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Income Tax - Case Laws
Showing 61 to 80 of 641 Records
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2014 (12) TMI 1305 - ITAT MUMBAI
Addition u/s 68 - transaction of shares - Held that:- There is complete absence of such material according to which it can be said that assessee infact had made investment in the purchase of shares. The books of accounts maintained by M/s Alliance Intermediaries and Network Private Limited would have been proper evidence to come to such conclusion that whether or not any investment is made by the assessee in the purchase of shares which is not done by the AO. The addition cannot be upheld on the basis of presumptions and assumptions when the assessee has discharged primary onus by submitting all the details. Without bringing any material on record to suggest the transaction made by the assessee with M/s Alliance Intermediaries and Network Private Limited are bogus, the addition could not be sustained in the hands of the assessee.
One of the solution can be that matter may be restored back to the file of the AO for proper examination of the case but that would amount to give second inning to the revenue. Before confirming the addition, CIT(A) also could made further enquiries as he is vested with these powers so that addition could be sustained on the proper basis. But learned CIT(A) did not do so. Keeping in view all these facts and also the fact that matters in the present cases are very small, that addition in the present case has wrongly been sustained by learned CIT(A) for which there is no basis except assumption and presumptions. The additions sustained by learned CIT(A) is deleted in both the cases and the appeals filed by the assessee are allowed.
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2014 (12) TMI 1304 - ITAT MUMBAI
ALV determination - basis on which a self-occupied property is valued - Held that:- The issue is covered by the decision of the Hon’ble Bombay High Court in the case of Smt. Smitaben N. Ambani Vs. CWT, reported in (2009 (1) TMI 430 - BOMBAY HIGH COURT) as held that the basis on which a self-occupied property is valued under rule 1BB of the Wealth-tax Rules and municipal ratable value is arrived at under the municipal law is the same i.e. “a reasonable amount of rent that can be expected by the owner from a hypothetical tenant”. That while arriving at such reasonable amount of rent that can be expected by the owner from a hypothetical tenant, the amount of statutory deduction, if any, permissible under the local municipal law must be added to the ratable value. Thus, the Hon’ble High Court held that while applying the provisions of rule 1BB for valuing the self-occupied property, municipal rateable value with addition of statutory deductions, if any, may be adopted instead of standard rent, for arriving at the gross maintainable rent. Respectfully following the order of jurisdictional High Court, matter is restored back to the file of AO with a direction to recompute the ALV in terms of above decision
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2014 (12) TMI 1301 - ITAT JAIPUR
Revision u/s 263 - huge claims of expenditure allowed despite castigating the assessee and huge revaluation amounts have been allowed as exempt u/s 10(2A) in the hands of the firm or partners which in the event of noncooperation ought to have been disallowed - Held that:- The assessment in question was consequent to a search; assesses non cooperation has been adversely viewed by AO and at the end of the day search assessment was framed without co operation of the assessee. Assessment order refers to various frequent reconstitution of the firm and transfer of land rights therein; instances of revaluation of land; claim of their exemption from the taxation are not addressed in the ex parte search assessment order. The issues raised by ld. CIT for non inquiry are found to validly raised and ought to have been inquired by AO more particularly when assessee was non cooperative. For this purpose necessary field inquiries were necessary besides cross verification of record of other search entities. This exercise was required from the AO to have been conducted as a sensible quasi judicial officer. Thus all the deficiencies referred to by ld CIT make the impugned assessment order erroneous as well as prejudicial to the interest of revenue. The reliance on the judgments of Smt. Taradevi Agrawal [1972 (11) TMI 2 - SUPREME Court] and Smt. Renu Gupta [2007 (5) TMI 188 - RAJASTHAN HIGH COURT] is well placed by ld CIT. We uphold the order passed u/s 263. - Decided against assessee.
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2014 (12) TMI 1298 - SC ORDER
Nature of interest received by the landowner-assessee - enhanced compensation - whether the interest which is received by the assessee-landowner partakes the character of income or not? - Held that:- No legal and valid ground for interference. The Special Leave Petitions are dismissed. HC order confirmed [2015 (12) TMI 1123 - PUNJAB & HARYANA HIGH COURT]
HC has held that the compensation awarded by the Court includes the additional compensation awarded under Section 23(1A) and the solatium under Section 23(2) of the said Act. Section 28 is applicable only in respect of the excess amount, which is determined by the Court after a reference under Section 18 of the 1894 Act.
