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Income Tax - Case Laws
Showing 241 to 260 of 1116 Records
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2015 (10) TMI 2370 - ITAT KOLKATA
Deduction towards bad debts claimed - CIT(A) allowed the claim - whether the principal amount of a term loan, given by the assessee as a NBFC, to be written off as bad debt when the said amount is in the nature of capital of the assessee? - Held that:- The assessee’s primary business is only money lending through hire purchase scheme and hence the instalments receivable becomes the stock in trade of the assessee and all these monies were advanced during the course of business of the assessee. Hence any loss arising out of it could only be treated as business loss u/s 28 of the Act.
We are not inclined to interfere with the findings given by the Learned CITA in this regard. Decided against revenue.
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2015 (10) TMI 2369 - ITAT PUNE
Penalty levied under section 271(1)(c) - disallowance of Legal Charges, treating the same as disallowance u/s 14A - Held that:- We find no merit in the order passed by the Assessing Officer in this regard, where no satisfaction was recorded for initiating the penalty under section 271(1)(c) of the Act in respect of disallowance made under section 14A of the Act, while completing the assessment under section 143(3) of the Act, by the Assessing Officer or while making the enhancement by CIT(A).
Though the provisions of section 14A of the Act were brought on statute on an earlier date, however, the provisions of Rule 8D of the Rules were introduced w.e.f. 01.04.2008 only. Before the insertion of Rule 8D of the Rules, no set procedure was laid down under the statute to work out the disallowance under section 14A of the Act. The disallowance made in the hands of the assessee before us is an ad-hoc disallowance, which admittedly has been accepted by the assessee because of no tax effect. But merely because an addition has been made in the hands of the assessee on a debatable issue, it cannot be held that the assessee has furnished inaccurate particulars of income in respect of the said disallowance under section 14A of the Act. Where the question of disallowance and its quantification are contentious, which lead to inference that difference of opinion between the assessee and the authorities were bona-fide and in such circumstances, it cannot not be said that the assessee has furnished inaccurate particulars of income. Such was proposition laid down by the Delhi Bench of the Tribunal in Jindal Equipment Leasing & Consultancy Services Ltd. (2011 (4) TMI 130 - ITAT DELHI). Thus no merit in the levy of penalty under section 271(1)(c) of the Act and we direct the Assessing Officer to delete the same. - Decided in favour of assessee.
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2015 (10) TMI 2368 - ITAT JAIPUR
Depreciation at higher rates on hydraulic crane - CIT(A) allowed the claim - not the commercial vehicle as held by the AO - Held that:- Similar issued has been decided by this Bench in the case of M/s. Narayani Cranes vs. DCIT (2014 (2) TMI 662 - ITAT JAIPUR) wherein this Bench has allowed depreciation @ 30% on Hydraulic Cranes - Decided against revenue.
Disallowance of crane operating expenses and wages - CIT(A) allowed part relief - Held that:- It is observed that the assessee had claimed ₹ 18,60,539/- under the head crane operating expenses. The AO observed that the assessee had made payment of wages in cash and no supporting bills were available. The assessee did not maintain the wages register. The AO observed that only self made vouchers were available which were not subject to verification. Thus in the absence of proper records and primary records the AO made a lump sum addition of ₹ 1.50 lacs which has been reduced by the ld. CIT(A) to ₹ 1.00 lac by considering all the aspects in this case and we find no infirmity in the order of ld. CIT(A) on this issue.- Decided against revenue.
Disallowance of conveyance, telephone, advertisement and general expenses - CIT(A) allowed part relief - Held that:- The percentage of conveyance and telephone expenses claimed against the turnover has increased while the turnover has declined as compared to previous assessment year. Therefore, the disallowance of conveyance expense is restricted to 10% of ₹ 2,17,006/- depreciation has not been included in this disallowance. This results in a confirmation of disallowance from conveyance expenditure of ₹ 21,700/-. Similarly, the disallowance on account of telephone expenses is restricted to 10% of the claim resulting in a confirmation of disallowance of ₹ 14,340/-. Regarding the advertisement and general expenditure, it is seen that the percentage of expenses have decline since last year and so ad hoc disallowance of ₹ 10,449/- is not sustained under the head advertisement and general expenses - CIT(A) has taken into consideration all the aspects with regard to claim of the assessee as referred in the above Grounds - Decided against revenue.
