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Income Tax - Case Laws
Showing 121 to 140 of 6519 Records
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2013 (12) TMI 1505
Issues involved: Disallowance u/s. 40(a)(ia) r.w.s. 194C, Levy of penal interests.
Disallowance u/s. 40(a)(ia) r.w.s. 194C:
The appellant contested the disallowance of payments to lorriwalas under section 40(a)(ia) r.w.s. 194C, arguing that there was no direct contract with the truck drivers as the appellant acted as an intermediary earning only commission. The appellant asserted that since there was no outstanding amount payable at the end of the year, the provision of section 40(a)(ia) should not apply. Additionally, it was emphasized that the appellant did not have any contractual obligations towards the truck drivers, thus negating the applicability of section 194C. The Tribunal noted discrepancies in the assessment, highlighting the lack of evidence establishing a direct contract between the appellant and the truck owners for transportation services. The Tribunal referred to a decision by the Hon'ble Madras High Court emphasizing the necessity to verify the exact nature of the appellant's business to determine the applicability of section 194C. The Tribunal remitted the matter back to the Assessing Officer for further examination and directed the appellant to provide necessary evidence to support its claims.
Levy of penal interests:
The appellant denied liability for penal interest, which was considered after condoning a delay in filing the appeal. The appellant cited reliance on an Income Tax Practitioner-cum-Consultant for handling tax matters due to the closure of the partnership firm's business. The delay in filing was attributed to the health issues of the practitioner. The Tribunal, after hearing both parties, condoned the delay and proceeded to address the appeal on its merits. The Tribunal acknowledged the past Tribunal decision on a similar issue for the assessment year 2007-08 and directed the matter to be reconsidered by the Assessing Officer in light of relevant legal provisions and other judicial decisions. The appellant's appeal was allowed for statistical purposes, with the order pronounced on December 30, 2013.
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2013 (12) TMI 1485
Undisclosed capital introduction and unaccounted profit of the business - unaccounted deposits made in Indian Bank, Bankura - undisclosed receipt as well as undisclosed income of the assessee - CIT(A) deleted the addition - Held that:- Perusal of the seized material in BDM/18, when compared to the audited balancesheet, as also the reconciliation of the balance-sheet show that in the audited balance-sheet, there is no land and building whereas in the seized BDM/18, there is an item of land and building. Admittedly, if there is a land and building, such an asset cannot be hidden. Further, even the search did not unearth any such land and building. Further perusal of the reconciliation shows that the cash and bank balance show an amount of ₹ 1,18,774/-, as per the seized BDM/18 and as per the audited balance-sheet is ₹ 15,88,517.60. Here, the Revenue has not been able to identify any bank account, which is having a balance of ₹ 1,13,774.43 as shown in BDM/18. Further, the sundry debtors show an amount of ₹ 13,119/- as per BDM/18 whereas as per the audited balance-sheet, the figure is ₹ 11,36,148/-, which is a higher figure in the audited balance-sheet. On the liabilities side, the sundry creditors shown, as per BDM/18, is ₹ 1,95,965.43 whereas as per the audited balance-sheet, the figure is ₹ 35,84,244.42, which is again a higher figure and this includes an amount of ₹ 28,48,604/- in respect of Dutta Automobiles, which are on the basis of contemporaneous document and evidence. There is also a loan from Union Bank, which is shown in the audited balance-sheet at ₹ 4,01,437/- but does not find place in BDM/18. All these figures, which have been extracted and explained earlier, clearly show that BDM/18 is clearly not a true and fair document for the purpose of making an addition much less a presumption of undisclosed income. CIT(A) on the issue is on the right footing and does not call for any interference. - Decided in favour of assessee.
