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Income Tax - Case Laws
Showing 341 to 360 of 6519 Records
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2013 (12) TMI 895
Whether penalty u/s 271(1)(c) be levied on change of head of income - Rent received - Business income or income from house property - Held that:- The assessability of an income under a particular head depends upon various facts and circumstances - There is very thin line demarcation on which it can be adjudged the nature of income and its classification - It has clearly not been brought on record by the A.O. that assessee's explanation is actually false on the basis of some evidence or material. The penalty u/s.271(1)(c) cannot be sustained in such a situation - Decided against Revenue.
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2013 (12) TMI 894
Levy of penalty under section 271(1)(c) - Prior period expenses - Held that:- The assessee has furnished all the particulars along with the voucher numbers of these expenses in the Audit Report which pertain to the financial year 2003-04 i.e., the assessment year 2004-05 - The bills were received after 1st April 2004 - No material has been brought on record to prove these details incorrect or the expenses do not pertain to the relevant financial year - The assessee has not concealed particulars of income - Decided against Revenue.
Genuineness of expenses - Held that:- Only part of the stitching charges remained unverified u/s 133(6) - In order to establish its claim of payment, the assessee has furnished copies of bills, details of account payee cheque, copy of bank statement reflecting such payments, Form-16A showing TDS deducted on such payments and also the details of Permanent Account Number of such parties - The assessee cannot be said to be guilty of furnishing inaccurate particulars of income - Decided against Revenue.
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2013 (12) TMI 893
Validity of reassessment - Held that:- Following Hindustan Unilever Ltd. vs DCIT [2010 (4) TMI 206 - BOMBAY HIGH COURT] - All the four units of the assessee were eligible under section 10B - Three units had returned a profit during the course of the assessment year, while the sick unit had returned a loss. The assessee was entitled to a deduction in respect of the profits of the three eligible units while the loss sustained by the fourth unit could be set off against the normal business income - The reassessment proceedings were not valid - Decided in favour of assessee.
Eligibility of loss for deduction u/s 10A - Held that:- Business losses of other units will not be set off against the profits of the undertaking engaged in export of computer 'software for the purposes of determining the allowable deduction under section 10A - Unabsorbed business loss is to be set off under section 72 and the same is not mentioned under section 29 - The deduction under section 10A in respect of the allowable unit under section 10A has to be allowed before setting off brought forwarded losses of a non-section 10A unit - Decided in favour of assessee.
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2013 (12) TMI 892
Receipts of crane hire charges, sale of empty gunny bags/drums and insurance claim - eligible for deduction u/s 80IA or not - Held that:- Following COMMISSIONER OF INCOME-TAX Versus ESCORTS FINANCE LTD.[2009 (8) TMI 677] - DELHI HIGH COURT - Even the ex-facie bogus claims attracts penalty - The assessee did not explain to the Income-tax Appellate Tribunal as to in what circumstances and on account of whose mistake, the amounts claimed as deductions in this case were not added, while computing the income of the assessee-company - The income should inextricably have a direct nexus with the ongoing business of the assessee. Insurance claim, sale of empty gunny bags and crane hire charges, though may be part of the business of the assessee but did not have direct nexus - Decided against assessee.
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2013 (12) TMI 891
Hoarding Maintenance Expenses - Held that:- The expenses for putting up new median hoardings has generated income to assessee not only for this concerned assessment year but also for the next three succeeding assessment years - Treating a part of the expenses as capital in nature and granting depreciation on the same is justified - The steel purchase was only a subject matter of appeal before the CIT (A) and not the whole hoarding maintenance expenses - The CIT (A) have considered only the steel purchases as capital expenses and not of the whole hoarding maintenance expenses - Partly allowed in favour of assessee.
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2013 (12) TMI 890
Leasing the quarrying by the Temple Management Committee - Liable for TCS - Held that:- As per decision in Jagannath Temple Managing Committee vs CIT & Others [2007 (10) TMI 173 - ORISSA HIGH COURT] - Shree Jagannath Temple Managing Committee has been constituted by the State Government under the provisions of Shree Jagannath Temple Act - As per section 2(31) - From the definition of the word 'person', it is apparent that an authority established by under Central, State or Provincial Act for managing affairs of the temple cannot be regarded to be a 'person'. Temple is different from its Managing Committee, which has been appointed under Shree Jagannath Temple Act - The order of the Assessing Officer did not make the Jagannath Temple Managing Committee to be responsible for collecting tax - The Assessing Officer has made Shree Jagannath Temple Office to be responsible to collect tax which cannot be a person - It cannot also be 'every person' as referred to Section 206(1C) - The order passed by the Assessing Officer is void ab initio - Decided in favour of assessee.
