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Income Tax - Case Laws
Showing 281 to 300 of 6519 Records
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2013 (12) TMI 1051
Validity of notice u/s 148 Held that:- Following ACIT vs. Rajesh Jhaveri Stock Brokers Pvt. Ltd. [2007 (5) TMI 197 - SUPREME Court] - If the AO for whatever reason has reason to believe that income has escaped assessment it confers jurisdiction to reopen the assessment. It is however to be noted that both the conditions must be fulfilled if the case falls within the ambit of the proviso to section 147 The collection of information of bank deposit of the appellant has provided a cause for reopening of the assessment of the appellant after the AO found that amount of turnover of draft discounted by appellant was not disclosed in the return of income and also no basis for earning of draft discounting commission was declared by her by giving the rate of draft discounting commission charged by her.
The relevant material the basis on which the assessee declared income in return of income are not available in the return - The complete and true facts for determination of income were also not found in return of income filed by the assessee - Even applying various rates of commission the income declared by the assessee was under assessed - The income declared could not find supported by material - The reasons recorded are that the assessee's case is a case of escapement of assessment as true and correct details were not found in the return of income filed by the assessee particularly in respect of amount deposited in Bank - Decided against assessee.
Rejection of books of accounts - Held that:- the books of account produced was not maintained correctly and the rate of commission shown by the appellant was quite low compared to the rate of commission being charged by the persons engaged in such business of draft discounting The assessee failed to explain satisfactorily the basis on which the income was accounted for - The A.O. issued summons to seven parties in A.Y. 2000-01 but the same were returned back - The assessee expressed inability to produce the parties. The A.O. noticed that books of account produced could not be verified as the assessee did not produce supporting documents, vouchers and other materials - The A.O. has rightly rejected the books of account for want of verification as the assessee has failed to furnish evidences in this regard - Decided against assessee.
Excessive estimation of income Held that:- Following CIT vs. British Paints India Ltd. [1990 (12) TMI 2 - SUPREME Court] - The A.O. is justified under section 145 of the Act to reject the books of account and determine the correct profit if ordinary principle of accounting are not followed - It is the duty of the A.O. to consider whether books of accounts disclosed the true statement of accounts from which the correct income can be derived - The source of the said huge cash deposits were not explained by the assessee by a single document, evidence or by any convincing reasons - The addition of entire gross amount is warranted for want of evidence but the A.O. himself has applied 0.5% rate of profit Decided in favour of Revenue.
Interest u/s 234B Held that:- Following Kapur Chand Shrimal vs. CIT [1981 (8) TMI 2 - SUPREME Court] - An appellate authority has the jurisdiction as well as the duty to correct all errors in the proceeding under appeal and to issue, if necessary, appropriate directions to the authority against whose decision the appeal is preferred to dispose of the whole or any part of the matter afresh, unless forbidden from the doing so by statute - In India most of the business activities, circulation of money and other financial activities are administrated through Income Tax Act, providing exemption in tax, incentives, allowances and dalliances of expense, labour and other welfare activities etc - Assessee is running an unusual business activity not in accordance with Indian Laws appears to be with collusion with the Department Decided against assessee.
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2013 (12) TMI 1050
Overriding title on property Held that:- There is no material to show that the brothers and sisters of the forefathers having any title over the property - The assessees have not placed any document to show that the payments to whom the assessees have made any title over the property - The conduct of the co-owners to whom the payment has been made is not supported by any arrangement either under the Income-tax Act or under the Muslim law Decided against assessee.
Agricultural land capital asset or not Held that:- Following Smt. Gousia Begum v. Deputy CIT [2013 (9) TMI 559 - ITAT HYDERABAD] - The capital gains arising out of sale of land situated within 8 k.m. of local limits of Hyderabad Municipality, is liable for tax on capital gains irrespective of the fact whether it falls under the limits of Rajendra Nagar Mandal or otherwise - Mere fact that the land in question was agricultural land cannot be a ground to claim for exemption under section 2(14) of the Act as the land is situated within the local limits of Hyderabad Municipal Corporation Decided against assessee.