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2013 (12) TMI 1483
Eligibility for deduction u/s 43B - payments of PF and ESIC paid beyond the due dates of the respective Acts, including the grace period - Held that:- Considering the fact that it was the case of employees contribution which was not deposited within the prescribed period under the PF Act and ESI Act, the said question / issue is to be held in favour of revenue and against the assessee in view of the decision of this Court in COMMISSIONER OF INCOME TAX II Versus GUJARAT STATE ROAD TRANSPORT CORPORATION [2014 (1) TMI 502 - GUJARAT HIGH COURT] wherein it has been held that if the assessee has not deposited employees contribution towards PF and ESIC Act, the assessee shall not be entitled to the deductions in the same year. - Decided in favour of the revenue.
Excise duty and sales - whether will not be included in the total turnover while calculating the deduction u/s. 80HHC of the even after insertion of Section 145A - Held that:- The said question is squarely covered by the decision of the Hon’ble Supreme Court in the case of Lakshmi Machine Works (2007 (4) TMI 202 - SUPREME Court) and in the case of Shiva Tex Yarn Limited (2012 (9) TMI 658 - SUPREME COURT), wherein held tax under the Act is upon income, profits and gains. It is not a tax on gross receipts. Under Section 2(24) of the Act the word "income" includes profits and gains. The charge is not on gross receipts but on profits and gains. The charge is not on gross receipts but on profits and gains properly so-called.Income from rent, commission etc. cannot be considered as part of business profits and, therefore, they cannot be held as part of the turnover also.Tribunal was right in holding that the excise duty and sales will not be included in the total turnover while calculating the deduction u/s. 80HHC of the even after insertion of Section 145 A - Decided against the revenue.
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2013 (12) TMI 1480
Disallowance u/s. 40(A)(2b) - ITAT deleted addition - Held that:- So far as the disallowance made under section 40A(2)(b) of the Act on the ground of motor bus rent is concerned, it appears that the AO disallowed 5% of the total payments towards motor bus rent by observing that the assessee has failed to reconcile the difference in payments as per tax audit report and as submitted during the assessment proceedings and had also not produced any comparative prices. The learned CIT(A) deleted the said disallowances by observing that the AO has not made out any case for excessive or unreasonable payments to the related purpose towards the motor bus rent. The learned CIT(A) also observed that no comparative prices for similar transport services was cited by the AO and therefore, was not justified in making ad-hoc disallowance of 5% under section 40A(2)(b) of the Act and therefore, the CIT(A) as such rightly deleted the disallowances made under section 40A(2)(b) of the Act. Considering the provisions of Section 40A(2)(b) of the Act and the Evidence Act, if the AO was of the opinion that the payment for which disallowance is claimed, is excessive or unreasonable. In that case, it was for the AO to assess fair market price and give comparative instances for payment for similar transport service. In absence of such comparative cases brought on record, as rightly observed by the ITAT it was not open for the AO to make disallowance under section 40A(2)(b) of the Act. We are in complete agreement with the view taken by the ITAT and the observations made by the learned ITAT while deleting disallowances made by the AO under section 40A(2) (b) of the Act on motor bus rent. No error has been committed by the learned ITAT which calls for interference of this Court. - Decided in favour of assessee.
Disallowance made under section 40(a)(ia) i.e. with respect to retrospective operation of the amendment in Section 40(a)(ia) by Finance Act, 2010 - Held that:- The said question is squarely covered against the revenue by decision of the Division Bench of this Court in Commissioner of Income Tax -Ahmedabad IV Versus Omprakash R. Chaudhary [2015 (2) TMI 150 - GUJARAT HIGH COURT] wherein held that the amendment in section 40(a)(ia) of the Act by Finance Act, 2010 would apply retrospectively.- Decided in favour of assessee.