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2013 (12) TMI 889
Depreciation on assets – Application of funds – Held that:- Following Karnataka Reddy Janasangha in [2013 (12) TMI 163 - ITAT BANGALORE] - The income of the trust is required to be computed under section 11 on commercial principles, without reference to the heads of the income specified under section 14 – As per Circular No.5-P (LXX-6) dated 19th June, 1968issued by CBDT - The income of the trust is to be computed on the commercial basis - The normal accounting principles clearly provide for deducting depreciation to arrive at income. The income so arrived after deducting the depreciation is to be applied for charitable purpose. Capital expense is application of the income so determined - There is no double deduction as claimed by the DIT(E) in his order – Depreciation is allowed on cost of assets which have been fully allowed as application of income u/s 11 – Decided in favour of assessee.
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2013 (12) TMI 888
Depreciation on investments held to maturity - Held that:- Following assessee’s own case for AY 2006-07 - Value of the securities at cost or market value whichever is less should be accepted for income tax even if the banks in their books do not value on that basis - it is an accepted proportion that investment made by the bank to comply with the SLR requirement would constitute their stock in trade and depreciation in value of the same is an allowable deduction - Decided against Revenue.
Broken period interest - Held that:- Following assessee’s own case for AY 2006-07 - The broken period interest included in the purchase price of Government securities held by the banking company to comply with SLR requirement is entitled to deduction - Decided against Revenue.
Disallowance u/s 14A - Held that:- Following assessee’s own case for AY 2006-07 - The disallowance is to be made on reasonable basis - The disallowance is reduced to 2% expenditure as relating to earning of the exempted income u/s 14A - Decided against Revenue.
Amortization of public issue expenses - Held that:- Following assessee’s own case for AYs 2000-01 to 2004-05 - The first and primary rule of construction is that the intention of the legislature must be found in the words used by the legislature itself - The expenses are disallowed u/s 35D - Decided against assessee.
Provision for bad and doubtful debts - Held that:- Following assessee's own case for earlier years - Irrespective of the debit to the profit and loss account on account of provision for bad and doubtful debts (PBDD), an Assessee is entitled to 10% of the AARA as deduction u/s.36(1)(viia) of the Act - Decided against assessee.
Disallowance of unrealized interest - Held that:- Following assessee’s own case for AY 2006-07 - Income which was earlier recognised is not to be allowed in the subsequent year in case it is permissible for the assessee to write off such income in concerned assessment year when it was found that it was not recoverable - Decided in favour of assessee.
Provision for leave encashment - Held that:- In view of the amendment to Section 43B by the introduction of Sub Section (f) which provides for allowing deduction on leave encashment only on the actual payment - There is nothing on record to show that the assessee has parted with the amount for making payment for the leave encashment - This was merely a provisions made by the assessee - Decided against assessee.
Debts written off by the non-rural branches - Held that:- Following Catholic Syrian Bank Vs. CIT [2012 (2) TMI 262 - SUPREME COURT OF INDIA] - The same is allowed as deduction - Decided in favour of assessee.
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2013 (12) TMI 887
Bad Debts – Held that:- Sedimentation claims are the normal features of the business carried on by the assessee - The manufacturer has to bear the loss due to sedimentation - The loss on account of sedimentation which the manufacturers have to bear is a debt due by the manufacturer to the assessee - The assessee has therefore recognized the liability which the beer manufacturer has to pay the assessee on account of short supply of beer due to sedimentation loss in its books of account - This liability has all the ingredients of a debt - This debt has been taken into account in computing the income of the assessee in the earlier previous year - Following TRF Ltd. v. CIT [2010 (2) TMI 211 - SUPREME COURT] - It was not necessary for the assessee to prove that the debt in question has become bad and irrecoverable – Decided against Revenue.
Bad debts of earlier years – Held that:- The assessee has failed to explain the amounts written off with substantial evidence – The assessee was given opportunity at three appellate stages to substantiate his claim - The assessee has not filed any evidence to substantiate its claim for deduction on account of bad debts – Decided against assessee.
