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Income Tax - Case Laws
Showing 1 to 20 of 641 Records
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2014 (12) TMI 1423
Deduction u/s. 80IB(5) - manufacturing activity done by the assessee or not? - HELD THAT:- Assessee is engaged in the business of manufacturing of lubricating oil and antistatic conning oil as has been mentioned even in para 3 of the assessment order itself. The entire profit shown in the profit & loss account was claimed as deduction u/s. 80IB(5). Without going into much deliberation and the decision in Daman Plastic [2013 (2) TMI 934 - ITAT MUMBAI] Assessee is entitled for deduction u/s 80IB of the Act.
Even otherwise, a provision in the taxing statute granting incentives for promoting growth and development should be construed liberally. Our view is fortified by the decision in Bajaj Tempo Ltd. [1992 (4) TMI 4 - SUPREME COURT], Impel forge and allied Industries Ltd. [2008 (12) TMI 370 - PUNJAB & HARYANA HIGH COURT] and CIT vs. Sadhu Forging Ltd we are of the view, that the assessee is entitled for deduction u/s. 80IB. Even otherwise, a provision in the taxing statute granting incentives for promoting growth and development should be construed liberally. Our view is fortified by the decision in Bajaj Tempo Ltd. vs. CIT [1992 (4) TMI 4 - SUPREME COURT]
AO denied the deduction merely on the ground that the assessee was doing job work for the sister concern, therefore, ultimate product was produced by sister concern - Assessee claimed that identically for A.Ys. 2005-06 and 2006-07, the claim of the assessee was accepted. The assessee has produced emulsifier by using raw material like fatty acids, glycols, vegetable oils, caustic soda, and other additives, consequently, the 'end product' is 'commercially known differently', therefore, in our view, the new article/new product emerged/manufactured, consequently, the assessee is entitled for deduction u/s. 80IB of the Act. Our view is fortified by the decision and the ratio laid down in CIT vs. Vinbros & Company [2012 (9) TMI 802 - SC ORDER], CIT vs. Zainab Trading Pvt. Ltd. [2011 (2) TMI 109 - MADRAS HIGH COURT], CIT vs. Esquire Translam Industries [2010 (7) TMI 77 - MADRAS HIGH COURT], Titanor Components Ltd. [2013 (11) TMI 69 - DELHI HIGH COURT], CIT vs. Ambuja Ginning Pressing & Oil Company Pvt. Ltd. [2010 (11) TMI 380 - GUJARAT HIGH COURT] and Midas Polymer Compounds Pvt. Ltd. [2010 (12) TMI 414 - KERALA HIGH COURT]
Since, the 'end product' was 'commercially known differently', therefore, it can be said that it was manufacturing activity done by the assessee, therefore, in view of the discussion made hereinabove, we are of the view that assessee is entitled for deduction u/s. 80IB. Appeal of the assessee is allowed.
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2014 (12) TMI 1418
Rejection of books of accounts - GP Estimation - AO estimated the G.P. at 12.34% on sales of dolomite and 10% G.P. on job work - On appeal, the CIT(A) adopted G.P. @ 10% in respect of sale of dolomite and @ 8% in respect of job work.
HELD THAT:- It is true that G.P. rate cannot be uniform in all the years and it varies from year to year depending on several factors such as local market condition, fluctuation in rates etc. It is also observed that the A.O. has not cited any comparable case while estimating G.P. in respect of sale of dolomite.
As regards the job work undertaken by the assessee, it is stated that this is the first year for the assessee to undertake this work and the AO failed to cite any comparable case while applying 10% G.P. on job work. It is seen that the ld. CIT(A) has sustained the addition of Rs. 3,82,023/- which appears to be on higher side particularly considering the facts and circumstances of the present case.
Nature of the business carried out by the assessee, we think it proper to restrict the addition on both counts.