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2013 (12) TMI 1455
Deduction u/s 80P denied - CIT(A) allowed the claim deeming the assessee bank as co-operative society - Held that:- In the present case, a clear finding is given by the Assessing Officer that by various judgments cited by learned A.R. of the assessee, the assessee does not get any support for the income earned from the investments made in non-SLR category because such investments were not the subject matter of the decision of CIT vs. Nawanshahar Central Co-operative Bank Ltd. [2005 (8) TMI 28 - SUPREME COURT OF INDIA]. The learned CIT(A) has not given any contrary finding that this contention of the Assessing Officer is not correct and the interest income is not in respect of non-SLR investment. Therefore, we find that the order of learned CIT(A) is not sustainable. We, therefore, reverse the same and restore that of the Assessing Officer. Decided in favour of revenue.
Penalty imposed u/s 271B - photocopy of tax audit report submitted by the assessee is not genuine document as such and it is not acceptable as per CIT - depreciation on Mutual Funds and securities - Held that:- While going through the assessment order, we do not find any such addition having been made by the Assessing Officer of the amount in respect of disallowance of depreciation on Mutual Fund securities. In the ground of appeal, it was stated by the Revenue in ground No. 2 that in course of assessment proceedings, the assessee never submitted that Mutual Fund were held for the purpose of trade and not for investment. It is also submitted in ground No. 2 that the assessee did not file any evidence in this regard even after several opportunities were given during the assessment proceedings. There is no mention of any remand report in this regard in the order of CIT(A). Under these facts, we are of the considered opinion that the order of CIT(A) on this issue is not sustainable. his matter should go back to the file of the CIT(A) for a fresh decision and pass speaking order. - Decided in favour of revenue for statistical purposes.
Revision u/s 263 - AO has not examined the issue of Carry forward of Loss and Unabsorbed Depreciation - Held that:- After carefully going through order of learned CIT passed by him u/s 263 we do not find any infirmity therein and therefore, the same is confirmed. - Decided against assesse.
Deduction u/s 36(1)(viia) - deduction @10% of the aggregate average advances made by the Rural branches has to be computed in the manner laid down under Rule 6ABA of the l.T.Rules - Held that:- Since the date of inclusion in the Sch-H of the RBI Act is an obvious fact, I hereby hold that the assessee bank was not a scheduled bank during the F.Y. 2006-07 (corresponding to the A.Y. 2007-08) and, therefore, is not entitled to deduction @10% u/s 36(1)(viia) of the Act.- Decided against assesse.
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2013 (12) TMI 1451
Revision u/s 263 - Date of completion of wind mill erection whether September 30, 2007 or September 1, 2007 - Claim of depreciation - Held that:- When the assessee erected the windmill and generated wind power, it cannot be said that it is impossible for the assessee to generate electricity. In this case, the assessee has generated the power from the windmill and the same was sold to the TNEB and the sale proceeds are being offered for taxation. Therefore, under these facts and circumstances of the case, it cannot be said that assessee has not erected the windmill on or before September 30, 2007. - All the details in respect of the erection of the windmill submitted before the Assessing Officer including the certificate issued by the S.E., Udumalpet Elecy. Distn. Circle, Udumalpet. The certificate issued by the S.E. was not challenged by the Department. Therefore, in our view, it is not a fit case to invoke section 263 of the Act - Tribunal directed the Assessing Officer to allow depreciation based on the certificate issued by the State Electricity Board. The hon'ble High Court upheld the order of the Tribunal on the ground that when the Department has not questioned the certificate issued by the State Electricity Board, the Tribunal was justified in directing the Assessing Officer to allow the depreciation. Keeping in view of the above facts, we find that the order passed by the learned Commissioner of Income-tax is not sustainable. Therefore, we set aside the order of the learned Commissioner of Income- tax - Decided in favour of assessee.
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2013 (12) TMI 1450
Validity of assessment - Return filed in the name of deceased person - Held that:- Assessment was admittedly framed on the deceased person, which is non est in law, therefore, the Commissioner of Income-tax (Appeals) has rightly annulled the assessment. Moreover, the tax effect is also below the prescribed limit, therefore, in any case the appeal is not maintainable and we dismiss the same. - cross-objections is filed by the assessee stating therein that the tax effect in the appeal is below the prescribed limit. Since the appeal of the Revenue is dismissed and the order of the Commissioner of Income-tax (Appeals) is confirmed, cross-objection of the assessee becomes infructuous and stands dismissed. - Decided against Revenue.
