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2015 (11) TMI 1781 - ITAT MUMBAI
Penalty u/s 271(1)(c) - income of the assessee is brought to tax under the provisions of 115JB and tax was charged on book profits pursuant to these provisions and the disallowances made by the AO under the normal provisions of the act - HELD THAT:- The appellant had been assessed u/s115JB Act and the various disallowances made in the assessment order did not have any impact on the tax liability of the assessee.The income computed under the normal provisions of the act is less than the book profits of the assessee. We are of the considered opinion that the penalty u/s 271(1)(c) of the act cannot be levied. The case of the assessee is fortified by the decision of the Delhi High Court v/s Nalwa Sons Ltd. [2010 (8) TMI 40 - DELHI HIGH COURT] wherein the income was computed in accordance with normal procedure is less than the income determined special provisions u/s 115JB and thus the income of the assessee was assessed u/s 115JB and not under the normal provisions and the tax was paid accordingly on the income as computed u/s 115JB of the Act.
Once the tax is levied on the income of the assessee u/s 115JB then the case the concealed of income have no role to play and would not lead to tax evasion and therefore, penalty cannot be imposed on the basis of disallowances or additions made under regular provisions. Further in the case of CIT v/s City Tiles [2014 (5) TMI 400 - GUJARAT HIGH COURT] has held that where the addition to the income of the assessee did not change the tax liability of the assessee as the assessment was made u/s115JB of the book profits penalty could not be imposed. The facts of the assessee are squarely covered by the above decisions and we therefore, respectfully following the decisions of the High Court, we delete the penalty imposed u/s 271(1)(C) by allowing the appeal of the assessee.
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2015 (11) TMI 1780 - ITAT COCHIN
Denial of benefit u/s 80P(2)(i)(a) - HELD THAT:- CIT(A) followed various orders of the Cochin Bench of the Tribunal in the case of M/s Kunnamangalam Cooperative Bank vs ITO [2014 (10) TMI 350 - ITAT COCHIN] and in the case of M/s Pinarayi Service Cooperative Bank Ltd vs ITO [2014 (7) TMI 1176 - ITAT COCHIN] and denied the benefit of deduction u/s 80P - Decided against assessee.
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2015 (11) TMI 1779 - ITAT COCHIN
Denial of benefit u/s 80P(2)(i)(a) - HELD THAT:- CIT(A) followed various orders of the Cochin Bench of the Tribunal in the case of M/s Kunnamangalam Cooperative Bank vs ITO [2014 (10) TMI 350 - ITAT COCHIN] and in the case of M/s Pinarayi Service Cooperative Bank Ltd vs ITO [2014 (7) TMI 1176 - ITAT COCHIN] and denied the benefit of deduction u/s 80P - Decided against assessee.
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2015 (11) TMI 1778 - ITAT COCHIN
Denial of benefit u/s 80P(2)(i)(a) - assessee is a cooperative society mainly engaged in banking business - reasoning of the AO for denying the benefit of section 80P deduction was that the assessee is a cooperative bank engaged in the business of banking and in view of insertion of sub.sec (4) to sec. 80P w.e.f 1.4.2007 cooperative banks were not entitled to get the benefit of deduction u/s 80P(2)(i)(a) - HELD THAT:- CIT(A) has followed the various orders of the Cochin Bench of the Tribunal in the cases of M/s Kunnamangalam Co-operative Bank vs Income Tax Officer, ward 2(3) Calicut [2014 (10) TMI 350 - ITAT COCHIN] for the assessment year 2009-10 and M/s Pinarayi Service Co-operative Bank Ltd vs Income tax Officer, ward 2, Kannur [2014 (7) TMI 1176 - ITAT COCHIN] for the AY 2009-10. Since the Cochin Bench of the Tribunal has decided the issue against the assessee on identical set of facts, we deem it appropriate to follow the coordinate Bench order, for the sake of consistency, which is subject matter of appeal u/s 260A before the Hon’ble jurisdictional High Court. Therefore, we uphold the order of the CIT(A) on this issue.Appeal filed by the assessee is dismissed.
