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Income Tax - Case Laws
Showing 321 to 340 of 6519 Records
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2013 (12) TMI 948
Recalling of Tribunal's order - Held that:- As per section 254 - If there is a mistake, then an amendment should be carried out in the original order to correct that particular mistake. The provision does not indicate that the Tribunal can recall the entire order and pass a fresh decision - The power to rectify a mistake under s. 254(2) cannot be used for recalling the entire order - Following CIT v. Hindustan Coca Cola Beverages [2006 (10) TMI 125 - DELHI High Court] - The power to rectify a mistake is not equivalent to a power to review or recall the order sought to be rectified.
Following CIT v. Karam Chand Thapar & Bros. (P.) Ltd. [1989 (2) TMI 5 - SUPREME Court] - The decision of the Tribunal has not to be scrutinised sentence by sentence merely to find out whether all facts have been set out in detail by the Tribunal or whether some incidental fact which appears on the record has not been noticed by the Tribunal in its judgment - If the court finds that it has taken into account all relevant material and has not taken into account any irrelevant material in basing its conclusions, the decision of the Tribunal is not liable to be interfered with, unless, the conclusions arrived at by the Tribunal are perverse - Decided against assessee.
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2013 (12) TMI 947
Registration u/s 12AA - Held that:- The activities conducted by the assessee are basically aimed at improving the knowledge and competence of its members - Income from programme revenue derived by the society during each year, is not as per the objects of the society - The DIT(E) didnot carried out any enquiry into the objects of the society - Where no activity is commenced, the question of making any enquiry regarding any activity by the DIT(E) would not arise. The nature of enquiry would depend on the facts of each case.
As per the amendment by Finance Act, 1983 w.e.f. 1st April, 1983 - The clause "not involving carrying any activities of profit" were omitted from this definition by the Legislature - Therefore, after such omission, the element of profit cannot be excluded from the definition "charitable purposes" u/s 2(15) of the Act - As per section 10(22) - Income of any activities cannot be exempted unconditionally if such institution also exists for deriving of profit - Such institution can claim exemption u/ss. 11 and 12 as element of profit is not excluded by the Legislature - As per Section 11 in order to claim exemption such institution must apply 75% of its income for charitable purposes. The surplus if any has to be invested in specified bonds - Because some profit has been earned by an assessee trust registration u/s. 12AA cannot be denied so long as provisions of sections 11, 12 and 12AA are complied with. - Decided in favour of assessee.
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2013 (12) TMI 946
Stamp duty valuation - stock in trade - Held that:- The assessee has disclosed the property in trial balance for all the years from 2000-01 to 2005-06 as part of stock in trade - The assessee was in the business of construction and development rights purchased by the assessee is part of stock in trade - The assessee could not get possession of the said property till the date the assessee transferred his rights in the said property to M/s Jajodia and Patel Properties - The assessee has treated the said property as stock in trade - The provisions of section 50C are applicable only in respect of capital asset, being land or building or both and there is no reference that the said provisions is applicable to stock in trade - The sale value as per agreement for sale of development rights under the facts and circumstances of the case is genuine - Decided against revenue.
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2013 (12) TMI 945
Exemption u/s 54 - determination of cost of acquisition of new house property - Legal fees toward purchase of the new asset – Held that:- The purpose for which the fees stands paid cannot be a matter of presumption - The seller-builder keep at hand all the approvals, clearances, title deeds, NOC, etc., toward execution of the sale agreement - In the absence of any evidence with regard to the actual work undertaken, this amount cannot be considered as forming part of the cost of purchase of the new asset - Decided against assessee.
Civil work expenses – Held that:- Civil work comprising re-plastering, re-tiling, waterproofing, re-wiring and installation of full length grills for safety, was done which was for the interior work and renovation – The assessee has much before the renovation work occupied the house property - The modifications being made did not impact inhabitable state of the residential property - The work done, as a perusal of the bill would show, is toward upgrading interiors, interior designing, extending to curtains. – Decided against assessee.
Transfer charges builder seller – Held that:- No material evidence was provided by the assessee to support the claim, so that the purpose for which the money is given is not known – However the AFS contained a clause that legal charges and security to be deposited by the buyer with the owner-builder which would cover the cost for formation of the (housing) society and it registration, and for the preparation of the AFS and conveyance – The details of the expenses were not given - Decided against assessee.