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2013 (12) TMI 1424
Stay of demand - Held that:- As per the CBDT Instruction, which is prevalent as of now is that in the normal course, the payment will not be stayed but can only be done for valid reasons and merely because an appeal has been preferred against the assessment order would not entitle a party to the stay - The petitioner-Trust is admittedly having Rs. 120 Crores in its account and, therefore, is in a position to make the payment - The Tribunal has, while taking into consideration the liquidity position of the petitioner-Trust and also keeping in view the interest of revenue, proceeded to stay 75% of the outstanding demands in dispute and has only required the petitioner to make payment of 25% of the outstanding demand - The petitioner has only been asked to deposit Rs. 11,40,43,550/- on or before 31.12.2013 - On such deposit and production of the original receipt before the Registry, the main appeals of the petitioner have been directed to be fixed in the month of January, 2014 - Decided against petitioner.
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2013 (12) TMI 1423
Validity of reassessment u/s 147 - service of notice - Held that:- The assessment proceedings were reopened after giving notice in terms of Section 148(1) of the Act - The assessee's accountant had received the notice and the assessee has subsequently attended the proceedings - A perusal of assessment records goes to reveal that Shri Tarsem Pal, Accountant was duly authorised to receive the notices and the services were rightly effected u/s 282 of the I.T. Act - Action of the AO in reopening the case under Section 147 of the Act as also of service of notice under Section 148(1) of the Act on the assessee through its representative, to be valid and legal - Decided against assessee.
Undisclosed octroi income - Held that:- The assessee has failed to show supporting entries showing payment of octroi - Decided against assessee.
Reserves on account of Sundry World Bank Account - Held that:- It was entire sale price charged in advance - The assessee did not refund the balance amount immediately at the time of delivery of tractor - The amount received as sale price in advance was clearly in the nature of trading receipt and the entire amount is clearly assessable as income of the assessee - The adjustment on account of refunds should be made in the year in which the deposits was actually received between the assessment year 75-76 to 77-78 - Decided against assessee.
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2013 (12) TMI 1422
Validity of assessment u/s 147 - Held that:- Chart of computation of income was furnished along with the return, share of the assessee was mentioned as 20% in the rental income, whereas during scrutiny of the cases, it was found that the assessee had not disclosed her income truly in the income tax return - When pursuant to notice under section 148 of the Act, the assessee had furnished the return, income was declared disclosing 25% share in the income of the property - It was thus clearly a case of escape of income from the assessment - It was not at all a case of 'change of opinion' but was a clear case of 'escapement of income from assessment' - Decided against assessee.
Whether simple interest or compound interest charged by the bank on the amount borrowed by the assessee be allowed - Held that:- As per section 24(1)(vi) of the Act - Amount of interest payable on capital borrowed, for construction of the property yielding income, is an admissible deduction - Only interest payable on such borrowed capital is to be deducted while computing income chargeable to income tax under the head 'income from house property” - Interest paid on interest levied by the bank, because of non-payment of instalments of borrowed capital to the bank, does not qualify for an admissible deduction - Decided against assessee.
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2013 (12) TMI 1421
Whether question of law raised first time before Tribunal be entertained - Held that:- On transfer of flats by the assessee the AO treated the capital gain as short term whereas the CIT(A) treated it as long term term capital gain - The issue was of gain being either short term or long term - The Revenue neither before the Assessing Authority nor before the First Appellate Authority claimed it as business income - For the first time, before the Tribunal without any factual foundation, the said contention could not have been raised - The Tribunal is justified in declining to entertain the appeal on that ground - Decided against Revenue.
