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Income Tax - Case Laws
Showing 61 to 80 of 690 Records
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2014 (7) TMI 1282 - ITAT CHANDIGARH
Addition u/s. 36(1)(iii) - interest free advances and outstanding advances - commercial expediency - Held that:- We find that there was opening debit balance of ₹ 4413287/- in case of Jay Ess Exports. No doubt certain purchases have been made from this party but for making purchases fresh payments have been made to this party and at all relevant time, the debit balances has rather increased during the year. We asked the assessee whether any disallowance was made in the earlier year and he admitted that disallowance was made with reference to the debit balance in case of Jay Ess Exports which was not challenged by the assessee. Assessee could not point out why huge advances have to be given to this party at all times, therefore in our opinion, the commercial expediency can not be inferred in this case - Decided against assessee.
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2014 (7) TMI 1280 - ITAT PUNE
Disallowance of expenditure incurred by the assessee towards making of enrollment cards under Rashtriya Swasthya Bima Yojana (RSBY Scheme) - deferred revenue expenditure - assessee will get enduring benefit out of this investment for years together the AO allowed only 1/10th of the expenditure by amortising the expenses and disallowed the balance - Held that:- As against incurring of approximately ₹ 77/- towards cost of each smart card the assessee received service charge of ₹ 97/- per smart card from the insurer. Further, the finding given by the Ld.CIT(A) that the issue of smart card per se is completely independent line of business for the assessee company from the main business of settling the beneficiaries claimed on behalf of the insurance companies under the RSBY scheme could not be controverted by the Ld. Departmental Representative.
Departmental Representative also could not controvert the finding given by the CIT(A) that the amount received during the year has been shown as income and the assessee has claimed the corresponding expenditure incurred on the printing and issue of smart cards. No infirmity in detailed reasoning given by the CIT(A). Merely because the amount appears to be huge cannot be a ground to disallow the same on the ground of enduring benefit to the assessee when the corresponding revenue earned has been considered as income of the impugned year. - Decided against revenue
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2014 (7) TMI 1279 - ITAT LUCKNOW
Addition u/s 54F - investment in respect of residential property has been made by the assessee outside India - Held that:- We find that except in the case of Leena J. Shah vs. ACIT [2005 (11) TMI 386 - ITAT AHMEDABAD] the Tribunal has taken a consistent view that the words “in India” cannot be inserted in section 54F of the Act and as per plain reading of section 54F of the Act, the sale proceeds of capital asset shall be invested in residential house in India or outside India.
We, accordingly, following the judgment of the Hon'ble Apex Court in the case of CIT vs. Vegetable Products Ltd. [1973 (1) TMI 1 - SUPREME COURT] hold that the view favourable to the assessee taken by various Benches of the Tribunal should be followed and accordingly following the same, we hold that the assessee is entitled for exemption under section 54F. We, therefore, do not find any infirmity in the order of the ld. CIT(A), who has rightly adjudicated the issue in the light of the ratio laid down by the Tribunal in a number of cases. Accordingly, the order of the ld. CIT(A) is confirmed and the appeal of the Revenue is dismissed.
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2014 (7) TMI 1278 - BOMBAY HIGH COURT
Possession of immovable property - The Central Government, by its order under Section 269UD(1) of the Act, on 26.3.1997, purchased the entire premises, including the tenanted premises. - The petitioner seeks to retain the right to reside in the premises on account of her long standing association and attachment with the house, as well as her old age, and consequently desires a settlement with the Appropriate Authority, with payment of appropriate purchase value.
Held that:- The silence of the Act on modes of disposal of property that are pre-emptively purchased under Chapter XX-C cannot be, by any stretch, presumed to limit or constrain the Government’s discretion in disposal of the property.
For the above reasons, the petitioner cannot claim any relief in these proceedings. At the same time, the Court is of the opinion that the CBDT or the appropriate department of the Central Government ought to consider the best manner to dispose of the property, preferably through public auction.
