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Income Tax - Case Laws
Showing 161 to 180 of 751 Records
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2018 (1) TMI 1432 - ITAT PUNE
Entitlement to deduction u/s 80P(2)(a)(i) - income of the society on account of interest from banks other than Co-operative Banks - Held that:- The said issue is squarely covered by the order of the Tribunal in ITO Vs. Niphad Nagari Sahakari Patsanstha Ltd. [2015 (1) TMI 1004 - ITAT PUNE] wherein the Tribunal had held that the assessee is entitled to claim deduction under section 80P(2)(a)(i) of the Act on the interest income received by it on bank fixed deposits.
As decided in Tumkur Merchants Souhards Credit Cooperative Ltd. Vs. ITO [2015 (2) TMI 995 - KARNATAKA HIGH COURT] interest earned from short term deposits with the bank was entitled to deduction under section 80P(2)(a)(i) of the Act - Decided in favour of assessee.
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2018 (1) TMI 1431 - ITAT VISAKHAPATNAM
Interest on share capital paid to the members of the bank - appropriation of profit and added to the total income - Held that:- AO called upon the assessee to show cause as to why the said interest amount should not be treated as appropriation of profit and added to the total income. The assessee has submitted before the AO that the said interest was paid annually to all the members as, it is bound to pay such interest as per the A.P. Mutually Aided Co-operative Societies Act 1995. AO after considering the explanation of the assessee has observed that the interest on capital paid to its members amounts to appropriation of profits and such interest is paid out of the surplus of profits and cannot be a charge on income and hence cannot be allowed as deduction. The Assessing Officer further observed that the ITAT, Visakhapatnam Bench has decided this issue in favour of the assessee for the Assessment Year 2007-08, however, principle of res-judicata has no application and each year is separate and distinct and accordingly disallowed the claim of the assessee.
Interest on share capital paid to the members of the assessee is allowable deduction - Held that:- In assessee’s own case, the facts are mutatis mutandis similar and therefore ld. CIT(A) by following the same, directed the Assessing Officer to delete the addition. Therefore, we find no infirmity in the order passed by the ld. CIT(A). Thus, these grounds of appeal raised by the revenue are dismissed.
Disallowance of interest paid to the members of the bank under section 40(a)(ia) - Held that:- As decided in favour of assessee clarification given in the CBDT circular No.9/2002, it is held that the assessee is not required to effect TDS on the interest payment made to its members even if it exceeds ₹ 10,000/-. The impugned disallowance made in the assessment is not in accordance with the clarification given in the CBDT Circular No.9/2002 and accordingly the AO is directed to delete the impugned disallowance made.
Amortization of premium on government securities - Held that:- Where the tribunal set aside the issue to the file of the Assessing Officer to decide the issue in accordance with law. In the present case, ld. CIT(A) by following the decision of the coordinate bench of the tribunal in the above referred to appeals in assessee’s own case, directed the Assessing Officer to examine the issue and accordingly relied may be granted.
Loss on account of merger of Ongole Cooperative Urban Bank and Ramachandrapuram Cooperative Urban Bank - Held that:- As decided in assessee's own case the assessee has not paid any amount to amalgamating company. The assessee has only taken losses of amalgamating company i.e. Bobbili Co-operative bank. Therefore, the assessee has not acquired any goodwill. CIT(A) by considering the entire facts of the case has passed a detailed order by considering the provisions of law. Case laws relied by the Ld. Counsel for the assessee also decided in a different facts and circumstances and therefore, we find no application to the facts of the present case. We find no reason to interfere with the order passed by the Ld. CIT(A). This ground of appeal raised by the assessee is dismissed
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2018 (1) TMI 1429 - ITAT RAIPUR
Addition treating Long Term Capital Gain as income from undisclosed sources - exemption u/s.10(38) - Held that:- No specific mistake in the order of CIT(A) could be pointed out by the DR. It is a settled position of law that suspicion alone cannot be the basis for making an addition in an assessment. Suspicion cannot take place of proof. In the instant case, we find no material could be brought on record by the Revenue to impeach the related transactions. In view of the facts of the instant case and the decisions discussed hereinabove, we do not find any infirmity in the order of CIT(A). Therefore, the appeal of the Revenue is dismissed.