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2015 (11) TMI 1777 - ITAT RAIPUR
Revision u/s 263 - Short deduction of TDS - payment paid to Amin Stone towards hire charges of JCB Machine - TDS u/s 194C or 194I - HELD THAT:- AO has requisitioned details of expenses mentioned u/s 40(a)(ia) along with details of deposit of amount of the TDS. Vide letter dated 10-8-2009 vide para 15 the assessee has mentioned that the details were enclosed therewith. The details were enclosed running into four pages submitted in paper book page Nos. 16 to 19.
It cannot be said that the AO had not made necessary enquiries and the details were not furnished. Hence this plank of learned CIT’s argument that necessary enquiry is not made is not sustainable. CIT’s assuming jurisdiction is that the rate of TDS applied is short.
We find that this issue is duly covered in the case of DCIT vs. M/s S.K. Tekriwal [2011 (10) TMI 10 - ITAT, KOLKATA] and DCIT vs. M/s Chandabhoi and Jassobho [2011 (7) TMI 956 - ITAT MUMBAI] wherein as held that section 40(a)(ia) is attracted in case of non deduction of tax and not where there is application of different rates and hence short deduction of tax. These decisions were cited before the learned CIT who has chosen to ignore the same. In our considered opinion, this approach of the learned CIT is not proper. Judicial discipline mandates that we adhere to the doctrine of stare decisis . Since the issue is covered in favour of the assessee, the jurisdiction assumed by the learned CIT is not proper and legal. - Decided in favour of assessee.
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2015 (11) TMI 1776 - ITAT DELHI
Penalty levied u/s 271(1)(c) - non recording of satisfaction by AO - effective ground of appeal of the assessee is that in absence of any satisfaction recorded in the assessment order, the penalty has been imposed without any jurisdiction and also, the assessee was not provided sufficient opportunity of being heard - HELD THAT:- AO has failed to record prima-facie satisfaction for initiate penalty proceeding in the assessment order passed under section 144 of the Act, respectfully following the judgement of the jurisdictional High court in the case of Madhushree Gupta [2009 (7) TMI 38 - DELHI HIGH COURT] and decision of the Tribunal in the case of Triveni Engineering and Industries Ltd. [2013 (11) TMI 174 - ITAT DELHI] we hold that in absence of any prima-facie satisfaction recorded by the ld. Assessing Officer for initiation of penalty in the assessment order, the penalty levied by the AO is without any jurisdiction and void ab-initio, therefore, order of the learned Assessing Officer passed under 271(1)(c ) of Act is quashed - Decided in favour of assessee.
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2015 (11) TMI 1775 - ITAT INDORE
Capital gain u/s 45 r.w.s. sec. 48 - assessee has transferred the land and received security deposit and that security deposit was again reinvested in making the construction of the malls - colourable device to avoid the tax - HELD THAT:- From the question of law admitted in LAKE PALACE HOTELS AND MOTELS LTD. [2008 (4) TMI 449 - RAJASTHAN HIGH COURT], nowhere it is stated that if the assessee has received any security deposit against the lease rent of security deposit, it is not chargeable to capital gain u/s 45 r.w.s. sec. 48. Therefore, CIT(A) is not justified in relying upon the decision of Hon’ble Rajasthan High Court. We therefore are of the view that the issue in controversy is covered by the Jodhpur ITAT Bench in LAKE PALACE HOTELS & MOTELS LTD. [2004 (3) TMI 771 - ITAT JODHPUR] but it is not decided by Hon’ble Rajasthan High Court.
We find that in the instant case, assessee has transferred the land and received security deposit and that security deposit was again reinvested in making the construction of the malls. We find that the said transaction is not a sale transaction. The Assessing Officer has held that the transaction entered into by the assessee with Kalani Bros and Padma Homes are colourable device on the ground that the lease agreement is stage managed affairs of the assessee. No interest was charged on the security deposit. AO has also referred this matter to District Registrar and he was of the view that it is a colourable device. As we have already held that transaction is not avoiding the tax and assessee has made registered agreement, therefore, unless and until, Assessing Officer proves that assessee has made this colourable device to avoid the tax.
