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Income Tax - Case Laws
Showing 261 to 280 of 6519 Records
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2013 (12) TMI 1105
Education cess and surcharge Whether the rate of TAX as per DTAA is inclusive of Education Cess and Surcharge Held that:- The non-resident assessee has earned interest from partnership firm in India As per article 11(2) if recipient is beneficial owner of interest, tax so charged shall not exceed 5% of gross interest if the interest is paid by the bank and in other cases 12.5% of the gross interest - The assessee is the beneficial owner of interest and tax charged cannot exceed 12.5% of gross interest As per DTAA between India and UAE - Tax has been defined in Article-2(2)(b) as per which income tax included surcharge - Therefore, tax referred to in Article 11(2) @ 12.5% also includes surcharge Following DIC Asia Pacific Pte Ltd [2012 (6) TMI 686 - ITAT, KOLKATA] Decided in favour of assessee.
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2013 (12) TMI 1104
Stay of demand Transfer pricing adjustment - Held that:- Adjustment has been made with respect to entire average capital employed in the business company whereas, the adjustment as per law, is required to be made only with respect to transaction with the AE - The recovery of the demand is stayed for a period of six months or till the disposal of appeal, whichever comes earlier Decided in favour of assessee.
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2013 (12) TMI 1103
Assessment of amalgamated company Valid or not Held that:- Following Micra India Pvt.Ltd [2013 (11) TMI 679 - ITAT DELHI] - On amalgamation, the company seizes to exist in the eyes of the law - Assessment upon a dissolved company is impermissible as there is no provisions in Income Tax Act to make an assessment thereupon - The assessment on a company which has been dissolved by amalgamation u/s 391 and 394 of the Companies Act, 1956 is invalid Following Spice Entertainment Ltd. Vs. CIT [2011 (8) TMI 544 - DELHI HIGH COURT] - Once it is found that assessment is framed in the name of non-existing entity, it does not remain a procedural irregularity of the nature which could be cured by invoking the provisions of Section 292B of the Act. - Provisions of Section 292B of the Act are not applicable in such a case. - The framing of assessment against a non-existing entity/person is not a procedural irregularity but a jurisdictional defect as there cannot be any assessment against a dead person Decided against Revenue.
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2013 (12) TMI 1102
Acquisition of agricultural land Transfer of capital asset or not Held that:- The land in question is located beyond 8 kms of the municipal limits of the Jamnagar - The land was located beyond 19 kms from the centre of the city of Jamnagar - The records of the Revenue Department shows that the lands are described by the District Collector, Jamnagar as agricultural lands - There is no incriminating material in the possession of the Assessing Officer to hold that the land in question is capital asset within the meaning of section 2(14) Decided against Revenue.
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2013 (12) TMI 1101
Surrender of tenancy/occupancy rights Capital gain or income from other sources - Held that:- The fact whether the assessee was a tenant or not was not determined through any document or order of the court The assessee has not furnished copies of the orders which contain the direction to the occupants of the premises to make payment to the landlord and there is no clarity on the nature of such payment - The assessee has acquired some rights in property either legal or otherwise The CIT was directed to examine whether the assessee was tenant and has acquired any tenancy rights or not the Commissioner of Income-tax (Appeals) shall also adjudicate how the "right to remain in possession of the premises or right to litigate" are different from "the right to tenancy" as both the rights allow the assessee to reside in the premises With amendment to section 55(2) the "tenancy rights" attained legal cognizance -As such there is need for first deciding if the assessee's rights in the property constitutes a "tenancy rights" within the meaning of section 55(2) The issue was restored for fresh adjudication.
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2013 (12) TMI 1100
Provision of PACS Manager salary Held that:- Following ACIT vs Rajasthan State Cooperative Bank Ltd., Jaipur [2013 (9) TMI 38 - ITAT JAIPUR] - Allowability of contribution by the Apex Bank for PAC Mangers salary is a statutory liability which is crystallized at the end of every year - The contribution once made become at the disposal of Registrar of Cooperative Society which is payable as and when demanded by the Registrar Cooperative Society alongwith interest on it - It is not contingent liability but a statutory liability which is crystallized at the end of every year and hence the liability is allowable Decided in favour of assessee.
