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Income Tax - Case Laws
Showing 481 to 500 of 6519 Records
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2013 (12) TMI 554
Additions u/s 68 - discharging the onus in establishing the identity of the shareholders, their creditworthiness and genuineness of the transactions - Held that:- It is important, to segregate cases of bonafide or genuine investments by third persons in a private limited company, from cases where receipt of share application money is only a facade for conversion of unaccounted for money or money laundering. The said question cannot be decided without taking notice of the surrounding facts and circumstances, by merely relying upon paper work which at best in some cases would be a neutral factor. The paper work though important may not be always conclusive or determinative of the final outcome or finding whether the transaction was genuine.
When and under what circumstances onus is discharged, as held in N.R. Portfolio (supra), cannot be put in a strait jacket universal formula. It will depend upon several relevant factors. Cumulative effect has to be ascertained and understood before forming any objective opinion whether or not onus has been discharged by the assessee. Of course suspicion or doubts may not be sufficient and care and caution has to be taken that the assessee has limitations but this cannot be a ground to ignore contrary incriminating evidence or material which when confronted, meets silence or no answer.
Assessing Officer had conducted enquiries and made a reference to the surrounding facts i.e. deposits/credit of the amounts in the bank account of the share applicants; substantial amount of Rs.41,88,000/- paid as premium and referred to the fact that only one Shri R.C. Verma, CA and Power of Attorney holder of M/s Ritika Finance & Investment Pvt. Ltd. had appeared alongwith Shri Dinesh Kumar, the AR of the assessee company during the assessment proceedings and filed the bank statement and copy of the balance sheet but, failed to file schedule of investments made by the said company. Others had failed to appear.
While deciding the question of law against the assessee, matter remanded back to ITAT for fresh decision.
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2013 (12) TMI 553
Penalty u/s 271(1)(c) - Held that:- The assessee was engaged in the business of food processing and packaging, for exports - Food items were perishable in nature and had expiry date beyond which they could not be sold and, therefore, the non-saleable/expired stock needed to be discarded - Products manufactured by the respondent-assessee were mainly exported to the USA - Compliance of FDA regulations, one of the most stringent requirements, was required - Details of items, which were written off, were set out, explained and elucidated by the assessee - The items included caps and cartons which had became unusable due to change in customers specifications, change in brand name or difference in quantities etc - Details and particulars of items were made available and ascertained - The respondent assessee was eligible for deduction under Section 10B of the Act - There was no cause or reason for the assessee to deliberately write off saleable goods which could be exported in the books of accounts as non-saleable - Decided against Revenue.
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2013 (12) TMI 552
Power to reject books of accounts u/s 145 - Held that:- The assessee filed its return of income in response to notice u/s 148 - The AO as well as CIT(A) made addition on the basis of estimate - The Tribunal is a final fact finding authority - The Tribunal reduced the addition being made on estimate - The AO should first point out the defect in bokks of accounts and reject them rather making an addition on adhoc basis - Decided against Revenue.
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2013 (12) TMI 551
Taxability of interest from FDR - Held that:- The interest income must be taken on receipt basis shown by the assessee from the F.D.Rs., Sahara and L.I.C. mutual funds - The assessee is maintaining the accounts on actual receipt basis and he is not maintaining any account on mercantile basis, as appears from the record - Decided in favour of assessee.
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2013 (12) TMI 550
Freight and forwarding expenditure - Held that:- The Assessing Officer and the higher authorities fell into error in relying solely on the testimony and deposition of one Vineet Bhargava who stated that the freight expenses did not reflect actual expenditure or transactions - The pre-condition for adding back such amounts or disallowing the expenditure so that it could attract Section 68 was the exactitude with which the transaction could be pin pointed - Decided in favour of assessee.
Unexplained income - Held that:- This credit balance had been reflected in the previous years books and also subjected to assessment - No question of law arises for interpretation in this appeal - Decided in favour of assessee.