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2013 (12) TMI 886
Tax not deducted at source on commission to non-resident selling agents - Held that:- The assessee paid commission to M/s Wallace Cartwright & Co - None of the authorities have verified agreement between the assessee and the said company, based on which payments were effected to them - No examination has also been done as to whether there existed any DTAA between India and Tunisia and what was the definition of "technical services" if any in such DTAA.
Reimbursement made to subsidiary for expenses incurred - Held that:- None of the authorities have verified the base on which the reimbursements had been done - The issue has been restored for fresh adjudication.
Disallownace u/s 14A - Held that:- The disallowance under Section 14A could not have been made since Rule 8D of Income-tax Rules, 1962 was not applicable for that assessment year - Rule 8D is applicable w.e.f. A.Y. 2008-09 - Decided against Revenue.
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2013 (12) TMI 868
Disallowance of Gifts on account of personal user of business assets - Various additions made are not justified being outside the purview of s. 153A of the Act – Held that:- The assessee had already submitted his returns prior to search which had also attained finality - no document or incriminating evidence was found during the course of search which could be legally made a basis for disturbing the already settled issues – The documents submitted clearly prove the identify, creditworthiness of the donor and genuineness of the gift - Following Jai Steels (India) vs. Asstt. CIT [2013 (6) TMI 161 - RAJASTHAN HIGH COURT] - In an assessment under s. 153A, it is not open to the assessee to seek deduction or claim relief not claimed by it in the original assessment which already stands completed before the date of initiation of the search or making of requisition - The gifts already disclosed by the assessee in the returns of income, which have attained finality, cannot be disturbed.
Unexplained gifts - Genuineness of Gifts – Held that:- After considering the proof regarding gifts, they are considered to be genuine gifts - The assessee has produced enough evidence to prove the identity of the donors, their creditworthiness and also the genuinity of the gift transactions - The gifts have been given through cheques and stand confirmed by the donors - The donors have also proved the sources of their respective gifts - No adverse materials was found during the course of search to even suspect the gifts – the gifts are otherwise genuine and have already been disclosed by the assessee in the returns filed before the date of search and which have already become final – Decided in favour of Assessee.
Addition on account of unexplained personal expenses – Held that:- The disallowance out of expenses claimed on account of personal or non-business user of the vehicles is not justified - The auditor has simply mentioned that some personal use of business assets is not denied by the assessee and the value of the same could not be ascertained by them - ad hoc and baseless additions cannot be encouraged – Decided in favour of Assessee.
Addition of gold ornaments – Held that:- The finding of the CIT(A) is not justified being simply ad hoc and without any valid basis - the additions made are deleted.
Justifiability of the additions - No unexplained asset(s)/expenditure has found during this search –Held that:- There is no other unexplained asset or expenditure which can be said to have been found during the search - The additions made are not supported by any unexplained assets or expenditure - On the basis of assets and the expenditure theory the addition so made in the hands of the assessee is apparently uncalled for.
Addition of unexplained expenditure on foreign travel – Held that:- There is no reason as to why the receipts of monies from his parents should not be accepted when even the source thereof has been explained and the proof is enclosed in the papers – the entire amount to be treated as explained.
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2013 (12) TMI 866
Computation of relief u/s 80I - Deduction of Relief u/s 80HH from gross total income - Recomputation of allowable deduction – Precedential value of J.P. Tobacco Products (P) Ltd Vs. C.I.T. – Held that:- Following Commissioner of Income Tax Vs. Lucky Laboratories Ltd [2005 (8) TMI 80 - ALLAHABAD High Court] and Madhya Pradesh High Court in J.P. Tobacco Products P. Ltd v. CIT [1996 (8) TMI 29 - MADHYA PRADESH High Court] - both the sections are independent and, therefore, the deductions could be claimed both under sections 80-HH and 80-I on the gross total income.