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2014 (7) TMI 1277 - ITAT VISAKHAPATNAM
Eligible for grant of deduction u/s 10B - whether the unit was actually in existence in the previous year relevant to AY and whether it started manufacture and process of herbal extracts? - Held that:- AO erred in considering only manufacturing expenses for the purpose of arriving at ratio of outsourcing by way of job work of manufacturing activity. This is illogical. CIT(A), in our view, has correctly considered raw material cost, cost of chemicals, packing materials, fuel and power manufacturing expenses as well as manufacturing establishment expenses as total cost of manufacturing and the amount paid towards job works as a percentage of this expenditure and thereafter arriving at 21.27% as the percentage of job work that was out sourced from the total manufacturing cost. This demonstrates that the conclusion of the AO that major portion of manufacturing activity is not conducted in the assessee premises, is factually incorrect. In fact Laila Impex is also an EOU. Thus, we uphold these findings of the first appellate authority and dismiss the grounds raised in this regard. Appeal of the revenue is dismissed.
In the issue of directions of the CIT(A) to the AO to compute the profit of 21.27% of the turnover, as the same is attributable to the outsourcing of manufacture through job works and, then to exclude such profits from the profits eligible for deduction u/s 10B, we hold that the same is contrary to law. No such exclusion is contemplated in the Act. We are supported by the propositions laid down by the Mumbai Bench of Tribunal in the case of Gebbs Infotech Ltd. (2010 (10) TMI 1083 - ITAT MUMBAI). Thus uphold the directions of the learned CIT(A) as in this case also, what was outsourced was a part of the job of manufacturing i.e. step 1 out of the 6 steps or stages of manufacturing activity.
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2014 (7) TMI 1276 - ITAT KOLKATA
Disallowance u/s 40(a)(ia) - expenditure on provision for commission and transportation on which the TDS was made in subsequent previous year - TDS paid on or before the due date of filing of return u/s. 139(1) - Held that:- The first proviso to 40(a)(ia) is applicable when the payment is made before the due date specified u/s 139(1) - here all payments of TDS have been made after 31-03-2009, but the TDS has been deposited before the due date specified in section 139(1) - since TDS has been made after 31-03-2009, we are of the view that the finding of the learned Commissioner of Income-tax (Appeals) on this issue is erroneous and consequently, the same stands reversed and that of the AO restored - thus this appeal of revenue stands allowed.
Disallowance u/s 40(a)(ia) on account of expenditure on interest on which no TDS was deducted - Held that:- Form No. 15G/H has not been produced by the assessee before the learned Commissioner of Income-tax (Appeals) nor even before us - hence the appeal of revenue stand allowed.
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2014 (7) TMI 1275 - ANDHRA PRADESH HIGH COURT
Deduction u/s 10B - Exclude the freight charges both from Export turnover and Total Turnover, though such an adjustment to the total turnover - Held that:- It appears, the learned Tribunal has followed the decision of the Special Bench in the case of Saksoft Ltd. [2016 (10) TMI 539 - ITAT CHENNAI] on identical issue and the issue was decided in favour of the assessee. It does not appear that the aforesaid decision of the learned Tribunal has been reversed or questioned before any forum. Hence, we think that the learned Tribunal has correctly applied the law following the rule of consistency.
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2014 (7) TMI 1273 - ITAT CHANDIGARH
Unexplained investment in stock - Search proceedings - under recording the purchase value of the goods as well as sale value of the goods - whether separate additions can be made for such unrecorded purchases and sales? - Held that:- Almost 50% purchases have been made outside the books of account because in the books of account only purchases of ₹ 34,26,938/- have been made whereas the purchases outside the books are ₹ 16,35,009/-. This in turn means that assessee would require some investment to hold such stock and also some sundry debtors wherever credit sales have been made. Since the amount of ₹ 16,35,009/- pertains to full year, in our opinion, an addition of ₹ 3 lakhs would meet the ends of justice because that would mean inventory for almost two months plus some credit sales.