Inam Land capital asset or not Held that:- According to the order of Mandal Revenue Officer (MRO), Rajendra Nagar Mandal, Rangareddi District dated March 4, 1999, the property bearing Sy. No. 21, Peeramcheruvu village an extent of 0.09 acres the nomenclature was changed from inam to patta with effect from March 4, 1999 Decided against assessee.
Deduction u/s 54F Held that:- If the assessee constructs any residential house, the assessee is required to place necessary evidence to prove that the construction has taken place - No evidence has been furnished regarding the construction of new house so as to show that the sale proceeds of the land were utilised for the purpose of construction of the new house - The onus lies on the assessees to prove by way of evidence to justify their claim for deduction - The onus was not discharged by the assessees - The assessees could not furnish the requisite evidence to prove the fact that there was any actual construction within the time stipulated in section 54F - Merely producing a copy of permission from Gram Panchayat with regard to construction permission by itself cannot discharge the assessees from proving actual construction Decided against assessee.
Deduction under section 54B Held that:- There is no adjudication by the Commissioner of Income-tax (Appeals) on this ground The issue was restored for fresh adjudication.
Brokerage Held that:- There is no adjudication by the Commissioner of Income-tax (Appeals) on this ground The issue was restored for fresh adjudication.
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2013 (12) TMI 1049
Income declared on account of survey operation Held that:- The Department failed to collect any material during the course of survey and the Assessing Officer is simply harping upon the statement of the assessee - Following the case of CIT v. S. Khader Khan Son [2013 (6) TMI 305 - SUPREME COURT] Solely on the basis of statement of ther assessee addition cannot be made Decided in favour of assessee.
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2013 (12) TMI 1048
Staff training expenses Capital or revenue - Held that:- It is the business requirement of the assessee company to train the staff recruited for voice in UK and US accents which is necessary for operating call centre and BPO services, which is the business of the assessee company Following Shriram Piston & Rings Ltd [2013 (5) TMI 729 - ITAT DELHI] The expenditure is in the revenue field, which enhances the capacity of the employees, leading to improvement of the productivity and profits - The training expenses incurred for training of staff members for employing them in the business of the appellant is revenue in nature - Decided against Revenue.
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2013 (12) TMI 1047
Validity of order u/s.263 Held that:- A.O. had failed to make proper inquiry - Following Malabar Industries Co. Ltd. vs. CIT [2000 (2) TMI 10 - SUPREME Court] - The order of AO was erroneous and prejudicial to the interest of revenue Decided against assessee.
Disallowance u/s 36(i)(iii) Interest on advances given - Held that:- Interest on advances have become bad and doubtful Both the concerns to whom advances were given were financially weak and they were not in a position to repay interest Assessee has agreed to forego interest portion Decided against Revenue.
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2013 (12) TMI 1046
Interest u/s 201(1A) Vehicle hiring charges Held that:- Such charges has not been prescribed u/s. 194I. Vehicles and Chauffers supplied by the contractor and was under the complete control of the contractor - The contract is for carrying out of some work for the appellant and it cannot be called a contract where vehicle simplicitor has taken on hire by the appellant Such type of payments are governed by the provision of Section 194C not u/s. 194I.
Connectivity charges Held that:- Connectivity charges were paid to GPSC against the agreement for using of pipeline connection of GAIL for gas transportation. This pipeline was owned by the GAIL and was opened to service to its other clients also, which was in nature of carriage of goods and covered u/s.194C of the IT Act.
Gas transportation charges Held that:- The appellant paid these payments for gas transportation purposes to Gujarat Gas Company Ltd. and avail them facility of pipeline of it. The ownership and complete control of this pipeline is of Gujarat Gas Company Ltd. This pipeline owned by the contractor is open for use for other clients also and it was a work performed carriage of goods as prescribed u/s.194C - It is covered u/s. 194C - The appellant has also submitted the confirmation from the deductee that these receipts have been disclosed in their respective income and all the deductees are limited company - Following decision in case of Hindustan Coca Cola Beverages Pvt. Ltd [2007 (8) TMI 12 - SUPREME COURT OF INDIA] Decided against Revenue.