Validity of change in method of charging depreciation from straight line to WDV – Computation of Liability u/s 115J of the Income tax act – Held that:- Following Apollo Tyres Vs. CIT [2002 (5) TMI 5 - SUPREME Court] - while computing the income under Section 115J of the Income-tax Act, the Assessing Officer has only power to examine whether the books of account were certified by the authorities under the Companies Act as having been properly maintained in accordance with the Companies Act - the Assessing Officer thereafter has limited powers of making increases and reductions as provided for in the Explanation to the said section - the Assessing Officer does not have the jurisdiction to go beyond the net profits shown in the profit and loss account, except to the extent provided in the Explanation to Section 115J of the Income-tax Act - the accounts maintained by the assessee are certified by the auditors – Thus, the book adjustment made by the Assessing Officer being contrary and liable to be set aside - Under the Companies Act, 1956, both straight line method and written down value method are recognized – Decided against the revenue.
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2013 (12) TMI 865
Deletion on account of bad debts – AO restricted the brokerage passing through profit and loss account – Held that:- Following CIT Vs. D.B. (India) Securities [2009 (7) TMI 894 - DELHI HIGH COURT] – the unrecovered amount by the share broker on behalf of its sub-broker has to be treated as debt and deduction is allowable - the shares remaining in the possession of the assessee can be sold in the market for whatever consideration and adjusted against the balance outstanding payable by the debtors and the net figure which results thereafter, has to be allowed as bad debt.
Further in DCIT Vs. Shreyas S.Morakhia [2010 (7) TMI 455 - ITAT MUMBAI] - the sum receivable by share broker from clients for transactions undertaken on their behalf is a trading debt - Unrecovered part has to be allowed as deduction – Thus, the assessee is entitled to deduction in respect of the amount becoming unrecoverable from its clients - the deduction has to be restricted to the amount determined after reducing the sum recoverable from sale proceeds of shares with assessee, if any – Order set aside and the matter remitted back to the AO for fresh adjudication – decided against Revenue.
Deletion of disallowance on account of Transaction charges – Held that:- Following CIT v. Kotak Securities Limited [2011 (10) TMI 24 - Bombay High Court] – The transaction charges paid by the assessee constitute 'fees for technical services' covered under Section 194J of the Act – Thus, the assessee was liable to deduct tax at source while crediting the transaction charges – order set aside and the matter remitted back to the AO – Decided in favour of Revenue.
Addition u/s 40(a)(ia) of Income Tax Act – Assessee contended that no amount was outstanding at the end of the year – Held that:- Following CIT v. Crescent Export Syndicate [2013 (5) TMI 510 - CALCUTTA HIGH COURT] - unless the amount is payable at the end of the year, no disallowance can be made u/s 40(a)(i) of the Act - there is no merit in the ground raised by the assessee in its cross objection – Decided against Assessee.
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2013 (12) TMI 848
Levy of interest tax on interest under Interest Tax Act, 1974 - Nature of finance charges as well as interest received - whether ITAT was legally justified in holding that hire purchase transactions of the assessee were not loan transactions - Held that:- TAT has failed to examine the agreement in totality and the documents to discover the real nature of the transaction which was emphasised by the CBDT vide Circular No. 760 and also by Hon'ble Supreme Court in the case of Sundaram Finance Ltd.(1965 (11) TMI 123 - SUPREME COURT OF INDIA) - the transactins entered by the respondent assessee with the customer/hirer is a loan transaction and the finance charges were nothing but interest. - Decided against the assessee.
Reassessment proceedings - Held that:- Particular company or firm receive notices and make their signatures endorsing the receipt and the Department officials do not enquire about their authority or power of attorney. What is relevant is the conduct of the assessee in acquiescing in such practice. If the assessee continues to give impression that such official or employees are duly and regularly representing it, then the Departemntal Officials are bond to be led or misled by such conduct. This representation of the assessee is further found to be supported by the conduct of the assessee in making compliance of the notice on the basis of such receipt. In the present case, it is established on record that the assessee had filed return in compliance to the notice, which was received on its behalf by is employees. Not only this, the assessee continued to be represented during assessment proceedings and never raised any objection on this count. - Decided against the assessee.
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2013 (12) TMI 847
Accrual of interest - whether interest income was chargeable only after the compliance of the agreement - Held that:- Hon'ble Supreme Court in the case of C.I.T. vs. Bokaro Steel Ltd. [1998 (12) TMI 4 - SUPREME Court] has observed that it is real income, which is exigible and hypothetical or notional income is not taxable. In the instant case, member of the AOP have never received any amount except Rs.25 lac at the time of agreement dated 28.8.1989. More than two decades have passed but the assessee has never received any fruits.