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2018 (1) TMI 1426 - ITAT BANGALORE
Disallowance of the claim of earning agricultural income - AO decided the issue against the assessee on the primary reason that possession of agricultural land was not at all handed over to assessee on entering into agreement of sale on 17.01.2013 - Held that:- In the present case, the assessee produces the agreement to sell wherein there is a clause of handing over possession of landed property to the assessee and this was confirmed by the seller that he has handed over the landed property on entering into sale agreement. There is evidence produced by the assessee before the AO in the form of estate books of account like expense bills, indent copies.The lower authorities opted not to comment on these documents and went on to hold that possession of property was not at all handed over to assessee vide agreement of sale dated 17.01.2013. \
In opinion thereof, the evidence brought on record by the revenue authorities was not sufficient to establish their stand that the assessee has not taken possession of land and cultivated the same and sale agreement is only paper transaction or bogus. The entire evidence has to be appreciated in a wholesome manner and even where there is documentary evidence, the same can be overlooked if there are surrounding circumstances to show that the claim of the assessee is opposed to normal course of human thinking and conduct or human probabilities.
Even applying this principle to the instant case, there was some difficulty in rejecting the assessee’s plea as opposed to the normal course of human conduct. The surrounding circumstances of the case were also not strong enough to justify the rejection of assessee’s plea as outrageous or fabricated one. Taking possession of land vide sale agreement and also carrying out of agricultural activities in the said land has to be accepted. However, the quantum of agricultural income declared in the impugned land is very much on the higher side which cannot be accepted to that extent.
AO considered the entire amount of ₹ 29,32,653 declared by the assessee as non-agricultural income. This view of the AO is very unreasonable and vindictive in nature. As already stated, the declaration of ₹ 29,32,653 as agricultural income out of the area of land measuring 26 acres 9 guntas is on the very higher side which cannot be reasonable. Hence make a reasonable estimate of 50% of ₹ 29,32,653 i.e., ₹ 14,66,327 as agricultural income and the balance amount as income from other sources at ₹ 14,66,326. Thus, assessee gets relief of ₹ 1,46,66,327. It is accordingly directed. - Decided partly in favour of assessee.
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2018 (1) TMI 1425 - ITAT AHMEDABAD
Levy of penalty u/s 271(1)(b) - assessee failed to comply with notice under section 142(1) of the Act on six occasions except partial compliance of notice dated 2.3.2016 - Held that:- we are of the view that there is no plausible reason which prevented the assessee from compliance of the notice issued by the AO, therefore, penalty under section 271(1)(b) of the Act has rightly been imposed. - decided against assessee.
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2018 (1) TMI 1423 - ITAT JAIPUR
Penalty u/s 271(1)(c) - unverifiable purchases - Held that:- The addition in quantum proceedings attained the finality it is not based on the finding that the assessee has inflated the purchases and suppressed the income or claim of the assessee was absolutely bogus. AO has only doubted the purchases from certain parties and made the addition only to the extent of 25% of purchases made from such parties instead of disallowing entire purchases from those parties. When the AO has not given any finding of bogus purchases then the disallowance made by the AO is only based on estimation which was restricted by this Tribunal as reasonable estimated. The issue of levy of penalty u/s 271(1)(c) of such addition is now covered by the decision of Hon’ble Jurisdiction High Court in case of CIT vs. Mahendra Singh Khedla [2012 (3) TMI 568 - RAJASTHAN HIGH COURT] - Decided in favour of assessee.
