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Income Tax - Case Laws
Showing 121 to 140 of 7553 Records
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2014 (12) TMI 1184 - ITAT PUNE
Deduction u/s 80-IB(10) - profits earned from development and building of a housing project, named, ‘Runwal Daffodils’ - Held that:- Assessee had asserted before the Assessing Officer that the PMC was levying municipal taxes in respect of each of the flat in the project and such levies were in the name of the respective owners. The MSEB receipts and possession documents were also furnished to the Assessing Officer. Before the CIT(A) assessee also pointed out that while making application for issuance of completion certificate to PMC, assessee had taken all the necessary steps required to be done before seeking the completion certificate, namely, obtaining of NOCs from various Departments like, Fire Department, Garden Department, Encroachment Department, Construction and Development Control Department, etc.. On this basis, it was sought to be contended that the non-issuance of the completion certificate by the PMC before 31.03.2008 was for reasons beyond the control of the assessee.
We find that all the aforesaid factual assertions made by the assessee have not been controverted either by the Assessing Officer or by the CIT(A).
In the absence of any material to controvert the assertions of the assessee 8 that the construction was completed before the stipulated dated i.e. 31.03.2008, we find no reasons to belie the same. Therefore, on facts, the position consistently canvassed by the assessee to the effect that the construction of the project was complete before the stipulated date of 31.03.2008 has to prevail. We set-aside the order of the CIT(A) and direct the Assessing Officer to allow assessee’s claim for deduction u/s 80-IB(10) in respect of the profits of the housing project, namely, ‘Runwal Daffodils’. - Decided in favour of assessee
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2014 (12) TMI 1183 - ITAT MUMBAI
Unexplained cash credit - CIT(A) deleted the addition - Held that:- The assessee has maintained regular cash book and all its account are audited. The Ld.CIT(A) has analyzed each and every deposits made by the assessee in the bank account from the withdrawals made by the assessee from the bank and the cash available in the cash book. The assessee has also shown sufficient cash in hand in the balance sheet of the earlier years and also the source of cash available with the assessee. Thus, the deposits made by the assessee has been properly explained by the assessee before the Ld.CIT(A) and without there being any contrary evidence or rebuttal by the department, we do not find any reason to deviate from such a the finding recorded by the Ld.CIT(A). Accordingly, the order of the Ld.CIT(A) is affirmed and ground raised by the Revenue is dismissed. - Decided in favour of assessee
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2014 (12) TMI 1182 - ITAT MUMBAI
Reopening of assessment - addition on account of share premium and share application money was made u/s 68 - Held that:- 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. If it is impossible for any prudent person to form a belief on the basis of material or evidence that the income chargeable to tax has escaped assessment and reason which have been recorded would not lead to a prudent person to form an opinion that the income has escaped assessment within the meaning of section 147 then the action of the Assessing Officer in reopening the assessment u/s 147/148 is contrary to the powers permitted under the said provisions of Act. In the case in hand, 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. Accordingly, in the facts and circumstances of the case, we hold that the reopening in these cases are not valid and consequently the same is quashed. - Decided in favour of assessee.
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2014 (12) TMI 1181 - ITAT MUMBAI
Penalty u/s. 271(1)(c) - unaccounted gifts - Held that:- The assessee has claimed to have received gifts. The payments were received through cheques. The Hon’ble Supreme Court in the case of CIT Vs P. Mohanakala [2007 (5) TMI 192 - SUPREME Court ] has held that transfer of monies through banking channels is not sufficient to hold gifts as genuine. It is also an admitted fact that the donors are not at all related to the donees. In all the proceedings, the main plea of the assessee was that the amount was offered as income to avoid litigation and to purchase peace of mind.
