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Income Tax - Case Laws
Showing 41 to 60 of 594 Records
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2014 (5) TMI 1137 - ITAT PUNE
Disallowance of claim of deduction u/s.80IB(10) - Gram Panchayat is not a local authority competent to issue approvals and completion for the housing project - Held that:- We hold that the concerned Gram Panchayat is a competent local authority for the purpose of issuing approval and completion certificates for claiming deduction u/s.80IB(10) in respect of the profit from sale of eligible flats in project in question. The Assessing Officer is directed accordingly. See Shri Krishna Haribhau Lohokare, Prop. Harikrupa Builders Versus ITO, Ward-4 (5) , Pune [2013 (2) TMI 800 - ITAT PUNE ]
Road area not part of the project and hence the area of the land was less than one acre - Held that:- This issue is covered in favour of assessee by the order of ITAT, Pune ‘B’ Bench in Bunty Builders Vs. ITO [2010 (2) TMI 791 - ITAT, Pune ] to hold that the area of amenity space compulsorily required to be handed over to Municipal Corporation constitutes an integral part of housing project and hence, is required to be considered while calculating the one acre area of plot of land of housing project for the purpose of deduction u/s.80IB(10). So, the assessee is eligible for claiming deduction on this account as well. The Assessing Officer is directed accordingly. - Appeal decided in favour of assessee
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2014 (5) TMI 1136 - ITAT JODHPUR
Disallowance of administrative expenses - Held that:- In the present case, it is an admitted fact that the assessee is a public limited company, so there cannot be a personal use on account of telephone and trunk call expenses. In the instant case, the Assessing Officer did not point out any instance where the expenses relating to travelling and conveyance were unreasonable or excessive or proved to be bogus. The Assessing Officer himself accepted 90% of the rental expenses as allowable and merely on the basis that there was an increase in the rental expenses as compared to earlier years it cannot lead to the disallowance of expenses in part. In the present case, the Assessing Officer disallowed the membership and subscription expenses merely on this basis that the proper vouchers had not been maintained but no defect was pointed out and no specific instance of claim being bogus and unreasonable or excessive had been pointed out, therefore, disallowance made by the Assessing Officer was rightly deleted by the Ld. CIT(A). We do not see any infirmity in the order of the Ld. CIT(A) on this issue. - Decided against revenue
Disallowance of repairs and maintenance of plant and machinery - Held that:- In the present case, it is an admitted fact that turnover of the assessee increased in comparison to the earlier years and the Assessing Officer had not pointed out any specific instance of bogus, unreasonable or excessive expenses relating to repairs and maintenance of plant and machinery. He had also not pointed out that the expenses were not incurred for business purposes or those were personal in nature, therefore, the disallowance made on the basis of surmises and conjecture is not tenable and the Ld. CIT(A) rightly deleted the same - Decided against revenue
Disallowance of manufacturing expenses - Held that:- Assessing Officer made the adhoc disallowance without quantifying any of the expenses, which was not incurred for the business purposes. The Assessing Officer also not pointed out which of the item was not supported by proper bills and vouchers, therefore, the disallowance was made only on the basis of presumption, which is not tenable and the Ld. CIT(A) was justified in deleting the same. - Decided against revenue
Disallowance of selling expenses - Held that:- It appears that the Assessing Officer made an adhoc disallowance only on this basis that the expenses were more in the year under consideration as compared to the earlier years. However, he ignored this vital fact that the main expenses amounting to ₹ 18.25 lacs out of total expenses of ₹ 26.60 lacs under this head were on account of royalty and the Assessing Officer did not point out any specific instance where the expenses were not incurred for the business purpose. Therefore, the disallowance made by the Assessing Officer was only on the basis of presumption, which is not tenable and the Ld. CIT(A) rightly deleted the same.
- Decided against revenue
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2014 (5) TMI 1135 - ITAT AHMEDABAD
Disallowance u/s 14A computation - Held that:- We are also of the view that the basic facts about the details of the investment as well as the source of the investment in shares and mutual funds for the purpose of earning exempted dividend has not been properly explained to the lower authorities. As decided in assessee’s own case for A.Y. 1998-99 and 2001-02 wherein, as well, the matter was restored for reconsideration as per law as relied upon Hero Cycle [2009 (11) TMI 33 - PUNJAB AND HARYANA HIGH COURT ] wherein it was observed that disallowance u/s.14A requires finding of incurring of expenditure and where it is found that for earning exempted income no expenditure has been incurred, disallowance u/s.14A could not be made.