We find that in the instant case, during the course of hearing, AR has specifically submitted before us that the same transaction is already over and assessee has already transferred its land to some other person, therefore, this transaction is already over and when this transaction is already over, as per the decision of Jodhpur Bench (supra), the assessee is not liable for capital gain and CIT(A) is justified in his action. During the course of hearing, the ld. DR could not bring any contrary decision against the Jodhpur Bench. We do not find any contrary decision, therefore, we endorse the action of the CIT(A). We state that the CIT(A) has without looking to the facts of the Rajasthan High Court judgment relied the judgment. We find that this judgment of Hon’ble Rajasthan High Court is not applicable to the facts of the assessee’s case. We, therefore, reverse the finding of the ld. CIT(A) but we agree on the decision of CIT(A) on the basis of Jodhpur ITAT decision.
Assessment u/s 153A - proof of incrementing material found in search - HELD THAT:- It is a settled legal position that once a search and seizure action has taken place u/s 132 of the Act or a requisition has been made u/s 132A, the provisions of section 153A trigged and Assessing Officer is bound to issue notice u/s 153A of the Act. Once notices are issued u/s 153A then assessee is legally obliged to file return of income for six years. The assessment and reassessment for six years shall be finalised by the AO.
It is also held by various Courts that once notice u/s 153A issued, then assessment for six years shall be at large both for AO and assessee have no warrant of law. It has been also held that in the assessment years where assessments have been abated in terms of second proviso to section 153A then Assessing Officer acts under original jurisdiction and one assessment is made for total income including the addition made on the basis of seized material. But where there is no abatement of assessments and assessments were completed on the date of search then addition can be made only on the basis of incriminating documents or undisclosed assets, etc. In these cases there was no incriminating document found and seized. No assessment proceedings were abated in these assessee.
Thus assessments for these assessment years were completed on the date of search. The assessments were completed u/s 143(3) read with section 153A/153C of the Act after the search. There was no abatement of any proceedings in these cases for these assessment years in terms of second proviso to section 153A of the Act.
There is no seized material belonging to the assessee which was found and seized in relation to additions made. In a recent decision, Hon'ble Delhi High Court in the case of CIT vs. Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT] has held that completed assessments can be interfered with by the Assessing Officer while making assessment u/s 153A of the Act, only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which was not produced or not already disclosed or made known in the course of original assessment. In all these cases no assessments were pending on the date of search for these assessment years. No assessments were abated in terms of second proviso to section 153A of the Act.
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2015 (11) TMI 1773 - ITAT PUNE
Assessment u/s 153A - addition u/s 68 - advance received from customers towards advances for sale of shops/flats - AO completed the assessment u/s. 143(3) - search action u/s. 132 - proof of incriminating material found in search - HELD THAT:- Admittedly, in the instant case, the assessee during the course of original assessment proceedings has filed the details of advance received from customers towards advances for sale of shops/flats. The assessment order passed by the AO u/s. 153A r.w.s.143(3) does not speak of any incriminating material that was found during the course of search.
Only the ADIT had conducted certain post search enquiries in respect of 4 persons out of the 13 persons mentioned by the AO according to which the persons are having income from agriculture only. Despite having bank accounts they have paid amount in cash and their credit worthiness is doubtful. In view of the above and in absence of any plausible evidence filed by the assessee during assessment proceedings to substantiate the genuineness of the transactions and credit worthiness of the persons who had given huge advances, the AO made addition of ₹ 2.30 crores u/s. 68.
CIT(A) allowed relief of only ₹ 7 lakhs and sustained addition of ₹ 2,23,00,000/-. It is the submission of the assessee that since no incriminating material was found during the course of search, therefore, in view of the decision of Continental Warehousing Corporation . [2015 (5) TMI 656 - BOMBAY HIGH COURT]and Murali Agro Products Ltd. [2010 (10) TMI 1052 - BOMBAY HIGH COURT] AO could not have made any addition u/s. 68 of the I.T. Act in respect of advance from customers towards sale of flats/shops.