Premium of leave encashment Held that:- Following CIT vs Hindustan Latex Ltd. [2012 (6) TMI 713 - KERALA HIGH COURT] - Leave encashment is not a statutory liability and even in the case of provision being made the deduction was allowed as a business expenditure - It was not a provision which was disowned but an actual liability towards premium paid on insurance policy and the liability was allowable as a deduction u/s 37 being an expenditure incurred for the purpose of business Decided in favour of assessee.
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2013 (12) TMI 1099
Penalty u/s 271(1)(c) Deprecνation on Portal & e-Commerce Site - Held that:- Following CIT Vs. Reliance Petro Product P. Ltd. [2010 (3) TMI 80 - SUPREME COURT] - Expenses incurred on developing Portal & e-Commerce Site is neither fixed asset nor an intangible asset as per section 2(11)(b) - AO disallowed depreciation - It is only disallowance of expenditure only on the basis that this is not an asset. The expenses are genuine, which are not denied by the AO. It is not doubted that the assessee has not developed Portal & e-Commerce Site and nothing is false - 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) Decided against Revenue.
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2013 (12) TMI 1098
Remuneration to partners Held that:- The assessee also failed to file the return of income as required u/s. 142(1) of the IT Act and also failed to comply with the notice u/s. 144 of the IT Act. Therefore, the provision of section 144 of the IT Act has been rightly invoked against the assessee for framing the exparte assessment order - Sub-section (5) of section 184 is exception to Rule and would clearly disentitle the assessee for claiming deduction by way of salary and remuneration etc. in case the assessee made a failure as provided u/s. 144 of the IT Act - The assessee claimed deduction on account of salary and remuneration in the original return of income - The findings of the AO are supported by the details filed in the return of income by the partners in which they have declared the amount of salary received from the assessee firm and as such specific material was available with the Revenue Department to prove that the assessee paid salary to these partners for which deduction has been claimed Decided against assessee.
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2013 (12) TMI 1097
Deduction u/s 40(b) liquor business - whether the assessee is to be treated as a firm and consequent benefit of salary and interest would be given to the partners - Held that:- Following assessees own case for the A.Y. 2003-04, 2005-06 and 2006-07 - From 1-4-1994 sections 184/185 have been amended and the earlier procedure of examining genuineness of firm has been dispensed with - As per the amended law, the firm shall be allowed registration if a certified copy of a deed, duly signed by all the partners showing the shares of the partners is filed, the firm is allowed to be registered - U.P. Excise policy does not prohibit constitution of partnership firm for carrying liquor business, so also licenses obtained by individuals can be converted into partnership firm on compliance of certain requirement - The assessee firm is eligible for registration u/s 184/185 and consequently eligible for deduction u/s 40(b) in respect of salary, interest as per law Decided against Revenue.
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2013 (12) TMI 1096
Applicability of section 248 Appeal by person denying liability to deduct tax in certain cases - The assessee, after deducting such tax at source, moved before the CIT(Appeals) under Section 248 for a ruling that there was no necessity for deducting tax at source - Held that:- There was an employee-employer relationship between the assessee and expatriate employees and withholding of tax on salaries of such employees having been already done by M/s CMS RDC, assessee was not obliged to deduct any tax - Such deputed employees were filing returns in India - Assessee was not required to deduct tax at source on reimbursement of salaries given to M/s CMS RDC - Section 248 does enable an assessee to file an appeal even after deduction of tax at source claiming that no tax was required to be deducted at source since such appeal is only for a declaration regarding tax liability There is no fault with CIT(Appeals) entertaining such appeal of the assessee Decided against Revenue.