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2013 (12) TMI 549
Validity of reassessment u/s 147 - Held that:- The perusal of the reasons showed that the escapement of income from assessment had been attributed not to any existing material, but on assumption of state of things to exist for the reasons best known to the AO - The information received from the office of the ld. CIT (A)-I, Agra was wholly vague and incorrect regarding sale of flats by the assessee firm - Examination of the balance sheet made it clear that the assessee did not sell any flat in the assessment year under appeal - The reasons recorded by the AO for reopening of assessment was based on incorrect and non-existing facts - There was no evidence, document or material in possession of the AO to prove that the assessee had in fact sold any flat in the assessment year under appeal - The ld. CIT (A) is also not justified in confirming the reopening of assessment on the ground that the additions made by the AO are connected with the reasons as recorded to the construction business - Decided against Revenue.
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2013 (12) TMI 548
Whether valuation made by AVO instead of DVO is liable to be rejected - Held that:- Inspite of clear directions for an estimation of the value of the property to be made by the DVO, if the valuation is more than Rs. 50 lacs, the report was submitted by the Assistant Valuation Officer (AVO) - The CIT (A) considered the description of the property and found that the method of valuation adopted by the AVO is a development method, which is the most appropriate method in the absence of any reliable sale instances and approved lay out plan as per master plan - The protest procedure prescribed in Section 50C (2) was followed in which the objections of the assessee were considered to the valuation report. The CIT (A) and the Tribunal agreed with the elaborate findings given in the report of Valuation Officer in support of the fair market value - The valuation in such case could be carried out only by DVO, does not in any way affect the findings as the ground is of technical nature - The valuation report was considered in detail, and the method of valuation and the reasons were found to be valid after considering the assessees objection - Decided against assessee.
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2013 (12) TMI 547
Transfer pricing adjustments - arm's length price - draft assessment order - Jurisdiction under Chapter X - opportunity of being heard before referring to TPO - writ petition - alternative remedy - Solicitor General submitted that the action of AO in referring the international transaction to TPO is a mere administrative act, because as per CBDT Instruction No.3 dated 20 May 2003, AO is to exercise powers under Section 92C where the value of the transaction is upto Rs.5 crores (now revised to Rs.15 crores) and AO is required to refer the transaction to TPO where even the value of the international transaction exceeds Rs. 5 crores (now exceed Rs.15 crores). It is, therefore, submitted that in view of the above Circular, AO has no discretion in the matter and , therefore, AO hearing the assessee before making reference to TPO would be an empty formality and a futile exercise.
Held that:- it is necessary for the Assessing Officer to decide the issue of objection to applicability of chapter X , if raised by the assessee, before referring the transaction to the TPO as it is a basic issue and would prevent loss of man hours on both sides in computing the ALP if it is finally concluded that Chapter X is not applicable. - this exercise could also be done by the Assessing officer before he determines the ALP in exercise of his powers under Section 92C(3)
The petitioner shall within two weeks from today submit before the DRP its preliminary objections to Draft Assessment Order and the TPO's order by raising jurisdictional issues. - The DRP shall decide the issue of jurisdiction before considering issue of valuation / quantification raised by the petitioner in its objections filed before the DRP, this of course subject to the additional grounds on jurisdiction being filed by the Petitioner within two weeks from today. The DRP shall decide the issue of jurisdiction as a preliminary issue within two months from the date on which the petitioner files its objections on the question of jurisdiction. - Decided in favor of assessee.
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2013 (12) TMI 546
TDS u/s 194C or 194I - disallowance u/s 40(a)(ia) for short deduction of TDS - agreement for hire of vehicles and to be used for loading and unloading and transport of the products - The party of the first part (the owner of the vehicles) was to retain the custody, ownership and possession of the vehicles. The vehicles were to be driven and operated by the persons who were to be paid by the owner. - Held that:- As correctly found by the tribunal, the agreement does not require the owner of the vehicle to do any work at all. It is the assessee who makes use of the vehicles and the equipment. He pays hire charges on the basis of the number of hours of use and thus clearly the appellant is not justified in contending that Section 194C applies.
Section 194-I specifically contemplates liability with any person paying rent to deduct in come tax at the rate of ten per cent for the use of any machinery or plant or equipment. (As far as the assessment year in question is concerned, the rate of tax was increased to ten per cent). - Decided against the assessee.
No basis for confining the effect of the words "other agreement or arrangement for the use of" "either separately or together" in regard to the machinery, only if it is part of immovable property. The Legislative intent is clear, in that, it intends liability to deduct tax in respect of "any machinery or plant or equipment". The machinery need not be the machinery annexed or immovable property otherwise under the Transfer of Property Act. - Decided against the assessee.