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2013 (12) TMI 1420
Whether expenditure incurred in excavating a drain to discharge effluents is revenue or capital - Held that:- Following Commissioner of Income Tax V/s Glen View Rubber Co. (P) Ltd. [2007 (1) TMI 121 - KERALA High Court] - Any expenditure incurred in complying with statutory requirements particularly where the asset concerned would enure to the benefit of the assessee from year to year, would necessarily be an asset of enduring nature - Such asset should be categorised as capital expenditure - The mere fact that the land is not owned by the assessee, is irrelevant as by excavating the drain through forest land on the basis of approval granted by the Forest Department, the assessee has been able to overcome statutory requirements for release of effluents as prescribed under the Pollution Control Act - Expense incurred upon construction of the drain for release of effluents have conferred benefit of an enduring nature upon the assessee - Decided in favour of Revenue.
Compensatory afforestation - Held that:- The assessee had offered gross amount of interest including TDS to tax in the Assessment year 1992- 93 - The assessee was not allowed credit for the TDS for want of TDS Certificates - The assessee could not obtain TDS certificates - Following Sutlej Cotton Mills Limited v. CIT [1978 (9) TMI 1 - SUPREME Court] - What is material is the factors or the circumstances which cause loss and the true nature and character of loss - If the loss occurred during the course of carrying on the business, it is incidental to it and hence allowable - The assessee having suffered loss, the expenditure had to be allowed as revenue expenditure - Decided against Revenue.
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2013 (12) TMI 1419
Product Development Cost - Capital or Revenue - Held that:- The development was on account of scientific research - The evidence on record shows most of the money is spent towards cost of the employees, who had developed the product, multi channel customer relationship management solution, which provides sales, marketing, services, human resources and finance through the medium of e-mail, chat, wireless, fax, phone, etc. to the end users - The expenditure in respect of the scientific research, even if it is capital in nature as it was incurred in relation to the business carried on by the assessee under Section 35(1)(iv) of the Act - the said expenditure is to be deducted - Decided against Revenue.
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2013 (12) TMI 1418
Penalty u/s 271(1)(c) - Held that:- The assessee has himself disclosed his additional income vide letter before passing of assessment order - Following Commissioner of Income Tax, Ahmedabad Vs. Reliance Petro-products Private Ltd [2010 (3) TMI 80 - SUPREME COURT] - There has to be concealment of the particulars of the income of the assessee and secondly, the assessee must have furnished inaccurate particulars of his income in order to be covered u/s 271(1)(c) - The assessee himself disclosed the value of land and calculated long term capital gain - Decided against Revenue.
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2013 (12) TMI 1417
Allowance of burning loss - Held that:- Following assessee's own case for earlier years - The Tribunal had not at all examined the various factors which were taken by the Commissioner of Income Tax (Appeals) in accepting the burning loss shown by the appellant - It had rejected the trading loss by invoking sub-section (1) of Section 145 of the Act - Provisions of sub-section (1) of Section 145 of the Act has rightly been invoked, the estimate of income has to be based on some materials - The Commissioner of Income Tax (Appeals) had taken into consideration various factors while accepting the burning loss shown by the appellant which in our considered opinion the Tribunal had failed to advert into - The issue was set aside for fresh adjudication.
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2013 (12) TMI 1416
Loan taken at higher interest rate than bank rate - Held that:- The Tribunal has confirmed the finding of CIT (A) and AO - The appellant borrowed from the outsiders at 18%, the capital borrowed from family members and sister concern was at 24% - Bank rate was not more than 21% - The A.O. tried to enter into the true nature of transaction in which he found it unreasonable for the assessee to borrow from the family members at a higher rate than the borrowings from outsiders - The payment of interest to the family members and sister concern at 24% was diversion of profits - It was found highly unusual for a person to borrow from the family at higher rate than the rate prevailing in the market and the rate of interest to be paid to the bank - Decided against assessee.
