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Income Tax - Case Laws
Showing 101 to 120 of 6519 Records
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2013 (12) TMI 1545
Penalties under Sections 271-D and 271-E - Held that:- It appears that in the instant case, the transaction in question, was not cash transaction. It was merely book entries.When that it so, then there is no violation of Section 269SS/269T of the Act. No addition is made in quantum appeal.
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2013 (12) TMI 1544
Whether the reserve and surplus of the amalgamated company can be treated as benefits accruing from business of the assessee in term of provisions of Section 28(iv) of the Act or not? - Held that:- In the present case there is no material whatsoever before us to indicate that the benefit, even if accruing to the assessee, on account of amalgamation by way of merger as not in revenue field, and not of an income nature.
Accordingly, there was no occasion to invoke Section 28(iv) of the Act.
According to us, CIT(A) was quite justified in his observations that “the amalgamation is not an adventure in the nature of trade” and that “this transaction is clearly a capital account transaction” and he was justified in deleting the addition. We uphold his order and dismiss the appeal of revenue.In the result, appeal of revenue is dismissed.
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2013 (12) TMI 1542
Exemption under Section 11 - Held that:- The assessee-trust has not proved its case for seeking exemption under Section 11 of the Act by producing any details of expenditure incurred by the assessee-trust on various activities undertaken to achieve its objects before the Revenue Authorities as well as before us till the closing of hearing of the present appeals. Therefore, we hold that the learned First Appellate Authority has wrongly deleted the addition made by the Assessing Officer in the assessment order dated 30.12.2008 by passing the impugned order, which deserves to be cancelled and accordingly we cancel the impugned order dated 25.09.2009 passed by learned CIT(A), Jalandhar, by holding that the construction of building of the medical institute for a long period, leaving behind the main object of the assesseetrust, does not qualify the assessee-trust for exemption under Section 11 of the Act and the same has rightly been brought to tax by the Assessing Officer, as per the provisions of the Act by making the additions of ₹ 1,72,80,372/- on account of interest income; ₹ 36,282/- for other receipts; and ₹ 25 crore as capital receipts for the year under consideration. - Decided in favour of revenue.
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2013 (12) TMI 1541
Addition made on account of unexplained cash credits under Section 68 - Held that:- When full particulars, inclusive of the confirmation with name, address and PAN Number, copy of the Income Tax Returns, balance sheet, profit and loss accounts and computation of the total income in respect of all the creditors/lender were furnished and when it has been found that the loans were received through cheques and the loan account were duly reflected in the balance sheet, the Assessing Officer was not justified in making the addition
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2013 (12) TMI 1539
Claim of the assessee for relief u/s. 10A/10AA - Held that:- Set aside the order of the AO in this regard and remand the issue to the AO for fresh consideration in the light of the evidence filed by the assessee and in the light of the ultimate outcome of the assessee's claim for deduction u/s. 10A/10AA of the Act. The assessee will be at liberty to file additional evidence to substantiate its case
Credit for tax deduction at source - Held that:- The issue should be examined afresh by the AG in the light of the subsequent instruction of CBDT on the issue relied upon by the learned counsel for the assessee. The assessee is directed to make the necessary application before the AO in this regard with supporting evidence, which according to the assessee has already been furnished to the AO. The AO is directed to examine the claim of the assessee in the light of the instruction referred to above. The assessee is also at liberty to furnish such further evidence as may be necessary or called for by the AO. As hold by the Hon'ble Bombay High Court in the case of Yashpal Sahini (2007 (7) TMI 7 - HIGH COURT , BOMBAY), the revenue will be precluded from recovering taxes/amounts as evidenced by the TDS certificates filed by the assessee before the AO, till completion of due verification by the AO.
TPA - selection of comparables - Held that:- Assessee predominantly functions as a provider of information technology (IT) products and services, inter alia undertaking export of software services and trading activities. The Assessee's primary business segments consist of export services, trading and leasing of company's products. The export services comprise of Global Business Services are) Application Management Services The trading segment offers a broad range of products from entry level, mid-range to high-end servers and main frames, presenting the best technology and practices to support e-business infrastructure requirements. The IBM Global Financing (IGF) segment providers flexible and attractive financing and leasing programmes to fund the IT requirement of India customers, thus companies functionally dissimilar with that of assessee need to be excluded from the final list of comparable.
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2013 (12) TMI 1538
Exemption u/s 11 - whether the amount lying with Credit Industrial at Commercial Paris was in violation of provisions of section 11(5) or not? - Held that:- There was no violation of the provisions of sec. 11(5) in the present set off facts. Further, AO has not demonstrated with facts and figures that submission of assessee that in the relevant assessment year under consideration i.e. A.Y. 2008-09 there was no accumulated income, is not correct. Therefore, in any views of the matter, there was no question of any violation of section 11(5).