Although the decision of the Hon'ble Bombay High Court in the case of Murali Agro Products Ltd. (Supra) passed on 29-10-2010 was available at the time of completion of the assessment u/s. 143(3) r.w.s. 153A (passed on 31-12-2010) the same was neither brought to the notice of the AO nor before the CIT(A) for which the AO/CIT(A) have not considered the same. Similarly, the decision in the case of Continental Warehousing Corporation (Supra) was passed after the order of the CIT(A). Thus, the lower authorities have no occasion to consider the above 2 decisions and apply their mind which are being relied on by the Ld. Counsel for the assessee before us for the first time to the proposition that the AO could not have made any addition u/s. 68 in absence of any incriminating material found during the course of search. Under the aforementioned circumstances, we deem it proper to restore the issue to the file of the AO with a direction to decide the issue afresh - Additional ground by the assessee is accordingly allowed for statistical purposes.
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2015 (11) TMI 1771 - DELHI HIGH COURT
Computing deduction u/s 80IA in respect of the captive power generating unit - rate at which power was supplied by the Haryana State Electricity Board ('HSEB') to various industrial units situated in the area, constituted market price of power - HELD THAT:- Substantial Question of law admitted.
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2015 (11) TMI 1770 - ITAT MUMBAI
TDS u/s 194C OR 192 - payments made to ITD Cementation India Ltd, toward the salary of their employee working for the joint venture - HELD THAT:- Judgment of assessee own case in respect of AY 2008-09 the issues/grounds raised in the present appeal and the assesses appeal in respect of AY 2008-09 are identical and respectfully following the judgment of coordinate bench in respect of the assessee, issue decided in favour of assessee
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2015 (11) TMI 1769 - ITAT BANGALORE
Reopening of assessment - capital gains arising out of the joint development agreement as assessee entered with Vaswani Estates Developers P. Ltd. - non-furnishing of reasons to assessee for reopning of assessment - Held that:- AO had not complied with the law laid down by the Hon’ble Apex Court in the case of GKN Driveshafts (India) Ltd (2002 (11) TMI 7 - SUPREME COURT). AO had not given copy of the reasons for which notice u/s.148 of the Act was issued. In our opinion awareness of the assessee as to the reason why notice u/s.148 of the Act was issued may not be sufficient to satisfy the requirement in this regard.
No doubt Ld. DR has relied on a judgment of Hon’ble Madras High Court in the case of CIT v. C. Palaniappan [2011 (3) TMI 589 - MADRAS HIGH COURT] where it was held that non-furnishing of reasons was only a supervening illegality and would not render the proceedings void by itself. However, we find that Hon’ble Delhi High Court in the case of Samcor Glass Ltd [2015 (12) TMI 773 - DELHI HIGH COURT] and Trend Electronics [2015 (9) TMI 1119 - BOMBAY HIGH COURT] had held that jurisdictional issues should be strictly complied with by the authorities concerned and no question of knowledge being attributed on the basis of implication can arise.
Once a jurisdictional High Court decision is there on a particular legal issue, this Tribunal being an inferior forum to jurisdictional High Court, is bound to follow the said judgment. Accordingly we are constrained to quash the assessment done on the assessee for the impugned assessment year. Appeal of the assessee having been allowed on legal ground itself, other grounds relating to the merits of the issue are not dealt with. Assessee’s appeal is allowed.
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2015 (11) TMI 1767 - ITAT CHENNAI
Exemption u/s 11 - whether the corpus donation received by the assessee is exempted u/s 11(1)(d) of the Act or not ? - registration u/s 12AA mandation pre-condition for grant of exemption u/s 11 and 12 - Held that:- Admittedly, the trust was not registered u/s 12AA of the Act. This Tribunal is of the considered opinion that registration u/s 12AA is a mandatory pre-condition for grant of exemption u/s 11 and 12 of the Act.
As carefully gone through the order of this Tribunal in case of Pentafour Software Employees’ Welfare Foundation vs ACIT (2008 (7) TMI 984 - ITAT CHENNAI). This Tribunal has not considered the mandatory requirement of registration u/s 12AA for claiming exemption u/s 11. Under the scheme of the Income-tax Act, 1961, donations are considered as income unless the same were received from blood relatives. In the case before us, admittedly the assessee is not registered u/s 12AA of the Act. Therefore, sec. 11 of the Act is not applicable. There is no provision in the Income-tax Act, 1961 for exempting the donation received by the assessee in case it is not registered u/s 12AA of the Act. Therefore, the order of this Tribunal in M/s Pentafour Software Employees Welfare Foundation is not applicable. - decided against assessee.