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2013 (12) TMI 1095
Applicability of section 172 Payments towards shipping business of the non-residents through shipping agents - Held that:- Special procedures are provided u/s. 172 of the Act for payment of taxes in case of any shipping owners or charters by non-resident - The Board Circular No. 723 dated 19-09-1995 (supra) clarifies that the provisions of section 172 would apply and no deduction of tax is required to be made as per provision of section 194C of the Act Decided against Revenue.
Purchase of Lac and Shellac Disallowance on account of inflation of local purchase - Held that:- No defects have been pointed out by the AO to show that there was any inflation in the purchases Disallowance cannot be made on the basis of estimation Decided against Revenue.
Commission paid to non-resident Held that:- The commission has been paid to non-resident outside India for services rendered outside India Following G.E India Technology Centre (P.) Ltd v. CIT [2010 (9) TMI 7 - SUPREME COURT OF INDIA] CBDT Circular No. 786 dated 07-07-2000 as also Circular no. 23 dated 23-7-1969 clarifies that where the non-resident agent operates outside India, no part of his income arises in India - Decided against Revenue.
Disallowance of supervision charges, export expenses, packing expenses, lorry hire charges and motor car and telephone expenses Held that:- All the disallowance are made on estimate basis and no specific defect has been pointed out by the AO Decided against Revenue.
expenditure under the head foreign travelling Held that:- Foreign travel by husband of the assessee was exclusively for the business purpose of the assessee - Assessee's husband was also promoting his own business during the same time Decided against assessee.
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2013 (12) TMI 1062
Gift received definition of 'relative' as provided under Explanation to section 56(2)(v) - Held that:- A perusal of the term "relative" used in the section clearly shows that mother's sister's son does not fall within the definition of 'relative' - The amount received by the assessee from mother's sister's son does not qualify for the benefit Decided in favour of Revenue.
Loan taken Held that:- The assessee has failed to substantiate his claim with documentary evidence either during the assessment proceedings or appellate proceedings with respect to identity and genuineness of the lenders of the loan - The documents which were produced before the CIT(A) were never submitted by the assessee before the Assessing Officer, which is in violation of Rule 46A The issue was restored for fresh decision.
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2013 (12) TMI 1061
Disallowable u/s 40(a)(ia) Held that:- A perusal of Form NO.16 clearly shows that what is paid by the assessee is only salary - A perusal of order of CIT(A) clearly show that he has taken into consideration that the employees are regular in the employment of the assessee and the assessee company has also deducted professional tax while disbursing the salary - Once it is shown that the assessee has only paid salaries to the person just because the teachers, are part time teachers, the same cannot be termed as professional fees for the purpose of invoking the provision of section 194J Decided against Revenue.
Expenditure u/s 37(1) Legal settlement for violation of Copyright Act - Held that:- A perusal of compromise petition filed before Honble Delhi High Court show that it is a compromise in respect of the contractual liability and the compromise is in no way on account of penalty Decided against Revenue.
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2013 (12) TMI 1058
Disallowance u/s 40(a)(ia) Expenses on catalysts - Held that:- A perusal of the copies of the invoice clearly indicates that the relevant product involved in the purchase is 'catalyst for phthalic anhydride' in the form of ring - This does not suggest that the assessee has purchased any 'patent, invention, model, design, secret formulae or process or trade mark or similar property' which in fact requires the element of the purchase of an intangible asset - Neither the findings of the AO nor that of the Ld. CIT(A) is based on any evidence to support that the payment was royalty - Decided in favour of assesse.
Valuation of stock Held that:- Following assessee's own case for the assessment year 2006-07 - All the relevant debits and credits (purchases, sales etc) in the profit and loss account should be grossed up The issue was restored for fresh decision.
Disallowance under section 14A Held that:- Following assessee's own case for the assessment year 2006-07 - Rule 8D is not applicable prior to assessment year 2008-09 The quantum of disallowance should be computed using some reasonable method - The quantum of disallowance was restricted to 2% of dividend income The issue was restored for fresh decision.
