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Income Tax - Case Laws
Showing 161 to 180 of 667 Records
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2013 (10) TMI 1181 - PUNJAB & HARYANA HIGH COURT
Interest u/s 234B Tax liability due to retrospective amendment - failure to pay advance tax - Held that:- The assessee claimed exemption under Section 81-IA of the Act while filing his return of income in November, 2006. The exemption was nullified by an amendment that came into force under the Finance Act, 2007 with retrospective effect. The assessee, therefore, could not be expected to know on the relevant date, that claim for exemption under Section 81-IA of the Act would not be available in view of the retrospective amendment and though liable to pay tax in view of the retrospective amendment, cannot be held liable to pay interest Reliance has been placed upon ratio recorded by a Division Bench of this Court in The Commissioner of Income Tax, Panchkula V/s M/s Haryana Warehousing Corporation, Panchkula's case [2008 (4) TMI 214 - PUNJAB AND HARYANA HIGH COURT] Decided against the Revenue.
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2013 (10) TMI 1180 - BOMBAY HIGH COURT
Explanation (baa) of section Section 80HHC of the Income Tax Act Computation of profit from business for deduction u/s 80HHC Held that:- Reliance has been placed upon the case of K. Ravindranathan Nair, [2007 (11) TMI 10 - Supreme Court of India], wherein it was held that formula in section 80HHC(3) provides for a fraction of export turnover divided by the total turnover to be applied to business profits calculated after deducting 90% of the sums mentioned in clause (baa) of the Explanation. Hence, profit incentives and items such as rent, commission, brokerage charges etc., though they form part of the gross total income have to be excluded as they are independent incomes which have no element of export turnover. In K. Ravindranathan Nair, the Supreme Court has held that where charges, though part of the gross total income, constitute independent incomes like rent, commission and brokerage 90% of the said sum has to be reduced from gross total income to arrive at business profits and has to be included in the total turnover in the said formula to arrive at the business profits in terms of Explanation (baa) Relying upon the above judgment, the instant case has been decided against the Assessee.
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2013 (10) TMI 1179 - PUNJAB & HARYANA HIGH COURT
Penalty u/s 271(1)(c) of the Income Tax Act Held that:- The appellant filed a return of income disclosing sale of land. Upon scrutiny of the return under Section 143(3) of the Income Tax Act, 1961, it is discovered that the assessee had sold two properties on 30.12.2005 for a consideration of Rs.1,26,04,166/-, allegedly, purchased in 1991 and 1996. After considering the documents on record, the cost of acquisition, vis-a-vis, the appellant, was found to be Rs.70,078/-. The Assessing Officer also found that properties had been purchased on 29.5.1998 and not in the year 1991-92 as claimed by the assessee. The assessee was unable to tender any explanation, thereby inviting additional tax as well as a penalty of 100% as held by Tribunal Decided against the Assessee.
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2013 (10) TMI 1178 - PUNJAB & HARYANA HIGH COURT
Jurisdiction of the Tribunal to order refund of the amount appropriated by the revenue, during pendency of the appeal Held that:- Jurisdiction of the Tribunal to order refund of the amount appropriated by the revenue, during pendency of the appeal. The learned Tribunal has held that it is empowered, in view of nature of its jurisdiction, as well Section 151 CPC to order refund, as the stay order has not been vacated. The power to ensure that its orders are not violated during pendency of a lis are inherent in any Court or Tribunal. In fact it is the bounden duty of the Tribunal to ensure where its order is violated that the violation is adequately redressed and money appropriated, is restituted. If such a power is held not to be available to the Tribunal, its interim orders would be flouted with impunity. If, the revenue was of the opinion that the stay order has been violated by the assessee or has been vacated, it should have approached the Tribunal for clarification by way of an appropriate application but instead proceeded in a ham-handed manner, to appropriate this amount. The order passed by the Tribunal, does not suffer from any error of jurisdiction or of law Decided against the Revenue.