Under Section 34 of the 1894 Act, the Collector awards interest on the compensation offered at the rate of 9% per annum for a period of one year from the date of taking possession and thereafter at the rate of 15% per annum from the date of expiry of one year on the amount of compensation or part thereof which remains unpaid or deposited before the date of such expiry.
A plain reading of Sections 23(1A), 23(2) as also Section 28 of the 1894 Act clearly spells out that additional benefits are available on the market value of the acquired lands under Section 23(1A) and 23(2) whereas Section 28 is available in respect of the entire compensation
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2014 (12) TMI 1294 - ITAT MUMBAI
Penalty levied u/s 271(1)(c) - change of head of income - Income From Property Or Business Income - Held that:- There is no dispute about disclosure of relevant information in the return of income relating to the impugned receipts, which were brought to tax under the head ‘house property’ by the AO. Thus it is a case of change of head of income and there is no default so far as disclosure of relevant information in the return of income is concerned.
In the instant case we find that the assessee is consistently furnishing relevant receipts under the head ‘profits and gains of business’ and the claim of the assessee was consistently accepted by the Revenue. Assessee offered the same for these years also but the AO changed the head of income only in view of the subsequent judgement in the case of Shambhu Investment (P) Ltd. (2003 (1) TMI 99 - SUPREME Court ). Therefore, there is nothing malafide from assessee’s side. The AO has not information to demonstration that the claim of the assessee in the return of income is not boanafide.
Case of Bennet Coleman & Co. [2013 (3) TMI 373 - BOMBAY HIGH COURT] says - "When income received has been disclosed in computation of income and there is only a change of head of income; in the absence of any facts that the claim of the assessee was not bonafide, the penalty cannot be imposed u/s 271(1)(c) - Decided in favour of assessee.
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2014 (12) TMI 1283 - ITAT RAIPUR
Trading addition - GP determination - rejection of books of accounts - Held that:- There is no dispute that the assessee in his statement dated November 4, 2011 has categorically admitted that the bank account with State Bank of India, Sakti bearing Account No. 10800468872, was not disclosed to the Revenue. As per the said account, there were voluminous transactions during the year under consideration. It is also apparent from the record that the assessee himself accepted the credits in the bank account aggregating to ₹ 89,58,650 as turnover from sale of steel rods and debits and purchase and other expenses. There is no material on record to controvert the findings given by the lower authorities.
Thus there is substance in the alternative submission of assessee and, therefore, we hold that the gross profit rate of 8 per cent. appears to be on the higher side. Keeping in view the entire facts and circumstances of the present case, ends of justice will meet in this case if the gross profit rate is restricted to 7 per cent. as against gross profit of 8 per cent. confirmed by the learned Commissioner of Income-tax (Appeals).
Addition on account of initial investment - Held that:- In the instant case the gross profit rate has been applied after rejecting the book result and, therefore, no separate addition of ₹ 5,00,000 is called for in respect of purchase and introduction of cash. Shri Sameer Singh, learned counsel for the assessee also referred to the decision in the case of CIT v. Banwari Lal Banshidhar [1997 (5) TMI 37 - ALLAHABAD High Court] wherein it was observed that (page 232) " when the gross profit rate is applied, that would take care of everything and there was no need for the Assessing Officer to make scrutiny of the amount incurred on the purchases by the assessee". In view of the above decisions, we are of the view that the addition made by the Assessing Officer and confirmed by the learned Commissioner of Income-tax (Appeals) is unwarranted and uncalled for. Accordingly, we delete the addition deposited in the bank account on April 8, 2008.
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2014 (12) TMI 1282 - ITAT MUMBAI
Validity of reopening of assessment - share application received by the assessee is not a genuine transaction but is on account of accommodation entries received thus addition u/s 68 - Held that:- Reasons are nothing but the summary of statement of Shri Giriraj Vijayvargiya during the search as well as the assessment proceedings of Shri Giriraj. It is manifest from these reasons recorded by the Assessing Officer that four concerns are mentioned which are controlled by Shri Vikas Berlia in which the allegation of giving accommodation entries in the shape of share application money was made by Shri Giriraj in his statement.