Validity of ground for appeal u/s 246A - Credit for TDS not granted Held that:- Following M. Chockalingam & M. Meyyappan v. CIT [1962 (10) TMI 48 - SUPREME COURT] - The expression, viz., "amount of tax determined" as employed in section 246(1)(a), encompasses not only the determination of the amount of tax on the total income but also any other act of omission which has the effect of reducing or enhancing the total amount payable by the assessee This is a valid ground acceptable u/s 246A - The issue was restored for fresh decision.
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2013 (12) TMI 1057
Disallowance u/s 40(a)(ia) Held that:- Assessee has filed the details of TDS and the submissions of assessee had also been sent to AO. The AO has in his Remand Report clarified that he has verified the challans in respect of TDS and has accepted that TDS was deposited before the due date of filing of the return - As one of the challans for an amount of Rs.98,676/- had not been included by AO Even unamended provision of section 40(a)(ia) if applied would clearly show that where the tax was deductible and was so deducted during the last month of the previous year then the payment of the same should have been made before the due date specified in sub-section (1) of section 139 Decided against Revenue.
Disallowance u/s 40(a)(ia) Held that:- The assessee had filed written submissions which was taken into consideration by CIT(A) while calling for the Remand Report The assessee has made extra payment of TDS which was not considered by the CIT(A) The issue was restored for fresh decision.
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2013 (12) TMI 1056
Exemption u/s 11(1)(d) Held that:- The assessee has not diverted any specified funds of 35AC projects towards non specified projects - The aseesee has spent corpus donation for 35AC projects and the same cannot be the basis for denying the benefits of exemption as the later is not prohibited by the provisions of the Act Decided against Revenue.
Depreciation on capital assets Held that:- The donations received by the assessee trust have been exempt from tax as the provisions of sections 11 to 13 of the Act are applicable in those respective years - The claim of depreciation on the assets acquired through such donation on the opening of WDV in the subsequent years, in our view, does not amount to the claim of double deduction Decided against Revenue.
Donation to other trust Held that:- According to the CBDT circular No.1132 dated 5.1.1978, the payment of a sum by one charitable trust to another for utilisation by the donee trust towards its charitable objects is proper application of income for charitable purposes in the hands of the done trust and the donor trust will not lose exemption u/s 11 Following CIT vs. Sarladevi Sarabhai Trust No. 2 [1988 (3) TMI 53 - GUJARAT High Court] - The charitable trust will not lose its exemption u/s 11, if it passes some money to another charitable trust, for utilisation by the donee trust towards its charitable purposes - The provisions of 80G is not applicable to the facts in this case Decided against Revenue.
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2013 (12) TMI 1055
Unexplained purchases in cash u/s 69 Held that:- The partner of the assessee firm had made admission that this amount is out of books and pertains to this assessee - But he has already surrendered this income in his hand and has paid taxes thereon and the department has accepted the same - Legally one income cannot be taxed twice or in two hands - This can be treated as a bonafide mistake of the deponent as the group is one and having different entities and he is a common partner in them - The honest surrender must be given due credit to show tax-friendly attitude Decided in favour of assessee.
Undisclosed cash purchases/ sales Held that:- Even if the books are not treated as reliable and can be rejected - The separate addition on account of undisclosed purchases/sales is likely to enhance the declared g.p. rate - The declared gross-profit has to be accepted Decided in favour of assessee.
Uaccounted sales Held that:- many unaccounted cash sheets relating to this group were found from the possession of Shri N.K. Malani - The outcome of all cash transactions between the inter-group concerns was comprised in the cash sheet and the income as per that document having been already considered in the individual assessment of Shri N.K. Malani, who happens to be a partner in both the firms - There is no scope to make any further addition on account of either unaccounted purchases or unrecorded sales, as the entire transactions of the group stand covered under the surrender of cash balance made by the common partner Shri N.K. Malani Otherwise it would tantamount to a double addition which is not contemplated by the Act Decided in favour of assessee.