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2015 (10) TMI 2367 - ITAT HYDERABAD
Revision u/s 263 - listed securities of which sales was made by Assessee has suffered security transaction tax and therefore, the provisions of section 10(38) of the IT Act is squarely applicable and the income generated from sale and purchase of securities being long term capital asset is exempted - Held that:- The application of section 10(38) will warrant, only when the transaction had suffered STT. In the present case, the contention of assessee has been that transaction has not suffered any STT, we observe that ld. CIT ought to have enquired with the AO since all the material facts are very much available on assessment records.
We have carefully considered the contention of ld. DR that the listed shares have to be transacted only through stock exchange. It is the businessman who will decide the mode of transaction, how it has to be done to his business exigencies. Particularly in the situation, where the shares value is not in favour of the assessee. The assessee has decided to deal directly with the counter part and closed the deal. We do not see anything contrary to any statute and the revenue has not doubted the genuineness of the transaction. Hence, the transaction is complete even without transacting through stock exchange.
On perusal of the ratio laid down in case of Spectra Shares & Scrips (P) Ltd. (2013 (6) TMI 173 - ANDHRA PRADESH HIGH COURT), it is clear that the impugned order should be erroneous and prejudicial to the interests of revenue. We observe that the original assessment order was not erroneous as the material facts were already available on record of the AO. The AO has already dealt with the matters by carefully applying his mind and he has satisfied with his views.
In the interest of justice, we have asked the ld. DR to verify the assessment file, whether the material facts like copy of agreements to sell and balance confirmation of the respective companies were available and considered by the AO before passing of the assessment order. It was observed that all the relevant papers were available as part of the assessment file.
Hence, we conclude that ld. CIT has not enquired properly into the issue before coming to the conclusion that the assessment order was erroneous and prejudicial to the interests of revenue. Therefore, we quash the order of ld. CIT passed u/s 263 and restore the order of the AO - Decided in favour of assessee.
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2015 (10) TMI 2366 - ITAT MUMBAI
TDS liability from the discount offered to various persons - nature of relationship - Held that:- The hospitals/laboratories are doing dual roles. This is particularly in view of the fact that the assessee is also widely advertising its services through the media and also through display of their name before the laboratories/hospitals. Further, if any of the laboratory is dedicated only for the assessee, then the discount paid to such kind of laboratories would fall in the category of “Commission” only, since the patients should be approaching them to get their tests conducted through the assessee.
Neither the assessee nor the tax authorities have brought on record as to how the hospitals/laboratories have approached the assessee, i.e. whether on the specific instruction of the patient or on its own and whether the laboratories/hospitals are dedicated to the assessee only or not, i.e., whether they have such kind of business link with the competitors of the assessee or not.
It is also required to be seen as to whether the test reports are given by the assessee directly to the patients referred to by the hospitals/laboratories or they are issued to the hospitals/laboratories, who in turn issue the test results in their own letter heads. This factor will also help to decide about the nature of relationship. Thus all the above facts need to be examined before answering the question about the nature of relationship between the assessee and hospitals/laboratories. This issue requires fresh examination at the end of the assessing officer.
Maintenance charges paid to the professionals for maintaining the medical equipment - TDS u/s 194C or 194J - Held that:- Routine, normal maintenance contracts which includes supply of spares will be covered under section 194C. However, where technical services are rendered, the provisions of section 194J will apply in regard to tax deduction at source. CIT(A) was justified in holding that the maintenance charges paid to the professionals for maintaining the medical equipments is a payment falling in the category of contract payments requiring deduction of tax at source u/s 194C of the Act - Decided in favour of assessee.