Consistent with the view taken in the past by the Tribunal in assessee’s own cases, we deem it proper to restore this ground back to the stage of the AO to be decided denovo after taking into account the latest decisions on the issue of the applicability provisions of Section 14A. The AO is required to examine the balance-sheet and related accounts of the assessee so as to see whether there was investment in shares/mutual funds out of the borrowed funds or non borrowed funds. In the light of the above directions, this ground of the assessee may be treated as allowed for statistical purpose only.
Depreciation on the assets leased back to Rajasthan Electricity Board (RSBB) is to be allowed as per law.
Expenditure in respect of a sale of a capital asset - allowable Revenue expenditure u/s.37 - Held that:- The accepted factual position was that the LPG Division was sold by the assessee in earlier years as a “slump sale”. We have been informed that on sale of the said LPG Division the assessee had offered to tax a ‘capital gain’ in the past. The assessee’s only argument is that the additional stamp duty was demanded in the year under consideration, therefore, the liability had crystallized during the year; hence, allowable only in this year. We are not convinced with the argument of learned AR because under the provisions of Section 37 of IT Act an expenditure which is incurred wholly and exclusively for the purpose of the business can be allowed as an expenditure. The expenditure of additional stamp duty being not an expenditure for the purpose of the business of the assessee but pertained to a capital gain which was shown in the past years, therefore, not to be allowed u/s.37 of IT Act for the year under consideration.
Expenditure for acquiring license to use software applications would be applicable as Revenue expenditure.
Adjustment of capital gain - whether a short term capital gain/loss can be adjusted against the long term capital gain/loss - Held that:- We are of the view that the long term capital gain is to be adjusted against the long term capital loss and likewise the short term capital gain is to be adjusted first against the short term capital loss. The provisions of the Act has prescribed the intra-head adjustments, therefore, the Revenue Authorities have correctly held that the appellant had wrongly adopted the method of adjustment of capital gain. Further we have also noted that, although not in the ground of appeal, the question of cost as per index cost was directed to be computed by AO as per Section 48 vide paragraph 16.2.1 of the order of learned CIT(A). Therefore, the assessee should not have any grievance in this regard. This ground of the Assessee is hereby dismissed.
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2014 (5) TMI 1134 - ITAT LUCKNOW
Registration under section 12AA denied - non disposal of application - Held that:- Since the ld. Commissioner of Income-tax has not disposed of the application for registration within a period of six months consequent to the order of the Tribunal remitting the matter back to him vide its order dated 28.1.2010, registration under section 12AA of the Act will be deemed to have been granted. Accordingly, we direct the ld. Commissioner of Income-tax to grant registration under section 12AA of the Act forthwith. - Decided n favour of assessee
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2014 (5) TMI 1133 - SC ORDER
TDS u/s 194H - Trade discount provided by newspaper publishers to advertising agencies under Rules and regulations of Indian Newspaper Society - Held that:- Special Leave Petition is dismissed. It is clear that advertising agency has never been appointed as agent of the petitioner. The relationship between the assessee and the advertising agency in accordance with the INS Rules is that of a principal to principal because (a) the assessee has no control over the advertising agency, (b) the advertising agency is responsible for payment even if the advertiser has not paid the advertising agency, (c) the advertising agencies are rendering service to the advertisers/ customers & other terms. Therefore, trade discount provided cannot be termed as Commission. See HC ref -2012 (5) TMI 488 - ALLAHABAD HIGH COURT
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2014 (5) TMI 1132 - ITAT KOLKATA
Revision u/s 263 - unsigned notice by the designated authority - notice was issued by ACIT - Held that:- The said notice u/s. 263 of the Act ha s not been signed by the “Commissioner of Income Tax” rather it has been signed by ACIT, Hqrs., Burdwan. The Hon’ble Allahabad High Court in the case of Rajesh Kumar Pandey (2012 (9) TMI 829 - ALLAHABAD HIGH COURT ) has expounded that when the Ld. CIT has not recorded his satisfaction, but it was the satisfaction of the Income Tax Officer (Technical) who is not competent to revise his order u/s. 263 of the Act, the order passed was liable to be set aside.