There is no allegation of AO that the share applicants of the assessee have any connection with Shri Giriraj Vijayvargiya or with Shri Vikas Berlia. Once these share applicant companies are unrelated/independent parties and have no connection either with Shri Giriraj or with Shri Vikas Berlia then there was nothing came to the possession of the Assessing Officer to believe that the share application money received by the assessee is bogus transaction and consequently the income assessable to tax has escaped assessment. From the reasons recorded by the Assessing Officer, there is no indication about the relation between the share application money and the bogus accommodation entries given by Shri Giriraj.
The sufficiency of evidence or material for forming the belief is not open to scrutiny but the existence of belief is must for a valid exercise of power. The reasons recorded by the Assessing Officer do not indicate even a remote nexus between the application money received by the assessee with the alleged accommodation entries provided by Shri Giriraj Vijayvargiya or the alleged beneficiary of the accommodation entries. - Decided in favour of assessee.
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2014 (12) TMI 1280 - RAJASTHAN HIGH COURT
Bogus share transactions - statement given by Mr. Mukesh Choksi - Held that:- It is not in dispute that the Assessing Officer treated the transaction bogus solely by relying upon the statement of Mr. Mukesh Choksi, who remained unconfronted, though, was called for as per Section 133(6) of the Income Tax Act, 1961. In response, it was communicated to the Assessing Officer that no adequate assistance could be given as the entire record of Mahasagar Securities was earlier impounded and was in custody of Income Tax Department. In these circumstances, Shri Mukesh Choksi was not confronted by the assessee. In absence of it, the statement of Shri Mukesh Choksi could have not been used against the assessee. - Decided in favour of assessee.
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2014 (12) TMI 1277 - ITAT JAIPUR
Assessment of income in the hands of the director of the company - Short Term Capital Gain - sale of land - whether land was in the name of the Director, which was subsequently transferred in the name of the company i.e. M/s GFFR Pvt. Ltd.? - Held that:- The agricultural land was purchased on behalf of the company in the name of the director, which has been reflected in the balance sheet of the company M/s GFFR Pvt. Ltd. as on 31/3/2008. The property was also sold through director on behalf of the company and short term capital gain has been shown in the return of the company. Therefore, there is no logic to assess the same in the income in the hands of the director of the company. Accordingly, we confirm the order of the learned CIT(A). - Decided against revenue
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2014 (12) TMI 1276 - ITAT MUMBAI
Transfer Pricing Adjustment - Selection of comparable - Held that:- As the assessee is engaged in legal process outsourcing which is a high end service akin to KPO, thus companies with dissimilar as that of assessee need to be de-selected as good comparable.
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2014 (12) TMI 1275 - ITAT DELHI
Disallowance u/s 10A - Assessee company had already commenced manufacturing even before approval was granted by software technology park of India (STPI) - Held that:- We find that the appellant authority has accepted the contention of the assessee that after receipt of the approval of STPI from 23rd September 2008, the assessee is entitled to the exemption u/s 10A of the Act. However he denied the claim since he was handicapped from determining the amount of exemption post 23.09.2008 because the assessee could not place the necessary details apportioning the profits before him. We further find that in the subsequent Assessment Year, the AO himself has allowed the assessee exemption u/s10A by order dated 17.02.2014 for Assessment Year 2011-12. Therefore we find that the limited issue that is before us is to determine the profits derived by the assessee from the date of approval from STPI i.e. post 23rd September 2008. For that we are inclined to remit the issue back to the file of AO to determine the profits eligible for exemption to the assessee from 23rd September 2008. For that, the assessee shall produce all the relevant documents necessary for the AO to determine the profits derived by the assessee from 23rd September 2008 and the AO shall pass fresh order on this issue.
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2014 (12) TMI 1274 - KARNATAKA HIGH COURT
Reopening of assessment - as per assessee already income tax return is filed for the Assessment Year 2006- 07 which is well within time and the same has been accepted by the respondent-Authority - Held that:- As per Annexure-D there is an assessment order passed, since the petitioner did not file another return as sought for by the respondent-Authority under Section 148 of the Act. It is submitted by the learned counsel for the respondent-Authority that the reassessment made by the Revenue could be challenged before the Appellate Authority. Hence, it is too premature for the petitioner to approach this Court.