As regards, the applicability of provisions of section 13(1)(d), as we have already held that the provisions of section 11(5) are not attracted in the present set of facts, the provisions of section13(1)(d) will also not apply. The assessee has been granted exemption u/s 11(1)(c) by the Board in respect of income applied outside India.Therefore, to the extent amount was not applied to the objects of society outside India, the amount remained with the French Bank. Therefore, it could not be said that there was any violation of provisions of sec. 11(5).
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2013 (12) TMI 1537
Sub-letting - ‘income from house property’ OR ‘business income’ - Held that:- So far as the findings under challenge of the CIT(A) in principle are concerned, in the absence of any distinction on facts pointed out by the Revenue vis-à-vis facts of assessment year 2007-08 , we see no reason to adopt a different approach in the impugned assessment year. At the same time, we find force in the consequential argument of the Revenue that since present is an issue of head of income i.e the Assessing Officer had treated the receipts in question as ‘business income’ and the CIT(A) under the head ‘income from house property’, the Assessing Officer has to examine the case afresh for the purpose of appropriate computation. In our view, this consequential argument deserves to be accepted since at the time of computing the income under the head ‘house property’ the case of the assessee has to be considered for the purpose of deductions u/s 24 of the Act
Disallowance u/s 40(a)(ia) for non-deduction of TDS - Held that:- CIT(A) has rightly directed the Assessing Officer to examine the assessee’s claim on the basis of ‘paid’ and ‘payable’ issue as stated hereinabove. So, the relevant grounds of the Revenue are decided in favour of the assessee.
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2013 (12) TMI 1536
Issues: Disallowance under section 40A(2) of Rs. 10,80,000 and administrative expenses of Rs. 2,36,000 paid to M/s Kukreja Services Pvt. Ltd.
Analysis:
1. The assessee appealed against the order of the ld. CIT(A) confirming the disallowance under section 40A(2) and administrative expenses paid to M/s Kukreja Services Pvt. Ltd. The Assessing Officer observed that the expenses were unduly high and unreasonable, especially considering the significant increase compared to previous years. The AO disallowed the payments made to the sister concern by the assessee as per section 40A(2)(b) of the Act.
2. During the hearing, the assessee's representative referred to previous ITAT decisions in the assessee's favor for similar issues. The Departmental Representative supported the lower authorities' orders. The Tribunal considered the submissions and previous decisions in the assessee's own case for assessment years 2003-04, 2006-07, and 2007-08. It noted that in earlier years, similar additions were made by the AO but were deleted by the Tribunal, following which the addition for the current assessment year was also deleted.
3. The Tribunal relied on its previous decisions in the assessee's cases for earlier years and the absence of any contrary decisions to delete the disallowance of Rs. 10,80,000 for the current assessment year. The appeal filed by the assessee was allowed, and the addition confirmed by the ld. CIT(A) was deleted. The order was pronounced in the open court on 24th December 2013.
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2013 (12) TMI 1535
Transfer pricing adjustment on account of notional interest on delayed payment from the A.E. - Held that:- Some kind of adjustment is required to be made on such transaction with the A.E. Looking to the fact that in the case of non-A.E., there has been maximum delay of 200 days, we are of the opinion that for bench marking the same, upto the delay of 200 days in the case of A.E. also, no interest should be chargeable. In case of delay beyond the period of 200 days, the transfer pricing adjustment is required to be made on account of charging of some interest. The learned Counsel for the assessee was required to furnish the working of period of delay which are beyond 200 days and to calculate interest at the LIBOR rate prevalent for the financial year 2007-08 plus 150 points i.e., 1.5%. The learned Counsel for the assessee has submitted this working before us. As per the said working the learned Counsel informed that LIBOR rate during the financial year 2007-08 was around 4.7% and if 1.5% is added, then interest rate would work out to 6.21%. Accordingly, we direct the Assessing Officer / TPO to verify the working and apply interest rate of LIBOR + 1.5% and workout the adjustment on account of interest for the period beyond 200 days. The assessee will furnish this working before the TPO for verification. Thus, the grounds raised by the assessee are treated as partly allowed.