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2013 (12) TMI 1054
Disallowance of labour charges Held that:- When the assessee is undertaking labour intensive work of a huge extent, a duty is cast upon the assessee to maintain muster roll with particulars of labourers with full details and particulars of the labourers engaged by it - The only document which the assessee has produced before the Assessing Officer was muster roll - The Assessing Officer on the basis of estimation has disallowed 20 percent of the expenditure incurred towards labour charges - The assessee is engaged in civil construction activities which is labour intensive and the fact that the labour in such areas is unorganized - In the interest of justice it is appropriate to reduce the disallowance to 10 per cent Partly allowed in favour of assessee.
Disallowance u/s 40A(3) Held that:- Payment was made to the supervisor, who was heading the group of labourers for the disbursement of payment to them - The payment to the supervisor has not been supported by vouchers - The assessee has not been able to show the veracity of the said payments made to labourers Decided against assessee.
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2013 (12) TMI 1053
Unexplained cash credits under section 68 Held that:- The assessee has furnished only details of bank account through which transaction took place only in respect of only four parties out of the 8 parties - In respect of remaining four parties, the assessee failed to submit any details - Following R. B. Mittal v. CIT [2000 (8) TMI 54 - ANDHRA PRADESH High Court] It is incumbent upon the assessee to prove that the credit entry in its books of account does not represent any income and that the party in whose name the amount is credited is not fictitious party but real, and the assessee is also required to prove that the entry made in the books of account is genuine - The assessee is expected to establish proof of identity of the creditors, capacity of the creditors and genuineness of the transactions in order to discharge the onus cast on the assessee - By merely filing bank account details of the alleged creditors, it is not enough to hold that the assessee has satisfied the above ingredients of section 68 Decided in favour of Revenue.
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2013 (12) TMI 1052
Exemption u/s. 11 Honorarium and LIC premium paid on life insurance policy of Secretary of Society - Held that:- Following assessees own case for preceding assessment year 2007-08 - The payment of honorarium to the office bearers of the society for bona fide services rendered by them - The amounts have been made for wholly and exclusively for the purpose and benefit of assessee-society. All the persons have rendered actual services to the assessee and even in the statement of Shri Narendra Singh, he has explained the details of the services rendered by him against the payment - The assessee exists wholly and exclusively for the education and all the amounts have been spent for educational purposes and for aims of the society - The assessee was entitled for exemption u/s. 11 of the IT Act Also the rule of consistency should be maintained and followed by the Income-tax Authorities while finalizing the assessment Following CIT vs. Escorts Ltd. [2011 (2) TMI 579 - DELHI HIGH COURT] The decision regarding the nature of transaction continued for several years, have to be maintained on principle of consistency - No violation u/s. 13(1)(c) was accordingly found - In the assessment year under appeal, total honorarium / salary paid to Shri Narendra Singh Dhakre was found including LIC premium - Small benefit is given to specified persons, which was included in the honorarium of Shri Narendra Singh Dhakre, who is the key member of functioning of the society, nothing could be attributed to the assessee for violation of provisions of section 13 - The AO has failed to establish that any unreasonable or excessive payments have been made to any specified person Decided against Revenue.
Disallowance u/s. 40(a)(ia) Legal expenses - Held that:- Following S.B. Builders & Developers vs. ITO [2010 (5) TMI 686 - ITAT MUMBAI] and assessees own case for A.Y. 2007-08 - Disallowance made u/s 40(a)(ia) becomes only of academic importance only as the only criteria to examine is to see application/utilization of funds of the society towards its objects - Appellants income is to be assessed as per provisions of section 11/13 of the IT Act in place of regular business income - Application of income & only fulfillment of requirements of section 11 needs to be seen which the appellant society is found to be satisfying - The assessee has utilized more than 85% of its income for achieving the objects of the Society. Even if addition was made for non-deduction of TDS, the same cannot be treated as additional income, for which benefit of section 11 have to be granted to the assessee Decided against Revenue.
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9911796707