Thus it is clear that for a valid assumption of the jurisdiction u/s. 263 of the Act, the notice issued u/s. 263 of the Act should be issued by the Ld. CIT. In this case, it is undisputed that notice was issued by ACIT, Hqrs, Burdwan who is not competent to assume jurisdiction u/s. 263 of the Act. Hence, the notice was not under the seal and signature of Ld. CIT. - Decided in favour of assessee
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2014 (5) TMI 1130 - SC ORDER
Amortization of lease premium - Revenue v/s capital - HC [2012 (11) TMI 325 - DELHI HIGH COURT] confirmed disallowance directed by the Income Tax authorities, on account of the assessee's amortization cost of land which according to the Revenue constituted capital expenditure - Held that:- Tag these Appeals
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2014 (5) TMI 1129 - ITAT CHANDIGARH
Deduction u/s 24(b) - deduction for interest paid - Held that:- The meaning given at Sl No. 2 for renewal would definitely take in its stride the conversion charges also because the dictionary clearly states that recreation of legal relationship or replacement of old contract with a new contract is covered by the definition of renewal. This means in the case of the assessee when the original contract for the property was for industrial shed and after charging the conversion charges the contract would be for commercial property. In our opinion, this would be definitely covered by the expression 'renewal". In practical terms the assessee could not have used the property except for running the industry in electrical items but now the assessee has been allowed to use the same in commercial terms and i.e. why the assessee has been able to exploit the same by giving commercial site on rent for the purpose of running a hotel. This is because of the renewal made by the Chandigarh Administration by changing the usage of the property.
Thus the assessee is definitely entitled to claim the deduction for interest paid to Chandigarh Administration and accordingly we set aside the order of the Ld. CIT(A) and direct the Assessing officer to allow deduction of this interest.
As far addition on account of interest paid to other parties No doubt the assessee has raised further funds, therefore Sarovar Hotel Pvt. Ltd by way of interest bearing securities but the same has not been shown to be paid for payment of conversion charges. In fact we had asked the Ld. Counsel to file the copies of partner's capital account because the Assessing officer has given a finding that there was a negative balance in the partner's capital account. These were filed and perusal of the same clearly show that there is negative balance in the partner's capital account. Even the balance sheet clearly show that partner's capital account had a negative balance. Therefore clearly the further borrowing have gone towards the payment to the partners and same are not related to the conversion charges. To this extent the Assessing officer is right that the disallowance has to be maintained. We may clarify that this contention is quite right because in the computation the assessee has claimed interest of only ₹ 60,18,199 and the income has been computed by the Assessing officer on the basis of computation filed by the assessee. - Decided partly in favour of assessee.
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2014 (5) TMI 1128 - ITAT CHENNAI
TDS u/s 195 - payments of commission made by the assessee to the nonresident agents - non deduction of tds - Held that:- In the present case, the disputed agents were nonresidents. Those non-resident agents are carrying on the business wholly outside India. The assessee had paid commission to those non-resident agents for services rendered by them wholly outside India. It also has to be seen that the nonresident agents did not have any permanent establishment (PE) in India. The commissions were remitted by the assessee directly to the non-residents outside India.
In the facts of the case as stated above, we find that the Commissioner of Income Tax (Appeals) is justified in holding that the payments of commission made by the assessee to the nonresident agents were not chargeable to tax in India in the hands of those non-resident agents. When no income is generated to the non-residents within India, those non-resident agents are not liable for any levy of income tax on account of the commissions they earned out of the services rendered outside India for the assessee. TDS arises only where there is a corresponding tax liability in the hands of the payee.- Decided against revenue
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2014 (5) TMI 1127 - ITAT PUNE
Claiming the deduction u/s. 80IA(4)(iv)(a) - Held that:- We find that the issue stands squarely covered in favour of the assessee by the decision of Velayudhaswamy Spinning Mills (P) Ltd. Vs. ACIT [2010 (3) TMI 860 - MADRAS HIGH COURT] and f Serum International Ltd. Vs. Addl. CIT, Range-6 [2013 (1) TMI 688 - ITAT PUNE ] wherein held profits are to be computed as if such eligible business is the only source of income of the assessee. When the assessee exercises the option, only the losses of the years beginning from the initial A.Y. are to be brought forward and not the losses of the earlier years which have been already set off against the income of the assessee - no notional brought forward and set off against the profits of the eligible business as no such mandate is provided in section 80-IA(5). When the assessee exercises the option, only the losses of the years beginning from the initial A.Y. are to be brought forward and not the losses of the earlier years which have been already set off against the income of the assessee.- Decided in favour of assessee.