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2013 (12) TMI 1531
Issues Involved:
1. Set off of brought forward business loss against income exempt u/s 10A.
2. Disallowance u/s 40(a)(ia) for short deduction of tax.
3. Classification of expenditure as capital or revenue.
4. Treatment of interest income.
5. Validity of assessment order and additions/disallowances.
6. Charging of interest u/s 234A, 234B, 234C, and 234D.
Summary:
Issue 1: Set off of brought forward business loss against income exempt u/s 10A
The Tribunal addressed whether income exempt u/s 10A should be set off against brought forward losses and unabsorbed depreciation. The Tribunal relied on the Karnataka High Court's decision in the case of Yoko Gawa India Ltd., which held that income eligible for exemption u/s 10A should be excluded before arriving at the gross total income. Consequently, the Tribunal allowed the assessee's contention that such income should not be set off against brought forward losses. The Tribunal stated, "the income of 10-A unit has to be excluded before arriving at the gross total income of the assessee."
Issue 2: Disallowance u/s 40(a)(ia) for short deduction of tax
The Tribunal considered whether disallowance u/s 40(a)(ia) can be made when tax has been deducted at source u/s 194C instead of 194J. The Tribunal followed the Calcutta High Court's decision in the case of S.K. Tekriwal, which held that shortfall in deduction does not warrant disallowance u/s 40(a)(ia). The Tribunal allowed the assessee's ground, stating, "if there is any shortfall due to any difference of opinion as to the taxability of any item or the nature of payments falling under various TDS provisions, the assessee can be declared to be an assessee in default u/s 201 of the Act and no disallowance can be made by invoking the provisions of section 40(a)(ia) of the Act."
Issue 3: Classification of expenditure as capital or revenue
The Tribunal examined whether the expenditure for debonding fixed assets should be treated as capital or revenue. The Tribunal directed the Assessing Officer to add the expenditure to the cost of the asset, allowing deduction upon the asset's sale. The Tribunal concluded, "if the expenditure is in the capital field, then it has to be added to the cost of the asset and consequently the assessee gets a deduction when the asset is sold."
Issue 4: Treatment of interest income
The assessee did not press this ground, and thus, the Tribunal dismissed it as not pressed.
Issue 5: Validity of assessment order and additions/disallowances
This ground was considered general in nature and was not specifically addressed by the Tribunal.
Issue 6: Charging of interest u/s 234A, 234B, 234C, and 234D
The Tribunal noted that this ground is consequential and did not provide a detailed ruling on it.
Conclusion:
The appeal of the assessee was allowed in part, with specific relief granted on issues related to the set-off of brought forward losses against income exempt u/s 10A and disallowance u/s 40(a)(ia) for short deduction of tax. The Tribunal dismissed the ground related to the classification of expenditure as capital or revenue, directing the addition of such expenditure to the cost of the asset. Other grounds were either dismissed as not pressed or considered general in nature.
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2013 (12) TMI 1530
Disallowance of unrealized foreign exchange loss - whether the said loss is neither on actual loss nor an accrued loss and hence not an allowable loss under the provisions of Income-tax Act? - Held that:- The issue stands covered by the decision of the Apex Court in the case of Woodward Governor India Pvt. Ltd.[2009 (4) TMI 4 - SUPREME COURT ] wherein held loss suffered as on the date of balance sheet is an item of expenditure u/s 37(1)
Not only the exchange loss on outstanding forward contracts is considered but also exchange gain on outstanding forward contracts is also considered. Hence it is clear that assessee company follows the accounting policies as per AS-11 prescribed by the Institute of Chartered Accountants of India (ICAI). This accounting policy has been consistently followed irrespective of whether it is gain or loss and hence needs to be accepted and the disallowance deleted. - Decided in favour of assessee
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2013 (12) TMI 1529
Addition u/s 68 - Held that:- The companies from which the share application money had been received by the assessee-company were genuinely existing and the identity of the individual investors were also established and they had confirmed the fact of making investment, the finding that assessee had discharged initial burden and addition under Section 68 could not be sustained.
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2013 (12) TMI 1528
Initiation of proceedings u/s.153C - Held that:- There are no incriminating materials indicating any undisclosed income of the assessee, which could have enabled the AO to invoke the provisions of section 153C of the Act. This becomes further clear from the fact that the income were determined for the assessment years 2001-02, 2002-03 & 2003-04 only on the ground that the assessee has not been approved under section 10(23C) of the Act. The determination of income has absolutely no relation or relevance to the seized materials. So far as the assessment years 2004-05 and 2005-06 are concerned, perusal of the assessment orders passed in those years would reveal the fact that the determination of income is on the basis of the impounded materials as a result of survey and not on the basis of any seized materials belonging to the assessee. In the aforesaid circumstances, the pre conditions for assuming jurisdiction under section 153C are not satisfied. So far as the decisions relied upon by ld D.R. in support of his contention, after carefully applying our mind to the ratio laid down therein, we observe that the decisions are distinguishable on facts and do not apply to the facts of the assessee’s case. In that view of the matter, we do not find any infirmity in the order of the CIT(A) in holding the initiation of proceedings under section 153C to be ab initio void and consequently annulling the assessments for all the aforesaid assessment years. Accordingly, we uphold the same by dismissing the grounds taken by the department.