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2014 (12) TMI 1414
TP Adjustment - comparable selection - whether ITAT is correct in law in rejecting the comparable companies adopted by the TPO which was selected by the Tax Payer itself and remitting the case to the Assessing Officer for fresh consideration in terms of its directions to determine the subject issue? - HELD THAT:- Tribunal, in relation to the aforesaid question, has rendered a fact finding which instances are acceptable or non-acceptable. We do not think that we should substitute our appreciation of fact in the absence of any allegation of perversity. We have seen the judgment and order and the findings of the learned Tribunal and it does not appear to us that the same are not based upon without any material. We do not find any element law to decide in this appeal.
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2014 (12) TMI 1411
Penalty u/s 271(1)(c) - additions in the Net Profit Ratio @5% on estimate basis as the assessee could not produce the relevant details asked for, during the course of assessment proceedings due to the fact that they were misplaced by the Accountant - meaning of word ‘concealment’ and ‘inaccurate’ - HELD THAT:- CIT(A) has rightly applied the decision of Reliance Petro Products Ltd [2010 (3) TMI 80 - SUPREME COURT] which is squarely applicable in the present case of the assessee as held that penalty based merely on the finding given in assessment order is not valid.
CIT(A) has rightly applied the decision of the Hon’ble Delhi High Court decision in the case of CIT vs. JK Synthetic Ltd. [1996 (2) TMI 123 - DELHI HIGH COURT] wherein it was held when the concealment proceedings u/s. 271(1)(c) in a case is purely based on assessment order penalty cannot be levied.
Levy of penalty in this case is not justified particularly when the assessment was framed on the income determined on estimate basis and without bringing any material on record to substantiate that the assessee willfully and intentionally concealed the income or furnished the inaccurate particulars of the income, hence, we do not see any reason to interfere with the order of the Ld. CIT(A), accordingly, we uphold the same and decide the issue against the Revenue.
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2014 (12) TMI 1407
Set off of Brought forward losses - applicability of section 79 - Tribunal allowing the set off of brought forward losses and by holding that the Assessee Company was deemed to be a company in which public is substantially interested - HELD THAT:- In the present case, item (B) was invoked because in the Assessee company the voting power has been unconditionally acquired and to the extent indicated in item (B) by a company to which the clause applies or any subsidiary of such company if the whole of the share capital of such subsidiary company has been held by the parent company or by its nominees throughout the previous year. After perusal of the share holding pattern, the Tribunal concluded that the shares of Tata Industries Limited have been transferred to Tata Power Co. Ltd. It may be that, now, the voting power under section 2(18)(b) is acquired by the Tata Power Co. Ltd. but once that company falls within the definition of the term “a company in which public are substantially interested”, then, the Tribunal's conclusion cannot be faulted.
There is material on record to indicate that as to how Tata Industries Limited and Tata Power Co. Ltd. have been treated by the Department/Revenue as companies in which public are substantially interested.
Section 79 provides for carry forward and set off losses in case of certain companies. That refers to a change in the share holding pattern taking place in a previous year in the case of a company, not being a company in which the public are substantially interested. Therefore, the prohibition which is carved out by this section becomes applicable. Obviously, therefore, if it is a company in which public are substantially interested, applicability of section 79 is ruled out. In the present case, we are not concerned with the section 43A of the Indian Companies Act. So long as the record indicated, the share holding pattern and the details which are set out at para 20 of the Tribunal's order which was undisputed, then, the Tribunal was justified in directing the Assessing Officer to allow the claim of brought forward losses. We do not see any substantial question of law arising for determination and consideration in this Appeal. Once the factual position and emerging from the record is noticed, then, the Assessee satisfies the condition stipulated and specified in section 2(18). The first question, therefore, cannot be termed as a substantial question of law.