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2018 (1) TMI 1422 - ITAT JAIPUR
Penalty levied u/s 271(1)(c) - addition @25% of unverifiable purchases while completing the assessment u/s 143(3) - Held that:- There is no definite finding by the AO that the assessee has inflated the purchase to the extent of 25% but it was only estimation of the AO to make addition which was subsequently restricted by this Tribunal to 15% of unverifiable purchase. Thus even the addition in quantum proceedings attained the finality it is not based on the finding that the assessee has inflated the purchases and suppressed the income or claim of the assessee was absolutely bogus.
AO has only doubted the purchases from certain parties and made the addition only to the extent of 25% of purchases made from such parties instead of disallowing entire purchases from those parties. When the AO has not given any finding of bogus purchases then the disallowance made by the AO is only based on estimation which was restricted by this Tribunal as reasonable estimated. Accordingly, the issue of levy of penalty u/s 271(1)(c) of such addition is now covered by case of CIT vs. Mahendra Singh Khedla [2012 (3) TMI 568 - RAJASTHAN HIGH COURT]. - Decided in favour of assessee.
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2018 (1) TMI 1421 - DELHI HIGH COURT
Disallowance u/s 14A - whether the explanation of the assessee and the amount offered to tax under Section 14A could not have been rejected by the AO in the manner that he did? - Held that:- Besides the fact that the findings are concurrent, the Court is of the opinion that the facts of this case are such that no interference is called for. As against the exempt income of ₹ 48,447/-, the assessee had itself offered ₹ 2,58,620/- as disallowance. AO however, disallowed the astronomically high figure of ₹ 3,57,82,473/-. The concurrent view of the lower appellate authorities based upon the settled principle enunciated in previous authorities cannot be faulted. The appeal is accordingly dismissed.
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2018 (1) TMI 1420 - ITAT PUNE
Revision u/s 263 - Claim of deduction u/s 54F denied - date of investment towards new residential property was on 18.11.2009 which was not one year prior to the date of transfer i.e., 09.05.2011 and hence not eligible for deduction - Held that:- We find that on identical issue the Co-ordinate Bench of the Tribunal in the case of ITO Vs. Narshivha Amrutrao (2015 (3) TMI 1014 - ITAT PUNE) after relying on the decision of Beena K. Jain (1993 (11) TMI 7 - BOMBAY HIGH COURT) has decided the issue in favour of assessee stating the date to be considered is the date on which the assessee had occupied the said property and not the date on which it had entered into an agreement to purchase the property. - decided in favour of assessee.
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2018 (1) TMI 1419 - ITAT RAJKOT
Treatment to purchase/ sale of shares completed within 30 days - business income or capital gain - Held that:- Revenue has accepted the activity of investment in the shares in earlier years as well as subsequent years which was also not disturbed by the Revenue. Therefore, the principles of consistency need to be followed without any deviation when there is no change in the facts and circumstances of the case from the earlier years.
We hold that the frequency, magnitude of the transaction in a systematic manner cannot be the criteria to hold that the assessee is engaged in a business activity of shares. Therefore, we are inclined to set aside the order of the Ld. CIT(A) and direct the AO to treat the income from investment activity under the head capital gain. Hence, the ground of appeal of the assessee is allowed.
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2018 (1) TMI 1418 - ITAT KOLKATA
Validity of re-opening assessment - additions of unexplained cash credits u/s 68 - Held that:- Assessing Officer’s remand report has nowhere been able to prove the relevant entry of ₹ 1.25 lac alleged to have been availed from Shri Surendra Kumar Jain. AO has rather shifted negative burden on the assessee that it could not be proved that it had not taken any accommodation entry in this regard. As find that the same sufficiently tilts the case in assessee’s favour as the Assessing Officer’s reopening reasons itself does not survive in these facts and circumstances. Therefore hold that the Assessing Officer had not correctly assumed the re-opening jurisdiction in absence of any such entry between assessee and the said entry operator. The sole reopening reason is not sustainable in the eyes of law therefore. - Decided in favour of assessee.
