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Income Tax - Case Laws
Showing 181 to 200 of 6519 Records
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2013 (12) TMI 1309
Unexplained cash credit - Held that:- The Assessing Officer did not record any finding regarding the explanation offered by the assessee - AO did not record that the explanation was not found to be satisfactory - Only additions were made without considering the explanation, which were found to be sufficient by the appellate authority - Decided against Revenue.
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2013 (12) TMI 1308
Whether non-issuance of notice u/s 143(2) affect the validity of block assessment order - Held that:- In the present case the admitted position is that the notice under Section 143 (2) of the Act was not issued, and thus question of service, or improper service is not relevant. The question nos.(i) to (v), framed by the Court are thus decided in favour of the assessee and against the department. - Decided in favor of assessee.
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2013 (12) TMI 1307
Validity of notice u/s 148 - Held that:- The assessing authority have relevant material or that the reasons given by him under Section 148 (2) of the Act are not required to be considered by us for adjudication at this stage - The petitioner has been served with notice under Section 148 - It was open to him to file objections - If the matter has not been decided by the assessing authority, it is still open to him to file objections to the issuance of notice, which the assessing authority is bound to consider and decide by passing speaking order.
The petitioner was to be assessed by the Asstt. Commissioner of Income Tax, Range-4, Agra. The matter was transferred, in accordance with the assignments made by the Chief Commissioner of Income Tax - Partly allowed in favour of assessee.
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2013 (12) TMI 1306
Compulsory levy of interest under section 234B - Held that:- Following CIT-II Kanpur versus M/s Deep Awadh Hotels P Ltd., Kanpur [2012 (5) TMI 320 - ALLAHABAD HIGH COURT] - In the absence of any mention of charging of interest in the assessment order, interest cannot be charged by issuing a notice of demand - If the assessment order contained the imposition of interest, only then, a notice of demand of interest could be issued under section 156 of the Act - The expression "shall" used in the sections 234A, 234B, 234C cannot be construed as "may" - Prior to the Finance Act 1987, the corresponding sections pertaining to imposition of interest used the expression "may". The change thus brought about by the Finance Act 1987 is indicative of the intention of the Legislature to make the collection of interest mandatory - The said expression "shall" has been used deliberately - Decided against Revenue.
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2013 (12) TMI 1305
Disallowance u/s 14A - Held that:- The provisions of Section 14A are attracted whether or not the shares are held as stock in trade or as investments, even though the provisions of rule 8D(2)(ii) and (iii) cannot be invoked in such a case , and even though the provisions of rule 8D(2)(i) are much narrower in scope than the scope of Section 14A - The matter was restored for fresh adjudication.
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2013 (12) TMI 1304
Levy of penalty under section 271(1)(c). - taxability of income in the hands of trust or beneficiary - applicability of provisions of Section 61(1) - Held that:- Following CIT vs. T.A.V. Trust [2003 (3) TMI 39 - KERALA High Court] - By virtue of the provisions of s. 161(1) of the Act income from property received by the trust cannot be treated as income from property in the representative assessment which has to be made on the trustee - In the case of a trust which is having income from business as well as income from house property, by virtue of the provisions of s. 161(1A) of the Act, the income from the business earned by the trust shall be taxed at the maximum marginal rate treating it as a single unit and the income from house property has to be assessed in the hands of the trustee in the manner provided in s. 161(1) of the Act - The trust is a representative assessee and to that extent of income tax leviable on the incomes of the beneficiaries, assessment can be made either in the hands of the respective beneficiaries or in the hands of the assessee to that extent only, indicating the tax liability of respective beneficiaries by consolidated order - The Assessing Officer has not followed either of the procedures but still contending to hold that the entire income received on the fixed deposit is taxable in the hands of the assessee- trust, violating the directions of the learned CIT(A) and also violating the provisions of the Act - The orders of AO levying penalty is not only bad in law but also on facts - Penalty cannot be levied - Decided in favour of assessee.
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2013 (12) TMI 1303
Disallowance of crane hiring charges, depreciation on machinery and other payment - Held that:- The assessee has made payments by way of cheques and hence they should have been encashed through some bank accounts only - The examination of the payees bank accounts will throw light about the genuineness of the transactions - The tax authorities have taken adverse view on the basis of enquiries conducted without examining the payees bank accounts - The statement given by Shri N Mohammed has been relied upon without confronting the same to the assessee - The enquiries conducted by the assessing officer are incomplete - The matter was restored for fresh adjudication.
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2013 (12) TMI 1302
Taxability of amount collected from members of Housing Society - Exemption of share transfer fee, nominee occupancy charges and non-refundable security deposit - Held that:- Following assessee's own case for the A.Y. 2007-08 - All these itmes whether received from out coming or incoming members is not liable to tax because of principle of mutuality - Decided against Revenue.
