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Income Tax - Case Laws
Showing 121 to 140 of 771 Records
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2013 (11) TMI 1620 - ITAT MUMBAI
Transfer pricing adjustment in respect of export sales made by the assessee to its Associated Enterprise (AE)- Held that:- D.R. has not raised any material contention to dispute the propositions put forth by the ld. counsel for the assessee duly supported by the working furnished by him showing that the ALP of the international transactions of the assessee company with its AEs of export of cut and polished diamonds would be within the range of safe harbor limit of 5% as stipulated in the proviso to section 92-C of the Act going by any of the two methods adopted for the purpose of comparability analysis. He, however, has contended that this working furnished by the assessee for the first time before the Tribunal in support of its two alternative stands requires verification and the A.O/TPO may therefore be given an opportunity to verify the said working. We find merit in this contention of the ld. D.R. Accordingly, the matter is restored to the file of the A.O./TPO with a direction to verify the working furnished by the assessee in support of its case that the ALP as worked out by any of the two methods being within the safe harbor limit of 5% that the price charged by the assessee, no TP adjustment is required to be made in respect of the transactions of the assessee company with its AEs of import and export of cut and polished diamonds. On verification, if it is found that the difference is less than 5% as claimed by the assessee, the A.O. shall not make any TP adjustment in respect of transactions of the assessee with its AEs of export of cut and polished diamonds. Ground No. 1, 2, 4 & 5 of the assessee’s appeal for A.Y. 2008-09 are accordingly treated as allowed as indicated above.
Addition made by the Assessing Officer/TPO by way of transfer pricing adjustment on account of notional interest on outstanding AE debtors - Held that:- The assessee in this regard has submitted that the relevant copies of invoices were filed by the assessee before the A.O. showing that the credit period allowed was 180 days to both the AEs and non-AEs. He has submitted that the A.O., however, brushed aside the same on the basis of finding given by the TPO that the assessee has granted excess credit period to its AEs by 85 days vis-a-vis credit granted to third parties and made the addition on this issue without giving the assessee an opportunity to establish its claim on further evidence that the credit period allowed to both AEs and non-AEs was at par. He has submitted that the assessee is in a position to establish its claim on this issue and urged that one more opportunity may be given to the assessee for this purpose. Since the ld. D.R. has not raised any objection in this regard, we set aside this issue to the file of the A.O. for deciding the same afresh after giving an opportunity to the assessee to establish its claim on further evidence that the credit period offered by it to AEs as well as non-AEs was at par. Ground No. 3 of assessee’s appeal is accordingly treated as allowed for statistical purpose.
Disallowance made u/s 40A(2)(b) of the Act to the total income of the assessee on account of labour charges paid to M/s Aakash Diamonds - Held that:- s the issue involved in the year under consideration as well as all the material facts relevant thereto are similar to that of A.Y. 2005-06, we respectfully follow the order of the Tribunal for A.Y. 2005-06 and restore this matter to the file of the A.O. for deciding the same afresh as per the same direction as given in A.Y. 2005-06.
Disallowance made on account of assessee’s claim for additional depreciation on plant and machinery - Held that:- Hon’ble Apex Court decision in the case of Gem India Manufacturing Co. (2000 (12) TMI 7 - SUPREME Court) wherein it was held that cutting and polishing of diamonds does not amount to manufacturing or production of goods and disallowed the claim of the assessee for additional depreciation in plant and machinery u/s 32(1)(iia) of the Act is directly applicable in the present case involving a similar issue and respectfully following the same, we uphold the impugned order of the A.O. disallowing the assessee’s claim for additional depreciation u/s 32(1)(iia) of the Act
Addition made to the total income of the assessee on account of difference in value of closing stock as shown by the assessee in the stock statement submitted to the bank and as shown by the assessee in the books of account - Held that:- It is noted that the quantity of rough diamonds and polished diamonds shown in both the statement is same and there is only a difference in the valuation of the said quantity which is higher in the case of statement given to the bank than the one shown by the assessee in its books of accounts. In our opinion, the burden in this regard is on the assessee to prove which of these two values is correct by providing the relevant details regarding the basis adopted for the said valuation. Since this has not been done by the assessee, we are of the view that this issue needs to be set aside to the A.O. to give one more opportunity to the assessee to explain the basis of valuation. Accordingly, this issue is set aside to the file of A.O. with a direction to the assessee to furnish the relevant details in order to explain the basis of valuation of the closing stock adopted by it. The A.O. shall verify the details furnished by the assessee in this regard and decide the issue accordingly.
