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Income Tax - Case Laws
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2006 (10) TMI 519 - TELANGANA HIGH COURT
... ... ... ... ..... ents in public sector in order to meet the efficiency and as a matter of fact, Section 10(10C) is by way of an incentive. The learned senior counsel Mr.S.R.Ashok relies on a judgment of Supreme Court in Commissioner of Income-tax v. Venkateswara Hatcheries (P) Ltd. (1999) 3 SCC 632 to canvass that the basic rule of interpretation was that the purport and object of the Act must be given its full effect and the entire Statute must be read as a whole and purpose construction should be given to the Legislation. There is no quarrel with that principal and that principle has not been given a go-bye while deciding this case. In fact, Section 10 (10C) has been created to give an added relief to those who come under a voluntary scheme framed under the provisions and Section 89 of the Act is applicable to everybody and is not by way of any relief, whereas Section 10 (10C) gives a relief. For these reasons, we allow the writ petitions, quash the impugned orders and dismiss the I.T.T.As.
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2006 (10) TMI 502 - ALLAHABAD HIGH COURT
... ... ... ... ..... s have actually been made by the assessee, as claimed by it, and if the payment has been made, its claim should be allowed. 6. We have heard Sri Shamboo Chopra, learned standing counsel for the Revenue. Nobody has appeared on behalf of the respondent-assessee. 7. In view of the order of the Tribunal confining the jurisdiction of the assessing authority to enquiry only regarding the genuineness of the payments made by the assessee, it was not open to the assessing authority to embark upon any other enquiry and to reopen the matter which had already been decided in favour of the assessee by the Tribunal. The Tribunal was justified in holding that the assessing authority could not have gone into the question of disallowance of the incentive bonus under section 36(1)(ii) of the Act. 8. We are of the considered opinion that the order of the Tribunal does not raise any substantial question of law which requires consideration. 9. Both the appeals are accordingly dismissed in limine.
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2006 (10) TMI 496 - PUNJAB AND HARYANA HIGH COURT
... ... ... ... ..... section 143(2) could no longer be invoked but the notice was required to be within the limitation prescribed under section 147 of the Act. 5. This aspect of the matter has not been gone into by the Tribunal as the appeal was accepted on the other issue. In the absence thereof, we do not express any opinion on this question. 6. For the above reasons, answer to the question raised is rendered in favour of the revenue and against the assessee and it is held that bar contained in Proviso to section 143(2) of the Act could not be invoked to the reassessment under section 148 of the Act in view of amendment by Finance Act, 2006. We do not express any opinion on the question sought to be raised by the assessee in absence of any finding recorded by the Tribunal. As other issues raised in the appeal before the Tribunal have not been gone into, we deem it appropriate to remand the case to the Tribunal for fresh decision in accordance with law. 7. The appeal is disposed of accordingly.
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2006 (10) TMI 492 - MADRAS HIGH COURT
... ... ... ... ..... of a sufficient degree of durability appropriate to the context. 8. It was also held that the phrase "enduring benefit" is not thinking of advantages that are permanent. There is a difference between the lasting and the everlasting. 9. In the light of the above ratio laid down by the Supreme Court, we are of the view that upgradation of computers by changing certain parts thereby enhancing the configuration of the computers for improving their efficiency but without making any structural alterations is not of an enduring nature. The expenditure incurred by the assessee has therefore to be treated as revenue expenditure. 10. Similar view has been taken by this Court in T. C. Nos. 1397 and 1398 of 2005, by judgment dated 20-1-2006 (CIT v. Southern Roadways Ltd. (2006) 282 ITR 379 (Mad)). Accordingly, the second question is answered in the affirmative, against the revenue and in favour of the assessee. 11. In the result, the tax case appeal stands dismissed. No costs.