Whether adjournment is sought by assessee Held that:- A perusal of the Tribunals order reveals that counsel for the assessee brought it to the notice of the Tribunal that the appeal involves an issue relating to AMP, which is pending before a Special Bench, in the case of LG electronics. The Tribunal adjourned the case to 16.04.2013. The opinion recorded by the Tribunal that order dated 16.01.2013 does not record a request for an adjournment, at the behest of counsel for the assessee, cannot be faulted. The counsel for the assessee brought to the notice of the Tribunal that an appeal involving a similar issue is pending before a Special Bench. It was for the Tribunal to hear the appeal or adjourn the appeal. The Tribunal choose, instead, to adjourn the appeal as it could not be decided without decision of the reference. The order dated 16.01.2013 must, therefore, be read as the assessee bringing a fact to the notice of the Tribunal and the latter adjourning the case. The endeavour of the revenue to interpret this order as an adjournment claimed by the assessee, in our considered opinion is erroneous as even a prima facie perusal of the order does not indicate any request by counsel for the assessee for an adjournment Decided against the Revenue.
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2013 (10) TMI 1177 - PUNJAB AND HARYANA HIGH COURT
Recovery of dues - renewal of bank guarantee furnished earlier during the proceedings - Notices under Section 226(3) of the Act, treating the petitioner as an assessee in default Direction to the Standard Chartered Bank to remit an amount of ₹ 26,26,87,000/- to the department Held that:- A perusal of the letter reveals that the Citi Bank has clearly stated that the bank guarantee is valid in their records and has been issued on behalf of the "Motorola India Private Limited." It is not denied by the respondents that letter was received by the respondents before they appropriated money from the petitioner's account. It is, therefore, rather surprising as to how and why notices were issued, under Section 226(3) of the Act, treating the petitioner as an assessee in default and, thereafter, directing the Standard Chartered Bank to remit an amount of ₹ 26,26,87,000/- to the department.
Perusal of the aforesaid bank guarantee reveals that renewal does not require any formal format, as the clauses reproduced above clearly envisage an automatic renewal for a period of three years except if the assessee does not furnish requisite documents regarding the bank guarantee to the bank and the bank, thereafter intimates the government 60 days before expiry of the bank guarantee that the guarantee shall expire on 28.02.2012 or on the happening of events enumerated in Clause 4 of the bank guarantee. Decided in favor of Assessee.
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2013 (10) TMI 1176 - PUNJAB & HARYANA HIGH COURT
Penalty u/s 271(1)(c) of the Income Tax Act Deduction u/s 80IB of the Income tax act Held that:- Commissioner of Income Tax as well as the Income Tax Appellate Tribunal have recorded concurrent findings of fact that as the assessee was allowed deduction under section 801B of the Act for assessment years 2004-05 and 2005-06, but disallowed similar deduction for assessment year 2006-07 as the assessee's returns were beyond the period prescribed by Section 139(1) of the Act, it cannot be said that the claim for deduction under section 801B of the Act was mala fide or raised with an object to evade tax.
Reliance has been placed upon the judgment of Honble Supreme Court of India in the case of CIT versus Reliance Petro Products Pvt. Ltd.[ 2010 (3) TMI 80 - SUPREME COURT ], wherein, while considering the question of levy of penalty, it was held that the mere fact that an assessee's claim for deduction is not accepted, does not automatically invite penalty. The revenue has not been able to establish any fact that would enable us to hold that deduction claimed by an assessee was mala fide or raised with the object of evading tax Decided against the Revenue.
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2013 (10) TMI 1175 - PUNJAB & HARYANA HIGH COURT
Rejection of registration u/s 12AA of Trust on the ground of suspicion regarding genuineness of its activities Held that:- The object of Section 12AA of the Act is to examine the genuineness of the objects of the Trust and though while examining genuineness, the income as well as resources of the Trust may be taken into consideration but any suspicion as to these facts cannot be the sole criteria for rejecting an application under Section 12A of the Act Decided against the Revenue.
Trustee, a life long membership is inferred as not charitable trust Held that:- There appears to be a misconception amongst officers exercising power under Section 12AA of the Act that if a trustee is a life long member of a Trust, it automatically raises an inference that the Trust is not charitable. The fact that a trustee is a life member, may be relevant but cannot by itself lead to a finding that the Trust is not charitable Decided against the Revenue.
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2013 (10) TMI 1174 - PUNJAB AND HARYANA HIGH COURT
Registration of assessee u/s 12AA of the Income tax Act rejected by CIT Held that:- CIT failed to conduct an independent enquiry, disregarded the fact that the appellant was allowed exemption, under Section 10(23C)(iiiad) of the Act and in essence has raised inferences contrary to facts. The Tribunal has also held that the CIT has ignored that the appellant is running a school since its inception.