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2013 (12) TMI 545
Undisclosed income - Gifts from NRI relatives - Held that:- The gifts received have been disclosedin the original return of income furnished u/s 139(1) - The search was made subsequent to such filing of return in which no incriminating evidence of undisclosed income was assessed - The Assessing Authority was wrong in concluding that the amounts shown as gift in the return constitute undisclosed income - Decided against Revenue.
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2013 (12) TMI 544
Valuation of property - determination of FMV as on 1.4.1981 - Held that:- The assessee has failed to file the valuation report of the qualified valuer - A duty was cast on the authorities to assess the fair market value independent of the evidence adduced by the assessee - The Assessing Officer himself could have referred the matter to a valuator to get the valuation done under Section 55A of the Act, which he has not resorted to - The property is situated in the heart of Bangalore city, in a prime commercial locality where the value of the property has multiplied automatically over the years - The authorities committed a serious error in relying on an inadmissible evidence and in not taking into consideration the undisputed facts as well as the memo of calculation filed by the assessee, which is more proper - Decided in favour of assessee.
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2013 (12) TMI 543
Addition on account of difference between the sale price declared by the assessee and the market price of the shares quoted at the recognised stock exchange - applicability of section 69B - Held that:- The primary contention of the Revenue is that the so-called oral trust, under which the shares were sold, is sham. HEICL could not have sold or transferred the shares. The fact is that the shares were sold and transferred and HEICL had acted as a "trustee". - The sales were duly recorded and there is no allegation that money or under table consideration was paid. There is no such finding by the Assessing Officer and the tribunal has categorically stated that there is no evidence or material to the said effect.
Remanding back the issue to decided afresh - Held that:- on mere suspicion, the matter cannot be remitted to the Assessing Officer to conduct fresh inquiry without there being any concrete foundation justifying and asserting a firm apprehension. Even before us during the course of hearing, the standing counsel for the Revenue did not press or make any headway. The suspicions raised remained in the realm of conjectures and surmises and do not have a firm basis.
The substantial question of law has to be treated as partly answered in favour of the Revenue and against the respondent insofar as transfer of 77929 shares by HEICL to V.C. Vaidya or ATPPL is concerned, on which we have passed an order of remit to the tribunal. However, on other aspects/transactions of HEICL, the appeal is dismissed and the question of law is answered in favour of the respondent-assessee and against the appellant-Revenue.
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2013 (12) TMI 542
Recovery of tax dues and penalties from successor - Revenue claim that they are entitled to recover said dues under I.T. Act and W.T. Act, payable by S.C. Mangal from the petitioner as the successor who has taken over the assets and liabilities of S.C. Mangal. - it was accepted by the counsel for the Revenue that no order under Section 170(3) has been passed by the Assessing Officer. - Held that:- the assessing officer will examine scope and ambit of Section 170(3) of the IT Act and decide whether penalty amount can be recovered from the successor under the said section, though the penalty order is subsequent to the date of succession.
Recovery of penalty - Section 18(1)(c) of the WT Act - held that:- Jurisprudentially, the person is actionable and responsible for himself, for what he does and not for what others do or for events or acts of others. Family per se or a spouse is not actionable or responsible for other family members and for the spouse. Doctrine of vicarious liability is not of general application and is applied in cases of statutory crimes.
It is directed that the penalty amounts under Section 18(1)(c) of the WT Act relating to assessment years 1991-92 and 1992-93 cannot be recovered from the petitioner. With regard to the income tax demand including penalty for the assessment year 1995-96, relating to S.C. Mangal, it is open to the respondents to initiate recovery proceedings after deciding the dispute by passing an order under Section 170(3) of the Act. While passing an order under Section 170(3), the assessing officer will decide whether penalty amount under Section 271(1)(c) of the IT Act can be recovered from the petitioner, even when the liability was determined subsequent to the date of succession - Decided partly in favor of assessee.