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2015 (10) TMI 2365 - ITAT DELHI
Jurisdiction of the Additional CIT to frame the impugned order of assessment u/s 143(3) - as per assessee assessment framed by the Additional CIT Range-6, New Delhi is without jurisdiction as firstly, he was not an Assessing Officer under section 120(4)(b) of the Act and furthermore, there was no order under section 127(1) of the Act for transfer of jurisdiction from DCIT, Circle 6(1), New Delhi to Additional CIT, Range 6, New Delhi - Held that:- It is an undisputed position and not challenged by the revenue in the present appeal either by placing on record any order or any notification supporting the position that an order was made under section 120(4)(b) of the Act so as to confer jurisdiction of the Additional CIT to exercise the powers or perform the functions of an Assessing Officer under section 2(7A) of the Act read with section 120(4)(b) of the Act. In view of the above factual and judicial position, we are of the view that the order of assessment so framed is without jurisdiction in as much as the Additional CIT did not have the requisite mandate power under the law to frame the impugned assessment under section 143(3) of the Act.
This order apparently is neither an order under section 120(4)(b) of the Act and nor it otherwise directs the Additional Commissioner to exercise or perform all or any of the powers and functions conferred on or assigned to an Assessing Officer under the Act. As regards the notification no. 267/2001 dated 17.9.2001 we notice that such notification by CBDT u/s 120(4)(b) of the Act directs that Joint Commissioner of Income Tax or Joint Director shall exercise the power and function of an Assessing Officer in respect of specified cases in respect of which such Joint Commissioner or authorized by Commissioner of Income Tax vide CBDT notification dated 14.9.2001 and 31.7.2001. It is thus apparent that the said notification is applicable in respect of Joint Commissioner authorized by Commissioner of Income Tax under notification as specified therein and no more. In the instant case it is admitted position that none of the notifications as specified therein confer powers of an Assessing Officer to the Additional Commissioner of Income Tax, Range 6, New Delhi.
We thus find merit in the claim of the appellant that in absence of an order u/s 120(4)(b) of the Act the Addl. CIT Range-6, New Delhi lacks jurisdiction to exercise the functions of the AO and therefore consequently the order of assessment framed is without jurisdiction.
Assessment has to be completed by the authority who has initiated the proceedings for making assessment and any other authority can take over the proceedings only after a proper order of transfer u/s 127(1) or 127(2) of the proceedings. The revenue has not brought any order for transfer of the proceedings from DCIT, Circle-6(1), New Delhi to the Additional CIT, Range-6, New Delhi and therefore it is quite evident that the Additional CIT, Range-6 took over the assessment proceedings without there being an order u/s 127(1). - Decided in favour of assessee.
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2015 (10) TMI 2321 - ITAT HYDERABAD
Penalties u/s 271C - Non deduction of TDS u/s 194C from the payments made to the contract workers - Held that:- the issue relating to the assessee’s liability to deduct tax at source from the similar payments made to contract labourers had come up for consideration before the Tribunal in assessee’s own case for the earlier years and the same was decided by the Tribunal in favour of the assessee concuding the allotment of work by the assessee to the SHGs is not by way of contract but is engagement of workers for a fixed period. The workers are being paid as per the agreed terms and conditions and the aggregate amount is paid to the group and not to any particular person. Therefore, as rightly held by the CIT (A), there is no contractor-contractee relationship but is more in the nature of employee-employer relationship as the assessee is also making contributions to the EPF and ESI and as rightly pointed out by the ld CIT (A), the payments made to an individual is not exceeding the prescribed limit u/s 192 of the I.T. Act, the TDS provisions are not applicable to the facts of the case before us.
Cancelling the penalties imposed u/s 271C thus is duly approved by the Tribunal holding that the assessees were not liable to deduct tax at source from the payments made to contract labourers who formed Self Help Groups. - Decided in favour of assessee.