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2006 (10) TMI 467 - PUNJAB AND HARYANA HIGH COURT
... ... ... ... ..... the same was incorporated in the main IT Act. 7. As regards the order of this Court in Roshan Singh Makker's case (supra), we find that provisions of Finance Act, 2000 were not brought to the notice of the Tribunal nor the same were brought to the notice of this Court by the learned counsel for the Revenue in that case and do not find mention in the order of the Tribunal which has been extracted in the order of this Court. This Court only interpreted the effect of proviso to s. 113 added w.e.f. 1st June, 2002, without taking into account the provisions of the Finance Act, 2000 which has been relied upon in the impugned order. The said order cannot, thus, be taken to be an authority for the proposition that irrespective of a provision in the Finance Act, levy of surcharge was not permissible on the ground that proviso to s. 113 of the Act was added only w.e.f. 1st June, 2002. 8. In view of the above, we do not find any merit in the writ petition and the same is dismissed.
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2006 (10) TMI 466 - DELHI HIGH COURT
... ... ... ... ..... Aggarwal, Advocate ORDER No substantial question of law arises in this appeal. The appeal is, accordingly, dismissed.
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2006 (10) TMI 465 - ALLAHABAD HIGH COURT
... ... ... ... ..... in the present case the opportunity to cross examine Sri Mohd. Shamim Khan was afforded but the appellants did not avail. 13. So far as additions under section 69C of the Act are concerned, we find that in view of the specific finding recorded by the Assessing Authority, which has been upheld in appeal by the Tribunal that the alleged gifts were purchased by the appellants after paying 10 per cent commission, the additions have rightly been made under section 69C of the Act. The question Nos. 3, 7 and 8, therefore, cannot be said to be substantial questions of law. 14. So far as the question No. 9 is concerned, we find that the Tribunal has held that the levy of interest is consequential. In any event the learned counsel for the appellants has not been able to disprove the levy of interest. 15. In view of the foregoing discussion, we are of the considered opinion that no substantial question of law arises in the present appeals. Thus, all the appeals are dismissed in limine.
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2006 (10) TMI 461 - PUNJAB AND HARYANA HIGH COURT
... ... ... ... ..... CIT, (2005) 277 ITR 341, wherein following the judgment of Delhi high Court in CIT v. KC Sahni (HUF), (2000) 246 ITR 299, it was held that prior to amendment in the year 1988, the benefit of Section 54 of the Act was not available to the assessee, which is HUF. Similar view has been expressed by various High Courts in Kanhyalal and Ramswaroop v. CIT, (1984) 149 ITR 157 (MP), Shrigopal Rameshwardas v. Addl.Commissioner of Income Tax, MP, (1979) 119 ITR 980 (MP), Smt.Rampyaribai Narayandas v. CIT, MP, Bhopal, (1984) 147 ITR 223 (MP), Anam Venkata Krishna Reddy v.CIT, (1988) 172 ITR 425 (AP), Ravindra Gunvantlal Shah v. CIT, (1994) 208 ITR 995 (Guj.) and Pravin Chand Mohin Kumar v. CIT, (1994) 208 ITR 11 (Raj.). Concurring with the view already expressed by this Court in Raghunath Dass Sethi's case (supra). None appears for the assessee. Following the above view, we answer the question in favour of the revenue and against the assessee. Reference is disposed of accordingly.
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2006 (10) TMI 458 - PUNJAB AND HARYANA HIGH COURT
... ... ... ... ..... ribunal was justified in law in holding that income of ₹ 8,27,39,992/- from procurement of wheat as an agent of the Government is not exempt u/s 10(29) of the Income-tax Act.” We find that identical question has been gone into by this Court in our judgment rendered on 06.09.2006 in Haryana Warehousing Corporation v. Commissioner of Income Tax I.T.R. No.120 of 1998. Accordingly, the question referred is answered in favour of the revenue and against the assessee.
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2006 (10) TMI 457 - KERALA HIGH COURT
... ... ... ... ..... confirmed one item, addition was limited to balance ₹ 1 lakh, which was the entry disowned by the creditor. Appellant’s case is that creditor is deliberately disowning the transaction. We are unable to accept this contention because once creditor disowns the transaction, it is for the appellant to prove the same, which the appellant failed. In the circumstance, there is no scope for interference. Appeal is therefore dismissed.