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2013 (12) TMI 541
Whether receipts of DEPB are eligible for deduction u/s 80HHC - Held that:- Following Topman Exports Vs. Commissioner of Income Tax [2012 (2) TMI 100 - SUPREME COURT OF INDIA] - Receipts on Duty Entitlement Passbook Scheme (DEPB) would form part of the profits and gains of the business, it being the assistance given by the Government of India to an exporter to pay customs duty on its imports - The "cash assistance" received under the DEPB scheme would fall under Clause (iiib) of Section 28 - This is chargeable to income-tax under the head "Profits and gains of business or profession" - The Explanation (baa) under Section 80HHC of the Act giving the formula for working out the deduction - "profits of the business" means the profits of the business as computed under the head "Profits and gains of business or profession" as reduced by ninety per cent., of any sum referred to in clause (iiia), (iiib), (iiic), (iiid) and (iiie) of Section 28 - 90% of the DEPB which is "cash assistance" against exports and is covered under clause (iiib) of Section 28 will get excluded from the "profits of the business" of the assessee, if such DEPB has accrued to the assessee during the previous year - Decided against Revenue.
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2013 (12) TMI 540
Deduction u/s 37(1) - contribution made to M.S. Udyog Bandhu and payment made to H.B.T.I. - nature of expenses - wholly and exclusively for the assessee's business - held that:- setting up of the Park would promote the business of the appellant because with more entrepreneurs setting up businesses in the State, the role of the appellant would become significant for providing them the necessary finance. The appeal is concluded by findings of fact. No substantial question arises for consideration in this appeal.The deduction was clearly permissible under Section 37(1) of the Act, 1961. - Decided in favor of assessee.
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2013 (12) TMI 539
Addition u/s 50C Held that:- The assessee has not been able to explain as to why provisions laid down u/s 50C are not applicable in his case The valuation done by the stamp value authority has been accepted by A.O. Decided against assessee.
Cost of acquisition Held that:- The assessee had furnished bifurcation of the indexed cost into various years which was not accepted by the authorities - The AO had given the logical estimation while reallocating such expenses into various years which was agreed upon by the assessee Decided against assessee.
Deduction u/s 54F - Held that:- The investment was made in a vacant plot and not in the residential house The assessee was not able to prove otherwise Decided against assessee.
Penalty u/s 271(1)(c) Held that:- There was no concealment of particulars of income or furnishing inaccurate particulars thereof on the part of the assessee on the above addition/disallowance to attract the penal provisions laid down u/s 271 (1) ( C) Decided in favour of assessee.
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2013 (12) TMI 538
Disallowance of interest expenses assessee has swapped earlier loan by new loan - purchase of Tenancy Development Rights(TDR) - The assessee has paid interest on unsecured loan from ACT Fininvest Pvt. Ltd., and Peninsula Land Ltd. on the loans borrowed in the earlier years - Held that:- During the year under consideration to repay the balance loan of ACT Fininvest Pvt. Ltd., the assessee has borrowed from Peninsula Land Ltd - If the earlier loan was accepted as taken for the purposes of business, the new loan should also be accepted as taken for the purposes of business - Akin to the transaction the CBDT vide Circular No. 28 dt. 20.8.1969 has declared that if the second borrowing has really been used merely to repay the original loan and this fact is proved to the satisfaction of the ITO, the interest paid on the second loan would also be allowed as a deduction u/s. 24(1)(vi) Decided in favour of assessee.
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2013 (12) TMI 537
Applicability of TCS provisions - Selling of Molasses and bagasses Held that:- Following CIT vs. Deep Chand and others [2002 (5) TMI 37 - DELHI High Court] - Molasses is not a waste or scrap and cannot be used as such - It does not fall within the meaning of scrap as defined in Explanation (b) to section 206C - The assessee cannot be held to be in default and is not required to deduct tax under section 206C(6) on the Molasses and no interest could be charged under section 206(7) Decided in favour of assessee.
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2013 (12) TMI 536
Deduction under section 80IB - Excise Duty Refund and interest subsidy Held that:- Following Shree Balaji Alloys v. CIT and Another [2011 (1) TMI 394 - Jammu and Kashmir High Court] - The Excise Duty refund & Interest Subsidy are to be treated as 'capital receipts' and are not liable to be taxed Decided against Revenue.
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2013 (12) TMI 535
Deduction u/s 80IB Excise Duty Refund Held that:- Following Shree Balaji Alloys v. CIT and Another [2011 (1) TMI 394 - Jammu and Kashmir High Court] - The Excise Duty refund is to be treated as 'capital receipt' and is not liable to be taxed Decided against Revenue.
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