Computation of book profit u/s 115JB - inclusion of claim of depletion in producing properties as claimed - HELD THAT:- Assessee had to prepare a Profit and Loss Account for the relevant previous year in accordance with PartII and PartIII of Schedule VI to the Indian Companies Act, 1956. Since, the Tribunal found that the guidance can be taken from the Notes of accounting standards issued by the ICAI on depreciation accounting and we have held that such a course was permissible, then, the Tribunal was justified in referring to para 4 of this guidance Note and thereafter relying upon it. Once the guidance Note indicates that depreciation also includes the depletion of natural resources through the process of extraction or use, then, the Tribunal was justified in eventually directing that the Assessing Officer must recompute the book profit under section 115JB after allowing the claim of depletion in producing properties as claimed by the Assessee. We have referred to the relevant provisions in the Indian Companies Act, 1956. Section 211(3C) of that Act specifically refers to the standards of accounting and which have been laid down by the ICAI. In these circumstances, the view taken by the Tribunal on this count cannot be termed as perverse. We do not see how a substantial question of law would arise for our determination and consideration. In such circumstances, the question No.4 is also not a substantial question of law.
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2014 (12) TMI 1404
Disallowance u/s 14A - HELD THAT:- Refereeing to various decisions, relied upon by the assessee, wherein a consistent view has been taken that where no exempt income is earned, there could not be any disallowance u/s 14A, we find no merit in the ground taken by the Revenue. Accordingly, ground no. 1 is dismissed.
Disallowance of interest claimed u/s 36(1)(iii) - CIT(A) has restored the matter to the file of AO - HELD THAT:- Nothing has been brought on record to controvert the findings of ld. CIT(A). We find that findings of ld. CIT(A) do not suffer from any infirmity and, therefore, we confirm his action.
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2014 (12) TMI 1402
Claim for conversion / manufacturing loss - appellant's claim for conversion / manufacturing loss to the extent of 5 per cent only - HELD THAT:- We find that it is not in dispute that the trading result disclosed by the assessee is fully supported by the books of accounts and stock register. No defect in the regularly maintained books of accounts of the assessee could be pointed out by the Revenue.
The quantum of weight loss in manufacturing by itself even when the same is more than others does not empower the Revenue to make addition unless some defect in the books of accounts of the assessee is found. The excess loss suffered by the assessee may provide a ground to the Revenue to investigate the fact properly but that by itself does not empower to disallow genuine loss when no defect in the books of accounts is found. Thus, in our considered opinion, the addition confirmed by the CIT(A) is not sustainable on the facts of the instant case. We, therefore, delete the addition and allow this ground of appeal of the assessee.
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2014 (12) TMI 1399
Exemption u/s 11 - registration u/s.12A rejected - application rejected by the CIT that object of the assessee-trust is to benefit of a particular family - HELD THAT:- As per clause(3) of the Objects, the assessee-trust has to undertake and help the activities in the field of compassion for all the forms of life (Jiv daya). To establish, run and maintain Cattele-Camps, Dhor-Wada, Panjra Pol, etc. To provide food and other necessary help to the miserable and mute animals. To undertake activities in the field of welfare of people and welfare of animals and provide help to them at the time of Natural or Manmade calamities. As per clause (7) of the Objects, the assessee-trust has to undertake activities for the protection of environment, afforestation and conservation of forest. To save the environment from getting polluted. To undertake activities to stop soil erosion and to stop destruction of forest. To undertake all the activities like plantation etc. to save the environment and to be helpful in all such activities.
From the Objects, it is clear that the assessee-trust, apart from benefitting a particular family, also have Objects which would benefit the public at large without being limited to a particular family or a community.
In the case of CIT vs. Dawoodi Bohara Jamat [2014 (3) TMI 652 - SUPREME COURT] held that where objects of assessee-trust exhibit dual tenor of religious and charitable purposes and activities, are not exclusively meant for a particular religious community, provisions of Section 13(1)(b) are not applicable and assessee-trust is entitled to claim exemption u/s.11 of the Act.
Thus CIT was not justified in rejecting the application of the assessee - Decided in favour of assessee.
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2014 (12) TMI 1398
Computation of deduction u/s 10A - setting off carried forward unabsorbed loss and depreciation from earlier assessment years or current assessment year - HELD THAT:- As provisions of section 10A are in the nature of deductions and not exemptions and the deduction under section 10A has to be given at the stage when the profit or gains or business are computed in the first instance. As per the judgement of the Coordinate Bench in the case of Value Process Technologies (I) P. Ltd. [2013 (1) TMI 802 - ITAT MUMBAI] which is relevant for the proposition, exemption under section 10A has to be allowed with setting off carried forward unabsorbed loss and depreciation from earlier assessment years or current assessment year either in the case of Non-STPI Unit or in the case of very same undertaking. Considering the above said proposition of law, we are of the opinion that the assessee should succeed on the ground raised before us. Assessee’s grounds are allowed.