The reasons to be assigned for the purpose of re-filing which is sought by the petitioner herein, could be considered after filing of the return once again as per the notice issued under Section 148 of the Act. Therefore, it is for the petitioner to approach the Appellate Authority within two months as per the proviso under Sec.146(a) of the Act.
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2014 (12) TMI 1273 - KARNATAKA HIGH COURT
Payment of admitted tax - Held that:- It is not in dispute that the admitted tax has been paid. If the assessee has paid the admitted tax, the order passed by the tribunal cannot be found fault with and therefore, we do not see any merit in the appeal. Accordingly, appeal is dismissed.
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2014 (12) TMI 1272 - ITAT MUMBAI
Disallowance of employee cost, office and administrative expenses and selling and administrative expenses - method of accounting followed - Held that:- The percentage completion method of accounting has been regularly followed by the assessee. In the succeeding assessment year 2010-11, the AO has accepted the deductibility of the identical nature of expenses in the assessment order passed u/s 143(3) of the I.T. Act. We agree with contention of the Ld. Counsel for the assessee that the employee cost refers to salary paid to the employees who are looking after the administration of office and not directly related to construction of the project but is part of the administrative expenses. Similarly, the office and administrative expenses and selling and marketing expenses are to be charged to the profit & loss account in the very same year in which they are incurred and have to be excluded from the cost of inventories for working out closing WIP as per the guidelines issued by the ICAI, Accounting Standard AS-2 and AS-7.
The assessee has regularly and consistently been following the said method of accounting as per the provisions of section 145A of the I.T. Act. The AO has not assigned any cogent reason as to why the method, which has been consistently followed by assessee and accepted by the department in past as well in succeeding assessment years and which is in accordance with the recognized principles of accounting by ICAI, is being rejected. In our view, the action of the Revenue Authorities in rejecting the assessee's accounting method, without assigning any reason is not justified. The accounting method followed by the assessee and thereby excluding the indirect expenses such as office employees’ salary, administrative expenses and marketing & selling expenses is as per the recognized principles of accountings and as such the claim of the assessee deserves to be allowed. We hold accordingly. The additions made by the lower authorities on this issue are hereby ordered to be deleted. - Decided in favour of assessee
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2014 (12) TMI 1266 - ITAT LUCKNOW
Rejection of books of account - taking into consideration the report of the auditor’s obtained u/s 142(2A) and after giving valid reasons for doing so - NP estimation - Held that:- As it is noted by special auditor that the assessee has denied to have carried out physical verification of WIP as on 31/03/2004 and hence, it can be reliably confirmed that the WIP is an approximation. It is also observed by the special auditor that they are not in a position to quantify the deviation to the revenue and balance sheet. In our considered opinion, correct figure of closing stock is very important for determining the income of the assessee and since the closing stock has been not properly ascertained by the assessee by physical verification etc., the rejection of book result cannot be faulted.
It may be that the reasons for which the assessee could not maintain proper books is that the assessee was working under abnormal business conditions but then also, such improper books cannot be relied upon to assess the income of the assessee and for such a situation, the only course open is to reject the book result and estimate the income of the assessee. The Assessing Officer has adopted the net profit rate of 2.5% for estimating the income of the assessee at ₹ 7,50,112/-. AO also allowed deduction of ₹ 2.28 lac being admissible salary to partners. Adopting net profit rate of 2.28% is not excessive and it could not be shown by the assessee that the rate adopted by the Assessing Officer is excessive and unreasonable. Under these facts, we hold that the order of CIT(A) is not sustainable in the facts of the present case and therefore, we reverse the order of CIT(A) and restore that of the Assessing Officer. - Decided in favour of revenue.