The jurisdiction to allow or reject an application, filed under Section 12AA of the Act rests with the CIT. The CIT having ignored relevant facts and considered factors that were not germane to the controversy, the order of the Tribunal, declining to impose its own opinion on merits and remitting the matter to the CIT to decide a matter afresh is not faulted Decided in favor of revenue.
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2013 (10) TMI 1173 - PUNJAB AND HARYANA HIGH COURT
Determination of income on the basis of TDS certificate - assessee claimed that the income pertaining the TDS certificates which were received late was booked in the earlier assessment year - Held that:- Lottery prize amounts received are duly reflected in account books for the relevant assessment years. The assessee having proved that TDS certificates, issued late, pertain to receipts reflected in the account books for assessment year 2006-07, the impugned orders, based upon a detailed appraisal of the account books are legal and valid - After appraising the account books and referring to each receipt and TDS certificate, set out facts, there was no fault on the part of the assessee.
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2013 (10) TMI 1172 - PUNJAB & HARYANA HIGH COURT
Reasons to be recorded for cancellantion of registration u/s 12AA of the Income tax act, by the Commissioner Held that:- Section 12AA(3) of the Act, reveals that a precondition to cancellation of registration are findings that activities of the trust are not genuine or are not being carried out, in accordance with objects of the trust. Thus, before cancelling registration, a Commissioner is required to record a finding that activities of the trust are not genuine or are not being carried out, in accordance with objects of the trust. A perusal of the order passed by the Commissioner reveals that he did not record any finding as required by Section 12AA(3) of the Act. The Income Tax Appellate Tribunal, therefore, rightly reversed the order passed by the Commissioner Decided against the Revenue.
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2013 (10) TMI 1171 - PUNJAB & HARYANA HIGH COURT
Mens rea for penalty u/s 271(1)(c) of the Income Tax Act - The respondent-assessee is a company engaged in manufacture of hosiery goods at Ludhiana. A survey under Section 133A of the Act was carried out in the business premises of the assessee. It surrendered undisclosed income amounting to ₹ 1.20 crores under different heads. The said income was included in the profit and loss account and offered to tax. However, the assessee claimed deduction on the entire income under Section 80IB of the Act which included the aforesaid surrendered Income of ₹ 1.20 crores Held that:- Reliance has been placed upon the judgment in the case of CIT v. Rubber Udyog Vikas (P) Limited, [2011 (2) TMI 858 - PUNJAB AND HARYANA HIGH COURT], wherein it was held that making incorrect claim would not tantamount to furnishing of inaccurate particulars unless it was established that the assessee had acted with mala fide intention or had claimed deductions being aware of the well settled legal position Thus, the instant case is not a fit case for imposition of penalty u/s 271(1)(c) of the Income tax act Decided against the Revenue.
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2013 (10) TMI 1170 - DELHI HIGH COURT
Deduction u/s 80G(5) of the Income Tax Act Held that:- Section 80G(5)(iv) requires an institution or fund to maintain accounts of its receipts and expenditure but the Director of Income-tax (Exemption), in his order dated September 24, 2010, has not alleged or stated that there was any such violation. The said order records that for the period ending March 31, 2008, and March 31, 2009, hardly any expenditure had been incurred and no charitable activities were performed - Case of the respondent- assessee was/is that they had spent Rs. 25,000 on 20 operations of disabled patients. Further, they had collected the corpus to establish a dharamshala - There was no violation of clause (iv) of section 80G(5) Decided against the Revenue.
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2013 (10) TMI 1169 - KARNATAKA HIGH COURT
Leasing of commercial complex - Business income or House property income - Reassessment u/s 147 - Whether status of assessee (i.e. Firm or AOP) would be relevant to determine head of income for the earlier AY ITAT had decided that the income should be taxable as income from House Property - For the current AY ITAT had remanded back the matter - Held that:- when the question does not really arise for our consideration from the order of the Tribunal, it is not necessary to go into for examination of this question as for academic purpose. In so far as reopening is concerned, the matter having been remanded and being kept open, that again is not a matter which is required to be examined by this court in this appeal to decide on the substantial question of law. The Tribunal itself has reserved liberty on this aspect to the Assessing Officer.
Res- judicata to apply in cases regarding taxation matters Held that:- Res judicata is not strictly applied in tax matters as in civil matters and particularly under the Civil Procedure Code, 1908, as each assessment year is different and it is for the assessee to assert its position and make it good and it is always open to the assessing authority to examine such matters.
