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Income Tax - Case Laws
Showing 381 to 400 of 6519 Records
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2013 (12) TMI 783
Non issuance of notice u/s 143(2) for reassessment proceedings u/s 147/148 - Held that:- the decision of Hon'ble Jurisdictional High Court in the case of Alpine Electronics Asia Pte. Ltd. (2012 (1) TMI 100 - DELHI HIGH COURT) would be applicable. Respectfully following the same, we hold that the assessment completed without issue of notice under Section 143(2) of the Act was invalid. - Decided in favor of assessee.
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2013 (12) TMI 782
Nature of rental income - business income or income from house property or other sources - a warehouse/godown was let out by the assessee for preservation of goods belonging to M/s. Hindustan Lever Ltd., for commercial purposes and the letting out of the building for warehouse is business of the assessee. - Held that:- the income derived is to be treated as income from business only. - Decided against the revenue.
TDS on rent paid - assessee contended that when the assessee itself did not claim the payments by debiting to profit and loss account, the question of disallowance of those amounts by invoking the provisions of section 40a(ia) does not arise. - Held that:- In the case of M/s. Narne Constructions (P) Ltd [2013 (3) TMI 412 - ITAT HYDERABAD], it was observed that; unless the assessee claims this item as expenditure / payment, the A.O. cannot allow or disallow the same - Decided in favor of assessee.
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2013 (12) TMI 781
Non Filing of Form NO. 10 for claiming exemption u/s. 10(21) - Reassessment - Application of income - trust wholly for charitable or religious purposes - Held that:- even if expenses for charitable and religious purposes have been incurred for the earlier year and the said expenses are adjusted against the income of a subsequent year, the income of that year can be said to have been applied for charitable and religious purposes in the year in which the expenses incurred for charitable and religious purpose had been adjusted. - Decision in CIT vs. Shri Plot Swetamber Murti Pujak Jain Mandal (1993 (11) TMI 17 - GUJARAT High Court) followed.
Order of CIT(A) confirmed - AO directed to verify the records and if the claim of the deficit of Rs.46,42,125/- is found to be correct, the surplus should be arrived at after setting of the same from the surplus of Rs.55,73,560/- during the current year. The total income shall be computed by the A.O. accordingly. - Decided against the revenue.
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2013 (12) TMI 780
Determination of arm's length price (ALP) - rate of commission charged by the assessee from its AEs - Held that:- As the law provides for considering the price charged or paid in a comparable uncontrolled transaction, there can be no scope for considering a quotation price in isolation which is not preceded with or succeeded by any actual transaction. - the bare quotation price cannot be accepted under the CUP method for the purposes of benchmarking. - Decided against the assessee.
It is the assessee who has to substantiate that the price charged is at ALP and not vice versa. The assessee has to face the music if it fails to prove so. Such a burden can be discharged by positively demonstrating and proving with the help of some comparable cases that the price charged or paid in an international transaction is at ALP. If the assessee does not bring on record any comparable case to indicate that the price charged in another comparable uncontrolled transaction should be differed, then the price so charged or paid in the given comparable uncontrolled transaction has to be accepted as ALP.
Assessee charged commission from SIMCO as well as some third party at $ 0.50 per DMT. Such rate, unless shown with the help of some other comparable case to be not applicable in respect of the other two international transactions because of different volume, cannot be ignored. - Decided against the assessee.
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2013 (12) TMI 779
Depreciation on dealership network - Held that:- Following assessee’s own case for A.Y. 2007-08 - The claim of the assessee for depreciation on dealership network is allowed by the Tribunal - The consideration paid by the assessee for the purpose of enhancing its network in the field of money transaction business by acquiring rights or infrastructure or other advantages attached to the marketing network - The same was in the nature of intangible asset as contemplated u/s 32(1)(ii) of the Act - The assessee was entitled to depreciation thereon @25% - Decided against Revenue.