Addition on account of alleged profit earned on alleged unaccounted sales - Held that:- As discussed in detail the aspect relating to unrecorded purchases and sales and practically deleted whole of that addition except for the sum of ₹ 3 lakhs which was required as investment in the form of inventory. It was also observed that at best only profit could be estimated on such undisclosed sales. The undisclosed sales was clearly admitted during the survey/search operation by the assessee himself and therefore, the same cannot be denied now. At least profits on all such transactions have to be assessed to tax. The Assessing Officer has been more then reasonable to assess the profit at the GP rate declared by the assessee in various years and the same has been confirmed by Ld. CIT(A), therefore, we find nothing wrong with the order of Ld. CIT(A) and confirm the same.
Addition on account of alleged capital gains short disclosed - Held that:- The year a sum of ₹ 1,60,000/- has been shown towards construction and further a sum of ₹ 44,333/- is shown for transfer charges and ₹ 28,550/- for purchase of wood etc. Therefore, it can be said that assessee has incurred some expenditure for cost of improvement. However, at the same time no documentary evidence has been placed and since admittedly the assessee is holding many properties, therefore, it cannot be said that all the expenses have been incurred for improvement of this property. In these circumstances, in the interest of justice we are of the opinion that if a sum of ₹ 1 lakhs is estimated towards cost of improvement, then the same would meet the ends of justice.
Unexplained investment in stocks under section 69B - Held that:- The assessee is regularly carrying on the business of sanitary and hardware items and, therefore, must be carrying on some stock . Before CIT(A) list of inventory was furnished showing stock of ₹ 18,47,600/-. Though inventory list was not furnished before Assessing Officer but this can be said to have be accepted by the Revenue because investment in undisclosed sale was calculated on the basis of these details. Further, we have already held while adjudicating the issue regarding undisclosed stock i.e sum of ₹ 3 lakhs should be added towards inventory and sundry debtors. Considering this fact and the fact that some of the items have been valued at retail price we are of the opinion that addition of ₹ 5 lakhs towards cost would meet the ends of justice.
Unaccounted cash found at the time of search - Held that:- A married women coming to her parents house may bring cash and considering the overall circumstances we are of the opinion that a credit for ₹ 1 lakh can be given for cash belonging to Smt. Jyoti Khajuria. As far as cash belonging to Shri Vijay Kishan Sharma is concerned, no credit can be given, firstly a father-in-law normally would not keep his cash in the house of son-in-law. Secondly there was no such occasion to keep the cash with the son-in-law. In any case this cash was withdrawn from Vijay Bank on 19.8.2010 and why that cash was withdrawn and kept at son-in-law’s house, has not been explained. Therefore we decline to give any credit for the cash to Shri Vijay Kishan Sharma. To sum up a credit for ₹ 1,60,000/- (i.e. ₹ 1 lakh for cash belonging to Smt. Jyoti Khajuria and ₹ 60,000/- belonging to the business should be given and balance addition is confirmed). Therefore we set aside the order of the CIT(A) and allow this ground partly.
Addition on account of alleged investment in jewellery substantive in the case of assessee appellant - Held that:- Atleast benefit of the instructions issued by CBDT in Instruction No. F.286/63/93-IT(inv)-11 dated 11.5.1994 should be allowed for jewellery. As per these instructions jewellery to the extent of 500 gms in case of a married lady and 100 gms in case of a married male should be accepted, therefore out of jewellery of 735.20 gms, jewellery of 600 gms should be accepted. Similarly diamond items had been valued at ₹ 65150/- and silver items had been valued at ₹ 21780/-. These are small amounts and considering the overall status of the family, in our opinion, these amounts should be accepted as explained. Therefore we set aside the order of the CIT(A) and direct the Assessing Officer to make addition of jewellery for 135.20 gms.
Addition on account of alleged undisclosed capital gains - cost of improvement - Held that:- No force in the submissions because no evidence has been filed for the source of the cash for so called improvement. Therefore we set aside the order of the CIT(A) and confirm AO order.