Allowability of employees contribution to PF - payments made before filing of return of income - HELD THAT:- Issue stands covered in favour of the assessee in view of the judgment of the Hon'ble Supreme Court in the case of Alom Extrusions Ltd. [2009 (11) TMI 27 - SUPREME COURT], which is relevant for the proposition that after omission of the second proviso to section 43B the payments made before filing of return of income is an allowable deduction. Accordingly, considering the fact that the payment is made within the grace period the conclusion drawn by the CIT(A) in this regard is fair and reasonable and it does not call for any interference. Therefore, ground No. 1 is rejected.
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2014 (12) TMI 1397
Disallowance of material expenses - expenses on account of steel, cement, glass, aluminum etc. were supported by the purchase bills, that the expenses claimed in respect of bricks, sand, earth etc. were not fully supported by proper bills, that many of the expenses regarding those items were claimed on the basis of self made cash vouchers and were not supported by Pucca bills of purchase, that same were not fully verifiable - HELD THAT:- AO had called for the details of various expenses incurred by the assessee, that it had furnished all the necessary details during the assessment proceedings, that the AO made a disallowance on estimate basis, that the audited accounts of the assessee were available to the AO and in the audit report there was nothing that could lead to the conclusion that the assessee had not incurred expenditure claimed in the books of account, that similar kind of expenses were disallowed in the earlier years by the AO were deleted by the Tribunal. We are of the opinion that the AO cannot make any addition/disallowance without giving proper reasons.
As a representative of the State, he is duty bound to pass a reasoned order. A reasoned order needs basic facts their analysis and conclusion. In the case under consideration, estimated disallowance has been made without assigning proper reasons. The AO has not rejected the books of account and has not pointed out any defects in the books. In these circumstances, in our opinion, he was not justified in making the disallowance. Therefore, confirming the order of the FAA, we decide the first ground of appeal against the AO.
Disallowance of labour and contingency expenses - HELD THAT:- We find that the assessee-firm had furnished books of account and audited statement of accounts and the AO was not able to pin-point the defects in such documents, that the quantity of material used in labour charges incurred were certified from time to time by the competent authorities and the AO was not able to negate the claim made by the assessee. It is also found that the AO had not disputed about the labour and contingency payment though he had made an ad hoc disallowance. We are of the opinion that the tax liability cannot be fastened to the assessee by the AO without bringing some positive evidence against the assessee on record, that the disallowance or addition has to be backed by some documentary/oral evidence which could prove that the claim made by it of an expenditure was not genuine. In the case under consideration, the AO has made a lump sum disallowance, but same is not backed by any evidence. We are of the opinion that the order of the FAA does not suffer from any legal or factual infirmity. - Decided against revenue.
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2014 (12) TMI 1396
Validity of block assessment u/s 158BD - Whether notice issued u/s 158BD does not satisfy the requirements of law on the ground that Assessing Officer has recorded satisfaction after completion of the block assessment under Section 158BC in the case of the person search? - tribunal has held that the satisfaction note has been recorded after the expiry of time limit under Section 158 BE in the case of the search person and therefore the notice issued under Section 158 BD is not validly issued - HELD THAT:- In the instant case, the assessment year in the case of search as was made on 28.03.2003. The notice under Section 158BD is issued on 09.07.2003. The satisfaction note is prior to the date of issue of notice. But certainly, not either on the day the assessment order was passed in the case of searched person or before 31.03.2003. As held by the Apex Court in the aforesaid judgment the satisfaction note has to be prepared immediately after the assessment proceedings are completed under Section 158BC of the Act of the searched person. Therefore on the ground that such a note was not prepared either at the time when the order was issued under Section 158BD or before 31.03.2003, the proceedings initiated under Section 158BD cannot be held valid.