Expenses on improvement – Held that:- Any house property would necessarily warrant being kept in a state of good repairs - Merely because repairs are not carried out for a number of years together, leading to incurring expenditure in lumpsum or in a huge sum, would not by itself make it capital expenditure - The same is only by way of substantial repairs, i.e., that had accumulated over the past decades - Some cost incurred toward improvement cannot be denied, the same is estimatedat Rs. 1.50 lacs, i.e., at around 20% of the expenditure claimed to have been incurred – Partly allowed in favour of assessee.
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2013 (12) TMI 944
Retainership fess - Income from salary or income from profession - Held that:- Following CIT Vs. Apollo Hospital International Ltd [2012 (8) TMI 459 - GUJARAT HIGH COURT] - In a situation when the terms of the employment/contract are such that no relationship of an employer & employee could be established then it is not justifiable on the part of the Revenue to treat an assessee as an employee of the said Institute - The fees received by assessee did not fall under the category of “Salary” but required to be taxed as “Professional Fees” - the AO is directed to examine the nature of expenditure whether incurred to earn the professional service – Decided in favour of the assessee.
Disallowance of expenses - Held that:- In above ground it is held that the income is professional fee - This issue is remitted for fresh adjudication to decide whether the expenses are allowable u/s 37 or not.
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2013 (12) TMI 943
Trading liability - genuineness of the entities against whom trading liabilities have been shown - assessee contended that if wants to make the addition on account of bogus credit u/s 68. Then, it has to be made in the year in which the credits were recorded first time. It is a carry forward from the earlier year, the AO has not disputed this aspect. If AO wants to make addition on account of cessation of liability u/s 41(1) of the IT Act then, the liability has not ceased, assessee has partly made the payment during this year and remaining in the next year. - Held that:- The reasoning of the ld. CIT (A) is that assessee failed to produce bank details of Raj Industrial Corporation indicating the credits of the amounts debited from its account. To our mind, it is a little too higher technical approach the assessee can produce its accounts, a certificate from its banker. It is to be seen that, why it will pay an amount to some unknown entity. - Decided in favour of assessee.
Demand of CENVAT - Held that:- It is an additional liability of the taxes. It is not related to any penalty - The AO has observed that it is panel in nature but how it is penal in nature AO has not observed this fact - Decided against Revenue.
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2013 (12) TMI 942
Transfer price adjustments - arm's length price (ALP) - Held that:- there is no cogent basis for sustaining the addition made with regard to the payment of technical fee, training fee, testing expenses, payment of modification of tools and payment of design and development expenses. - DRP has not given any cogent reasons. - No additions - Decided in favor of assessee.
Whether the matter should be remanded back - Held that:- TPO has made the elaborate order whereby he has only dealt with royalty aspect and not dealt with the other allied payments. The royalty payment has been allowed by the DRP. In these circumstances, assessee will be put to great hardship, if the TPO is given a second inning to make out a fresh case. - Decided against the revenue.
Excessive and unreasonable expenses u/s 40A(2) - Secondment of employees - AO in the assessment order amongst other things, has alleged that the expenses are bogus in nature and the same have been booked by way of some tax avoidance measures. However, the Assessing Officer towards the end, has allowed 50% of such expenses as excessive and unreasonable - Held that:- DRP has also affirmed Assessing Officer's action by stating that claim of assessee that 17% of the time of employees of MIL has been spent for the assessee is also without any supporting evidence. Thus, we find that there is conflict between submissions of the assessee and finding by the authorities below. - Issue remitted back.
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2013 (12) TMI 941
Travelling expenses – Held that:- The assessee has incurred the expenditure wholly and exclusively for the purpose of the business of the assessee, the ad- hoc disallowance cannot be made - The expenditure incurred for the purpose of business is allowable under Section 37 – Decided in favour of assessee.