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2014 (7) TMI 1271 - BOMBAY HIGH COURT
Allowability of deduction under Section 80JJA - Held that:- In relation to that, in the case of the very Assessee, this Court in the case of Commissioner of Income Tax v/s Smt. Padma S. Bora [2012 (12) TMI 666 - BOMBAY HIGH COURT] has dealt with the identical questions. The Commissioner of Income Tax's Appeal was dismissed by this Court finding that the same does not raise any substantial question of law. That was in relation to Assessment Year 2003-2004 and 2004-2005.
In the current Assessment Year the Tribunal has adopted identical reasoning. In such circumstances, we do not think that the Appeal raises any substantial question of law. The Same, therefore, deserves to be dismissed.
Allowability of bad debts claim - Held that:- The Assessee is engaged in the business of money lending. Merely because the Assessee does not have license to conduct this business, does not mean that the claim of bad debts should be denied. The Commissioner has in relation to this claim held in his order at the Tribunal's order in the case of B. N. Khandelwal v/s Income Tax Officer [2007 (5) TMI 352 - ITAT MUMBAI] would assist the Assessee inasmuch as the amount is lent in ordinary course of money lending business. It was written off after making efforts to recover.
The effort was unsuccessful. In such circumstances, the Tribunal did not commit any error in reaffirming the conclusion of the Commissioner of Income Tax (Appeals) and which is to be found in paragraph no. 4.2 of the Commissioner's order. The present Appeal also is continuation of the attempt by the Revenue to question such findings. The findings being purely of fact, the same do not raise any substantial question of law. The Appeal is, therefore, dismissed.
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2014 (7) TMI 1270 - ITAT PUNE
Disallowance being written off as irrecoverable - allowable deduction u/s 37 - Held that:- CIT(A) has not given cogent reasoning while upholding the order of the Assessing Officer and he has simply stated that the amount in question being TDS cannot be said to be business expenditure of the assessee company and therefore, the same could not be allowed. According to us, the order of CIT(A) is non-speaking one as it contains no reasoning. In the absence of reasoning, the order cannot be upheld - restore this issue to the CIT(A) with a direction to decide the same as per fact and law after providing due opportunity of being heard to the assessee
Disallowance out of foreign travel expenses - Held that:- The expenses related to foreign travel of Shri Aditya Bhartia, his wife Payal Bhartia and his father Radhe Shyam Bhartia. Based upon the findings for A.Y. 2007-08, the Assessing Officer held that there was no justification for foreign travel of Smt, Payal Bhartia and Shri Radhe Shyam Bhartia, Accordingly, he disallowed ₹ 4 lacs treating the same as non-business expenditure, which was confirmed by the CIT(A). Taking over all view and in the interest of justice, we restrict the disallowance to ₹ 2 lacs.
Disallowance of the claim u/s.80IB(3)(ii) - Held that:- CIT(A) was justified in rejecting the claim of the assessee following the decision of similar issue decided by the Tribunal in Samruddhi Industries Ltd. (2011 (3) TMI 696 - ITAT, PUNE) holding that the assessee is not entitled as it did not continue SSI during the assessment year under consideration. This reasoned finding of CIT(A) needs no interference from our side. We uphold the same.
Allowability of MAT Credit - Held that:- CIT(A) erred in not adjudicating the ground No.6 of the assessee. The learned Departmental Representative could not dispute the same. So in the interest of justice, we restore this issue to the file of CIT(A) with a direction to decide the same after providing due opportunity of being heard to the assessee.
Allow the deduction u/s.80IA(4)(iv)(a) without deducting brought forward loss or unabsorbed depreciation prior to initial year on notional basis
Disallowance of deduction u/s.35(2AB) - Held that:- The approval u/s.35(2AB) of the Act has been accorded to R & D unit of assessee company from 01.04.2009 to 31.03.2012 which entitles the assessee to claim weighted deduction u/s 35(2AB) from A.Y. 2010-11. Relying upon clear cut finding of Hon'ble Delhi High Court in the case of Apollo Tyres Ltd. (2010 (4) TMI 48 - DELHI HIGH COURT) the action of the Assessing Officer denying the deduction u/s. 35(2AB) of the Act was rightly upheld by the CIT(A). As directed Assessing Officer to restrict the disallowance u/s. 35(2AB) of the Act to ₹ 85,39,848/-. This reasoned finding of CIT(A) needs no interference from our side. We uphold the same.