Disallowance of 60% of residential telephone expenses - CIT(A) restricted the said disallowance to 30% - Held that:- No record was maintained by the assessee to show that the expenses incurred on residential telephones of the partners were wholly and exclusively for the purpose of its business. As rightly held by the A.O., personal use of residential telephones by the partners in the absence of such record could not be ruled out and some reasonable disallowance for such personal use was very much warranted. Although, such disallowance made by the A.O. at 60% of the total telephone expenses was excessive and unreasonable, we are of the view that the ld. CIT(A) is quite fair and reasonable to restrict the same to 30% of the residential telephone expenses. Having regard to all the facts of the case, we are of the view that there is no case of any further relief to the assessee on this issue
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2013 (11) TMI 1619 - ITAT JODHPUR
TDS u/s 194J - non deduction of tds - Held that:- As per the agreement entered into by this assessee with the concerned Authority it is a compulsory payment to be made as a reimbursement. On this amount, obviously Section 194J is not applicable
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2013 (11) TMI 1617 - ITAT CHENNAI
Addition made under difference closing stock - Held that:- Once the stock valuation has been accepted by the sales tax authorities, it is binding on the income tax authorities as well. Therefore, we hold that the CIT(A) has rightly deleted the addition in question and the findings under challenge stand confirmed.
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2013 (11) TMI 1615 - ITAT HYDERABAD
Transfer pricing adjustment - risk adjustment - Held that:- TPO himself has computed risk adjustment at 0.73%, we are inclined to allow the benefit of risk adjustment to the assessee at 1%
Re-compute the deduction u/s 10A of the Act after reducing the communication charges both from the export turnover as well as total turnover.
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2013 (11) TMI 1614 - ITAT HYDERABAD
Non attendance on the date of hearing was out of inadvertence and not as the assessee was disinterested in prosecution of appeal.
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2013 (11) TMI 1609 - ITAT LUCKNOW
Unexplained/undisclosed cash found at the time of search - Held that:- Assessing Officer has himself admitted that the said amount was shown in the cash flow statement as opening balance so it cannot be said that the assessee earned income to that extent during the year under consideration. In the present case also, as per the cash flow statement submitted by the assessee for the present year as available on page 12 of the paper book, opening balance of cash in hand was ₹ 4.09 lacs and the closing balance is ₹ 4.39 lacs. This increase of ₹ 0.30 lacs is on account of cash withdrawn from bank ₹ 1.175 lacs and expenses and drawings of ₹ 0.87 lacs. Hence, it cannot be said that there is any increase in cash in hand in the present year which stands unexplained. Regarding this contention of the learned DR of the revenue that the cash flow statement was not filed with income tax return filed before the date of search, we find that there is no such requirement that the assessee must file cash flow statement, balance sheet or copy of capital account with the return of income. Hence, on this basis, no adverse inference can be drawn against the assessee.
The A.O. could have asked the assessee to explain the opening cash as on 01.04.2003 ₹ 4.60 lacs and if he could find that the assessee is not able to explain this opening cash on 01.04.2003, addition could have been made in A. Y. 2003 – 04 when the assessee is showing the cash for the first time but is not able to explain. The A.O. can do so now also if the law permits but in the present year, the addition made by him cannot be sustained in the facts of the present case. We delete the same. - Decided in favour of assessee
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2013 (11) TMI 1608 - ITAT HYDERABAD
Unexplained credit - Held that:- Assessee deserves another opportunity to explain the transactions, particularly, in the context that many of the credits pertain to earlier years. Accordingly, we are of the opinion that the issues raised in this appeal are required to be re-examined by the AO, as Assessee was not given due opportunity. With reference to rental income received but assessed under the head ‘income from house property’ and also computation of short-term loss and long term loss, which even the CIT(A) found that there are mistakes vide para 10 of the impugned order, are required to be verified by the AO with claims in various years. Therefore, after considering the totality of the facts of the case, we are of the opinion that orders are to be set aside and restore all the issues raised in the grounds to the file of AO for fresh examination and to decide the same in accordance with law and facts, after providing reasonable opportunity of being heard to the Assessee. Assessee is directed to put-forth the necessary material/evidence if any, in support of its claims. We order accordingly.
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2013 (11) TMI 1607 - ITAT MUMBAI
Receipts being in the nature of reimbursement of expenses - royalty - chargeability to tax - Held that:-Following the findings of the Tribunal in A.Y. 2004-05, the view taken by the AO about the treatment of this amount as royalty under Article-12 has been set aside as also in line with the findings of the Tribunal in A.Y. 2004-05 , we have held that this amount is also not reimbursement of expenses. The natural corollary which follows in the present circumstances is that the taxability of this amount is required to be determined in terms of Article-7 as has been held by the Tribunal in A.Y. 2004-05. It would be pertinent to mention here clearly that in A.Y. 2004-05, the break-up of the sum was available under clauses 3.1, 3.2 and 3.3 which has been mentioned by us elsewhere was not made available to us. Therefore, the total impugned receipts are liable to be considered in terms of Article-7. We, accordingly set aside the impugned order and remit the matter to the file of the AO for considering the facts in the light of Article-7 of the DTAA.