Depreciation on computer peripherals - Held that:- Following CIT vs. BSES Yamuna Power Ltd. [2010 (8) TMI 58 - DELHI HIGH COURT] - Computer accessories and peripherals such as printers, scanners, server etc. very much form an integral part of the computer system and consequently they are eligible for depreciation at higher rate of 60% - Decided against Revenue.
Expenses on exempt income - Interest and other expense - Held that:- Following assessee’s own case for A.Y. 2006-07 - Own funds were available with the assessee company in the form of share capital and reserves at the relevant time which was sufficient to made the investment in the equity shares.
Other expenses - Held that:- As per Rule 8D - The disallowance in respect of other expenses is sustained - Partly allowed in favour of assessee.
Rectification of mistake - Held that:- Following CIT vs. Sakseria Cotton Mills Ltd. [1979 (2) TMI 17 - BOMBAY High Court] - The issue relating to allowability of deduction on account of provision for diminution in the value of investment while computing the book profit u/s 115JB of the Act was not the subject matter of appeal before the Tribunal - No direction were given by the Tribunal on this issue while restoring the matter to the file of the A.O. - There was no mistake in the order of the A.O. passed u/s 143(3) r.w.s. 254 of the Act on 30-12-2008 in allowing the deduction on account of provision for diminution in the value of investment calling for any rectification u/s 154 of the Act - Such mistake, was in the order originally passed by the A.O. u/s 143(3) - The rectification made by the A.O. on this issue to the order passed u/s 143(3) r.w.s. 254 of the Act by an order dated 19-8-2010 passed u/s 154 of the Act thus was not permissible - Decided in favour of assessee.
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2013 (12) TMI 778
Hiring Charges - Tax not deducted at source - Held that:- The risk and responsibility of fulfilling of various terms and conditions of the contract remained with the Assessee, where the Assessee had taken on hire the vehicles - It cannot be attributed as contract of service and thereby a sub-contract and therefore the provisions of section 194C(2) are not applicable - The Revenue could not controvert the findings of CIT(A) by bringing any contrary material on record - Decided against Revenue.
Interest expense - Held that:- The amount paid as interest to banks and finance companies was not submitted by the Assessee before A.O. nor the details are available before the Tribunal - CIT(A) has granted relief to the Assessee by following the decision of Special Bench in the case of Merlyn Shipping [2012 (4) TMI 290 - ITAT VISAKHAPATNAM] - The Hon. Gujarat High Court in the case of Sikandar Khan N. Tunvur [2013 (5) TMI 457 - GUJARAT HIGH COURT] held that the decision of Special Bench in the case of Merilyn shipping (supra) does not lay down correct law - The issue was set aside for fresh adjudication.
Disallowance of expenses - Held that:- In the Remand Report, the Assessee had produced the bills and vouchers and A.O. had failed to identify any single discrepancy - Assessee has shown increased gross profit and net profit as compared to the immediate preceding year - The A.O. has also not pointed out any deficiency in the books of accounts - The Revenue could not controvert the findings of CIT(A) by bringing any contrary material on record - Decided against Revenue.
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2013 (12) TMI 777
Denying exemption u/s. 11 and 10(23C) - Rescinding of the approval granted u/s. 10(23C)(vi) - unaccounted income as also unaccounted investment in land and cash - incriminating documents found during search and seizure - Held that:- The objects of the trust have been violated in a wholesome manner and the basis on which registration is granted no longer survives or holds good, would call immediate interference by the registration granting authority. In these circumstances, the registration authority cancels the registration. The argument placed before us by learned AR is superficial which cannot be considered. - Decided against the assessee.
Estimation of unaccounted receipt collected from students towards management quota fees - Held that:- the receipts as per seized documents accepted to have been collected by Sri R. Kondal Rao during the course of search action as well as before us and offered for taxation by Sri R. Kondal Rao, the same cannot be considered in the hands of the assessee once again in the event he complied with the payment of tax. - AO to pass fresh orders - Decided in partly in favor of assessee.