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2013 (12) TMI 1527
Deduction of tax at source on the payment of interest on compensation awarded - Held that:- No tax is to be deducted at source from compensation awarded in lieu of acquisition of agricultural land. In respect of `interest' it has to be seen whether interest is a part of compensation. If answer is in affirmative then tax cannot be deducted at source. If, however, it is for delay in making payment it does not form part of compensation and tax may be deducted at source. In view of specific finding of Hon'ble Supreme Court in Ghanshyam's case (2009 (7) TMI 12 - SUPREME COURT ) amount awarded under Section 28 of the Land Acquisition Act is accretion in value of land and interest thereon forms part of compensation; income tax cannot be deducted at source when land acquired is agricultural land.
Admittedly, in the instant case the land was agricultural land and enhanced compensation and interest was awarded under Section 28 of the Act.
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2013 (12) TMI 1526
Addition on cessation of liability - Held that:- On the facts of the case it reveals that not only the existence of outstanding liability of labour charges for so many years is improbable in the normal course of business but the assessee has also failed to give any evidence regarding the genuineness of the creditors, identity of the creditors or any payment of the liability subsequently till date, despite specific query by us on this point. Under such circumstances it is held to be a case of cessation of liability. Accordingly, the appeal of the Revenue is hereby allowed and the action of the AO in adding the said labour charges into the income of the assessee is upheld.
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2013 (12) TMI 1525
Exemption under Section 54(1) - Whether the Tribunal committed an error in holding that the assessee would be entitled to claim exemption under Section 54 in respect of two separate residential houses acquired out of the capital gains, when the Section contemplates exemption in respect of "a" house for the current assessment year? - Held that:- It is clear that the assessee was not attempting to evade tax. In fact, after purchasing two residential houses, still there remained unutilized capital gain, which he has offered for tax. Therefore, as held in the aforesaid Rukminiamma's case, the context in which the expression "a residential house" is used in Section 54 makes it clear that it was not the intention of the legislature to convey the meaning that it refers to a single residential house. The letter "a" in the context, which is used, should not be construed as meaning singular, but being a indefinite article, the said expression should be read in consonance with the other words "buildings and lands" and therefore, the singular "a residential house" also permits use of plural by virtue of Section 13(2) of the General Clauses Act.
Therefore, we are of the view, in the facts and circumstances of this case, the acquisition of two residential houses by the assessee out of the capital gains falls within the phrase "residential house" and accordingly, the assessee is entitled to the benefit conferred under Section 54(1) of the Act. However, we make it clear that while interpreting this word, the Court or the Tribunal or the authorities have to keep in mind the facts of the particular case. When we have held "a" cannot be read as singular, it also cannot be read as multiples and so as to avoid paying tax under Section 45 of the Act. Therefore, in the facts and circumstances of this case, we answer the first substantial question of law raised in favour of the assessee and against the Revenue.
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2013 (12) TMI 1524
Exemption u/s 54 - Held that:- Tribunal allowed the exemption while rendering the decision has followed the decisions of this Court in the case of CIT vs. Syed Ali Adil (2013 (6) TMI 278 - ANDHRA PRADESH HIGH COURT) and also the Delhi High Court in the case of CIT vs. Gita Duggal [2013 (3) TMI 101 - DELHI HIGH COURT ] on the same issue
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2013 (12) TMI 1517
The contribution towards provident fund, even if deposited beyond the stipulated period, is allowable by virtue of the amendment and the disallowance under section 14A of the Income Tax Act, 1961 is plainly contrary to the provisions of the statute.
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2013 (12) TMI 1513
Transfer of cases at Central place for co-ordinated and effective investigation - Petitioners belonged to the same family or group. They were subjected to common search operation. Their assessments were, therefore, under proposal for transfer – Commissioner transferred the case to Ahmedabad.
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2013 (12) TMI 1512
Unexplained investment - addition to gold jewelery - Held that:- Assessee has not offered any explanation either before the Assessing Officer or the Commissioner of Income Tax (Appeals) for excess jewellery found in the course of search as to why it should not be treated as unexplained income. The Commissioner of Income Tax (Appeals) also observed that excess jewellery is arrived only after accounting for all jewellery for which explanation has been offered and accepted. In the circumstances, we do not find any infirmity in the orders passed by the Commissioner of Income Tax (Appeals) in confirming the assessments made by the Assessing Officer. - Decided against assessee.
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