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2013 (11) TMI 1606 - ITAT DELHI
G.P. rate adoption - Held that:- Thought average rate of g.p. in the case of assessee being 4.9% still, the g.p. rate of 3.61% earned in the case of Krishan Kumar [2012 (9) TMI 548 - ITAT, DELHI] is justifiable.
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2013 (11) TMI 1605 - ITAT MUMBAI
Addition made on account of unexplained/unproved purchases in all the four years under consideration.
Disallowance u/s 14A - Held that:- Disallowance made by the A.O. in A.Y. 2007-08 on the basis given in Rule 8-D is quite reasonable having regard to all the facts and circumstances of the case and nothing has been brought on record before us to dispute or controvert this position. We, therefore, uphold the impugned orders of the ld. CIT(A) confirming the disallowance made by the A.O. u/s 14A of the Act for both the years under consideration i.e assessment years 2007- 08 & 2008-09.
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2013 (11) TMI 1604 - ITAT PUNE
Entitled to deduction u/s. 80P(2)(d) - Held that:- Assessee is eligible for claiming deduction u/s.80P(2)(d) of I.T Act, which is available for income earned from business and not from other sources as rightly held by CIT(A).
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2013 (11) TMI 1603 - ITAT HYDERABAD
Application for registration u/s. 12AA - Held that:- The assessee society was registered with the State Authorities on 16th February, 2012 and field application for registration u/s. 12AA of the Act on 9th March, 2012, i.e., within 21 days of registering the society with the State Authorities. In the meanwhile the assessee has not carried on any activities. But this reason itself does not disentitle the assessee in seeking registration u/s. 12AA of the Act.
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2013 (11) TMI 1600 - GUJARAT HIGH COURT
Additions u/s 68 - Held that:- The assessee successfully proved the source of income and the same was routed through the Bank. Thus, the Assessing Officer was not justified in treating the same as undisclosed income and in making the additions under Section 68 of the Income Tax Act. - Decided in favour of assessee.
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2013 (11) TMI 1599 - ITAT AHMEDABAD
Addition u/s 36(1)(iii) - Held that:- If rate of interest paid to specified persons in compared with rate on unsecured loan are more or less are same. Besides this, various formalities are required to avail the finance from the bank. It is also settled law that how the business should be carried on is the prerogative of the assessee and the Assessing Officer cannot dictate the terms as to how the business should be carried on. While considering the claim u/s. 36(1)(iii) what is to be required to judge is whether the amount is borrowed for the purpose of business or not. Since the amount has been borrowed in earlier years as well as during the year at a stipulated rate of interest and which has been still utilized for the purpose of business, the interest rate could not have been re-negotiated for earlier year. Therefore, rate of interest, paid by the assessee is quite reasonable having regard to the fair market value of such services. Therefore, the CIT(A) was incorrect in restricting the interest payable to the extent of 15% or 14% which is supported by various decisions mentioned in the order in preceding paras. Since the interest rate paid by the assessee is reasonable, the order of the CIT(A) is reversed and addition is deleted. Thus, assessee’s appeals are allowed and Revenue’s appeals are dismissed on this ground.
Addition u/s 14A - Held that:- The assessee has mixed fund in books of account i.e. borrowed as well as self generated. Therefore, the assessee had to prove fund invested in the shares are from the exempted or self generated fund. Now Rule 8D is applicable. Accordingly, the assessee has calculated itself disallowance as per Rue which is very nominal. Thus, we confirm the order of the CIT(A).
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2013 (11) TMI 1597 - ITAT AHMEDABAD
Addition u/s 40A - Held that:- Provision of section 40A(2) did not apply to the facts of the present case in as much as the trade discount is not an expenditure which is incurred or with respect to which a payment is made.