Disallowance on account of foreign travel expenses - AO made disallowance on account of non-business expenditure and the same was upheld by the CIT(A)- Held that:- A similar issue in assessee's own case for A.Y. 2008-09 has been decided vide para 5 of this order. Facts being similar, so following the same reasoning and taking all facts into consideration, we restrict this disallowance to 2,70,000/-.
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2014 (7) TMI 1269 - ITAT NEW DELHI
Disallowance u/s 14A - expenditure in relation to exempt income - Held that:- The expenditure, which has to be disallowed, has to be in relation to exempt income. The assessee before us has demonstrated that expenses incurred by it, to a large extent pertain to amalgamation of ten companies. This expenditure cannot be attributable to the earning of exempt income. This expenditure has to be excluded while computing disallowance u/s 14A with regard to administrative expenses. As a detailed verification is to be done, we set aside the issue to the file of the Assessing Officer for fresh adjudication in accordance with law. It is for the assessee to make its contentions before the Assessing Officer.
The Jurisdictional High Court in the case of Maxopp Investment Ltd. (2011 (11) TMI 267 - Delhi High Court ) has clearly laid down that no disallowance can be made u/s 14A of the Act, if no expenditure is incurred in relation to the exempt income. This proprietary has to be applied by the Assessing Officer. - Decided in favour of assessee for statistical purposes.
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2014 (7) TMI 1268 - CALCUTTA HIGH COURT
Adjustment of accumulated unabsorbed depreciation allowance brought forward as against income from house property and income from other sources - whether the assurance of the Finance Minister in Parliament that set-off of the cumulative unabsorbed depreciation brought forward from earlier years as on April 01, 1997 can be set off against the profits and gains of a business or profession or any other income of the tax payer for the assessment year 1997-98 and subsequent year forms part of the legislative intent and any construction contrary thereto is erroneous? - Held that:- the provisions introduced suggest that the unabsorbed depreciation allowance could not be wholly set off against the profits and gains, if any, of any business or profession carried on by the assessee. The unabsorbed depreciation allowance could be set off from the income under any other head during the assessment year 1997-98. If the unabsorbed depreciation allowance could not be wholly set off during the assessment year 1997-98, the left over could only be set off against the profits and gains, if any, of the business or profession in the assessment year 1998-99. This submission of Mr. Agarwal appears to be plainly correct on the basis of the wordings used in sub-section (2) of Section 32 as amended by the Finance (No.2) Act, 1996 with effect from 1st April, 1997. Both the questions are answered in the negative and in favour of the revenue.
Another submission advanced by Mr. Bagchi that the unabsorbed depreciation of the previous year becomes depreciation of the current year as would appear from the Circular issued by the CBDT which has also been taken into account by the learned Tribunal may be correct, but that does not materially alter the situation. The intention of the legislature appearing from the amendment made by the Finance (No.2) Act, 1996 is that the depreciation unabsorbed or otherwise or current would be set off against the income arising from business or profession or any other income, but the left over portion thereof could not be set off in the assessment year 1998-99 except against the income arising from business or profession. Therefore, this submission of Mr. Bagchi does not help his case nor does the same lead to a different result of the appeal.
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2014 (7) TMI 1265 - ITAT KOLKATA
Compensation for giving up right to receive pension - nature of receipt - assessee had to surrender his right to receive pension on account of the partners of the erstwhile Arther Anderson joining S.R. Batliboi & Co - Held that:- The ratio decided by the Hon’ble Delhi High Court in the case of Khanna and Annadhanam [2013 (1) TMI 681 - DELHI HIGH COURT] applies in all force, thus respectfully following it, the Assessing Officer is directed to treat the lump sum received by the assessee on giving up the right the receipt of retirement benefit as capital receipt in the hands of the assessee.