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2006 (10) TMI 454 - MADRAS HIGH COURT
Payments to associate concerns - reimbursement of day-to-day expenses - cash payments exceeding ₹ 10,000 - Interpretation of the r. 6DD(j) - whether cash payments made by the assessee to the associate concerns would attract s. 40A(3)? - HELD THAT:- In our considered opinion, even though s. 40A(3) of the Act is not absolute, payments made in cash cannot automatically be allowed merely for the reason that the payments were made to associate concerns and such reason that weighed the CIT(A) is not only illogical, but also outside the scope of s. 40A(3) of the Act. If such reason is accepted, the transactions which frustrate s. 40A(3) would pave way for evading tax which is contrary to the object of s. 40A(3). The cumulative effect of Circular of CBDT dt. 31st May, 1977, r. 6DD(j) and s. 40A(3) is that the assessee should satisfy that there were exceptional and unavoidable circumstances of transactions in which payments were made in cash and that payment by way of crossed cheque or crossed bank draft was not practicable or the same would have caused genuine difficulty to the payee having regard to the nature of the transaction or there was necessity for expeditious settlement. In addition to that, the assessee should also furnish evidence to the satisfaction of the AO as to the genuineness of payments as well as the identity of payee.
We fail to see that the assessee has satisfactorily explained the exceptional and unavoidable circumstances warranting the payment by cash; the payments by way of crossed cheque or crossed bank draft was not practicable; such payments would have caused genuine difficulties to the payee; and there was necessity for expeditious settlement. Even though it is found that the assessee made cash payments for day-to-day affairs of associate concerns, the reason given by the CIT(A) for deleting 20 per cent disallowance that the payments were made to associate concerns and hence, they were allowable cannot be a justifiable reason as it is outside the scope of s. 40A(3) of the Act. We are satisfied that the deletion of disallowance of 20 per cent the total amount frustrates s. 40A(3) of the Act.
In the result, we answer the questions of law referred to above in favour of the Revenue and against the assessee. The appeal stands allowed. No costs.
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2006 (10) TMI 449 - DELHI HIGH COURT
... ... ... ... ..... mently contended before us on behalf of the Revenue that these decisions do not prohibit initiation of penalty proceedings and that for that purpose the declaration that the assessed is an "assessed-in-default" is relevant. However, this does not appear to have been raised before the Tribunal. It was for this purpose that we have extracted the grounds raised before the Tribunal. The specific question of whether penalty proceedings can nevertheless continue despite the payment of tax and interest thereon by the deductee was not separately and distinctly raised or contended before the Tribunal. We are, therefore, not called upon to consider this question in the present proceedings under Section 260A of the IT Act. 4. In the facts and circumstances of this case, no substantial question of law arises for consideration since the question which has been raised before the authorities stands covered by the aforementioned decisions. 5. The appeals are dismissed accordingly.
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2006 (10) TMI 447 - ITAT DELHI
... ... ... ... ..... ference. We have noticed that the assessee in its letter dated 0020/18-3-2005 to the Assessing Officer (page 44 of the Paper Book) specifically stated that the intending transferor, Smt. Lata R. Gurnaney is completely unrelated with the assessee or with any of its directors. The Assessing Officer has not contested the assessee’s averment. In that situation the Assessing Officer’s conclusion that the whole gamut of transactions was a device for lowering profit by bogus interest is founded on no material. There is no material to substantiate such suspicion of a collusion amongst multiple parties involved in the whole real-time developments. Suspicion by itself cannot take the place of evidence. No such conclusion is viable on objective appraisal of the surrounding circumstances. Therefore, we uphold the order of the CIT(A) in deleting the addition of ₹ 25 lakhs by way of disallowance of the interest. 15. In the result, the revenue’s appeal is dismissed.
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2006 (10) TMI 441 - GUJARAT HIGH COURT
... ... ... ... ..... ld by the Hon'ble Supreme Court in the case of Mc Dowel & Co.Ltd. V/s. Commercial Tax Officer (1985) 154 ITR 48 (SC)? C Whether on the facts and in the circumstances of the case the Appellate Tribunal was right in accepting assessee's deliberate and unjustified claim of not paying interest to partners and ignoring their obligation to pay interest to the partners which was authorized as per the partnership deed and was due within the parameters of the provisions of section 40(b)(iv) of the I.T.Act, 1961 particularly in background of the fact that the assessee had claimed deduction u/s.80IB of the I.T. Act?” The learned Counsel for the revenue fairly admits that similar issue was raised in case of Commissioner of Income Tax v/s. Industrial Workwear being Tax Appeal No. 1177 of 2005 and the said Appeal was not admitted. Following the view taken in above Tax Appeal No.1177 of 2005, no case is made out for admission of these Appeals. The Appeals stand dismissed.