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2015 (10) TMI 2320 - ITAT HYDERABAD
TDS u/s 194C - TDS on the amounts paid to the sanitation contractors - AO held that the TDS was deductible on such payments and for failure to deduct the TDS, assessee is in “assessee in default” u/s 201(1) and is also liable to pay interest u/s 201(1A) - whether the SHGs can be called as contractors - Held that:- The GHMC has engaged and issued the poceedings in favour of the SHGs by lots and work has been allotted per unit by fixing the wages per person and also specifying the number of workers to be engaged for each unit and per shift. The working hours of the workers as well as the shifts are also specified in the notification. From the bills paid to the SHGs also, it is seen that the payment is made on the basis of number of mandays and wages per day and is not a fixed amount per month. Thus, it is clear that the allotment of work by the assessee to the SHGs is not by way of contract but is engagement of workers for a fixed period. The workers are being paid as per the agreed terms and conditions and the aggregate amount is paid to the group and not to any particular person.
Therefore, as rightly held by the CIT (A), there is no contractor contractee relationship but is more in the nature of employee employer relationship as the assessee is also making contributions to the EPF and ESI and as rightly pointed out by the ld CIT (A), the payments made to an individual is not exceeding the prescribed limit u/s 192 of the I.T. Act, the TDS provisions are not applicable to the facts of the case before us - Decided in favour of assessee.
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2015 (10) TMI 2319 - ITAT AHMEDABAD
Levy of penalty u/s. 271(1)(C) - undisclosed income which was disclosed by the Assessee and accepted by the Return in the return of income - A.R. submitted that during the course of survey, no incriminating material or evidences were impounded and the aforesaid statement has been controverted by Revenue by placing any material on record - Held that:- Considering the fact that Assessee had made the disclosure of income in the revised return of income and the AO has also accepted the same and in view of the fact that during the courses of survey, no incriminating material was found and since Revenue has not found actual concealment of income or furnishing of inaccurate particulars of income in the return of income, we are of the view that no penalty u/s. 271(1)(c) would be attracted in the present case. We further draw support from the decision of Hon’ble Gujarat High Court in the case of Kirit Dayabhai Patel vs. Act (2015 (1) TMI 201 - GUJARAT HIGH COURT) where the Hon’ble High Court has even in the case where income was shown in the return filed u/s. 153 of the Act has held that no penalty u/s. 271(1)(c) is leviable. - Decided in favour of assessee.
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2015 (10) TMI 2318 - ITAT AHMEDABAD
Bogus purchase of M.S.Steel from Dhruv Steel - Held that:- The purchases made by assessee were duly supported by various documentary evidences such as inward stamped bills and weigh bridge challans etc. Assessing Officer has not appreciated such evidences, particularly the confirmation of M/s. Dhruv Steel from whom assessee has purchased steel and the fact that if the purchases made by assessee were not genuine, it would not have been able to construct a huge plant of oil, which is evident from the evidences submitted on behalf of assessee. In view of above, CIT(A) held that conclusion reached as to bogus purchase of M.S.Steel in assessment order for AY. 2004-05 was not justified. Accordingly, disallowance made on the basis of observation in assessment order for A.Y. 2004-05 was not justified. We are not inclined to interfere in reasoned finding of CIT(A). - Decided in favour of assessee.
Disallowance of the depreciation as being unexplained - CIT(A) deleted addition - Held that:- We have upheld the order of CIT(A) on the issue of genuineness of steel transaction whereby he has held the purchase of M.S. Steel from M/s. Dhruv Steel as genuine for A.Y. 04-05. Accordingly, disallowance made by Assessing Officer in subsequent order on point of depreciation was not justified held by CIT(A). In view of this, addition made in both years of disallowing claim of depreciation of building and plant & machinery was rightly held to be unwarranted by CIT(A) and same was rightly deleted by him.- Decided in favour of assessee.
Disallowance of interest expenditure incurred by assessee on loan taken from - Held that:- Source of loan taken by M/s. Vimal Marketing who has received the same from M/s. Dhruv Steel. Assessing Officer should not go into the source of source of loan taken by assessee. In these circumstances, CIT(A) was justified in allowing assessee’s claim of interest expenditure. This reasoned finding of CIT(A) needs no interference from our side - Decided in favour of assessee.
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2015 (10) TMI 2317 - ITAT DELHI
Validity of reopening of assessment - non issue of notice - Held that:- AO has not issued any notice u/s 143(2) of the I.T. Act to the assessee. During the entire assessment proceedings, the assessment order in dispute is invalid, void abnitio and against the provisions of the law and the impugned order is not sustainable in the eyes of law and hence, we cancel the same by accepting the appeal filed by the Assessee. - Decided in favour of assessee.
