) TMI 1195 - ITAT CUTTACK
Liability for payment of arrears of salary - Implementation of the 6th Pay Commission to his employees - Certain liability - HELD THAT:- Assessee company calculated his liability and made provision in his books of accounts and claimed as expenditure, which are placed in the record. The liability calculated by the assessee company was a fixed liability which was to be paid to its employees towards arrear salary which cannot be also taken back from the employees. As a certain liability for the impugned assessment year. The assessee company can make provision for the certain liability which is certainly to be paid, therefore, the assessee company has rightly made provision for the arrears of salary in his books of accounts. This is a necessary expenditure, which is required to be deducted from the profit of the assessee company for the impug....... + More
- 2020 (10) TMI 1194 - ITAT JAIPUR
Addition u/s 69 - investment not recorded in the books of accounts - HELD THAT:- We find that there is no specific finding which has been recorded by the ld CIT(A) regarding the source of investment being the unsecured loan taken from Shrishtianand Builders and Colonizers - AO in the remand report has also merely gone by the bank statement of Shrishtianand Builders and Colonizers and confirmed the genuineness of the loan transaction. Where a loan transaction has been claimed to be entered into by the assessee, the necessary attributes of such loan transaction in terms of tenure, purpose, rate of interest, repayment and hypothecation/guarantee for availing such loan transaction needs to be substantiated by the assessee and which needs to be examined by the AO. Disbursement of loan and its utilization for making the aforesaid investment nee....... + More
- 2020 (10) TMI 1193 - ITAT MUMBAI
Deduction u/s 80P(2)(a)(i) - interest income earned - assessee company was a Credit Co-operative society - Assessee not eligible for deduction in respect of the interest income earned by the appellant on the deposits kept with Bombay Mercantile Co-operative Bank Ltd and Maharashtra State Co-operative Bank Ltd. - HELD THAT:- As relying on Jawala Cooperative Urban Thrift & Credit Society Ltd. [2014 (12) TMI 1227 - ITAT DELHI] and Tumkur Merchants Souharda Credit Co-operative Ltd [2015 (2) TMI 995 - KARNATAKA HIGH COURT] assessee is entitled for the deduction u/s 80P(2)(d) in respect of the interest income earned by the appellant on the deposits kept with Bombay Mercantile Co-operative Bank Ltd and Maharashtra State Co-operative Bank Ltd. Accordingly, we set aside the finding of the CIT(A) on this issue and allowed the claim of the assessee. - Decided in favour of assessee.
- 2020 (10) TMI 1192 - ITAT MUMBAI
Penalty u/s 271(1)(c) - unproved claim of purchases - HELD THAT:- Hon’ble Supreme Court in CIT-2 Lucknow Vs. U.P State Bridge Corporation Ltd. [2018 (8) TMI 766 - SC ORDER] observed, that where a claim of expenditure is neither found inaccurate nor could be viewed as concealment of income on the part of the assessee, then, merely because the said claim was not accepted or acceptable to the revenue, that by itself would not attract penalty under Sec. 271(1)(c). In the case before us, as the revenue had failed to disprove to the hilt on the basis of clinching documentary evidence the authenticity of the claim of the assessee of having made purchases from the aforementioned parties, therefore, merely on the basis of the unproved claim of purchases no penalty under Sec. 271(1)(c) could have been validly imposed on it. - Decided against revenue.
- 2020 (10) TMI 1191 - ITAT JAIPUR
Condonation of delay - delay of 654 days - HELD THAT:- As submitted that there has been a change in the management of the company and the present tax matter pertaining to the period prior to change of management, it was decided that the same would be handled by the erstwhile management, however, due to change of management and lack of diligence on part of ershwhile employees, the appeal could not be filed. It has been further stated that the matter came to light of the present management on 11.07.2018 when an enquiry was made by the Assessing officer for payment of outstanding demand and thereafter, the appeal papers were prepared and appeal was submitted before the Registry As soon as it came to know of the old tax matter pertaining to the period prior to change of the management, it took steps and filed the present appeal. Therefore, in....... + More
- 2020 (10) TMI 1190 - ITAT JABALPUR
Revision u/s 263 - Claim of cost of improvement - variance in the stands of the two sides, the assessee and the builder - HELD THAT:- Factors such as enquiry with the owners regarding the flooring, etc., and, equally, the nature and uniformity of the difference between the two sets of flats/duplexes, etc. would only complete the enquiry, establishing, completely missing, whether the stated modification was actually carried out and, if so, at the assessee’s instance, justifying payment of additional sum by him, at whatever value, to the Builder. Again, while the assessee claims marble flooring only in the bed rooms, the report says of it being in all the rooms. What does that mean: Has the Builder, in benevolence, provided marble even where not sought by the assessee? The inspection by the inspector, i.e., assuming so, is, thus, wort....... + More
- 2020 (10) TMI 1189 - ITAT DELHI
NRI expenses - Ad hoc & surmiseful addition of 20% - Assessee is a non-resident banking company which carries on the business of banking and other related activities through its branches in India in accordance with the provisions of Banking Regulation Act, 1949 - HELD THAT:- Revenue has allowed the complete expenses including the 20% expenses disallowed in the earlier years. Hence, this issue is no more res integra. The appeal of the assessee on this ground is allowed. Disallowance of Expenses - Assessee interest income from foreign currency loans to its Indian customers, taxable u/s 115A(3) - AO held that under section 115A(3), no deduction is permissible for the income covered under the said provision and the corresponding expenditure is to be disallowed - HELD THAT:- As relying on own case we direct the AO to adopt the following me....... + More
- 2020 (10) TMI 1188 - ITAT MUMBAI
Income accrued in India - taxing the receipts from TCL as 'Royalty' under Section 9(1)(vi) of the Act as well as Article 13(3)(a) of the India-UK Tax Treaty - HELD THAT:- As decided in own case [2018 (12) TMI 1321 - ITAT MUMBAI] the amounts received by the assessee from TCL for providing Satellite Telecommunication Services is not to be held as royalty in its hands. The Grounds of appeal Nos. 2 to 5 are allowed in terms of our aforesaid observations. PE in India - Liaison Office (LO) of the assessee constituted its PE in India and that the Land Earth Stations (LES) constituted a PE of the assessee in India - HELD THAT:- A.O/DRP had in the aforesaid preceding years concluded that the LO and LES were to be treated as the PE on the assessee in India, remains the same, as are involved in the appeal of the assessee for the year under c....... + More
- 2020 (10) TMI 1187 - ITAT CUTTACK
Deduction u/s 80P - whether assessee is eligible for deduction u/s.80P(2) and not engaged in banking business? - HELD THAT:- As decided in own case [2020 (8) TMI 361 - ITAT CUTTACK] Assessee society is eligible for deduction u/s. 80P(2)(a)(i) of the Act and the assessee will get the benefit of Circular issued by the CBDT No. 37/2016, dated 02.11.2016 as quoted above. Since we have allowed the legal ground of assessee, other grounds raised by the assessee on merits are for academic purposes. Thus, appeal of the assessee is allowed on legal ground.