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2018 (1) TMI 1415 - ITAT CHENNAI
Charitable activity - exemption u/s 11 - application of proviso to Section 2(15) - predominant activity of the assessee - Held that:- It is not disputed that apart from the two Kalyanamandapams, assessee was having properties from which a school, a health centre and a library were run. It might be true that the school was run by another trust. However, rental received by the assessee for running the school called Avichi school was nominal. We find great strength in the argument of the AR, that property from which the School was run, if given out on market rates, would fetch tens of crores in income, and forgoing such income for educational purpose, was nothing but charity in the nature of education. Especially so, since the school was run by a trust which was undisputedly having registration u/s.12A of the Act. Apart from this assessee had earned little revenue from its diabetic centre. It had also given out a premises to the Government for a library. All the activities of the assessee were either in the field of education or in field of medical care.
No doubt, ld. Commissioner of Income Tax (Appeals) has observed that assessee could not produce evidence for the charity done by it. However, it is not disputed that assessee had maintained books of accounts and produced the books and records before ld. Assessing Officer. Such books were subject to audits and assessee had filed Audit reports in form 10A of the Act. In such circumstances, we find no reason to uphold the finding of the lower authorities that predominant activity of the assessee was not charity.
Coming to the application of proviso to Section 2(15) of the Act assessee’s charitable activities were directly or indirectly in the nature of relief to the poor or education or medical relief. It was not an organization which was pursuing an activity of general public utility, different from education, medical relief or relief to the poor. First proviso to Section 2(15) is attracted only where an assessee carries on activities which was of general public utility other than those mentioned specifically in the definition of charitable purpose given in Section 2(15). In the circumstances, we are of the opinion that assessee was eligible for the exemption claimed by it u/s.11(1) of the Act for the impugned assessment years. Orders of the lower authorities are set aside and the ld. Assessing Officer is directed to give assessee the exemption claimed by it u/s.11(1) - Decided in favour of assessee.
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2018 (1) TMI 1414 - KERALA HIGH COURT
Stay petitions - Held that:- I reckon the petitioner has exercised on time its statutory remedy of filing second appeals. True, before the Tribunal, stay petitions are pending. Procedural fairness demands that the authorities wait, before taking further steps, until the appellate authority decides on the stay petitions.
Therefore, I dispose of the writ petition, directing the respondent authority to defer coercive steps until the fourth respondent considers the stay petitions.
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2018 (1) TMI 1413 - ITAT MUMBAI
TPA - Comparable selection - functinal similarity - Held that:- Assessee-company,engaged in the business of providing Information Technology Enabled Services (ITES), thus companies functionally dissimilar with that of assessee need to be deselected from final list.
We find that the AR has fairly conceded adjustment @9% (approx.) of AE transaction which would not be objected to by the assessee. AO is directed to work out exact adjustment. Effective ground of appeal is allowed in favour of the assessee,in part.
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2018 (1) TMI 1412 - ITAT MUMBAI
Addition of bogus purchases - inability of the assessee to produce the suppliers - Held that:- In this case the sales have not been doubted. It is settled law that when sales are not doubted, 100% disallowance for bogus purchase cannot be done. The rationale being no sales is possible without actual purchases. This proposition is supported from the Hon'ble jurisdictional High Court decision in the case of Nikunj Eximp Enterprises [2014 (7) TMI 559 - BOMBAY HIGH COURT]
In the present case, the facts of the case indicate that assessee has made purchase from the grey market. Making purchases through the grey market gives the assessee savings on account of non-payment of tax and others at the expense of the exchequer. In such situation, in my considered opinion, on the facts and circumstances of the case, 12.5 % disallowance out of the bogus purchases meets the end of justice.