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2015 (10) TMI 2316 - ITAT PUNE
Addition made on account of suppressed production / sales of TMT bars on the basis of electricity unit consumption - CIT(A) quantifying the suppressed production @ 4% as against the addition made by the Assessing Officer on account of the total suppressed production, where the assessee was found to be indulging in clandestine removal of goods without payment of Excise duty - Held that:- No extrapolation of sales for 300 days can be made in the hands of the assessee on the basis of the evidence found for clandestine removal of material without payment of Excise duty for few days, which in turn, has been admitted by the assessee by way of filing petition before the Settlement Commission, which in turn, has also been accepted by the Settlement Commission. Merely because the Settlement Commission accepted the claim of the assessee of additional Excise duty payable on the said clandestine removal of material without payment of Excise duty does not establish the case of the Revenue that the said figures of additional production should be utilized for extrapolating the sales in the hands of the assessee for the entire year. Admittedly, the assessee had offered additional income on the said clandestine removal of material without payment of Excise duty, which is to be added as income in the hands of the assessee. The learned Authorized Representative for the assessee fairly admitted that in case the said additional income has not been added while computing the income in the hands of the assessee for the respective years, the same may be directed to be added in the hands of the respective assessee in respective years. Accordingly, we direct the Assessing Officer to verify from the records for the respective years and include the additional income on account of such admitted clandestine removal of material without payment of Excise duty, by the assessee either before the Settlement Commission or before the Excise authorities, in the hands of the assessee. We have heard bunch of appeals and in some years, there is no admission of clandestine removal of material without payment of Excise duty and in those years in the absence of any evidence and / or any investigation or inquiry made by the Assessing Officer and where the Assessing Officer has failed to collect additional evidence, no addition can be made in the hands of the assessee, by way of extrapolation of sales for 300 days on account of any evidence found in any preceding or succeeding years. Further, no addition can be made in the hands of the assessee, where no petition has been filed by the assessee before the Settlement Commission in any of the respective years or before the Excise authorities.
Since we have deleted the addition in the hands of assessee on both accounts i.e. addition made on account of erratic consumption of electricity and addition proposed on the basis of evidence found for the part of the year of clandestine removal of material without payment of Excise duty, next addition made in the hands of the assessee i.e. alleged investment in the purchases for effecting such sales which goods have been clandestinely removed, is not sustainable. Accordingly, we hold that no addition can be made in the hands of the assessee on account of alleged investment in purchases under section 69C of the Act
One issue remaining to be adjudicated is non issue of notice under section 143(2) after issue of notice under section 148 of the Act. In view of our order in deleting the addition on account of suppressed production/sales, the said issue is dismissed as academic. - Decided in favour of assessee.
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2015 (10) TMI 2315 - ITAT CHANDIGARH
Addition made on account of entries contained in hand written sheet found during the course of search - Held that:- Once the assessee is not carrying on any construction work, then the natural corollary is that it would not make any payment for the purpose of construction and when hand written sheet depicted construction payments, the same could not be treated as the document belonging to the assessee. Further the assessee clearly pointed out that the name of the person on the said sheet was Mr.Sajjan Jain, who was employee of M/s Goel Construction Co.Pvt. Ltd. and the said facts could have been verified by the Assessing Officer, but the Assessing Officer had failed to discharge his onus and in the said circumstances there is no merit in the addition made in the hands of the assessee. Further the assessee has also filed affidavit to the effect that the said document was not in his hand writing or in the hand writing of his employees and also Shri Sajjan Jain was not in his employment and belonged to M/s Goel Construction Co.Pvt. Ltd. In the entirety of the facts and circumstances, we delete the addition - Decided in favour of assessee.