What remains is the question of word “immediately” used in the aforesaid provision. However in the instant case we do not propose to go into the said question because the order passed by the tribunal has to be sustained on the ground that satisfaction has not been recorded in the case of the searched person.
Admittedly, in this case the satisfaction note is prepared in the case of the assessee itself. It ought to have been prepared in the case of the person searched. Therefore the entire initiation of proceedings under Section 158BD is vitiated. In that view of the matter the order passed by the tribunal confirming the order of the appellate authority cannot be found fault with.
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2014 (12) TMI 1392
Unexplained investment in jewellery - unexplained cash - interest on deposits in FCNR accounts - addition on account of household expense - a profit of 25% was estimated besides an addition of unexplained cash credit was also made based on certain entries/notings found to be recorded in loose papers - HELD THAT:- As requested to restore the matter to CIT(A) to be decided the matter in light of decision in case of Chandrakant J Patel vs. V N Srivastava [2011 (3) TMI 1322 - GUJARAT HIGH COURT] Nothing contrary has been brought to our knowledge on behalf of Revenue. Facts being similar, so following same reasoning we restore the matter to CIT(A) with direction to decide the matter in light of observation in Chandrakant J Patel - Appeal filed by assessee is allowed for statistical purpose.
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2014 (12) TMI 1391
Nature of income - agricultural income or income from other sources - AO had held that the agricultural land owned by the assessee was about 8 acres only and as such the assessee could not have earned huge agricultural income from the sale of vegetables and other agricultural produce - Tribunal directing the AO to accept the agricultural income declared and not to consider any part of the same as income from other sources - HELD THAT:- The Tribunal has observed that out of about 15000 saplings of Eucalyptus trees/Nilgiri trees which were planted in 1982-83, it is quite reasonable to assume that atleast 5000 saplings of Eucalyptus trees/Nilgiri trees will grow into full trees in the year 1990-91 relating to AY 1991-92 which could be cut and sold because as per the certificate issued by the Range Forest Officer no permission is required for cutting and sale of Eucalyptus trees/Nilgiri trees.
Tribunal as well as CIT(A) are justified in coming to the conclusion that there is no merit in the appeals filed by the Revenue. The assessee HUG owns fertile agricultural land having irrigation facilities from which agricultural income has been shown and accepted by the revenue in earlier years also and the fact of assessee having been alloted agricultural land and 15000 Eucalyptus trees/Nilgiri trees in the year 1982-83 has been certified by Range Forest Officer. We are in complete agreement with the reasonings adopted and findings of fact arrived at by the lower authorities. Decided in favour of the assessee
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2014 (12) TMI 1386
Assessment u/s 153A - Unexplained gift u/s 69A - HELD THAT:- Where AO had not referred to any incriminating material found during the course of search based on which addition was made, then the AO had no jurisdiction to make addition in the assessment framed under s. 153A of the Act.
In the case of Jai Steel (India) v. CIT [2013 (6) TMI 161 - RAJASTHAN HIGH COURT] held that the requirement of assessment or reassessment under s. 153A has to be read in the context of s. 132 or 132A of the Act, inasmuch as, in case nothing incriminating is found on account of such search or requisition, then the question of reassessment of the concluded assessments does not arise, which would require more reiteration and it is only in the context of the abated assessment under second proviso which is to be reassessed.
In number of cases, the Tribunal Benches have consistently taken the view that when no assessment is abated, question of making any addition or making disallowance which are not based on material found during search is bad in law - we hold that the addition made by the AO and confirmed by the learned CIT(A) is bad in law. We, therefore, allow original ground as well as additional ground of the appeal.
Addition u/s 68 on gift received treated as unexplained - HELD THAT:- Both the authorities below have categorically held that the assessee failed to prove the genuineness of transaction and creditworthiness of the donor. No confirmation of gift was filed along with the return of income of the assessee. It is claimed that the alleged gift was made in cash but the donor was not produced before the AO for examination. At this stage also, the assessee could not prove the genuineness of the transaction and creditworthiness of the donor. No additional evidence, whatsoever, was filed before us. in the absence of any supporting evidence, we are of the view that the addition is fully justified.