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2014 (12) TMI 1265 - ITAT COCHIN
Denial of deduction u/s. 80P by invoking the provisions of sec. 80A(5) - Assessee filed return of income beyond the time limit prescribed u/s. 139 and the time given in notice u/s. 142(1)- Held that:- After considering the provisions of section 80A(5) and the judgment of the Apex Court in Prakash Nath Khanna & Another vs CIT (2004 (2) TMI 3 - SUPREME Court ) found that the assessee is not eligible for exemption u/s 80P unless return is filed either u/s 139(1) or 139(4) or within the time provided by the assessee in the notice issued u/s 142(1) of the Act or u/s 148 of the Act and a claim was made for deduction u/s 80P of the Act. See case of Ramanthali Service Co-operative Bank Ltd. vs. ITO [2014 (11) TMI 1108 - ITAT COCHIN] - Decided against assessee
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2014 (12) TMI 1264 - CALCUTTA HIGH COURT
Reopening of assessment - Held that:- Allegation levelled against the writ petitioner in the reasons for another assessment year is that they have allegedly taken service from non-existing service providers. In that process they have transferred their unaccounted money.
More particulars are required. If at all there is a network through which the assessee is operating, the main circuits have to be identified. In those circumstances, the communications dated 7th March, 2014 being ‘P-8’ collectively, are set aside. The respondents are directed to issue fresh communications containing details to substantiate the allegations of the department by 27th February, 2015. If they are not issued, the Sections 147, 148 proceedings in respect of the above assessment years will automatically stand dropped.
If the fresh reasons are supplied, the writ petitioner will have the right to reply to them within four weeks after communication of the reasons. In that event, the Sections 147, 148 proceedings in respect of the above assessment years will remain suspended till the reply is received and processed by the Income Tax department, by a decision. Affidavits were not invited. Hence, the allegations contained in the application are deemed not to be admitted.
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2014 (12) TMI 1263 - ITAT CHENNAI
Disallowance of depreciation claimed by assessee trust - Held that:- In case of trusts registered u/s.12A, the claim of depreciation does not amount to double deduction. - Decided in favour of assessee
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2014 (12) TMI 1262 - ITAT CHENNAI
Addition u/s 80P(2)(a)(i) - Revenue submits that the lower appellate authority ought not to have granted the impugned deduction qua jewel loans facility availed by the aforesaid associate members - Held that:- We find from the assessee’s regulations that these jewel loans come in the array of its byelaws. The Deputy Registrar of Co-operative Societies, Udhagamandalam has also approved the same on 11.7.1994.
Therefore, we observe that this activity is as per its byelaws. The Revenue’s next argument that it ought not to have allowed this facilities to the associate members not having voting and other rights for section 80P deduction stands rejected by a co-ordinate bench of the 'tribunal' in case of M/s SL(SPL) 151, Karkudalpatty Primary Agricultural Co-operative Credit Society Ltd [2014 (5) TMI 556 - ITAT CHENNAI] . It stands held that allowing associate members to avail these facilities does not disentitle a co-operative society from availing section 80P deduction. The relevant provisions of the State Co-operative law have also been discussed therein. The Revenue fails to draw any distinction on facts. Thus, we affirm the CIT(A)’s findings. - Decided against revenue
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2014 (12) TMI 1256 - GUJARAT HIGH COURT
Entitlement to depreciation - whether sanitary and pipe fittings fixed to the hotel building constituted 'plant'? - Held that:- Considering the decision of the cases of CIT v. Taj Mahal Hotel, [1971 (8) TMI 2 - SUPREME Court ] and CIT v. Anand Theatres [2000 (5) TMI 4 - SUPREME Court ] which has been considered by the Rajasthan High Court in the case of CIT v. Jodhan Real Estate Development Co. (P.) Ltd. [2002 (8) TMI 9 - RAJASTHAN High Court which has been relied upon by the Tribunal, the questions which are raised in the present appeal are required to be answered in favour of the assessee. We are not giving further elaborate reasons for the same as in the aforesaid case, the Apex Court has already held that the sanitary and pipeline fittings as well as electrical installations fell within the definition of "plant". The court also held that the fact that the assessee claimed depreciation on the basis that sanitary and pipeline fittings fell under "furniture and fittings" in rule 8(2) of the Indian Income-tax Rules, 1922, did not detract from its position as the rules cannot take away what is conferred by the Act or whittle down its effect. - Decided in favour of the assessee.
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