Undisclosed income of the assessee - assessee had failed to furnish any proof that the cheques issued by Shri Chhabra had bounced again and again - Held that:- no merit in the claim of the assessee in this regard and in the absence of the assessee having furnished any evidence to prove its case that sum of ₹ 5 lacs was offered against cheuqes being dishonoured, does not establish the case of the assessee. In case the cheques were being dishonoured then how the total of ₹ 7,89,760/- has been taken and it does not talk of any dishonour of cheques. In the absence of any evidence filed to prove its case we find no merit in the plea of the assessee and we uphold the addition of ₹ 5 lacs in the hands of the assessee as income from undisclosed sources. - Decided against assessee.
Addition on entries contained in seized papers A-l page 44 - assessee pleads that the said amounts have been considered by Shri J.C.Bansal in his computation filed before the Hon'ble Settlement Commission - Held that:- Where the applicant had also offered additional income before the Settlement Commission in the hands of Maa Saraswati Educatiional and Social Welfare Trust, we find no merit in the so called addition made in the hands of the assessee totaling ₹ 19,95,000/-. Accordingly, we direct Assessing Officer to delete the addition of ₹ 19,95,000/-. Further addition of ₹ 5,11,373/- was made in the hands of the assessee on protective basis. In view of the settlement petition having been filed by Shri J.C.Bansal before the Settlement Commission, the Settlement Commission has already decided the issue in the hands of Maa Saraswati Educatiional and Social Welfare Trust and which also incorporates the additional income offered by Shri J.C.Bansal and further being assessed in his hands. In view thereof, we find no merit in the said addition of ₹ 511,373/- and the same is directed to be deleted - Decided in favour of assessee.
Disallowance of deduction under section 80IB - amount declared during the course of survey as additional income - Held that:- In view of the ratio being settled by the Hon'ble Punjab & Haryana High Court in the in National Legguard Works Vs CIT and another (2006 (9) TMI 100 - PUNJAB AND HARYANA HIGH COURT), M/s Tudor Knitting Works Pvt. Ltd. Vs CIT (2013 (10) TMI 1171 - PUNJAB & HARYANA HIGH COURT ), M/s Kim Pharma (P) Ltd. V CIT (2013 (1) TMI 495 - PUNJAB AND HARYANA HIGH COURT) we hold that the assessee is not entitled to the deduction under section 80IB of the Act on the surrendered income - Decided against assessee.
Addition based on the seized document - Held that:- As per tabulated details at page 14, the amount credited/paid totaled to ₹ 46,43,115/- and the balance on each page was shown as receivable by Mr. Monga and his family members from the assessee vide letter dated 10.08.2008. Further sum of ₹ 13,00,000/- is mentioned in the said letter placed at page 67 as having been received by him. In totality thus, the total payments made by the assessee were of ₹ 46,43,115/- + ₹ 13,00,000/- and the addition is to be restricted to ₹ 59,43,115/- as held by the Commissioner of Income Tax (Appeals). The balance being the amount payable by the assessee to Shri Monga and his family members is not includible as income of the assessee. Accordingly, we uphold the addition of ₹ 59,43,115/- in the hands of the assessee and dismiss the grounds of appeal raised by both assessee and the revenue in this regard.
Percentage completion method rejected by CIT(A) - determination of profit from the real estate business of assessee - Held that:- Where the assessee was following a particular method of accounting consistently, which has been accepted by the department from year to year and in the absence of any defect being pointed out by the Assessing Officer that by following such method, income had escaped assessment, we find no merit in the order of the Assessing Officer in holding that percentage completion method should be applied to the assessee for the year under consideration. It is the prerogative of the assessee to arrange its affairs in such a manner and follow any recognized method of accounting to compute its profits. In view thereof, we find no merit in the order of the Assessing Officer in re-computing the income in the hands of the assessee. Upholding the order of Commissioner of Income Tax (Appeals) - Decided against revenue.
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2015 (10) TMI 2314 - ITAT CHENNAI
Disallowance under section 54 - AO observed that the assessee could not get the property registered in his name within the period of two years from the date of sale of the original asset and hence the assessee was not eligible for deduction under section 54 - CIT(A) allowed the claim - Held that:- In this case, the assessee sold residential property during the financial year 2006-07 and thereafter entered into an agreement for purchase of new house dated 31.03.2007 for a consideration of ₹ 99,00,000/-. The assessee has paid ₹ 15,00,000/- on 30.07.2007 and subsequently on 25.02.2011, ₹ 50,00,000/- was also paid.