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2014 (7) TMI 1264 - KARNATAKA HIGH COURT
Benefit of Section 54(1) in respect of the second residential property purchased by him - whether purchase of “a residential house’ as mentioned in Section 54(1) means ‘one residential house’ only? - Held that:- From the facts it is clear that having sold the property in Basavanagudi, probably, as the assessee could not secure a proper residential house sufficiently big to invest the entire sale consideration derived from the sale of residential house, he has chosen to purchase two properties nearby. In fact to purchase a second property, the balance consideration was not sufficient.
Therefore, in the sale deed in respect of the second residential house, the name of his wife who is a doctor by profession as well as his father’s name are included who might have contributed the balance sale consideration. So it is not a case where the assessee is attempting to evade tax. He had made a bonafide attempt to invest the sale consideration from the sale of residential premises in purchasing two residential premises in the very same locality situated nearby. - Decided in favour of assessee
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2014 (7) TMI 1263 - ITAT COCHIN
Disallowance of depreciation claimed on Wind Mill on the reasons that it has been incurred for development of the infrastructure of the land - Held that:- From the nature of various payments, it is clear that separate amounts towards earth work and the foundation; erection and commissioning have already been paid to Suzion Infrastructure Ltd. Hence, in our opinion, the payments made to TNEB are not towards development of land infrastructure, foundations, erection and installing and commissioning etc., which in the sense of terminology of development of windmill are actually infrastructure charges.
we are of the opinion that these charges paid to TNEB are for evacuation of land, towards fee of NOC of land and its registration and supervision charges to make unhindered land available and ensure technical specifications. Accordingly, the same cannot form part of the plant and machinery of windmill to be eligible for depreciation. In view of the above facts and circumstances of the case, we are of the considered opinion that the lower authorities are right in treating the payment towards permission for land utilization, NOC and registration of land and has rightly capitalized them with the cost of land and denied deprecation on this payment - Decided against assessee
Addition towards interest on investment expenditure incurred in new the line of business - Held that:- In order to allow as the amount of interest paid in respect of capital borrowed for the purpose of business must be of an existing business. In this case, as the business was not set up at the time of incurring the interest; therefore, no question of allowance of interest is allowable u/s 36(1)(iii). Whether this was a part of new business or not was a fact, which was for the assessee to establish and the assessee was failed to establish the fact even before us. Being so, it is not possible to uphold the contention of the assessee. In the premises, the lower authorities were right in disallowing the proportionate interest expenditure relating to the investment made in the new line of business - Decided against assessee
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2014 (7) TMI 1262 - ITAT MUMBAI
Penalty u/s 271(1)(c) - disallowance made u/s 40(a)(ia) - Held that:- The disallowance has been made only on the reason that TDS has not been deducted by the assessee on the said expenditure.
Delhi High Court in the case of CIT Vs. AT & T Communications Services India Pvt. Ltd.(2012 (2) TMI 8 - DELHI HIGH COURT ), has held that invoking the provisions of section 40(a)(ia) for making disallowance should not be ground for the levy penalty u/s 271(1)(c) of the Act. Also, in the case of New Horizon India Ltd. Vs. DCIT ( 2010 (5) TMI 653 - ITAT DELHI) the Delhi Bench of the Tribunal has deleted the penalty levied u/s 271(1)(c) of the Act on account of disallowance made u/s 40(a)(ia) of the Act on the ground that the assessee cannot be held guilty of concealment or furnishing of inaccurate particulars of income on account of disallowance made u/s 40(a)(ia) - Decided in favour of assessee.