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2015 (11) TMI 1766 - ITAT DELHI
Interest accrued on the deferred installments towards the premium of the premises - Interest to NOIDA Authority towards the allotment of plot to the assessee and claimed the same as deduction - allowable business expenditure u/s 37 - Held that:- The facts are not disputed that the interest claimed by assessee was in respect of deferred instalments after the land including the superstructure was put to use on acquisition. Therefore, ld. CIT(A) rightly held that the interest pertaining to the period post acquisition and putting of such land including the superstructure in use, could not be capitalized along with the cost of land. We are in agreement with the view taken by ld. CIT(A), which is also fortified by the decision of Hon’ble Supreme Court in the case of Bombay Steam Navigation Co. (P) Ltd. (1964 (10) TMI 12 - SUPREME COURT).
Depreciation on computer accessories and peripherals such as, printer, scanners and server - Held that:- The said issue is covered by the decision of Hon’ble Delhi High Court in the case of CIT Vs. BSES Yamuna Powers Ltd. [2010 (8) TMI 58 - DELHI HIGH COURT] holding that the depreciation on computer accessories and peripherals such as, printer, scanners and server was to be allowed @ 60% the same being part of computer system.
TPA - Comparable selection - Held that:- Since the OP/OC of each comparable affected the average margin, on the basis of which addition is made, therefore, computation of correct OP/OC of each comparable is of paramount importance. We, therefore, restore this issue to the file of ld. TPO to examine the assessee’s contention. Ground is allowed for statistical purposes.
Misc. income as operating income in computing the operating margins of Mahindra Acres Consulting Engineers Ltd. and Rites Ltd. - Held that:- The assessee’s reliance is on the decision of the ITAT in the case of M/s bobst India Pvt. Ltd. Vs. ACIT [2014 (2) TMI 1347 - ITAT PUNE], in which it has been held that any item of income or expenditure, which is not linked to the international transactions under review has to be excluded from the computation of net operating profits and operating revenues. We find that this plea has not been taken before CIT(A) and, therefore, we refrain from making any comment on this aspect, particularly because if this principle is to be applied, then it is to be applied in respect of all the items of income and expenditure, which aspect has not been examined by lower revenue authorities. Since this issue does not arise out of the CIT(A)’s order, we refrain to adjudicate the same. Ground is dismissed.
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2015 (11) TMI 1765 - ITAT COCHIN
TDS u/s 194I or 194C - Short deduction of tds - contract for carrier coming within the provisions OR ‘hire’ simplicteor coming within the provisions - Held that:- The contract entered between the assessee and the ship owners are not placed on record though there is a reference to some of the clauses of contract in the order passed u/s 201(1) and 201(1A). We find the issue has not properly deliberated by both the AO and the CIT(A) with regard to the contract entered between the assessee and the ship owners.
Therefore, for a proper appraisal of the issue and in the interest of justice and equity, we are of the view that the matter needs to be examined by the ACIT(TDS) afresh. ACIT(TDS) shall examine the contract entered between the assessee and the ship owners, which is the basis for making payment of charter hire charges. ACIT(TDS) on examination of the agreement/contract shall determine whether it is a case of contract of carrier coming within the ambit of sec. 194C or ‘hire’ simplictor and whether such hiring of ships come under the provisions of section 194-I of the Act. The ACIT(TDS) shall expeditiously dispose of the matter in accordance with law as indicated above after affording reasonable opportunity of being heard to the assessee
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2015 (11) TMI 1764 - ITAT KOLKATA
Deemed dividend addition u/s 2(22)(e) - granting of loan formed substantial part of its business - Held that:- As decided when once the business of the lender company covered by exception (ii) to section 2(22)(e) of the Income Tax Act, then the provisions of section 2(22)(e) will not be applicable. As per section 2(22)(iii), the loans granted did not fall within the definition of dividend and therefore, we find no infirmity in the orders of the ld. CIT(A) to be interfered with. Hence, we confirm the same - decided against revenue
Addition under section 68 -share application money treating the same as unexplained cash credits - Held that:- From the details and documents filed by the concerned share subscribers, it was held by the Assessing Officer that their identity and capacity as well as the genuineness of the relevant transactions were duly established and no addition under section 68 was called for. Keeping in view these submissions made by the ld. Counsel for the assessee, which have not been disputed or controverted by the ld. D.R., we find no justifiable reason to interfere with the impugned order of the ld. CIT(Appeals) deleting the addition - decided against revenue
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2015 (11) TMI 1762 - ITAT BANGALORE
Allowability of provision for warranty - Held that:- As decided in favour of assessee [2012 (3) TMI 627 - ITAT BANGALORE] we are concerned with Product Warranties. To give an example of Product Warranties, a company dealing in computers gives warranty for a period of 36 months from the date of supply. The said company considers following options: (a) account for warranty expense in the year in which it is incurred; (b) it makes a provision for warranty only when the customer makes a claim; and (c) it provides for warranty at 2% of turnover of the company based on past experience (historical trend).