As per the section 54, the assessee, after selling the original residential house, he has to invest within the period two years from the date of the original sale. In this case, the assessee has invested an amount of ₹ 15,00,000/- only on 30.07.2007 and final amount was paid only on 25.02.2011, almost after four years of sale of original property.Therefore, the assessee has invested only an amount of ₹ 15,00,000/- as per section 54 of the Act. Therefore, he is eligible only for the amount he has invested as per sub-section (2) of section 54 of the Act. The ld. CIT(Appeals), without considering sub-section (2) of section 54 of the Income Tax Act, proceeded on a different footing that whether the transfer was taken place or not, which is not relevant. Therefore, direct the Assessing Officer to allow the claim of deduction under sub-section (2) of section 54 of the Act to the extent of ₹ 15,00,000/-. - Decided partly in favour of revenue.
Disallowance of losses under Future and Options - setting off of brought forward loss - Held that:- The transactions in Future & Options are not to be considered as speculation losses w.e.f. 01.04.2006 consequent to the Finance Act, 2006. In so far as set off of brought forward losses from one head against the income from another head, as per section 71(2) of the Act [with effect from assessment year 2005-06], where in respect of any assessment year, the net result of computation under the head ‘profits and gains of business or profession’ is a loss and the assessee has income assessable under the head ‘salaries’, the assessee shall not be entitled to have such loss to set off against such income. However, it shall be allowable from set off from income from any other head. The ld. CIT(Appeals), by considering the above provisions of law, directed the Assessing Officer to allow the set off of brought forward loss against one head to another head i.e. the claim of loss from Future & Options has to be set off against the capital gains income from the sale of house property. In view of the above, we find that the ld. CIT(Appeals) has correctly directed the Assessing Officer by following the section 71(2a) of the Act. Accordingly, we find no infirmity in the order passed by the ld. CIT(Appeals) on this issue, which is confirmed. - Decided against revenue.
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2015 (10) TMI 2313 - ANDHRA PRADESH HIGH COURT
Payment of technical know-how fee - revenue expenditure or capital in nature - Held that:- in terms of Article 5.1(d) of the Agreement. These clauses viewed in the context of the intention of the parties would certainly point out that both the parties intended to benefit for a considerable period of time out of the relationship emanating from the agreement. Even though in the Bio-technology field changes are likely to happen in fast phase, the assessee still has the benefit of the same in view of the dynamic nature of the agreement entered into between the assessee and the technology provider. This in our considered view is a distinct and distinguishing factor, which would benefit the assessee giving an enduring benefit to the assessee. In that view of the matter, the judgment of the Supreme Court in Alembic Chemicals Case (1989 (3) TMI 5 - SUPREME Court ) is distinguishable. In that view of the matter, apportioning a part of the expenditure in the nature of a capital expenditure by the CIT Appeals cannot be termed as erroneous. This single distinguishing factor is sufficient to answer the Question in favour of the revenue and against the assessee.
Expenditure on account of payment of royalty - revenue v/s capital expenditure - Held that:- It is agreed to be paid by the assessee and the same needs to be treated as revenue expenditure particularly considering the fact that the same is linked to the percentage of consideration received on sale of the products produced by the assessee by use of the Germplasm and with the help of the technical know-how. - Decided against the revenue.
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2015 (10) TMI 2312 - PUNJAB & HARYANA HIGH COURT
Jurisdiction of court - Held that:- This court has no territorial jurisdiction to adjudicate upon the lis over an order passed by the Assessing Officer at New Delhi. The petitions are returned to the petitioner for filing before the competent court of jurisdiction in accordance with law.
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2015 (10) TMI 2311 - KARNATAKA HIGH COURT
Offences punishable under Section 276B r/w. Section 278B - failure to remit TDS in respect of various payments made by the Company - Held that:- There is no dispute to the fact that the petitioner herein is a non-Executive Director of the Company. In the entire complaint there is no averment to the effect as to how this petitioner was involved directly or indirectly in the commission of the offences.