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2013 (10) TMI 1168 - MADRAS HIGH COURT
Reopening of finalized assessment u/s 147 after retrospective amendment to Section 80P - Exemption in respect of income earned on the sale of liquor in the hands of Co-operative society - Held that:- From the decisions of the Hon'ble Supreme Court and the discussions made therein, it is apparent that the amendment which was brought in 1999 has became as the Income-tax (Second Amendment) Act, 1999 (Act 11 of 1999), and on recording the submission made by the Solicitor General before the Delhi High Court when the amendment was impugned, it was made clear that the amendments would apply to the assessments which were yet to be finalized - In the present case, the assessments were of the year 1997, 1998 and 1999 and, admittedly the assessments were finalised in 1999 and it were reopened by issuing notice dated January 17, 2003, under section 148 of the Act. Therefore, the present case falls within the assessments finalised before the amendment and no doubt the assessee is entitled for deduction Decided in favor of Assessee.
Deduction in respect of interest income - Held that:- the deduction claimed in respect of sale of liquor does not fall under the categories stipulated in section 80P(2) of the Act and, therefore, the Tribunal has rightly rejected the claim of the assessee with regard to the sale of liquor. - Decided against the assessee.
Deduction in respect of income from consumer goods sales and the income from liquor sales Held that:- The Tribunal without assigning any reason has just upheld the order of the authorities. When it is not in dispute that the agricultural produce are grown by its members and fall within the category (iii) of section 80P(2) and, moreover, the goods are meant for public distribution we have been left with no other option than to set aside the order of the authorities as well as the Tribunal on this score. Decided against the Assessee.
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2013 (10) TMI 1136 - ITAT MUMBAI
Interest on borrowed funds to be part of cost of acquisition for the purpose of section 48 of the Income tax act on purchase and sale of shares Applicability of section 14A of the Income tax act Held that:- Entire interest has been paid by the assessee as a part of cost of acquisition of shares allotted, is to be treated as cost of acquisition - There is a direct nexus between the borrowed money and the cost of acquisition of shares by assessee. The assessee is entitled to capitalize the said interest as part of cost of acquisition as per section 48 of the Act. Hence, short term capital gain as accrued to the assessee on the sale of shares of NTPC Ltd., NDTV Ltd, and Datamatics Ltd has to be considered after considering the payment of the said interest as part of cost of acquisition. Since, the short term capital gain is taxable under the Act, the provisions of section 14A is not applicable on the facts and circumstances of the case Appeal allowed Decided in favor of Assessee.
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2013 (10) TMI 1135 - ITAT JODHPUR
Penalty u/s 271(1)(c) Held that:- No penalty u/s 271(1)(c) of the Act is leviable in the given facts and the circumstances of the case - There can be no dispute with regard to the position of law that under section 271(1)(c) penalty can be levied only if either the act of "concealment of particulars of income" or "furnishing of inaccurate particulars of income" is found to have been committed by the assessee - By the mere reason of such concealment or of furnishing of inaccurate particulars alone, the assessee does not, ipso facto, become liable to a penalty - Where there is no finding that any details supplied by the assessee in its return are found to be incorrect or erroneous or false there is no question of inviting the penalty under section 271 (1)(c) - A mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee - Such a claim made in the return cannot amount to furnishing inaccurate particulars - the Penalty Deleted Decided in favour of Assessee.
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2013 (10) TMI 1134 - ITAT MUMBAI
Charitable purpose u/s 2(15) - A trust for providing a common platform for trading in shares and securities - Revenue has denied the benefit of registration u/s 12A on the ground that the same does not cater to the members of the public at large, but only to the members of the public who invest in shares - Funding of Corpus fund is in dispute Held that:- if the said funding by way of contribution by the stock exchanges is, in turn, recovered from the individual member brokers, the arrangement would in essence becomes one of insurance by the individual brokers of the stock exchange to meet their liabilities arising in the course of their trade. This is as, simply put, the loss to the investor arising on account of the default of the broker is only the broker's liability, and a trade liability at that. This then assumes the form of an underwriting arrangement, or an insurance scheme under the aegis of the stock exchange, which is only a trade association set up or formed for the benefit of its members. The only difference is that such a fund instead of being created by the settlor stock exchange within itself, is so done by way of a separate fund. The word 'consideration' in proviso to section 2(15) is, to our mind, wide enough to cover such indirect funding, if any.