Commission expenses – Held that:- The assessee is an authorized dealer of vehicles, buses and others equipments - Considering the nature of business wide convincing and liaison work is required for selling these vehicles particularly which are to be supplied to schools colleges and charitable institution etc. The concerned parties have clearly established and identified the vehicles sold through bill number date and parties to whom the vehicles were sold - The nature of assessee's business are that such liaison work is necessary for selling and such liaison work is in the form of service rendered for selling the vehicles - Merely having friends and relatives, adverse inference cannot be drawn particular by under the circumstances of the case and it is established that these persons have rendered service against the commission paid – Decided in favour of assessee.
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2013 (12) TMI 940
Accelerated depreciation - Held that:- Following assessee's own case for the A.Y. 2006-07 - As per Rule 5(2) of I.T Rules and the certificate (P.B-II) issued by the Ministry of Science and Technology, Department of Scientific & Industrial Research, New Delhi dated 15.6.2007 - Plant and machinery installed during the Financial Year 2005-06, are for improved design of tractors in the plant set up for the manufacture of agricultural tractors, Harvester combines and Industrial forklifts based on technology originally acquired from Central Mechanical Engineering Research Institute, Durgapur (CMERI) and improvements made thereon based on their own in house R&D efforts - Assessee satisfied the requisite conditions for accelerated depreciation and the revenue failed to bring evidence on record to rebut such evidences - Decided against Revenue.
Repair and maintenance - Held that:- Following assessee's own case for the A.Y. 2006-07 - The expenditure was incurred by the assessee on renovation of floors, ceiling, painting etc. The expenditure is duly allowable in the hands of assessee being current repairs - The expenditure incurred on purchase of carpets being replacement of existing asst is an allowable expenditure - Such expenditure incurred by the assessee cannot be regarded as capital expenditure, where the claim is in the nature of repair and replacement - Decided against Revenue.
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2013 (12) TMI 922
Deletion of penalty u/s 271(1)(c) of Income Tax Act, 1961 - Disallowance of expenses under section 14A – Inaccurate particulars of income furnished – Held that:- The penalty levied u/s 271(1)(c) of the Act was on the facts of the case and the law has rightly been deleted by the Ld. CIT(A) - the information and details in respect of exempt income and expenses incurred during the relevant year were available in the audited accounts filed with the A.O. - the information and details have not been found by the AO to be false or factually incorrect - Relying upon Godrej & Boyce Mfg. Co. Ltd. vs. Dy.CIT [2010 (8) TMI 77 - BOMBAY HIGH COURT] - Rule 8D will not be applicable and the very foundation of levy of penalty in the present case i.e. Rule 8D for making disallowance u/s 14A in the assessment year under consideration stands demolished and therefore, penalty cannot survive.
There is no finding that any details supplied by the assessee in its Return were found to be incorrect or erroneous or false – Thus, there would be no question of inviting the penalty u/s 271(1)(c) of the Act - A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee - Such claim made in the Return cannot amount to the inaccurate particulars – Decided in favour of Assessee.
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2013 (12) TMI 905
Pre-operative expenses - Expenses on business expansion activities - Held that:- The increase in capital base after issue of additional equity shares by private placement, the assessee-company intends to expand its existing project - The assessee has invested substantial amount in purchase of Machineries etc., Further, with the increase in number of Windmills, the sales turnover of the assessee has increased almost three fold from Financial Year 2008-09 to Financial Year 2010-11 - The expenditure incurred towards raising of additional equity shares by private placement can be attributed to extension of undertaking and is thus eligible for amortization under the provisions of section 35D - Following EID Parry (India) Ltd., Vs. DCIT [2012 (7) TMI 698 - MADRAS HIGH COURT] - where expenditure has been incurred in connection with issue of shares which are directly relatable to expansion to capital base of the company for raising of new projects, it would be allowable u/s. 35D - Decided in favour of assessee.
Deduction u/s 80IB - Held that:- The assessee for the first time raised the issue of additional/higher deduction amounting to ₹ 50,61,142/- u/s.80IB before the CIT(Appeals) - This claim was never made before Assessing Officer - Decided against assessee.
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2013 (12) TMI 904
Applicability of section 50C - Held that:- Following ACIT Vs. P.R.Chockalingam [2012 (4) TMI 417 - ITAT CHENNAI] - The value of the property should be determined at the time of handing over of possession of the property and not at the time of registration - The value should be determined in accordance with the terms and conditions mentioned in MOU between the assessee and the developer - The provisions of Section 50C will not be applicable as they were inserted by the Finance Act, 2002 w.e.f. 01-04-2003 - Decided against Revenue.