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2014 (5) TMI 1125 - ITAT MUMBAI
Depreciation on membership rights of Multi Commodity Exchange - Held that:- In the present case assessee has paid non-refundable admission fees for acquiring trading rights in Multi Commodity Exchange Ltd. The said capital expenditure was eligible for depreciation u/s 32 of the Act. See case of Techno Shares and Stocks Ltd. [2010 (9) TMI 6 - SUPREME COURT OF INDIA] - Decided in favour of assessee
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2014 (5) TMI 1124 - SC ORDER
Penalty u/s 271(1)( c) - Scope of term 'Direction' in the Assessment Order to initiate penalty proceedings - Whether penalty proceedings can be initiated when there is no loss to revenue - Held that: - The special leave petition is dismissed.
The question of law is kept open.
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2014 (5) TMI 1123 - ITAT CHENNAI
Claim of deprecation on the fixed assets acquired - assessee could not produce original invoices/bills for the purchase of fixed assets - Held that:- In the light of the fire incident which has gutted the branch offices of the assessee at Bhiwandi and Jamshedpur, the assessee has not been able to produce documents in support of purchase of assets. However, the assessee has been able to show from records expenditure incurred for fixing of the assets. The said claim of the assessee has not been rebutted by the Revenue. In view of the facts and circumstances of the case, we hold that the assessee is entitled to claim deprecation on the fixed assets acquired for Bhiwandi and Jamshedpur Branches. - Decided in favour of assessee
TDS u/s 194C - Dis-allowance u/s.40(a)(ia) - non deduction of tds on freight charges - Held that:- A perusal of the assessment order as well as the impugned order shows that the assessee during the course of assessment proceedings had produced 164 Form 15-I having value of ₹ 7.28 Crores on 10-11-2009 of which the Assessing Officer had not taken note of although reference of the same has been made in the assessment order. The CIT(Appeals) after considering the same had granted the relief to the assessee to the extent of Form 15-I produced by the assessee before the Assessing Officer. We do not find any error in the order of CIT(Appeals) in giving benefit of Form 15-I valuing ₹ 7.28 Crores. This ground in the appeal of Revenue is accordingly dismissed.
For the remaining amount of ₹ 8.41 Crores assessee has submitted that the details of truck-wise list of forms 15-I received and destroyed in fire at Bhiwandi were produced before the Assessing Officer Filing of Form 15-I is mandatory. Obtaining of duplicate Form 15-I could be difficult but not impossible. The assessee could have made some effort in procuring duplicate Forms. There is nothing on record to show that any effort was made to obtain duplicate Forms. Therefore, in our considered opinion, the assessee has not discharged its duty and thus, cannot take advantage of fire in the office to get absolved from this liability. Accordingly, this ground of appeal of the assessee is dismissed.
Dis-allowance of foreign exchange fluctuation loss - CIT(Appeals) after examining the documents on record concluded that out of the total loan of ₹ 23.84 Crores, ₹ 21.68 Crores were utilized for working capital purposes and hence allowed the same as expenditure - Held that:- The Hon'ble Apex Court in the case of Woodward Governor India (P) Ltd., (2009 (4) TMI 4 - SUPREME COURT ) has held that loss suffered by the assessee on account of fluctuation in the rates of foreign exchange as on the date of balance sheet is an expenditure u/s.37(1) of the Act. We do not find any infirmity in the findings of the CIT(Appeals) on this issue.
Dis-allowance of interest on diversion of interest bearing loans - Held that:- CIT(Appeals) has rightly allowed the interest claimed by the assessee on sums advanced to its subsidiary company as a measure of commercial expediency. We do not find any reason to dislodge the findings of the CIT(Appeals) on the issue.See case of S.A. Builders Ltd., v. CIT [2006 (12) TMI 82 - SUPREME COURT]
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2014 (5) TMI 1122 - ITAT MUMBAI
Income on account of 'Royalty and Fees for Technical Services' - taxable on receipt basis OR accrual basis - Held that:- As decided in assessee's own case for assessment years 1990-91, 1991-92, 1994-95, 1996-97, 1997-98 and 2001-02 has held that Royalty has to be assessed to tax on receipt basis and not on accrual basis
Software is a part and parcel of equipment sold, therefore, no Royalty is payable
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2014 (5) TMI 1119 - ALLAHABAD HIGH COURT
Interest earned on fixed deposits - "income from other sources" OR "business income" - nature of income - Held that:- The F.D.R. have not been received by Assessee for the purpose of investing money or otherwise, but it is a part and parcel of his regular business activities in which he has to furnish security to the Department to obtain civil contracts and if an interest has been earned thereon, in my view, it will qualify to be an "income on business" and not as "income from other sources".