Disallowance on account of forfeiture of EMD made beyond the scope of s. 153A - HELD THAT:- Assessee did not bring any material on record to prove that the EMD amount as been forfeited by BPCL. In the absence of any documentary, evidence regarding forfeiture of EMD, the claim of the assessee cannot be accepted. At this stage also, the assessee has not brought any evidence to demonstrate that the claim made by it was justifiable. It is settled law that where an assessee claims deduction, the onus lies on him to bring all material facts on record to substantiate his claim. In view of the above, we do not find any merit in the appeal filed by the assessee.
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2014 (12) TMI 1384
Disallowance u/s 14A - As per DR assessee to prove that a particular item of expenditure was incurred for earning taxable income and hence should not be disallowed u/s 14A - HELD THAT:- The assessee claims that the expenditure on interest, is incurred for the purpose of earning interest income but no evidence is lead by the assessee to prove this claim. Similarly on the issue of other expenses no evidence is lead to demonstrate that a particular expense cannot be said to have been incurred in relation to earning the income, which is not part of total income. Under these circumstances we are unable to accept the plea of the assessee.
Assessee argued that the AO has not recorded satisfaction that the computation of disallowance u/s 14A by the assessee is wrong. We find that the satisfaction is discernible from para 2 of the assessment order, where the AO has not agreed with the manner in which the assessee applied Rule 8D and has computed the disallowance in his own way. This was after considering the detailed reply given by the assessee on 28.12.2011. Hence these arguments of the Ld.Counsel is dismissed as devoid of merit.
CIT(A) has restricted the net disallowance u/s 14A. We are of the view that the disallowance has to be recomputed under Rule 8D (2)(ii). Thus for this limited purpose we set aside the matter to the file of the AO for computing the disallowance.
Disallowance of claim of short term capital loss - assessee has submitted that right to obtain shares is an asset and forfeiture of the same is, extinguishing of a right and hence covered u/s 2(47)(ii) of the Act - HELD THAT:- As decided in SHRI CHAND RATAN BAGRI [2010 (1) TMI 123 - DELHI HIGH COURT] held that forfeiture of the convertible warrant amounted to a transfer within the meaning of s.2(47) - A share in a company is nothing but a share in the ownership of the company. While the right of the assessee to share in the ownership of the company Stands extinguished on account of the forfeiture, the company, with all its assets, continues to exist. The forfeiture only results in one less shareholder. It is not as if the asset in which a share was being claimed was also extinguished - Decided against revenue.
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2014 (12) TMI 1383
Denial of TDS credit - HELD THAT:- We find that the credit has been allowed by the authorities below, it terms of Section 199 of the Income Tax Act, 1961 (herein after ‘the Act’) and Rule 37BA(3) of the Income Tax Rules, 1962 (herein after ‘the Rules). The assessee declared interest income of ₹ 23,170/- and accordingly corresponding credit of TDS of ₹ 2,327/- has been allowed and excess credit claimed of ₹ 1,909/- has been disallowed, which is also in terms of the reply dated 14.12.2012, furnished by the assessee - Having regard to the above, the claim is bereft of merit and thus rejected.
Disallowance of electricity expenses - Addition as personal expenditure - HELD THAT:- We find that the disallowance sustained is excessive. The assessee is a bachelor and has claimed as rendering services as an advocate from residence. The ld CIT(A) has accepted said factual aspect. Therefore we restrict the disallowance to 50% of the expenditure incurred and claimed pertaining to electricity expenses of the residence. So, this ground is partly allowed.
Addition of client development expenses - HELD THAT:- We find no reason to interfere with the disallowance made. No evidence could be led to deny the factual finding, that the expenditure included expenditure on shoes, apparels, purses, toys etc. Thus such expenditure disallowed as personal expenditure is reasonable and is upheld.