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2013 (12) TMI 903
Loan taken from company - Deemed dividend - Held that:- The assessee has taken loan from the company in which he is substantially interested - Provisions of Section 2(22)(e) were attracted with respect to the loan taken by the assessee as discussed by the CIT in his order u/s 263 - The advance given by the company for purchase of property in the name of assessee also amounts to advance by company to the assessee, therefore, attracts the provisions of Section 2(22)(e) - The amount of deemed dividend cannot be more than accumulated profits - The issue was set aside for fresh adjudication by AO to determine the factual position and the quantum of advance given by the company and deemed dividend.
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2013 (12) TMI 902
Fall in G.P.rate - Held that:- Following CIT Vs. Smt. Poonam Rani [2010 (5) TMI 57 - HIGH COURT OF DELHI] - The AO has not pointed out any particular defect or discrepancy in the account books maintained by the assessee - The CIT(A) was satisfied that the assessee had furnished complete details, including quantitative details in respect of purchase of raw material, manufacture and sale of the finished products - The Assessing Officer had not invoked the provisions of Section 145(3) of the Act - The addition on estimate basis without rejecting the books of accounts was not justified - Decided against Revenue.
Disallownace u/s 14A - Held that:- The assessee made an investment in tax free bonds and units and earned tax free dividend income - The partners current capital was non-interest bearing and used for investment in mutual fund - Following assessee's own case for earlier A.Y. 2007-08 and 2008-09 - Nothing was brought on record to prove the nexus between the interest bearing funds and the investment in bonds and mutual funds on which exempted dividend income was earned by the assessee - The disallowance made by the Assessing Officer and sustained by the learned CIT(A) was not justified - Decided in favour of assessee.
Depreciation on WEG installed - Held that:- Following assessee's own case for earlier A.Y. 2008-09 - The assessee was eligible for depreciation under section 32 of the Act on the wind mills - The issue was restored for fresh adjudication.
Interest on FDR - Held that:- The assessee pledged the FDR as security for export oriented units (EOU) - The FDRs were pledged for commercial expediency of the assessee - Following CIT Vs. Jagdish Prasad M. Joshi [2008 (11) TMI 326 - BOMBAY HIGH COURT] - It is to be considered as business income and eligible for deduction under section 10B of the Act - Decided in favour of assessee.
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2013 (12) TMI 901
Undisclosed investment - Held that:- No plausible explanation was furnished by the assessee to show that there was fall in the real estate prices during the past years - The value of another piece of land which was purchased by the assessee from 'Devabala Group' around same time had appreciated. This fact has not been disputed by the assessee - The CIT(Appeals) has only taken into consideration the amount advanced by the assessee to Shri C. Balan - Decided in favour of Revenue.
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2013 (12) TMI 900
Validity of assessment u/s 263 - Held that:- The subscription collected by the assessee is not its income and hence is not taxable in the hands of the assessee - The assessee is only a nodal agency for collecting subscription on behalf of M/s. Sun TV Network Ltd. - The amounts collected by the assessee are credited to the separate account 'Subscription Charges' - The said account is debited at the end of Financial Year when the amounts are paid to M/s. Sun TV Network Ltd. - As the subscription collected by the assessee from various cable operators is not the income of the assessee, the same is not shown in Profit & Loss account - The cable operators are deducting tax at source on the payments of subscription made to assessee - The assessee is remitting the gross amount to M/s. Sun TV Network Ltd., the assessee is entitled to receive credit of the tax deducted at source u/s. 199 of the Act subject to production of TDS Certificates received from respective deductors - Decided in favour of assessee.
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2013 (12) TMI 899
Deduction u/s 80IC - Held that:- Plant which was used outside India by a person other than the assessee shall not be regarded as plant and machinery previously used for any purpose - In the given case, the plant and machinery was never used within India, as per the documents submitted by the assessee and enquiries made by Ld. CIT(A) - Though the machinery was second hand but it was not used by the assessee outside India, therefore, it cannot be said that machinery was previously used for the purpose of computing deduction u/s 80IC(4) of the Act - Decided against Revenue.