Also F.D.R. were purchased for security purposes for obtaining the contracts and the Court observed that it is in connection with the business activities of Assessee, which was the view taken by Commissioner also so as to hold that income earned on such F.D.R. is to be treated as "business income" and not as "income from other sources".
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2014 (5) TMI 1118 - ITAT CHANDIGARH
Sale of land - Addition on cash deposits in the State Bank of India and Axis Bank - Held that:- The only inference which can be drawn is that the deposit of cash made by the appellant in his saving bank accounts maintained with the Axis Bank and with the SBI Bank had nothing to do with the facts of sale of land by his father and his uncles. It is also endorsed by the fact that there was no such deposit or withdrawal from the bank accounts maintained by the appellant. As far as, reliance placed on the statement of the father of the assessee and the copy of the affidavit of the father and of uncles of the appellant, it is noted that in the statement as well as in the affidavit, it is stated that the advance of ₹ 60 lac was received on 02.08.2008. Further amount of ₹ 25 lac was received on 30.04.2009 and further ₹ 15 lac on 25.06.2009 whereas, the first agreement dated 02.08.2008 was cancelled on 30.04.2009 and the entire amount of ₹ 60 lac was stated to be returned.
Fresh agreement was carried out and advance of ₹ 85 lac was received, which was also canceled later on and the entire amount of advance of ₹ 85 lakh was also returned on the same date. The facts given in the affidavit and in the statement are, as such, contradictory. The facts stated in the affidavits, relied upon by the appellant are, as such, not in consonance with the agreement and hence are not reliable.
In view of the fact discussed above, it is noted that the appellant failed to explain the source of deposit of cash in the saving bank accounts maintained with the Axis Bank and the SBI Bank and hence addition thereof made by the AO is hereby confirmed. Various ground of appeal taken by the appellant are, as such, rejected.
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2014 (5) TMI 1115 - ITAT MUMBAI
Eligibility for exemption under section 11 - receipt received from Mahalaxmi Hospitality, Mahalaxmi Hotel & Resort and Mahalaxmi Food Link for Purposes of playing cards and also having Permit Room Bar and Restaurant for catering and soft drinks and hiring income from Marriage Hall/ground - Held that:- The AO has given a categorical finding that though the membership of the club is open to public but it has been restricted in many ways and it is not easy to get membership of the club even for the persons who count in the society. Even the membership is offered on payment of very high premium. High class premium services, such as facility of liquor bar, playing cards, restaurant, marriage hall, catering services etc. have been provided to the members, which cannot be said to constitute any charitable activity. Services can be availed for consideration only by members who constitute high class, influential and rich persons that too on payment of high premium for getting membership of the club. Though the assessee club is also offering the facility of sports to its members that itself, cannot partake the character of charitable activity. It is not the case of the assessee trust that such sports activities are provided or have resulted into any benefit to the public at large or any section of the society. The sports activities accompanied by facilities like liquor bar, playing cards, restaurant, marriage hall, catering services etc. limited to a certain group of persons i.e. members of the club cannot be said to be a charitable activity from which any benefit is derived by the public or section of the public rather the benefits are limited to high and rich distinguishable group of persons i.e. members of the club only. There is no element of charity involved in such an activity rather the activities of the club are meant for leisure and pleasure of the members of the club and the membership has been restricted to certain individuals not to any section of the society.
We therefore do not find any infirmity in the order of the AO in holding that the activities of the assessee trust do not fall in the definition of charitable purpose as defined under section 2(15) of the Act.
Benefit of mutuality - We may point out that if the services of restaurant, bar room, swimming-pool etc. are restricted to members or their family members or guests only, then the income from those services cannot be said to be business income of the society and the benefit of mutuality will be available to the assessee in relation to such facilities/services. However, the income which has been earned by the assessee by providing facilities to non members is required to be treated as business income of the assessee. We accordingly restore the matter back to the file of the AO to distinguish the income from facilities/services which have been offered to non members as compared to the income relating to the services/facilities which have been provided to members of the club. It will not affect the concept of mutuality or benefit of mutuality even if the said services are offered by the club by way of providing contracts etc. to private parties on commission basis or rent basis, for the benefit of members/family members or guests of the club members only.
Since the grounds relating to above claim of the assessee were not adjudicated by the ld. CIT(A) but were dismissed being rendered infructuous and since we have restored the matter to AO to distinguish the income earned from non members, hence we direct the AO to consider the above claim of depreciation etc. of the assessee accordingly as per law. - Decided in favour of revenue for statistical purposes.