Addition towards capital fund - funds contributed by members of the trust for specific purpose - Held that:- voluntary contributions in the nature of tied up grant received by the assessee cannot be brought to tax even the trust is not registered u/s. 12AA of the Act. The tied up donations received by the assessee should not be taxable as income of the assessee, if it is used for specific purpose for which it has been given and it cannot be considered as revenue receipts so as to tax the same. - On the other hand, the donations used for the benefit of the trustees it should be brought to tax as income of the assessee. The AO is directed to segregate these donations which are diverted for personal benefit of the Members of the trust and tax the same accordingly. - Decided partly in favor of assessee.
Addition on account of amount collected over and above the prescribed fees and that amounts were not brought in the books of account - Held that:- it is seen that while the seized documents indeed showed receipt of such unaccounted income by the assessee society, M/s. J.B.· Educational Society's books do not show anything payable on this account to the assessee. Therefore, it cannot be said that the amount received by JB Educational Society was not over and above the total amount recorded in the. seized documents pertaining to the assessee society. Accordingly, he was of the view that the claim of double addition is not tenable in the facts and circumstances of the case. - Decided against the assessee.
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2013 (12) TMI 776
Validity of assessment u/s 143(3) - Held that:- The assessee received the refund along with interest of the amount paid by him under the agreement - Following DDA v. ITO [1995 (1) TMI 126 - ITAT DELHI] - Compensation paid by the Developer to the allottees under a self-financing scheme, for delay in the construction was considered by the Revenue as income in the nature of interest u/s. 2(28A).
The assessee's right is limited to recover the amount paid (for the purchase of flats) at the contracted rate of interest, on being so demanded by the buyer on the construction having not been completed by the specified date - The proposition that the interest received is chargeable to tax as income will also apply where the interest is payable under the terms of the agreement, express or implied, and the court or arbitrator gives effect to the terms of the agreement and awards interest which has been agreed to be paid - The part of amount is chargeable u/s 56 as interest income - Partly allowed in favour of assessee.
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2013 (12) TMI 775
Head of income under which to be taxed - Held that:- The assessee had not offered the income, on sale of conversion of assets in to stock-in- trade, as per the provisions of section 45(2) of the Act - AO also did not consider the said provisions while finalising the assessment - The issue was restored for fresh adjudication.
Denial of deduction u/s 80HHC - Held that:- The assessee has exported the moulds - The assessee cannot be denied the benefit of section 80HHC of the Act on export proceeds of moulds - The issue was restored for fresh adjudication.
Depreciation on mould purchased - Held that:- Moulds were ready for use and depreciation is allowable even if assets were not using during the year under consideration - This aspect has not been looked into by the AO/FAA - If moulds were available to be used, AO should allow the depreciation as per the provisions of the Act - The issue was restored for fresh adjudication.
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2013 (12) TMI 774
Determination of profits in the business of wine - Held that:- Income of the assessees in the line of liquor business has to be estimated at 5% cost of sales made by them - Decided against Revenue.
Unexplained credit - Held that:- Following Kale Khan Mohammed Hanif Vs. CIT [1963 (2) TMI 33 - SUPREME Court] - The onus of proving the source of a sum of money found to have been received by the assessee is on assessee himself - If he disputes liability for tax, it is for him to show either that the receipt was not income or that if it was, it was exempt from taxation under the provisions of the IT Act - The amounts of the cash credits could be assessed to tax as income from undisclosed sources in addition to the business income computed by estimate - The taxing authorities were not precluded from treating the amounts of the credit entries as income from undisclosed sources simply because the entries appeared in the books of a business whose income they had previously computed on a percentage basis - The issue was restored for fresh adjudication.
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2013 (12) TMI 773
Levy of penalty u/s 271(1)(c) - Income from property - Held that:- Change of head or confirmation of an addition in quantum proceedings does not result in automatic levy of concealment of income. In the case before us, all the facts location of the properties, income received from the properties during the AY under consideration -were available on file - For levy of penalty u/s 271(1)(c) the two conditions must exist - In this case both the conditions were not fulfilled - Penalty u/s. 271(1)(c) was not leviable as it is a case of change of head of income only and assessee as well as AO were treating a particular head of income as correct head of income in earlier years - Decided in favour of assessee.