Disallowance u/s 14A r.w.r.8D - CIT(A) noted that the assessee has earned exempt income as dividend and as long term capital gain, but no expenses has been shown to have been incurred for earning the exempt income - HELD THAT:- we find that the assessee had made investments in Mutual Funds, shares of ₹ 85 lakhs approximately, and in respect of which an exempt income in the shape of dividend and long term capital gain has been claimed. No explanation has been furnished to satisfy that no expenditure was incurred to manage the above investment yielding tax free income. The books of account have been examined by the AO, who has held that disallowance under Rule 8D, is warranted - we decline to interfere with the conclusion of the authorities below. Ground raised is rejected.
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2014 (12) TMI 1382
Assessment of HUF - property in dispute is an individual property or joint family property - HELD THAT:- This Court by its order in earlier years [2012 (10) TMI 1249 - KARNATAKA HIGH COURT] allowed these appeals and held the property in dispute is a joint family property and accordingly relief was granted.
Thus these three appeals are to be allowed, setting aside the order passed by the Tribunal holding that the property in dispute is an individual property and holding that it is a joint family property. Accordingly, the assessing authority shall grant relief in terms of the said order.
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2014 (12) TMI 1379
Stay of recovery - AR submitted before us that Stay was granted for the assessment year 2007-08 on identical issues and the case was heard by the Bench and the orders are awaited - HELD THAT:- We find merit in the contention of the Ld. AR. On identical matters, for the assessment year 2007-08, the case was heard and the order is likely to be pronounced shortly as submitted by the Ld. AR. Therefore, we hereby grant stay to the assessee from recovery of demand by the Revenue for a period of 60 days from this date or date of order whichever is earlier.
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2014 (12) TMI 1378
Correct head of income - Interest earned on bank deposits - Business income or income from other sources - HELD THAT:- It is not in dispute that assessee corporation is a government company promoted by H.P. State Electricity Board Ltd. The assessee has admittedly not started commercial operation in the year under consideration and was still in the pre-operative stage.
The assessee's counsel has referred to the accounts of the assessee to show that assessee received lesser interest of ₹ 625.97 lacs and paid interest on loan in the year under consideration would show that assessee has to pay more interest as against the small interest received by assessee. Therefore, if any adjustment is made against interest paid, still there is a liability of the assessee to pay interest on the loans. The assessee also explained that for effective funds management, the temporary surplus funds were kept in short term bank deposits and thereafter, interest was earned and so was also used for construction of the project and for paying interest to the power finance company which have not been adversely commented upon by the authorities below. Therefore, the reliance of the Assessing Officer on the decision in the case of Tuticorin Alkali Chemicals and Fertilizers Ltd. Vs. CIT [1997 (7) TMI 4 - SUPREME COURT] was totally misplaced.
It is clear that the funds with the assessee, even if temporarily used for savings/short term deposits, but the earning of the interest were directly connected with work of construction of the project employed by the assessee - earning of interest could not be treated as income from other sources, since the income was earned in the period prior to commencement of the business and it was the nature of capital receipt and was required to be set off against pre-operative expenses. We, therefore, set aside the orders of authorities below and delete the addition. Appeal of the assessee is allowed.
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2014 (12) TMI 1376
Depreciation on computers and peripherals - @60% OR 15% - finding recorded by the Tribunal is that the laptops, printer, scanner, mouse, IBM san switches, projector, pen drive, network equipment, router pack, desktop with monitor, visual impex etc., are all computer peripherals and are accordingly covered under the head 'Computer and Peripherals', which are entitled to depreciation @ 60% - HELD THAT:- The aforesaid finding is essentially a finding of fact. We also find that the issue is covered by the decision of this Court in several cases starting from CIT versus BSES Rajdhani Power Limited [2010 (8) TMI 58 - DELHI HIGH COURT], CIT versus Citicorp Maruti Finance LImited [2010 (11) TMI 802 - DELHI HIGH COURT] and CIT versus Bonanza Portfolio Limited[2011 (8) TMI 1058 - DELHI HIGH COURT]. Assessee, who is present on advance notice, has drawn our attention to another decision in CIT versus Birlasoft Limited [2011 (12) TMI 608 - DELHI HIGH COURT] Special Leave to Appeal filed against the said decision was dismissed by order dated 14th February, 2014.
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