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2014 (7) TMI 1261 - ITAT LUCKNOW
Disallowance of expenses incurred on temporary erections and site accommodation - Held that:- The assessee has been maintaining proper books of account and in the light of the nature of activities undertaken by the assessee, we find force in the contentions of the learned counsel for the assessee that at every site temporary constructions are made and a particular percentage of expenditure is debited to the account under the head "temporary site accommodation" and whatever materials were left out from the site they are being reutilized further. Therefore, no excess claim was raised by the assessee. Since no disallowance was ever made in earlier assessment years, we find no justification in the disallowance made in this very assessment year, as the AO cannot blow not and cold in the same breath by admitting the claim of the assessee in one assessment year and denying the same in the succeeding assessment year. We are, therefore, of the view that the claim of the assessee is reasonable and is allowable - Decided in favour of assessee.
Disallowance of expenses incurred on shuttering, centering, scaffolding, etc. - Held that:- The assessee has been debiting a particular amount per cubic metre to the cost of the project as expenses incurred in shuttering, centering, scaffolding, etc. keeping in view the complexity of nature of work. Copy of the office circular is available at p. 54 of the compilation of the assessee, in which guidelines have been laid down for debit of ₹ 600 per cubic metre on account of shuttering, centering, scaffolding, etc. Keeping in view the totality of the facts and circumstances of the case and the nature of complexity of the work, we are of the view that the assessee's claim of expenses on shuttering, centering, scaffolding, etc. raised as per circulars issued by the department is an allowable expenditure in the light of the order of the Tribunal in the assessee's own case. It is also evident from the record that in earlier year no disallowance was made on this account. Therefore, following the rule of consistency, disallowance cannot be made in the impugned assessment year without any valid reason. We accordingly find no merit in the disallowance and we set aside the order of the learned CIT(A) and delete the addition in this regard.
Disallowance of deduction under s. 80-IA - Held that:- We find that the claim of deduction under s. 80-IA of the Act was allowed in asst. yrs. 2005-06 and 2007-08 by the AO himself and in asst. yr. 2003-04 the claim was disallowed, but later on it was allowed by the learned CIT(A) and the Revenue has not challenged the order of the learned CIT(A) before the Tribunal. Therefore, it attained finality. Therefore, in the light of these facts, we find no infirmity in the order of the learned CIT(A) who has rightly allowed the claim of the assessee under s. 80-IA of the Act. Accordingly, we confirm the order of the learned CIT(A) on this issue.
Addition of provision for "foreseen loss" - Held that:- we find that the assessee has not placed any evidence on record to demonstrate the basis for making provision for "foreseen loss". No doubt, foreseen loss may be possible in the business of the assessee as it is engaged in complicated construction work, but without any basis provision for foreseen loss cannot be created. We are, therefore, of the view that whenever loss is suffered, it can be debited to its P&L a/c and the Revenue may allow the same after making necessary verification. Accordingly, we hold that in the impugned assessment year provision for foreseen loss cannot be allowed, but the assessee will be allowed to debit the actual loss suffered by it in any of the assessment years and the same would be allowed by the Revenue after making necessary verification.
Disallowance of prior period expenses booked in this year - Held that:- As we have confirmed the addition having noted that the assessee could not place any evidence to establish that the prior period liabilities have been crystallised in the impugned assessment year. Similar is the position in the instant case, as nothing is placed on record to establish that the liabilities for earlier years have been crystallised in the impugned assessment year. Accordingly, following the view taken in the foregoing paras, we confirm the addition.
Non-deduction of TDS - assessee has submitted that the payment was made in the nature of advance, therefore, the same cannot be disallowed on non-deduction of TDS - Held that:- This issue requires a fresh adjudication by the lower authorities after necessary verification with regard to the nature of payment. Accordingly, we set aside the order of the learned CIT(A) and restore the matter to the file of the AO with a direction to adjudicate this issue in the light of evidence with regard to the nature of payment. Accordingly, this appeal of the assessee is disposed of.