Interest Income - Held that:- The principle of mutuality relates to the notion that a person cannot make a profit from himself - The concept of mutuality has been extended to defined groups of people who contribute to a common fund, controlled by the group, for a common benefit - Any amount surplus to that needed to pursue the common purpose is said to be simply an increase of the common fund and as such neither considered income nor taxable - The issue was restored for adjudication.
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2013 (12) TMI 1267
Business income vs Capital Gain - Income from sale of shares – Held that:- Following the principles laid down in Sugamchand C. Shah vs. ACIT [2010 (1) TMI 942 - ITAT, Ahmedabad] - if shares are not held even say for a month, then the intention is clearly to reap profit by acting as a trader and he did not intend to hold them in investment portfolio - Where shares are held for more than a month, they should be treated as investment and on their sale short term capital gain should be charged - When shares are held for less than a month, gain on them should be treated as profit from business – Following assessee’s own case for A.Y. 2006-07 - basic data required to work out the frequency of transactions of holding period is not collected by the AO – The issue was restored for fresh decision.
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2013 (12) TMI 1266
Disallowance of entertainment expenses – The assessee was carrying on the business of network marketing for procuring and promoting the business he had to travel outside and had to incur expenses on entertaining the people - Held that:- The assessee could not provide the bills for the expenses incurred – Bills cannot be provided for such small expenses incurred for entertaining people – The appeal was partly allowed in favour of assessee.
Disallowance of travelling and conveyance – Held that:- No receipt can be obtained from Taxi operator or for local conveyance, auto rikshwa or manual rikshwa - The expenditure made for refreshment to various agents for which vouchers may not be available – Partly allowed in favour of assessee.
Disallowance of personal expenses – Telephone and mobile expenses - Held that:- For telephone only 10% of the telephone expenses is to be treated for personal usage – Depreciation on mobile phone should be allowed as the expenses have been treated as capital expenditure – Partly allowed in favour of assessee.
Car running and maintenance expenses – Held that:- In the absence of details of personal usage, confirmation of personal usage cannot be denied - In case of motor car expenses only 10% of the expenses, can be disallowed towards personal a usage – Partly allowed in favour of assessee.
Addition on account of household expenses – The assessee has shown a sum of Rs. 30,000 towards household withdrawals - The assessee's wife had also shown household withdrawals of Rs.13,756 – Held that: - Keeping in view the gross receipts of Rs. 23 lakhs of assessee, the AO estimated household expenses of Rs.10,000/- per month - Many expenses which has been claimed were held to be bogus by the Assessing Officer - Sufficient cash which is shown to have been incurred towards such bogus expenses, is available with the assessee – Decided in favour of assessee.
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2013 (12) TMI 1265
Exemption u/s 10A – The assessee earned profit in STPI unit whereas incurred loss in non-STPI business - Held that:- Following CIT v. Yokogawa India Ltd. [2011 (8) TMI 845 - Karnataka High Court] - “Total income” used in Section 10A was to be understood as the total income of the STPI unit, which was clear from the first proviso to Section 10A(1) which made a reference to the total income of the undertaking and not to the total income of the assessee - Assessee was entitled for claiming deduction considering its STPI unit separately - CIT fell in error in concluding that giving-effect order suffered from any error prejudicial to the interests of Revenue – Twin conditions for invoking power of CIT under Section 263 of the Act were not satisfied - Decided in favour of assessee.
Payment towards gratuity scheme of LIC – Held that:- Following assessee’ own case for A.Y. 2002-03 [2007 (6) TMI 273 - ITAT MADRAS-C] - The assessee company has a scheme with the LIC of India and the payment is made to LIC of India - LIC of India is an approved institution for maintaining gratuity funds – The issue was restored for fresh examination.
Employee’s contribution to ESI and PF – Held that:- Following CIT v. Alom Extrusion Ltd. [2009 (11) TMI 27 - SUPREME COURT] - Amendment to Section 43B made by Finance Act, 2003, would act retrospectively with effect from 1st April, 1988 – Amount should be paid during the year irrespective of the fact that the contribution was deposited after due date - Decided against Revenue.
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2013 (12) TMI 1264
Interest u/s 234B and 234C – A search and seizure operations u/s 132 were carried out at the premises on 13.03.2008 - Cash amounting to Rs. 3,86,11,000/- was seized - The appellant company requested the assessing officer to adjust the aforesaid amount of Rs. 3,86,11,000/- as advance tax paid by the appellant - Held that:- Following Commissioner of Income Tax vs K.K. Marketing [2005 (5) TMI 58 - DELHI High Court] - Seizure of cash belonging to the assessee firm could be adjusted against its advance tax liability since there is a request by the assessee to adjust the seized cash against the advance payment of tax – Following Commissioner of Income Tax vs Arun Kapoor [2010 (7) TMI 610 - Punjab and Haryana High Court] - On request for adjustment of advance tax liability against seized cash, the assessee is liable to pay interest u/s 234B and 234C - The assessee is also entitled to get benefit of payment of advance tax out of seized cash from the date of making application for adjustment of seized cash as advance tax towards tax liability – Decided against Revenue.