Under the circumstances, the third option is most appropriate because it fulfills accrual concept as well as the matching concept. For determining an appropriate historical trend, it is important that the company has a proper accounting system for capturing relationship between the nature of the sales, the warranty provisions made and the actual expenses incurred against it subsequently.
If warranty provisions are based on experience and historical trend(s) and if the working is robust then the question of reversal in the subsequent two years, in the above example, may not arise in a significant way. - decided against revenue
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2015 (11) TMI 1760 - ITAT INDORE
Deduction claimed u/s 80IB(11A) denied - assessee has not fulfilled the conditions as prescribed in the Act - assessee’s claim that hiring Riksha will suffice the conditions of integrated business of transportation with handling and storage - Held that:- Deduction u/s 80IB(11A) is available to undertakings who are deriving profit from the integrated business of handling, storage and transportation of foodgrains. Thus, the facilities of transportation, handling and transportation must exist as an integrated business and the undertaking must derive profit from such business.
Transportation by hiring lorry or thela will not generate profit. The benefit must be from integrated business including transportation. The assessee’s claim that hiring Riksha will suffice the conditions of integrated business of transportation with handling and storage shall not be sufficient. Rather it will go against the very spirit of the Act. This deduction is available only on the profit derived from the integrated business of handling, storage and transportation of foodgrains. No merit in the pleading of the assessee and sustain the orders of the authorities below. - Decided against assessee.
Depreciation on the building and warehouse - assessee did not claim depreciation on the building - Held that:- The assessee claims that the audited balance sheet of the assessee shows the addition of warehousing building to its assets at ₹ 1,78,62,323/- and also shows rental income from FCI and Cargil India Private Limited and the tax has been deducted from the rent, therefore, in our view, the assessee is entitled to depreciation on warehousing - Appeal of the assessee stands partly allowed.
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2015 (11) TMI 1759 - ITAT MUMBAI
Revision u/s 263 - amount earned on cancellation of forward contracts entered in foreign exchange was not taxed by the AO - amount received on account of gain on cancellation of forwarding contracts was liable to be taxed as income of the assessee during the year under consideration - Held that:- The gain arose on forwarding contracts was on account of cancellation for forwarding contracts entered into in connection with the offshore equipment, byepass valve system etc. Since the commercial production had not begun during the year under consideration, the assessee company correctly capitalized all the expenses incurred in relation to setting up of plant and machinery and the gains reduced from the expenses to be capitalized resulting in lesser capitalization to that extent.
Our view is further supported by the decision of Hon’ble Supreme Court in the case of Challapally Sugar Ltd. (1974 (10) TMI 3 - SUPREME COURT). No infirmity in assessee’s claim for setting of gains on such forward contracts from the cost of plant and machinery during pre-commencement stage.