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2013 (12) TMI 1045
Approval under section 80G Held that:- The assessee trust is an extension of the mutual Club of Masons - The mother body has not sacrificed or surrendered its mutual status. Therefore, that mutual status transgresses to the assessee-trust as well - As the mother body, Club of Masons, is not surrendering its status of mutuality, it is not possible to treat the assessee-trust as an independent charitable institution The application put in by the assessee under section 80G cannot be entertained in law - Decided against assessee.
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2013 (12) TMI 1044
Disallowance u/s 40(a)(ia) Held that:- The assessee availed services from some third parties. Payment for such services was made to such third parties through the medium of its holding company. Such payment cannot be considered as reimbursement of expenses at cost to its holding company - In order to invoke the provisions of section 40(a)(ia) it is of paramount importance to ascertain the chargeability of the amount to tax in the hands of such persons who were eventual receivers - The payment includes income element but it still may not be not chargeable to tax under the provisions of the Act and/or the relevant Double Taxation Avoidance Agreement - Unless the chargeability of such amounts is established in the hands of such trainers, the provisions of section 195 cannot apply and ex consequenti, the application of section 40(a)(ia) is ruled out The issue was restored for fresh decision.
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2013 (12) TMI 1043
Proceedings u/s 147 Held that:- The notice was issued beyond the period of four years from the relevant assessment year - The notice does not state that the escapement of income chargeable to tax was by result of the failure on the part of the assessee to make a return u/s 139 or in response to a notice issued under sub-section (1) of section 142 or 148 or to disclose fully and truly all material facts necessary for its assessment for that assessment year - The proceedings u/s 147 read with reference to notice u/s 148 dated 31.12.2011 was clearly invalid Decided against Revenue.
Depreciation on windmills at higher rate Held that:- Following M/s. K.K.S.K. Leather Processors (P) Ltd [2009 (11) TMI 556 - ITAT MADRAS-D] - Even if option is not exercised within the stipulated time as per second proviso to rule 5(1A), the same cannot have a serious consequence of total denial of the claim of the assessee - When there is no prescribed procedure or mode of exercising option prescribed in the Rules, then the option exercised by the assessee by way of making a claim in the return of income along with the audit report is definitely more than the requirement of the second proviso - The requirement of second proviso to rule 5(1A) is satisfied if the option is exercised before the expiry of due date of filing of return of income under section 139(1) Decided against Revenue.
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2013 (12) TMI 1010
Applicability of section 80IB - Held that:- Area of commercial usage was less than 5% of total constructed area and project was approved by the CIDCO Municipal Corporation as a residential project - Following Brahma Associates vs. JCIT [2009 (4) TMI 215 - ITAT PUNE] - As per insertion of clause (d) in section 80IB(10) vide Finance Act, 2004 - Restriction of 5% is applicable only with prospective effect and there is no justification to presume that such a limit or prohibition was in place in the earlier years as well on the commercial use of area - Even 10% of commercial area can be allowed whereas, Appellant's shops area is less than 10% of the total housing project or residential area - The issue regarding applicability of provision of law under clause (d) of sub- section (10) of section 80IB of Act, is relevant for the housing project approved after 01.04.2005 and it cannot be presumed to be decisive as applicable for the old housing project approved much earlier than amended provision of law prospectively - Decided against Revenue.
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2013 (12) TMI 1009
Depreciation on tenancy rights - Held that:- There is a vast difference between know-how, patents, copyrights, trade marks, licences, franchises etc. on one hand and tenancy rights on the other - Tenancy rights cannot be construed as "intangible" assets falling within the meaning of Explanation 3 to section 32(1) - The tenancy right cannot be treated as an intangible asset, there is no question of allowing depreciation on it - Decided against assessee.