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2013 (12) TMI 1263
Disallowance of interest on capital borrowed for capital WIP - Held that:- AO did not give clear finding on the issue and made adhoc disallowance of 15 % from the profit and loss account - There is no finding recorded by AO that the textile project was not by way of expansion of business - The interest on the borrowed amount for the project was to be allowed as revenue expenditure, as held by the Tribunal - The Tribunal being final court of accepting any finding has found justification in the order of CIT (A) in deleting the addition of ₹ 14,52,654/- because on the facts of the case that the assessee had used the funds for the purpose of its business - Decided in favour of assessee.
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2013 (12) TMI 1262
Rejection of registration u/s 12AA - Held that:- nothing has been brought on record, by the learned Commissioner of Income Tax before denying registration under section 12AA of the Act and approval under section 80G of the Act - Tribunal is a final fact finding authority and has found that - As per the aims and objectives of the trust, registration should be granted - Decided against Revenue.
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2013 (12) TMI 1261
Evasion of taxes - Held that:- The appelant filed revision u/s 264 of the Act - The Commissioner, allowed the appellant to produce the materials in support of the alleged expenditure incurred for improvement of the land sold by the appellant - After having gone through the entire materials/evidence, the revisional authority held that all the documents produced by the appellant in support of his case are fabricated - Spot inspection was also conducted by the revisional authority and it was found that the claim of the appellant in respect of the development/improvement of the land was not genuine - Decided against petitioner.
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2013 (12) TMI 1260
Validity of assessment u/s 147 - Held that:- Notice has been issued within the stipulated time and cannot be treated as barred by time - The AO has also furnished reasons recorded by the assessing officer for reopening the case - The appeal has no merits - Decided against assessee.
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2013 (12) TMI 1259
Deduction u/s 80HHC on goods manufactured and traded by self - Held that:- The deduction u/s 80HHC was a legally debatable issue - After the judgment of Apex Court in IPCA Laboratories (supra) the entire provisions of Income Tax Act under Section 80HHC were modified - If assessee's entire claim had been disallowed because of the decision of the Supreme Court in IPCA vs. DCIT [2004 (3) TMI 9 - SUPREME Court] that would not have tantamounted to assessee concealing its income or furnishing inaccurate particulars of its income, because the assessee has made calculation of deduction u/s 80HHC as per the then prevailing interpretation - In such case the conditions necessary for levy of penalty under Section 271 (1) (c) of the Act are not fulfilled - The Income Tax Authorities did not find that the assessee had either concealed the particulars of his income or furnished inaccurate particulars of such income, to attract the levy of penalty - Decided against Revenue.
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2013 (12) TMI 1258
Penalty u/s 271(1)(c) - Held that:- The firm was reconstituted and that even if the relevant AY, was the first year of the business of the new firm, where the entry in favour of the one of the partners, which was to be paid to her, was not sufficiently explained - Nothing was produced to support the argument that there is no concealment - There was no documentary proof as to the payment of goodwill. If it was goodwill what was the basis for its calculation is also not shown - The Tribunal is a final fact finding authority and it was of the view that income has been concealed - Decided against assessee.
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2013 (12) TMI 1257
Genuineness of unsecured loans and creditworthiness of lenders - Held that:- After the initial burden was discharged by the appellant-assessee, the AO did not accept the application to summon the creditors and proceeded to examine the records namely the bank accounts to find out whether the unsecured loan transactions were genuine - He considered each and every loan transaction and found that none of the individual unsecured creditors could be said to be creditworthy to advance loans for such amounts - The findings recorded by the AO about the creditworthiness of some unsecured loans out of total unsecured loans, does not suffer from any error of law - The AO didnot failed to exercise his jurisdiction in refusing to summon the file of unsecured creditors other than one who had appeared and was examined - Decided against assessee.
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2013 (12) TMI 1256
Whether surplus amount of sale of land is assessable as long term capital gain or adventure in trade - Held that:- The CIT (A) considered the facts and relied upon relevant principles of law, as well as the case laws in arriving at a conclusion that in the given circumstances, the agreement with the coloniser, who had to develop the plots and ultimate sale of the plots to the nominees of the colonisers, at a price to be fixed by the coloniser in which the assessee had no share of excess profits, was not in the nature of any adventure in the nature of trade - The assessee was not engaged in any trade or business of selling land - The transaction was only to get best price of his land, which the coloniser was ready to pay - The ITAT did not commit any error on facts or in applying the principles of law in upholding the findings of CIT(A) - Following Ram Narain Sons (P) Ltd. v. IT Commissioner [1960 (12) TMI 3 - SUPREME Court] - In consideration whether a transaction is or is not an adventure in the nature of trade, the problem must be approached in the light of the intention of the assessee having regard to the "legal requirements, which are associated with the concept of trade or business - Decided against Revenue.
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