An individual member of a particular member stock exchange is not called upon to pay any direct charges to the applicant fund. In fact, a part of the auction money of the defaulting money is also, in terms of the SEBI circular (FITTC/FII/02/2002 dated 15.05.2002), made over to the corpus of the fund. Accordingly, the object of the applicant cannot be as a service in relation to any trade, etc. Further, even assuming so, the same does not involve any consideration inasmuch as no quid pro quo can be attributed to the mandatory contributions to the fund by the participating stock exchanges Therefore, applicant fund is a public charitable fund, set up to advance an object of general public utility, and has been wrongly denied registration as one by the Revenue Decided in favor of Assessee.
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2013 (10) TMI 1133 - ITAT MUMBAI
Nature of compensation received for breach of contract - capital receipt or revenue receipt or casual income or to be taxed as long term capital gain or short term capital gaine - Compensation amount of ₹ 16,05,82,500 is capital receipt or revenue receipt that is whether it is non-taxable or taxable receipt Held that:- The Hon'ble Supreme Court in Kettlewel Bullen & Co. Ltd.[ 1964 (5) TMI 4 - SUPREME Court] have observed that where on a consideration of the circumstances, payment is made to compensate a person for cancellation of a contract which does not affect the trading structure of his business, nor deprive him of what is substance of his source of income, termination of the contract being a normal incident of the business, and such cancellation leaves him free to carry on his trade the receipt is revenue. However, where by the cancellation of an agency, the trading structure of the assessee itself is impaired or such cancellation results into loss of what may be regarded as the source of the assessee's income, the payment made to compensate for cancellation of the agency agreement is normally a capital receipt.
In the present case, what the assessee has lost, is the very source of his business and loss of a trading structure. If the right given by the ROFR would have continued, the assessee would have the source of income from the bottling business and this would have constituted its profit making apparatus - Even before the assessee's actual business could start, there was a breach by the other party which ended up the said business itself. Thus, clearly this is a case of loss of source of income itself and hence, the compensation which was received by the assessee is on capital field i.e., capital receipt which cannot be taxed under the income laws Decided in favor of Assessee.
Whether the receipt is casual income - taxability u/s 10(3) -Held that:- the receipt cannot be said to be casual because it has not been incurred by chance or by fortuitous. Here, it is a case of breach of an agreement and the amount has been settled after a dispute among the parties. This receipt cannot be termed as neither casual nor non recurring - Decided in favor of assessee.
Higher rate of depreciation to be allowable to the assessee, when the vehicle is used by the third party instead of assessee Held that:- Once it is not disputed that the assessee was the owner of the vehicle and its business is for hiring and leasing of vehicles to the third parties, the higher rate of depreciation has to be allowed Reliance has been placed upon the decision of Delhi High Court in MGF India Ltd., [2006 (7) TMI 125 - DELHI High Court]
Professional fee paid for negotiation with Coca-cola Co., a business expenditure to be deductible Held that:- He was a person who was instrumental in carrying out the negotiation with The Coca Cola Co. for settling the dispute and for awarding the compensation, such an expenditure has to be allowed as business expenditure and no disallowance can be made Decided in favor of Assessee.
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2013 (10) TMI 1132 - ITAT MUMBAI
Levy of Interest for failure to pay advance tax - Interest u/s 234B & 234C of the Income Tax Act Held that:- Assessee was a notified entity under the provisions of Special Court Act,that no interest u/s.234A,234B &234C of the Act could be charged in her case,that her bank account were operat -ed under the directions of the Special Court,that the provisions of Special Court had overriding effect over the Act,that all the assets were under the control of the custodian,that the appellant could not have paid the advance tax unless directed by the Special Court,that the assessee did not have control over its income/assets,that she could not be penalised for non-payment of advance tax Assessee did not have control over the her funds/assets,that she could not be held as defaulter for failure in payment of advance tax Penalty levied is deleted.
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2013 (10) TMI 1131 - ITAT AHMEDABAD
Rectification of mistake - Earlier ITAT had remanded back the case to the CIT(A) with direction to given an opportunity to AO before allowing expenses - appellant contended that the Hon'ble ITAT has exceeded its jurisdiction by adjudicating beyond the grounds of appeal. Accordingly, he argued that it is an apparent mistake on the part of the Bench - Held that:- After carefully considering the issues of the assessee, we do not find any apparent mistake on record and detailed findings have been given in respective paras. If we entertain the argument of the assessee through M.A., it tantamount to review of our own case. The law doesn't permit us to review our own judgment - Decided against the assessee.
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