With regard to unrecognized gain in forwarding contracts, we find that gain arising on forward contract is an unrealized gain on account of restatement of the liability at the year end. The said forward contracts were entered into in connection with the purchase of Turbines. The nature of gain on account of forward contract is in connection with the acquisition of fixed assets and in view of our above discussion, the same is to be adjusted from the cost of the fixed assets. The Hon’ble Supreme Court in the case of Sutlej Cotton Mills Ltd. (1978 (9) TMI 1 - SUPREME COURT) held that profit or loss arises to an assessee on account of appreciation or depreciation in the value of foreign currency held as capital asset or as fixed assets is liable to be treated as capital in nature, therefore, profit or loss would be of capital nature.
No merit in the order of the ld. CIT passed u/s 263 of the Act and we set aside the same. - decided in favour of assessee
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2015 (11) TMI 1758 - ITAT INDORE
Assessment u/s 153A - addition in respect of share application money - proof of incriminating documents as found and seized during the course of search - abetted assessment - Held that:- It is a settled legal position that once a search and seizure action has taken place u/s 132 of the Act or a requisition has been made u/s 132A, the provisions of section 153A trigged and Assessing Officer is bound to issue notice u/s 153A of the Act. Once notices are issued u/s 153A of the Act then assessee is legally obliged to file return of income for six years. The assessment and reassessment for six years shall be finalised by the Assessing Officer.
It is also held by various Courts that once notice u/s 153A of the Act issued, then assessment for six years shall be at large both for Assessing Officer and assessee have no warrant of law. It has been also held that in the assessment years where assessments have been abated in terms of second proviso to section 153A then Assessing Officer acts under original jurisdiction and one assessment is made for total income including the addition made on the basis of seized material. But where there is no abatement of assessments and assessments were completed on the date of search then addition can be made only on the basis of incriminating documents or undisclosed assets, etc. In these cases there was no incriminating document found and seized. No assessment proceedings were abated in these assessees. Thus assessments for these assessment years were completed on the date of search. The assessments were completed u/s 143(3) of the Act read with section 153A/153C of the Act after the search. There was no abatement of any proceedings in these cases for these assessment years in terms of second proviso to section 153A of the Act. There is no seized material belonging to the assessee which was found and seized in relation to additions made.
We allow the appeals on the ground of sec. 153A of the I.T. Act wherein we have already held that in absence of any incriminating documents found and seized during the course of search, the Assessing Officer is not justified in making the addition in non-abated assessment order while passing the order u/s 153A r.w.s. 143(3) of the Act. - Decided in favour of assessee
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2015 (11) TMI 1757 - ITAT DELHI
Deduction u/s. 80IB on the amount of DEPB - Held that:- Hon’ble Supreme Court in the case of Baby Maine Exports, [2007 (3) TMI 206 - SUPREME COURT] relied by the assessee before us. In this decision, Hon’ble Apex Court has held that the premium paid by the export house or the trading house to a supporting manufacturer is an integral part of the turnover of the supporting manufacturer and was thus includible in the profits of the business eligible for deduction u/s. 80HHC.
The assessee was entitled for deduction u/s. 80IB in respect of sale of DEPB received as supporting manufacturer. In view of catena of decisions relied upon by the assessee, in our considered view, the conclusion of the CIT(A) denying deduction u/s. 80IB qua purported DEPB receipt, is not found to be correct. No material is adduced by the DR to take a contrary view. We, therefore, reversing the impugned order, hold that the assessee is entitled for deduction u/s. 80IB of the Act. This issue is decided in favour of the assessee as such. The ground No. 1 is accordingly allowed.
Computation of deduction u/s. 80HHC and 80IB ignoring the provisions of section 80IB(13) r/w sec. 80IA(9) - Held that:- Referring to the varied decisions in the matter laying our hands on the decision favourable to the assessee rendered in the case of Associated Capsules (P) Ltd. [2011 (1) TMI 787 - BOMBAY HIGH COURT] relied by assessee, we reverse the order of the CIT(A) holding that deduction u/s. 80IB would not go to reduce the total income for the purpose of calculating deduction u/s. 80HHC. Accordingly, this issue is decided in favour of the assessee.
Disallowance on account of foreign traveling - Held that:- For want of any bills/vouchers or supporting evidence to substantiate foreign traveling expenses to the extent of ₹ 1,47,827/-, the ld. Authorities below have rightly disallowed the same. Therefore, this ground of appeal raised by assessee has no force and is liable to be dismissed.
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