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2006 (10) TMI 439 - ALLAHABAD HIGH COURT
... ... ... ... ..... kesh Ranjan Agrawal appearing for the respondent-assessee. 5. It is agreed between the learned counsel for the parties that both the questions have to be answered in favour of the assessee and against the revenue in view of the decision of this Court in CIT v. Dhampur Sugar Mills Ltd. (No. 1) 2005 274 ITR 340 1, wherein this Court has held that interest on excess levy sugar price is an allowable deduction and in ITR No. 65 of 1996 - CIT v. Dhampur Sugar Mills Ltd. decided on 28-4-2005, wherein this Court has held that the question of disallowance of interest does not arise in the case where the assessee-company had not charged interest on the advances given to its subsidiaries, namely, M/s. Dhampur Yeast Company and M/s. U.P. Straw Boards & Agro Products Ltd. 6. Respectfully following the aforesaid two decisions, we answer the questions referred to us in the affirmative, that is, in favour of assessee and against the revenue. However, there shall be no order as to costs.
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2006 (10) TMI 426 - PUNJAB & HARYANA HIGH COURT
... ... ... ... ..... was not per se enough for making the addition. The Tribunal affirmed the order of the CIT(A). It was held that the assessing officer having accepted gross profit rate and having not pointed out any suppressed sales or inflated purchases or any other discrepancy in the books of account, addition was not justified merely on the ground that there was variation in the stock statement furnished to the bank and the closing stock in the accounts books. 3. We have perused the impugned order and heard learned counsel for the revenue. 4. The finding recorded by the Tribunal is a pure finding of fact. The counsel for the revenue could not point anything to show that the findings recorded by the Tribunal are perverse. 5. No substantial question of law arises from the order of the Tribunal. Further, we find that ITA No.193 of 2005 (CIT v. Shree Vardhman Rice & General Mills), raising a similar question of law, was dismissed by this Court on August 16,2005. 6. The appeal is dismissed.
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2006 (10) TMI 383 - GUJARAT HIGH COURT
TDS liability on Insurance companies - TDS u/s 194A - interest received on the compensation - Motor Accidents Claims - HELD THAT:- The income-tax liability of the concerned claimants to pay tax on the interest accrued on the compensation awarded to them shall arise if such interest income accrued in the concerned financial year together with other income of the respective claimants in that financial year exceeds the chargeable limit as specified in the provisions of the Income-tax Act, 1961 in force for the relevant years. It will, therefore, be open to the claimants to make appropriate applications/representations before the concerned income-tax authority for refund of such amount/s as may be due to them out of the amount which has already been deducted by the Insurance Company as tax deducted at source under the provisions of Section 194A of the Act.
It is necessary to obviate such a situation in future for other claimants who may be awarded compensation with interest thereon, and the amount of interest being deposited exceeds Rs. 50,000/-, but who may not be liable to have any tax deducted at source as per the interpretation placed by us on the provisions of Section 194A of the Act.
In the facts of the present case, since the Insurance Company had deducted tax on compensation u/s 194A(3)(ix) of the Act by treating the entire interest amount as one lumpsum amount, we direct that after giving the claimants the details of the amounts of interest spread over the relevant financial years and the break-up amongst several claimants, the Insurance Company shall, within one month from the date of receipt of a certified copy of this order, furnish to the claimants the certificate indicating the interest amounts computed for each year and with the break-up of the interest amounts payable to each claimant in each of those years as per the apportionment made in this order.
Thereafter it will be open to the claimants to make applications/representations before the appropriate income-tax authority which shall decide the same within six months from the date of receipt thereof.
We are not passing any orders on the prayers for disbursement of the amounts as the learned advocate for the claimants seeks leave to file a separate application with all necessary facts in support of the prayer.
Leave as prayed for is granted - The application is accordingly allowed in the aforesaid terms.