As assessee has prayed that when only the profits earned by the assessee on these bogus purchase transaction is to be taxed, the gross profit already shown by the assessee and offered to tax should be reduced from the standard 12.5% being directed to be disallowed on account of bogus purchase find considerable cogency in the submission as otherwise it will be double jeopardy to the assessee. Accordingly, modify the order of learned CIT-A and direct that the disallowance in this case be restricted to 12.5 % of the bogus purchases as reduced by the gross profit rate already declared by the assessee on these transactions.- Decided partly in favour of assessee
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2018 (1) TMI 1411 - ITAT DELHI
TPA - determination of ALP of international transaction - MAM selection - CPM OR TNMM - retrospective amendment to the second proviso to section 92C (2) by the Finance Act, 2012 - Held that:- As decided in assessee's own case [2014 (3) TMI 619 - ITAT DELHI] directing TPO to exclude domestic transaction in computation while computing adjustment based on ALP of international transaction was upheld”. So, we are of the considered view that for transfer pricing adjustment only, international transactions are to be considered. Since there is no change of facts on this point qua the year under assessment, TPO is directed to exclude domestic transaction in computing adjustment based on ALP of international transaction.
TPO while computing the ALP of international transaction has taken average OP/TC at Profit Level Indicator (PLI) at 14.24% which is factually incorrect because as per working of comparable companies net margin given by the taxpayer, available at page 194 of the paper book, is 11.51%. Without disputing the working of the comparable companies and net margin given by the taxpayer, the ld. TPO has wrongly given the average at 14.24% which is incorrect. So, TPO is directed to adopt the correct average PLI as per working available at page 194 of the paper book.
TPO was required to consider the segmental account to determine the ALP of the international transaction. Taxpayer is directed to again place on record segmental accounts with identifiable cost in profit and loss account of the taxpayer to be examined by the ld. TPO.
Denying the benefit of +/- 5% by applying the TNMM under Second Proviso to section 92C (2) Tolerance margin in the instance case is to be determined after making correct computation by the TPO, as discussed in the preceding paras. We are of the considered view that in case, variation between the ALP as determined u/s 92C (1) and the price at which the international transaction has actually been undertaken exceeds the tolerance margin then the taxpayer is not entitled for benefit of +/- 5%. This exercise is to be carried out by the TPO after correct computation by the TPO in the light of the decision rendered by the Special Bench of the Tribunal in IHG IT Services (India) (P.) Ltd.[2013 (5) TMI 309 - ITAT DELHI].
In view of what has been discussed above, impugned order passed by the ld. DRP/TPO/AO is set aside and the TPO is directed to decide afresh after providing an opportunity of being heard to the taxpayer in view the directions issued herein before. Appeal filed by the assessee is allowed for statistical purposes - Appeal filed by the assessee is allowed for statistical purposes
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2018 (1) TMI 1409 - ITAT CHANDIGARH
Unexplained investment - additions relate to the same transaction of sale and purchase of property. Assessee Mohinder Singh (since deceased through his legal heirs) was the seller of the property whereas assessee Malkiat Singh was the purchaser of the property - inadmissibility of oral evidence in the presence of registered deed - Held that:- In the case in hand, the amount was recovered from the possession of Shri Mohinder Singh, assessee by the Police authorities. The assessee has been a partner in the conspiracy to falsely represent about the sale consideration to the registration authorities and thereby resulting into payment of less stamp duty, of which the assessee, as discussed above, has also reaped the consequential benefits. Moreover, the question as to the nature of receipt and its taxability has not been gone into by the Hon’ble Allahabad High Court.
Referring to case of Paramjit Singh [2010 (2) TMI 262 - PUNJAB & HARYANA HIGH COURT] holding the inadmissibility of oral evidence in the presence of registered deed is binding on this Tribunal. Under the circumstances and in the light of the above referred to statutory provisions and case laws, the nature of receipt of the income over and above the registered sale consideration in the hands of seller Mohinder Singh, in our view, will not fall under the head ‘Capital Gains’ but ‘income from other sources’. The amount received by Sh. Mohinder Singh, over and above the sale consideration mentioned in the registered document, is ordered to be assessed as income from other sources. The order of the CIT(A), in the case of Shri Mohinder Singh is hereby set aside. The appeal of the revenue is accordingly treated as allowed.