Book profits u/s 115JB - Held that:- The amount disallowable u/s 14A is always part of the expenses specifically debited to the profit and loss account - It is axiomatic that unless any expenditure is incurred and claimed as deduction, there can be no question of any hypothetical disallowance u/s 14A - The amount disallowable u/s 14A is covered under clause (f) of Explanation (1) to section 115JB(2) - Following M/s. RBK Share Broking Pvt.Ltd. v. ITO [2013 (12) TMI 74 - ITAT MUMBAI] - Decided against assessee.
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2013 (12) TMI 1008
Demand u/s 220 - Appealable or not - Held that:- The giving effect orders show revised computation of total income based on appellate orders - If these were simply orders levying interest under Section 222(2) of the Act, it might not have been appealable. But, this particular levy of interest under Section 220(2) is only one of the many items considered in these orders - It can therefore be deemed either as an order passed under Section 154 or passed under Section 143(3) read with Section 250 and 251 of the Act - Following assessee's own case for assessment year 2006-07 - The assessee has support of Circular No.334 dated 3.4.1982 of CBDT under which any part of the giving-effect order could be assailed by the assessee - The issue was set aside for fresh adjudication.
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2013 (12) TMI 1007
Transfer Pricing Adjustment Held that:- Following assessees own case for A.Y. 2006-07 - The food supplied is a basket containing individual items rather than supply of the items individually - The entire transaction has to be viewed as a single transaction - From the comparison of rate per passenger for individual airlines that the rate for the passenger rate for Singapore Airlines is the highest and the rate for Virgin Atlantic is the third highest - The transactions are at arm's length price Decided in favour of assessee.
Disallowance u/s 14A Held that:- The total investment of the assessee in the mutual fund has decreased - The assessee has earned tax free dividend income from Tata Mutual Fund which is claimed as exempt u/s 10(35) - The assessee has not allocated any expenditure for earning tax free dividend income and since the disallowance made by the A.O. on adhoc basis appears to be on higher side Following assessees own case for the A.Y. 2006-07 - A reasonable disallowance of ₹ 1,50,000/- is justified Partly allowed in favour of assessee.
Depreciation on goodwill Held that:- Following assessees own case for the A.Y. 2003-04 Depreciation is allowable on goodwill Following CIT vs. Smifs Securities Limited [2012 (8) TMI 713 - SUPREME COURT] - Goodwill would fall under the expression "any other business or commercial rights of similar nature" in section 32(1) Explanation 3 (b) Decided in favour of assessee.
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2013 (12) TMI 1006
Order u/s 263 Held that:- The property transferred by the assessee, which resulted in the impugned capital gain, was co-owned by the assessee and his wife with 50% share each. The assessees wife also received equal consideration and equal share in the five floors of the building Following CIT v. Gita Duggal [2013 (3) TMI 101 - DELHI HIGH COURT] - Relief u/s 54 is available in respect of a residential house which should not be restricted to a residential unit - A person may construct a house according to his plans and requirements. He may use the ground floor for his own residence and let out the first floor having an independent entry so that his income is augmented Following Malabar Industrial Co. Ltd. v. CIT 2000 (2) TMI 10 - SUPREME Court] - Where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue, unless the view taken by the Income-tax Officer is unsustainable in law Decided in favour of assessee.
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2013 (12) TMI 1005
Penalty under section 271B failure to get its accounts audited - Held that:- the professional income of the assessee received from partnership firm of Chartered Accountants is taxable under the head income from business or profession - the assessee ought to have got her accounts audited under section 44AB of the Act, the Assessing Officer imposed penalty under section 271B of the Act.- Decided against assessee.
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2013 (12) TMI 1004
Validity of reassessment u/s 147 Held that:- The assessee has filed all the necessary details and material facts in the form of Audit Report in the return of income, with regard to the claim of deduction under Section 80HHC and also the computation of taxable income The assessment completed u/s 143(3) was reopened much after the expiry of four years from the end of the relevant assessment year - From the 'reasons recorded' by the Assessing Officer it can be inferred that AO is withdrawing the deduction under Section 80HHC which was earlier allowed by the Assessing Officer The assessment already completed cannot be reopened for change of opinion - For acquiring a jurisdiction under Section 147, specifically in the cases where assessment has been completed under Section 143(3) the Assessing Officer has to categorically spell out the failure on the part of the assessee that he did not disclose fully and truly all material facts - The Assessing Officer has failed to record that there was any failure on the part of the assessee to disclose fully and truly all material facts Therefore reasons recorded do not allow him to reopen the completed assessment under Section 143(3), beyond the period of four years in view of the proviso to Section 147 Decided against Revenue.