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2013 (11) TMI 1594 - KARNATAKA HIGH COURT
Entitlement to claim exemptions as a charitable institution under section 11 - Held that:- The recipient has accounted the receipt as the amount receive towards building funds and thereafter, a separate account is maintained for the said amount. Form this, it could be inferred that there is a ‘Specific direction by the donor’. The said amount is used as part of the corpus. It may be possible that, in a given case, the provision may be abused and unaccounted monies could be converted into corpus fund without furnishing the particulars of the person who are contributing and to avoid tax liability to have benefit of exemption, but that is a question of fact. The court has to decide on the material available on record, whether the said provision is abused in the aforesaid manner or not. In the absence of any material to show that the said provision is abused and if it is demonstrated that the educational institution has collected money in the form of voluntary contributions from public and may be from the parents of the students who are studying in the institution and when they have issued receipts acknowledging the said amount towards building fund and made requisite entries in the books and deposited the same in the bank, if the court is satisfied with the genuineness of the transaction, it is well within the power of judicial authority to hold that the requirement of Section 11(1)(d) of the Act is fulfilled and the assessee in entitled to be exempted.
In the fact of the case, we are satisfied from the material on record that these voluntary contribution made by the public to the assessee was with a specific direction to use the name for building purpose and therefore, the said donations shall form part of the corpus of the trust and assessee is entitled to the benefit under Section 11 of the Act.
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2013 (11) TMI 1593 - ITAT LUCKNOW
Addition u/s 14A - Held that:- We find that as per the provisions of Section 14A, no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to income, which does not form part of the total income under this Act. Meaning thereby the basic condition precedent for invoking the provisions of section 14A is that there should be income, which does not form part of the total income under this Act. Thus, wherever the assessee earned the interest free income, the corresponding expenditure incurred in earning that income is to be disallowed. In the absence of any interest free income, there cannot be any disallowance as no corresponding expenditures were incurred to earn a particular tax free income. Therefore, the CIT(A) has rightly held that in the absence of tax free income, no disallowance u/s 14A is permissible. Since we do not find any infirmity in the order of CIT(A), we confirm his order.
Claim of interest - Held that:- In the instant case the liability was not statutory liability. Admittedly it was a contractual liability. Though it accrued at the time of execution of first agreement through which loan was obtained by the assessee but that liability was disputed by the assessee by raising a dispute with regard to rate of interest through various correspondences and auditors notes attached to the balance sheet. Finally the dispute was resolved in the impugned assessment year through a supplementary agreement through which the rate of interest was reduced from 12% to 6% per annum besides other terms of payments.
Therefore, the contractual liability is finally accrued on its crystallization in the impugned assessment year, and on the basis of the said agreement the assessee has made debit entry to the profit & loss account. Since the contractual liability has been crystallized in the impugned assessment year, the entries passed by the assessee in its accounts is in accordance with law and no disallowance can be made on the ground that the assessee has been following mercantile system of accounting and the debit entries are to made in corresponding assessment years. We have carefully examined the order of CIT(A) and we find that he has adjudicated the issue in right perspective following the judicial pronouncements rendered on the subject. Since we find no infirmity in his order, we confirm the order of CIT(A).
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2013 (11) TMI 1591 - ITAT CHENNAI
Addition made on account of sale of agricultural land by holding that the impugned transaction cannot be categorized as adventure in the nature of trade or business - Held that:- The assessee had entered into an agreement with the promoter of the land, who has expertise in the business of developing and marketing residential plots, to market his land, in order to realize maximum sale consideration for the sale of his agricultural land. By virtue of the agreement, the assessee has agreed to sell his agricultural land to the promoter at a cost of ₹ 30 lakhs by agreeing to certain conditions laid down by the promoter to suit his business requirements.
The actual business of developing and marketing the land is conducted by the developer and the profit from the same is realized by him. The assessee's stake in the entire transaction is only the sale consideration of his agricultural land for ₹ 30 lakhs. Once the amount of ₹ 30 lakhs is received by the assessee, balance entire sale consideration of the remaining land will be appropriated by the promoter. In these circumstances, the assessee's role in the whole transaction is only that of a seller of the agricultural land and for realizing his sale consideration of ₹ 30 lakhs. Therefore, we are of the considered view that the assessee has only sold his agricultural land at a sale consideration of ₹ 30 lakhs which is not liable to capital gain tax because the land in question is not a capital asset by virtue of section sec.2(14)(iii) of the Act. Hence, we do not find any hesitation to confirm the order of the ld. CIT(A) and also the views expressed by him in his order. Accordingly this appeal is held against the Revenue
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2013 (11) TMI 1590 - ITAT MADRAS
Deduction under Section 80-IA entitlement - CFS run by the assessee is entitled for the benefit of deduction under Section 80-IA.
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2013 (11) TMI 1589 - ITAT DELHI
Assessment u/s 153A - Held that:- The undisputed fact in this case is that there is no incriminating material belonging to the assessee which was found during the course of search in the premises of Rajdarbar group of companies. This fact is evident from the impugned assessment order itself. There is no indication of any material having been found in the course of search and there is no income which was sought to be added based on the search material.
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