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2013 (12) TMI 898
Unexplained investment and purchases - Held that:- There is no material on record to say that the purchases made by the assessee were bogus except the general statement recorded by the Department in the case of Shri Rakesh Kumar Gupta. which was later on retracted - In absence of any material brought on record against the submissions made by Shri Rakesh Kumar Gupta before the AO of the assessee the addition, if any, made in the case of the assessee will be based on presumption only - As against that assessee has submitted various evidences to show that the actual delivery of the goods was received by the assessee from the said party which has not been discarded by the AO - The addition cannot be made solely on the basis of the statement of the third party - The alleged bills through which the assessee has claimed to have purchased the material has not been examined - For all these 3 years the assessee has not shown any opening stock or closing stock which further supports the view of the Assessing Officer that there was no physical purchase and sale of the goods in question - To prove the genuineness of the purchase and sale the supporting material has to be produced to show that the transactions in question are backed by actual delivery - The issue was restored for fresh adjudication.
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2013 (12) TMI 897
Validity of assessment u/s 147 - Held that:- The AO in this case had reopened the assessment on three different grounds - The AO in the reasons recorded has not mentioned anywhere regarding any facts being not disclosed truly and fully by the assessee - The AO had reopened the assessment only on account of retrospective amendment to the Explanation 1 to section 115JB (2) by the Finance Act 2009 with effect from 1.4.2001 - As per amendment any amount set aside as provision for diminition in the value of assets has to be added to book profit - The retrospective amendment no doubt can be made the basis for reopening of the assessment but in cases where assessment has already been made u/s 143(3) as in this case and four years have elapsed from the end of relevant assessment year, reopening can be made only if there is failure on part of the assessee to disclose truly and fully all material facts - The provisions for bad and doubtful debts have been added by the assessee in the computation of income under the normal provisions which is clear from the details of computation of income - AO was not required to discover it from examination of book of accounts - There was no failure on part of the assessee to disclose truly and fully all material facts relating to provisions for bad and doubtful debts - Reopening on account of failure to add back the provisions to the book profit cannot be upheld.
Deferred tax credit was because of reversal of provision made in earlier year, it was only an accounting entry and there was no real income and, therefore, it was reduced from the profit - The AO has reopened the assessment as per the subsequent amendment by the Finance Act 2008 w.e.f 1.4.2001 - Amount of deferred tax credited to the P&L Account is required to be reduced while computing the book profit in terms of clause (viii) of Explanation 1 to section 115JB(2) - The AO had reopened the assessment in 2010 when this particular provision was already on the statute - There was no escapement of income on this account and reopening based on this reason cannot be justified.
Any income which is eligible for reduction u/s 10A is required to be reduced and expenses relating to such income are required to be added - Entire income which is eligible for exemption u/s 10A is required to be reduced and not only the income which is actually allowable as deduction u/s 10A - The assessee has acted clearly in accordance with provisions - Decided in favour of assessee.
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2013 (12) TMI 896
Leasing of property - valuation - nature of charges received towards amenities i.e renting out car parking spaces, high end air conditioning plant, lift, water supply with power back up, fittings, furnishings and fixtures like wooden cabins and wooden empanelling are common - Statutory deduction u/s 24(a) - Held that:- These are common in nature which are to be provided to the tenants/lessees to carry out their day-to-day works by the landlord, without these they cannot function - For this the assessee has executed multiple agreements with the lessee company - The treatment of an income under the head "house property" is dependent upon the intrinsic nature of the letting out and not on the fact of multiple agreements execution. All the agreements are executed on the same day and assessee has given a plausible reason for drawing different agreements for letting the same house property - All the agreements together constitute a composite transaction for letting out of house property; rent there from is liable under the head income from house property, eligible for statutory deduction u/s 24(a) - In all the earlier years the entire rental income from this property based on these agreements has been considered as income from house property - Following Radhasoami Satsang Vs. CIT [1991 (11) TMI 2 - SUPREME Court] - When facts and circumstances being same the revenue should not deviate and adopt contrary view unless there are extra ordinary circumstances - Decided against Revenue.
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