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2014 (5) TMI 1113 - ITAT BANGALORE
Status of the assessee - treated as AJP as declared by the assessee or AOP as proposed by the AO - entitlement to exemption u/s. 10(23C)(iiiad) - whether the assessee was entitled to exemption u/s. 11? - Held that:- We find that the issues raised by the revenue in its ground of appeal have all been dealt with by the Hon’ble High Court of Karnataka in the assessee’s own case viz., Children Education Society, (2013 (7) TMI 519 - KARNATAKA HIGH COURT ). On the question of status of the assessee, the Hon’ble High Court has held that the same has to be adopted as AJP. On the question of exemption u/s. 10(23C)(iiiad) of the Act, the Hon’ble High Court has held that the assessee was entitled to the said exemption and that the receipts of each of the educational institutions have to be considered separately and not by aggregation. With regard to the receipts by way of building fund and infrastructure development fund, the Hon’ble High court remanded the same to the Assessing Officer for fresh consideration to look into the ledger books and other accounts showing the receipts on account of building fund and infrastructure fund and its utilization for the purpose of construction and on that basis, pass suitable orders.
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2014 (5) TMI 1112 - ITAT PUNE
Income assessed u/s. 172(4) in the hands of the assessee as an agent - income accrued in India - DTAA of India Cyprus - interpretation of 'Effective Management' - Held that:- The authorities below have taxed income in the hands of Shaan as an agent of Glendive. If in their opinion Glendive may be bogus entity interposed in between to take advantage of Cyprus treaty, then it is not the income of Glendive but that of Aquavita. On one side, they are taxing the income in the hands of Glendive and on the other hand, they hold that Glendive is only a paper company. If in their opinion it is the income of Glendive, in that event, it is to be noted that Glendive does not have any establishment outside Cyprus. Accordingly, the income arises to it in Cyprus only.
It is not the case of the authorities below that Glendive has any establishment outside Cyprus. According to authorities below, Glendive is just a paper company and has been interposed in the transaction as a charterer. In that event, the income would accrue to Aquavita and not Glendive. This approach of authorities below is not justified. The other reasoning given by authorities below is that the effective management of Glendive cannot be in Cyprus because it has no staff, big office establishment in Cyprus and it is a one person company. He has relied on the OECD commentary which explains the words 'Effective Management'. The Indo Cyprus Treaty defines the words 'Effective Management' in Article 8 itself.
While other treaties like the one's with Mauritius, Poland, Netherlands do not define the words 'Effective Management' in the Article 8 thereof. Thus, for interpreting, these treaties, reliance may be placed on the OECD Commentary but so far as the Cyprus Treaty is concerned, there is no reason to rely upon to OECD Commentary because Article 8 itself has defines the term. Hence, in our case, when Article 8 of Cyprus Treaty explains clearly the word 'Effective Management', there is no need to refer to OECD Commentary or other sources for the meaning of these words. In view of the above, the CIT(A) erred in holding that the income of Glendive was taxable u/s 172(4) in the hands of Shaan Marine as an agent and the treaty benefits were not available to Glendive. - Decided in favour of assessee
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2014 (5) TMI 1111 - ITAT AHMEDABAD
Addition made on the basis of statement made during the course of survey u/s.133A - receipt of money in cash - Held that:- As evident from the observation of the ld.CIT(A) that the AO had not confronted the assessee regarding receipt of money in cash and merely assumed that the assessee has received cash from each and every purchaser.
Undisputedly, the AO has not made enquiry from the other purchasers and no material has been placed on record that money was received in cash except that statement was made by one of the Directors of the company during the course of survey. The ld.CIT(A) has held that the retraction letter of the assessee is not valid without giving any reason. We also find that the ld.CIT(A) has not taken into account the decision of CIT vs. Khader Khan Son reported at (2007 (7) TMI 182 - MADRAS HIGH COURT) and the appeal filed by the Revenue before the Hon’ble Apex Court [2013 (6) TMI 305 - SUPREME COURT] . Therefore, ld.CIT(A) was not justified in confirming the action of the AO and moreover the Revenue has not placed any independent material on record to substantiate the addition. Under these facts, the addition to the extent of ₹ 2,95,000/- only (Rs.4,75,000 – ₹ 1,80,000) is hereby sustained and the AO is directed to delete the balance amount of ₹ 29,75,000/-. - Decided partly in favour of assessee.
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