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2006 (10) TMI 381 - ITAT MUMBAI
Exemption of income u/s 11 - incomes other than income under the head “Profits and gains from business and profession” - Object of “general public utility” - charitable purposes u/s 2(15) - HELD THAT:- It is not the Revenue’s case that the activities of the assessee cease to be in the nature of “general public utility”. The assessee was declined exemption only on the ground that it cannot be said that the assessee was “not involved in the carrying on of any activity for profit”. Post April 1, 1984, however, that aspect of the matter ceased to be relevant so far as the scope of “charitable purposes” u/s 2(15) is concerned.
The pre-1961 position thus stands restored. In those years, and following the Tribunal’s decision for the assessment year 1943-44, the assessee was held to be pursuing an object of public utility. The Revenue admits and accepts this position, as reflected from the stand taken by the Revenue authorities all along. The post-amendment section 2(15) being pari materia with section 4(3)(i) of the 1922 Act and the material facts being identical, the assessee thus continues to be eligible for exemption u/s 11. As for the disability u/s 11(4A), the same being confined to exemption of business income, the assessee will nevertheless be entitled to exemption in respect of other incomes, such as “income from house property”, “capital gains” and “income from other sources”.
We, accordingly, answer the questions Nos. 1 and 4 as follows :
(1) Whether the object of the assessee-trust is an object of general public utility u/s 2(15) of the Income-tax Act, 1961? - Yes. In the light of the amendments in section with effect from April 1, 1984, the assessee trust is eligible for being treated as pursuing an object of general public utility u/s 2(15) of the Act.
(4) If the answer to the first question is in the affirmative, does the earning of substantial profit by the assessee affect its status as a trust existing for an object of general public utility and consequently the claim for exemption under section 11, and if so, to what extent, in the light of the judgment of the Supreme Court in the case of Addl. CIT v. Surat Art Silk Cloth Manufacturers Association [1979 (11) TMI 1 - SUPREME COURT]? - While earning of substantial profit does not affect its status as “a trust existing for an object of general utility”, so far as business income is concerned, earning of substantial profits attracts the disqualification u/s 11(4A) of the Act, from exemption u/s 11. As for the exemption of income of the assessee-trust under the heads of income other than “profits and gains from business or profession” is concerned, the earning of substantial profit does not affect the said exemption.
The matter shall now go before the Division Bench for disposal of appeals in accordance with the law, and in the light of our above observations.
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2006 (10) TMI 380 - ITAT BANGALORE
... ... ... ... ..... 1930 rdquo does not advance the case of the Revenue. It is not the learning alone that results in the source of income to the assessee in this case. In fact the other collaterals and relatives also are equally learned. The pooja rights in question have been acquired through inheritance and the assessee could have also performed the pooja by proxy by appointing a competent person. Income is of the Hindu undivided family and as held in paragraph 20.7, there can be no estoppel against law. Thus this plea of the assessee has to be allowed. Coming to the issue of disallowance of salary we find that the assessee has evidence in the form of recordings in a register. Similar claim of the assessee is allowed in the earlier years. We see no reason for part disallowance in these years. Thus we delete the disallowance and allow the claim of the assessee. In the result all the appeals of the Revenue are dismissed and the appeals of the assessee as well as the cross-objections are allowed.
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2006 (10) TMI 361 - ITAT AMRITSAR
Charitable or religious trust - Denial of exemption, Income escaping assessment ... ... ... ... ..... considered opinion that the learned CIT(A) was not justified in deleting the additions of Rs. 25 lakhs and Rs. 29 lakhs for the assessment years 1995-96 and 1996-97 by relying on fresh evidence without complying with the provisions of rule 46A and also without taking into account the contravention of provisions of sections 13(1)(c) and 13(1)(d) of the Act. We, therefore, set aside the orders of the CIT(A) and restore the appeals to his file to be decided de novo as per law and after complying with the provisions of rule 46A and also by taking into account the observations made hereinabove. Needless to say that while redeciding the appeals, the learned CIT(A) shall allow adequate opportunity to both the parties. We order accordingly. These grounds of appeals of the revenue are treated as allowed for the assessment years 1995-96 and 1996-97. 21. In the result, while the appeals of the assessee are dismissed, the appeals filed by the revenue are allowed for statistical purposes.
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