Quantum of additions liable to be made into the income of the purchaser Shri Malkiat Singh - Held that:- Though the AO has observed that Shri Malkiat Singh has failed to disclose the source of the entire amount paid over and above the sale consideration mentioned in the sale deeds, however, a fact on the file that cannot be ignored is that Sh. Malkiat Singh, after purchasing the part of the land through first sale deed, sold the same at a higher rate to other persons. The amount received by Sh. Malkiat Singh on such a further sale can be well assumed to be source of the amount paid by him on the occasion of subsequent purchase of land from Shri Mohinder Singh, unless it is established that he had spent the said amount for some other purpose. Hence, the amount received by Sh. Malkiat Singh on resale of land can be assumed to be source of amount paid by him to Shri Mohinder Singh (seller) on a later date. However, this fact has been ignored by the lower authorities. We, therefore, remand the matter to the file of the AO to examine this limited aspect of quantifying the additions required to be made to the income of Sh. Malkiat Singh. It is made clear that no other issue or aspect will be looked into at the end of the AO.
Penalty levied on the assessee Mohinder Singh (seller) u/s 271(1)(c) - Held that:- As held that the amount received by the assessee Mohinder Singh, over and above the sale consideration mentioned in the sale deed, is liable to be assessed as income from other sources; however, we are of the view that this is not a fit case for levy of penalty u/s 271(1)(c). The assessee had disclosed the source of income being the amount received from Sh. Malkiat Singh on account of sale of his land. The assessee was under bona-fide belief that since the entire amount received by him was on account of consideration for the sale of land, the land being an agriculture rural land falling outside the purview of the definition of a capital asset, the income from the sale of land was exempt from taxation, hence, non-offering of the said income for taxation cannot be said to be a deliberate act on the part of assessee Mohinder Singh of furnishing of inaccurate particulars of income or concealment of income. - Decided against revenue
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2018 (1) TMI 1408 - ITAT DELHI
Transfer pricing adjustment - Freight forwarding and logistics with transacted value wrongly mentioned - selection criteria for comparable or non-comparable - Held that:- The assessee is engaged in rendering freight and forwarding services in domestic and international sectors. It earns its revenue from the customers in India, whose cargos are booked to be delivered by it outside India through its AEs network and it also earns revenue in respect of inbound cargo received from the goods booked by its AEs from outside India, which have to be delivered to the customers in India, thus companies functionally dissimilar with that of assessee need to be deselected from final list.
Companies not be excluded for minor variations in the ratio of lease rent to sales and net fixed assets to sales. Also no company can be excluded simply on the basis of a higher or lower profit margin registered in the year relevant to the assessee company. When average of the profit margins of the otherwise functionally comparable companies is taken, the differences due to particular higher or lower profit margins are ironed out.
Determining the amount of transfer pricing adjustment by considering the entity level gross revenue shown by the assessee at ₹ 286.89 crore - Held that:- No income arising from non-AE transaction can be computed having regard to its ALP. In fact, price/profit from comparable transactions of the assessee with non- AEs, is one of the subtle and most reliable modes for determining ALP in respect of international transactions. Thus, it boils down that the Act does not contemplate an addition by way of transfer pricing adjustment in respect of transactions with non-AEs. As the authorities below have ventured to make a composite addition, so, that part of the addition which relates to the transactions with non-AEs is untenable and hence cannot be sustained. We, therefore, vacate the impugned orders pro tanto.