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2013 (12) TMI 772
Suppression of commission income - Held that:- The assessee had declared gross commission income for RTO liaison work - No details related to such commission incomewere furnished before the Assessing Officer - The Assessing Officer was justified in estimating the income but such estimation appears to be on the higher side - The assessee had filed the return for the first time in response to notice u/s.153A(a) declaring income of Rs.66,520/- which includes Rs.20,850/- commission for RTO liaison work - The estimation has been restricted to Rs. 24000/- - Partly allowed in favour of assessee.
Opening cash balance - Held that:- The opening balance of Rs.5,51,321/- also consisted of cash of Rs.1,25,726 - The appellant has not given any evidence to the effect that this cash actually has been brought forward from the earlier year - This cash has surfaced in the period relevant for A.Y. 2002- 03 for the first time - Cash represents unexplained income of the appellant for A.Y. 2002-03 - The addition of Rs.1,80,750/- on account of opening balance is restricted to Rs.1,25,726 - Partly allowed in favour of assessee.
Unexplained investment - Held that:- The assessee has deposit of Rs. 10,000 in Mahesh Sahakari Bank - In view of the addition of commission income and cash available the addition should not be made - Decided in favour of assessee.
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2013 (12) TMI 771
Unexplained investment - Held that - The purchase and sale of shares were done through Off Market Transactions, meaning thereby that the shares were not routed through Demat account nor through BOLT - After year 2000, when the SEBI has made it mandatory to transact through Demat Account, thereby completely banning the physical transactions of the shares through BOLT , the assessee is still transacting in physical shares Offline - The genuineness of the transaction needs further verification at the assessment stage - The issue was restored for fresh adjudication.
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2013 (12) TMI 770
Disallowance u/s 14A - Held that:- The application of Rule 8D is w.e.f. assessment year 2008-09 - The disallowance in this case is to be computed on some reasonable basis - The issue was restored for fresh adjudication.
Depreciation on goodwill - Held that:- Following CIT Vs. Smifs Securities Ltd. 2012 (8) TMI 713 - SUPREME COURT - Goodwill has been held to be an asset eligible for depreciation - Decided in favour of assessee.
Repair and maintenance expenses - Held that:- The details of expenses incurred, filed by the assessee were not considered by the AO - The issue was restored for fresh adjudication.
Website Development Expenses - Held that:- The AO is not entitled to grant deduction on the basis of a letter requesting an amendment to the return filed - The assessee should have filed valid revised return for claiming the expenses - Following Pruthvi Brokers & Shareholders (P) Ltd. [2012 (7) TMI 158 - BOMBAY HIGH COURT] - The issue was restored for fresh adjudication.
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2013 (12) TMI 769
Tax not deducted at source on prefessional fees paid - Held that:- The assessee himself is a painter and selling his own paintings and art works - The assessee can be considered to be in a "vocation" - This aspect has neither been considered by the AO nor by the CIT(A) - Whether the provisions of Section 194J apply in the case of the assessee would depend upon the finding of the fact whether the assessee is in profession or in business - The issue was restored for fresh adjudication.
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2013 (12) TMI 768
As per section 143(1) - denial of exemption u/s 54F while processing rectification application u/s 154 for claim of TDS - adjustments for any arithmetical error in the return or incorrect claim u/s 141(1) - Held that: - It is clear that what is possible to adjust is only any arithmetical mistake or any incorrect claim patent on the face of the return - In the present case, there was no question of any arithmetical error - Assessing Officer held that the capital gain was not exempt from levy of tax - The debatable issues like exmption u/s 54F are not to be considered - The Assessing Officer has overstepped his authority to deny the exemption claim of the assessee made under Section 54F in the present case, beyond the jurisdiction of Section 143(1)(a)
We cannot just ignore the anxiety of the Assessing Officer in the matter of exemption under Section 54F. But, the only thing is that such an enquiry is not possible on the petition filed by the assessee under Section 154. - Decided in favour of assessee.