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2013 (12) TMI 1415
Depreciation for the purposes of section 115JA - Held that:- Following Apollo Tyres Ltd Vs. CIT [2002 (5) TMI 5 - SUPREME Court] - Company as well as Registrar of Companies is obliged to satisfy that the accounts of the company are maintained in accordance with the requirements of the Companies Act - The book profits u/s 115JA, depreciation shall be computed on the same method and rates, which have been adopted for calculating the depreciation for the purpose of preparing the profit and loss account laid before the company at its Annual General Meeting in accordance with the provisions of Section 210 of the Companies Act, 1956 - The department did not bring anything on record, which could have established that the accounts of the company were not maintained in accordance with the requirements of the Companies Act - Decided against Revenue.
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2013 (12) TMI 1414
Whether transactions of purchase and sale of shares constitutes business income - Held that:- The facts in the impugned year do indicate that the transaction cannot be considered as investment in shares - Regarding transactions in F&O - There is no delivery of the shares - Shares of Cybermedia were purchased and sold on the same day - Therefore these should also be treated as business income - The authorities are of the view that remaining transactions should also be treated as business activity - There can not a situation where part of transaction can be treated as business and other as investment - The period of holding has never exceeded 150 days - It cannot be considered that assessee's intention is to invest in shares as there is large turnover within a short period - The intention is not to make investments for long periods as the frequency of transactions is very high - Decided against assessee.
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2013 (12) TMI 1413
Deletion of Confirmation of Gross receipt – Held that:- Only profit portion has to be brought to tax after considering the facts and reasonably estimating the profit margin of the appellant - the appellant has acted only as a mediator between the consigner and the truck-owner/driver and the consideration is only commission and not freight - He does not have any vehicles of his own - the appellant is only a commission agent - The CIT (A) has followed the order of the Tribunal while directing the Assessing Officer to apply net profit rate of 7% - There was no infirmity in the direction given by the Ld CIT (A) to the Assessing Officer to apply net profit rate of 7% - decided against Assessee.
Confirmation of Addition of 40% of Expenses of office expenses and fuel expenses - Held that:- The appellant has not submitted anything - the appellant has miserably failed in substantiating his claim and discharging his onus of proving the genuineness of expenses - the disallowance made by the A.O. confirmed - No material has been placed before us to rebut the findings recorded by the CIT (A) - the expenses are not fully vouched – Decided against Assessee.
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2013 (12) TMI 1412
Deletion on account of expenditure claimed towards shifting of plant and machinery – Held that:- The expenditure incurred was towards shifting of plant, machinery, equipments files and records, etc., to the second location at Balanagar consequent upon sale of its industrial land at Kavadiguda where these plants and machineries were earlier located - No new plant or machinery has been set up by the assessee - The Assessing Officer has not given any reason as to why he considers the expenditure as capital in nature - during the remand proceeding though the assessee has produced all evidences with regard to the expenditure incurred towards shifting, the Assessing Officer has not offered any comment why he considers the expenditure as capital in nature - the expenditure incurred was towards shifting existing plant, machinery equipments, records, etc. - The incurring of expenditure did not result in any benefit of enduring nature to the assessee – Thus, the expenditure incurred is revenue expenditure and as such is allowable.
Relief on account of Computation of book profit by AO u/s 115JB(2)(vii)of the Act – Held that:- The period for which the assessee becomes entitled for deduction under the aforesaid provision commences from the assessment year in which it becomes a sick industrial company and ends in the assessment year during which the net worth becomes equal to or exceeds the accumulated losses - for the first time the net worth has exceeded the accumulated losses during the impugned assessment year - the provision contained in clause (vii) to Explanation 1 of section 115JB is very much applicable to the assessee - the assessee is entitled to claim deduction under the provision - the AO has not correctly interpreted the provision of the Act – the letter relied by AO reveals the fact that nowhere the Board has made any adverse comment with regard to the assessee's claim of deduction under clause (vii) to Explanation 1 of section 115JB(2) for the impugned assessment year – Decided against Revenue.
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