TDS u/s 195 - disallowance u/s 40 (a)(i) - non deduction of tds by assessee paid administrative fee to EGL, US and EGL Singapore for providing non-technical day-to-day administrative supports functions - Held that:- The Tribunal, while dealing with the similar disallowance for the preceding year held that such an amount paid by the assessee is not chargeable under Article 12 of the DTAA because no services were `made available’ to the assessee by the service providers. A copy of such order has been placed on record. On a pertinent query, the learned DR fairly admitted that the facts and circumstances of the ground for the instant year are mutatis mutandis similar to those of the preceding year - order for deletion of the disallowance.
Depreciation on computer peripherals at the reduced rate - assessee claimed depreciation @ 60% on computers and printers etc. - Held that:- This issue of allowing depreciation at higher rate on computer peripherals is no more res integra in view of the judgment of the Hon'ble Delhi High Court in CIT vs. BSES Yamuna Powers Ltd. [2010 (8) TMI 58 - DELHI HIGH COURT]. We, therefore, direct to allow depreciation on the computer printers at the higher rate as claimed by the assessee.
As regards the direction of the DRP for suitably adjusting the opening written down value of computer peripherals, we direct the AO to enhance the written down value with the excess amount of depreciation disallowed in the preceding years provided such decision of the AO was accepted by the assessee.
Levy of interest u/s 234A - AR contended that the return was filed within the extended time allowed by the CBDT vide order u/s 119 of the Act (F.No.133/38/2006-TPL (Pt.) - Held that:- We direct the AO to verify the assessee’s contention and suitably amend the charging of interest u/s 234A, if warranted.
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2018 (1) TMI 1407 - ITAT DELHI
Addition on account of provisions for unrealized surcharge levied on account of delay in payment of bills - accrual of income - Held that:- The books of accounts of the assessee are regularly audited by the CAG and Tax auditors and the same has been duly accepted them. We further find that the case laws cited by the Ld. DR in the written submissions are on different set of facts and circumstances, hence, the same are not applicable in the present case.
The assessee’s case is fully covered by the Coordinate Bench decisions of the Tribunal in assessee’s own case of assessment years 2006-07 to 2008-09 [2012 (2) TMI 563 - ITAT DELHI] and [2012 (7) TMI 340 - ITAT, DELHI]. In view of the above, we are of the considered view that CIT(A) has rightly deleted the addition in dispute by respectfully following the decision of the previous CIT(A) as well as the ITAT decisions in assessee’s own case of assessment years 2006-07 to 2008-09, hence, the impugned order does not need any interference on our part, therefore, we uphold the action of the Ld. CIT(A) on the issue in dispute and reject the ground raised by the Revenue.
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2018 (1) TMI 1406 - ITAT BANGALORE
Addition of unexplained income - search conducted upon the Mukesh Choksi group, statement of Mukesh Choksi was recorded and in his statement he has admitted that he was providing accommodation entries to those who were interested to earn capital gain - Held that:- There is no finding with regard to the supply of statement of Mukesh Choksi to the assessee. Moreover, nothing is available on record, where from it could be inferred that assessee was ever allowed to cross-examine Mr. Mukesh Choksi. It is settled position of law that statement or the evidence which is being relied upon by the AO for making the addition in the hands of assessee, the same should be confronted to the assessee and the assessee should be allowed to cross-examine the witness in this regard.
From a careful perusal of the orders of lower authorities, it is quite evident that statement of Mr. Mukesh Choksi was relied on for making the addition, but assessee was never allowed to cross-examine him. AO was not justified in making addition in the hands of assessee, without allowing the assessee to cross-examine Mr. Mukesh Choksi, whose statement was relied upon for making the above additions. Accordingly set aside the order of CIT(Appeals) and restore the matter to the file of AO with a direction to first confront the statement of Mr. Mukesh Choksi to the assessee and allow him to cross-examine Mr. Mukesh Choksi to dig out the truth in this regard. - decided in favour of assessee for statistical purposes.
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