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2013 (12) TMI 767
Penalty u/s 271B - assessee has failed to audit its books of account as required u/s.44AB - Held that:- The assessee was exempt from tax upto A.Y. 2002-03 and the law was amended w.e.f. 01-04-2003 - As per the amended provision the definition of local authority was restricted by the Finance Act, 2002 w.e.f. 01-04-2003 and APMC was excluded from the local authority - There was bona fide belief on the part of assessee for not getting its accounts audited u/s.44AB and obtain such audit report before the specified date although the assessee maintains books of accounts and such books of accounts are duly audited by the auditors appointed by the cooperative department - Following Hindustan Steel Ltd. Vs. State of Orissa [1969 (8) TMI 31 - SUPREME Court] - There is a rule that ignorance of law is no excuse but there is no presumption that every one knows the law - Decided in favour of assessee.
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2013 (12) TMI 745
Service of notice u/s 143(2) for the purpose of reassessment u/s 147 - The stand taken by the revenue is that the notice issued under Section 142(1) dated 14th August, 2008 should be treated as omnibus or a general notice. It is accordingly submitted that this notice under Section 142(1) dated 14th August, 2008, should be regarded as a notice issued under Section 143(2) of the Act. – Bar of limitation - Held that:- The notice under Section 142 (1) dated 14th August, 2008 was issued and served beyond the period of one year from the date of filing of return i.e. 15th June, 2007 - It was barred by limitation.
The contention of the appellant that notice under Section 142 (1) can be regarded as a notice issued under Section 143(2) of the Act cannot be accepted - Following Commissioner of Income Tax versus Lunar Diamonds Ltd. [2005 (3) TMI 33 - DELHI High Court] - service of notice under Section 143(2) of the Act is mandatory - for proceedings under Section 147 of the Act, notice under Section 143(2) is required and is mandated except in cases covered by the first and second proviso to Section 148 of the Act – the facts of the case are not covered by the exceptions carved out in the two provisos as the return filed on or after 1st October, 2005 - Section 292BB does not help the Revenue, as the respondent-assessee had objected to the reassessment proceedings on the ground of non-issue and service of notice under Section 143(2) before the Assessing Officer – Decided against the revenue.
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2013 (12) TMI 744
Treatment of rental income - Property leased out as 'income from business' instead of treating the same as 'income from house property' – Held that:- The assessee constructed a warehouse/godown for specific purpose and let out to the M/s. Hindustan Lever Ltd., and the income derived is to be treated as income from business only - Following ITO vs. Rasiklal & Co. (P) Ltd. [2008 (8) TMI 802 - ITAT MUMBAI] – Assessee not merely letting out its premises for warehousing but being also under obligation to provide adequate security to the material stored apart from receiving and delivering stock, taking physical inventory at regular intervals, to do loading and unloading and stock taking in addition to ensuring proper spray of pesticides in the godown, it was doing a complex commercial activity, hence receipts were taxable as business income and not income from house property, more so when receipts were assessed as business income in the past and there was no change in factual or legal position – Decided against Revenue.
Income from Business OR from other Sources - Income received on let out of furniture and fixtures and generator assessed as 'Income from other sources', to be assessed as business income – Held that:- The assessee is carrying on the business of letting out warehouse/godown for commercial purposes - The furniture & fixtures and generator are attached to that business of the assessee - This leasing of assets cannot be isolated from the assessee's business so as to treat the income derived from furniture & fixtures and generator as income from other source - the CIT(A) is justified in treated the income from letting out of furniture & fixtures and generator as income from business and allowing depreciation claim of the assessee – Decided against Revenue.
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2013 (12) TMI 729
Unaccounted investment in property - Held that:- Following Sargam Cinema vs. CIT [2009 (10) TMI 569 - Supreme Court of India] - Where the books of accounts have not been rejected by the AO, reference to DVO is not justified - The Tribunal has observed in its impugned order that the AO has not pointed out any material defect/ discrepancy in the books of account maintained by the assessee - The books of account were not rejected before referring the matter to the DVO - Decided against Revenue.
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9911796707