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2014 (7) TMI 1260 - BOMBAY HIGH COURT
Allowability of deduction under Section 80-IB - whether the activity undertaken by the assessee qualifies to be a manufacturing activity? - Tribunal allowed the claim - Held that:- The Division Bench of this Court in "CIT v. Arts & Crafts Exports" [2011 (12) TMI 338 - Bombay High Court] held that whether the decision of the Tribunal in the case of assessee for earlier year that the assessee was engaged in manufacturing activity and, therefore, entitled to deduction under Section 80-IB, had been accepted by the revenue and no argument was advanced to establish that the said decision of the Tribunal was erroneous, allowability of deduction under Section 80-IB of the Act during relevant previous year could not be assailed by the revenue. The facts of this case and present cases are similar. The ratio of this decision, in our view, is perfectly applicable to the present cases. - Decided in favour of assessee
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2014 (7) TMI 1259 - ITAT CUTTACK
Application filed u/s 12A - rejection of claim holding that the Assessee was not engaged in charitable activities - Held that:- It is not the case of the Assessee that it is running a normal schooling for sports. Therefore, we hold that the Assessee‟s activities do not fall within the term “education”.
CIT has used material behind the back of the Assessee for rejecting the registration and has not given him proper opportunity, we, therefore, with our above observation set aside the order of CIT and restore this issue to the file of CIT with the direction that the CIT shall look into the matter of registration of the institution afresh after giving proper and sufficient opportunity to the Assessee to prove that the objects for which the Assessee institution is created are genuine and are for charitable purposes. We may clarify that while considering the application of the Assessee for registration, the CIT should not apply proviso to Sec. 2(15) retrospectively. If he so choses that in view of the proviso inserted w.e.f. 1.4.2009 the activities carried on by the Assessee no more remains charitable as per the amended definition of Sec. 2(15), he may pass an order u/s 154 rectifying his order withdrawing the registration of the Assessee in case he grants registration to the Assessee w.e.f. 1.4.2009 by passing a specaking order. - Decided in favour of assessee for statistical purposes.
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2014 (7) TMI 1257 - ITAT KOLKATA
Allowing the deduction u/s 80IA - Held that:- This is an undisputed fact that the assessee made a claim u/s 80IA of the Act for the first time in A.Yr.2004-05 which was disallowed by the AO. Before the ld. CIT(A) the assessee has filed an appeal for A.Yr.2004-05 but the ld.CIT(A) has for the first time allowed the eligibility of the claim of the assessee u/s 80IA of the Act during A.Yr.2006-07 as that appeal was heard first. In the appellate order for A.Yr.2006-07, the CIT(A) after examining the claim of the assesee took a view that the assessee is eligible for the claim of deduction u/s 80IA.
The order for A.Yr.2006-07 had been followed in A.Yr.2004-05, 2005-06, 2007-08 and 2008-09 by the CIT(A). In view of this fact in A.Yr.2006-07 in which the claim of the assessee u/s 80IA was examined on merit for the first time by the CIT(A). The CIT(A) not serving the notice to the AO has violated the provision of sub-sections (1) and (2) of section 250 of the IT Act and thus denied the natural justice to the Revenue so that the Revenue could have placed its case before the ld. CIT(A). Therefore we hold that the order passed by the ld. CIT(A) is in violation of principles of natural justice and we therefore set aside the matter to the file of the ld. CIT(A) with the direction to the ld.CIT(A) to give the AO proper and sufficient opportunity of being heard and to decide the issue afresh in accordance with law.
Since we have set aside the order of the ld. CIT(A) for A.Yr.2006-07 in which the CIT(A) for the first time allowed the claim of the assesse u/s 80IA of the Act and in subsequent year CIT(A) allowed the claim of the assessee u/s 80IA of the Act by following the order for A.Yr.2006-07. We, therefore, set aside the order of the ld. CIT(A) for A.Yr.2004-05, 2005-06, 2007-08 and 2008-09 also and restore the issue involved to the file of the ld. CIT(A) with the direction that the ld. CIT(A) shall redecide the appeal for all these assessment years afresh after deciding the appeal for the A.Yr.2006-07. - Appeals filed by the Revenue are allowed for statistical purposes.
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