It is the established position of law that there is no concept of vicarious liability under criminal jurisprudence, unless the statute specifically prescribed for the same. Though Section 278B of the Act contemplates such vicarious liability, the basic requirement is, there must be specific allegation to that effect in the complaint which is lacking in the present case. In that view of the matter, the prosecution against this petitioner is vitiated and initiation of such proceedings is pure abuse of the process of law. - Decided in favour of assessee.
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2015 (10) TMI 2310 - GUJARAT HIGH COURT
Penalty where search has been initiated - whether two out of three conditions prescribed in section 271AAA are not fulfilled as concluded by CIT(A) and ITAT - Held that:- Commissioner (Appeals), after duly appreciating the material on record, has recorded a finding of fact to the effect that the assessee had duly satisfied the manner in which the undisclosed income had been derived and that the assessee had further substantiated the manner in which the undisclosed income was derived. Insofar as the third category, namely, payment of tax together with interest in respect of undisclosed income, there is no dispute. The learned counsel is not in a position to point out that the Tribunal has placed reliance upon any irrelevant material or that any relevant material has been ignored, nor is he in a position to dislodge the findings of fact recorded by the Tribunal. The Tribunal having based its conclusion upon the concurrent findings of fact recorded by it after appreciating the evidence on record, in the absence of any perversity in the findings recorded by it, it cannot be said that the impugned order passed by the Tribunal gives rise to any question of law, much less, a question of law, so as to warrant interference. - Decided against revenue.
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2015 (10) TMI 2309 - GUJARAT HIGH COURT
Addition on unaccounted sales - assessee challenging the rate of gross profit estimated at 10% on the ground that it was on the higher side - Held that:- Entire sales cannot be added as income of the assessee but addition can be made only to the extent of estimated profits embedded in the sales and that the income from suppressed sales should be determined by assessing the gross profit of the assessee
It is evident that the Commissioner (Appeals) had estimated the gross profit at 10%, whereas the Tribunal having regard to the gross profit of the previous year, which was 5.22% and which had been accepted by the revenue has, on the very same material, estimated the gross profit at 6.50%, which is higher than the gross profit accepted by the Department in relation to the previous year. Nonetheless, both, the Commissioner (Appeals) as well as the Tribunal, have resorted to estimation for the purpose of computing the gross profit. Thus, ultimately the gross profit has been determined on the basis of an estimate. As to whether the estimate of gross profit by the Commissioner (Appeals) is to be accepted or that by the Tribunal is to be accepted, cannot in any manner be said to give rise to a question of law, much less, a substantial question of law, so as to warrant interference. - Decided against revenue.
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2015 (10) TMI 2308 - MADRAS HIGH COURT
Pension fund trust - Whether the assessee had contributed funds need not be approved by the Jurisdictional Commissioner or Chief Commissioner? - whether Tribunal was right in holding that the income would crystallize on approval of assessee's claim for reimbursement by competent authority while dealing with the issue of reimbursement of the amount relating to the issue of free passes for traveling of freedom fighters, etc., by the assessee? - Held that:- Tribunal has recorded a finding that State Transport Corporations operating in different districts in the State are signatories to the Trust Deed for setting up the Pension Fund Scheme and that the said fund has been recognized by the CIT-VII, Chennai. A bare reading of the above provision clearly and unambiguously states that recognised provident fund means a provident fund which has been and continues to be recognised by the Chief Commissioner or Commissioner and nowhere it states that it should be recognised by the jurisdictional Commissioner. Therefore, it is not open to the Department to take a plea that the provident fund trust should be recognised by the Commissioner/Chief Commissioner of Income Tax, Salem, which is not the purport of the provision. Accordingly, this contention of the Revenue is also negatived.
No question of law, much less substantial questions of law arise for consideration in this appeal. Accordingly, this appeal, filed by the Revenue/appellant, fails and the same is dismissed confirming the order passed by the Tribunal. - Decided against revenue.
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