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2013 (12) TMI 1003
Interest paid on deposits Held that:- The taxpayer received deposit outside the books of account and paid interest - Following assessees own case for the assessment year 2008-09 - The taxpayer borrowed funds for enhancing the working capital for the purpose of money lending business - Interest on capital borrowed for the purpose of business falls within the provisions of section 36(1)(iii) - Any interest paid on the capital borrowed for the purpose of business or profession has to be allowed as deduction u/s 36(1)(iii) - Provisions of section 37(1) are not applicable in respect of interest on the capital borrowed for business purpose As per provisions of it can be inferred that the intent of legislature is to disallow the payment like protection money, extortion, hafta, bribe, etrc. when it was claimed as business expenditure - It is immaterial whether the money was borrowed in personal capacity or not Decided against Revenue.
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2013 (12) TMI 1002
Exemption u/s 11 Held that:- The amounts were donated to three trusts, viz. Vivekananda Charitable Trust, Cochin Child Foundation and Bethel Educational & Charitable Trust are given to interested persons of the respective trust.
In the case of Vivekananda Charitable Trust, the property was taken on lease for running a school. Vivekananda Charitable Trust has also paid franchise deposit for setting up of a school - The deposit and rent paid to lessor for taking the premises on lease was not higher than the market rent.
Donation made to Cochin Child Foundation was initially deposited in the commercial space - Principles of law states that when the charitable trust utilises the funds for construction of kalyana mandapam and used the income from kalyana mandapam for charitable activity it would amount to utilisation of funds - Cochin Child Foundation has commercial space for augumenting its income so that the charitable activity can be carried out continuously.
Donation to Bethel Educational & Charitable Trust was uitlised for purchase of land from trustees within the Piravom town and the land purchased from outsiders are 5 kms away from Piravom town - It is common knowledge that the land which is situated in town would cost more than the land which is situated 5 kms away from the town - The payment of sale consideration is as per the prevailing market rate and, no benefit was shown to any of the interested person Decided against Revenue.
Valuation of property Held that:- The fair rent is not a static figure. It may vary depending upon various factors such as the locality of the land, urgency to sell the land, necessity of the purchaser to purchase the land, access to the road, railway station, airport, distance between the land and the public infrastructure facilities available around the area, etc. need to be considered - The land was situated around bypass area. The CIT(A), after taking into consideration that the Cochin bypass road was fully developed during 1976, fixed the fair market value as on 01-04-1981 at Rs.5,000 Decided against assessee.
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2013 (12) TMI 1001
Determination of profit @5% of the cost of goods sold Held that:- Following Income tax Officer-Ward-2, Hyderabad Versus Amaravathi Wine Shop, Hyderabad [2012 (8) TMI 706 - ITAT, HYDERABAD] - Income of the assessees in the line of liquor business has to be estimated at 5% cost of sales made by them - the CIT(A) directed the Assessing Officer to determine the profit @ 5% of the cost of the goods sold - There was no infirmity in the orders of the CIT(A) Decided against Revenue.
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2013 (12) TMI 1000
Penalty u/s 271(1)(c) Held that:- The assessee filed return of income on 26.2.2009 which was a valid return u/s 139(4) - No material has been brought on record by the Revenue to show that any income was concealed by the assessee in the return of income filed for the year under consideration - The assessee filed only one return for the year under consideration and the income shown therein was found correct on assessment - No difference in the tax on this returned income and the tax on the assessed income - No penalty u/s 271(1)(c) of the Act is legally tenable Decided in favour of assesse.
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