It appears that the assessee has not received any amount till date. No benefit has been received, so no addition can be made on the notional income. However, the department is always at liberty to charge tax as and when the amount will be received by the assessee. - Decided against the revenue.
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2013 (12) TMI 846
Penalty u/s 271(1)(c) - CIT(A) and ITAT deleted the penalty - Held that:- The question of mens rea and interference with the penalty imposed would arise only if concealment deliberate in nature is found to be established. Once the concurrent findings with regard to excess stock being deducted is held not to be a concealment at all we cannot accept the submission of revenue. - Decided against the revenue.
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2013 (12) TMI 845
Power of CIT(A) to reopen the assessment and enhance the income liable to tax u/s 251(1)(a) during appellate proceedings - Held that:- It is seen that the CIT (Appeals) had not only stated to reopen the assessment in which the appeals are pending but also for the assessment in which either no appeal is pending or already stands disposed. In our considered view, the impugned show cause notices seeking to reopen the assessment in respect of all the years seems to be in excess of the power of the CIT (Appeals) under Section 251(1)(a).
Since the CIT (Appeals) has expressed doubts that the petitioner is not a company and is seeking to reopen assessment of the petitioner-company over the years, we are of the view that the impugned show cause notices are in excess of jurisdiction and are liable to be quashed. However, it is open to the CIT (Appeals) to issue a fresh show cause notice in accordance with law. - Writ petition allowed - Decided in favor of assessee.
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2013 (12) TMI 844
Condonation of delay in fining an appeal before CIT(A) - Held that:- It is true that the appellant's mother died on 23 December 2008 and the assessment order was passed on 21 December 2009 and therefore, there was considerable time gap between two events. Similarly the appeal was filed on 15 November 2010. Thus, there was considerable time gap. However, each person reacts differently to the shocks which life administers from time to time. There can be no uniform standard of reaction by all persons to the unfortunate events. However, in the appeal filed before the Tribunal, the applicant sought to put the blame on the consultant who is no longer alive. This was indeed unfair and the Tribunal appears to have been of view that he ought not to have blamed the consultant who passed away before the Tribunal heard the appeal. We agree with the above view of the Tribunal.
In the peculiar facts and the circumstances of the case, we are of the view that interests of justice would be served if delay is condoned and the appeal is heard on merits by the CIT(A) subject to payment of costs as directed hereafter.
This order is passed subject to the appellant paying costs of Rs.25,000/to the Victoria Memorial School for Blind at Mumbai within two weeks from today, the appeal shall be entertained by CIT(A) after the receipt issued by Victoria Memorial School for Blind is produced before the CIT(A). - Decided in favor of assessee.
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2013 (12) TMI 843
Revision u/s 263 - Challenge to the power of CIT on the ground that when the block assessment itself was made only after the approval of the Commissioner of Income Tax as required under Chapter XIV-B, the self-same authority could not assume authority once again even as against the assessment years 1995-96 and 1996-97 on issues which were already subject matter of consideration in the block assessment. - Held that:- the transactions were reflected in the books of accounts and they were all genuine transactions and that the order of the Tribunal on the block assessment appeal having become final, the sole reliance on the findings in the block assessment thus not being available to the Revenue, on merits, we have no hesitation in holding that the Tribunal had committed serious error in not considering the facts in a proper perspective. It is rather ironical that the Tribunal ignored the findings of its own order in the block assessment appeal, which clearly points out to the genuineness of the transactions and the disclosure of the transactions in the books of accounts and consequently on the sustainability of the claim on the depreciation, which was also the subject matter of consideration in the block assessment.
There is no material at all for the Commissioner of Income Tax to exercise his jurisdiction under Section 263 of the Income Tax Act to deny the assessee on the deduction as well as on the depreciation claim considered by the Assessing Officer in the assessment relating to the assessment years 1995-96 and 1996-97. - Decided in favor of assessee.
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2013 (12) TMI 842
Deduction under Section 80HHC on sale of DEPB - Held that:- allowance of relief under Section 80HHC(3)of the Act only the profit and not entire sales proceeds arising out of the DEPB is required to be reduced / considered. - Applying the law laid down by the Hon’ble Supreme Court in the case of Topman Exports (Topman Exports), the question raised / formulated in the present appeals is answered in favour of assessee.
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9911796707