The assessee had no intention to declare its true income. It is the statutory duty of the assessee to record all its transactions in the books of account, to explain the source of payments made by it and to declare its true income in the return of income filed by it from year to year. The Assessing Officer had recorded a categorical finding that he was satisfied that the assessee had concealed the true particulars of income and was liable for penalty proceedings under section 271 read with section 274 of the Act. There was no illegality in the Department initiating penalty proceedings. - Decided against assessee.
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2014 (12) TMI 1180 - ITAT MUMBAI
Levy of penalty u/s. 271(1)(c) - gifts received - revenue is aggrieved by the deletion of the penalty in respect of Long Term Capital Gains offered by the assessee for tax as income from other sources pursuant to survey action u/s. 133A of the Act - Held that:- The facts in issue are identical to the facts in issue in the case of Mrs. Rashila R Oswal [2014 (12) TMI 1178 - ITAT MUMBAI] for A.Y. 2005- 06. For our detailed reason given in the appeal of Mrs. Rashila R. Oswal and on findings the facts in issues in these appeals to be identical, the appeal filed by the assessee is dismissed and the appeal filed by the Revenue is also dismissed.
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2014 (12) TMI 1179 - ITAT PUNE
Rectification of mistake - issue challenging the validity of re-opening of assessment u/s 147 has not been adjudicated by the Tribunal - Held that:- Revenue has not disputed the factual matrix brought out by the applicant that the Ground of Appeal raised by the assessee relating to the validity of re-opening of assessment u/s 147 of the Act has not been adjudicated by the Tribunal.
In view of the aforesaid, we hereby recall the order of the Tribunal dated 30.03.2012 for the limited purpose of adjudicating the Ground of the assessee relating to the validity of re-opening of assessment u/s 147 of the Act, which had not been adjudicated earlier. For the said purpose, the Registry is directed to post the appeals of the assessee before a regular Bench for hearing qua the issue relating to the validity of re-opening of assessment u/s 147 of the Act. - Decided in favour of assessee
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2014 (12) TMI 1178 - ITAT MUMBAI
Penalty u/s 271(1)(c) - Long Term Capital Gain on sale of shares offered by the assessee for tax as ‘Income from other sources” pursuant to a survey action u/s. 133A - Held that:- Held that:- t is an undisputed fact that in the original return of income filed on 12.8.2005, the assessee has returned only ₹ 954,828/-. It is also an undisputed fact that after the survey operation conducted at the premises of the assessee, the assessee agreed for declaring Long Term Capital gains of ₹ 44,83,268/- and ₹ 20,00,000/- on account of gifts received as income from other sources. It is also an undisputed fact that the revised computation of income, the assessee has offered only ₹ 12,00,000/- as gifts and during the course of the assessment proceedings, the assessee further agreed for the addition of ₹ 2,00,000/- out of the balance gift amount. The explanation of the assessee that the amount has been offered to purchase peace of mind and to avoid unnecessary litigation is not a valid reason as per the decision of the Hon’ble Delhi High Court in the case of MAK Data ltd. (2013 (1) TMI 574 - DELHI HIGH COURT ) which has been subsequently confirmed by the Hon’ble Supreme Court [2013 (11) TMI 14 - SUPREME COURT ]. Considering all these facts in totality, we do not find any reason to interfere with the findings of the Ld. CIT(A). - Decided against assessee.
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2014 (12) TMI 1175 - ITAT MUMBAI
Taxability for amount received from partnership firm on retirement, as per mutual agreement - treaed as capital gains chargeable to tax - Held that:- Hon’ble Gujarat High Court in CIT vs. Mohan Bhai Pama Bhai (1971 (9) TMI 56 - GUJARAT High Court) held that no transfer is involved when a retiring partner receives at the time of retirement from the firm, his share in the partnership asset either in cash or any other asset. The ratio laid down in P.H. Patel (1987 (8) TMI 40 - ANDHRA PRADESH High Court ) wherein it was held that when a partner retires from a partnership taking his share of partnership interest, there is no element of transfer of interest in the partnership asset by the retiring partner. Therefore, considering the totality of facts and the circumstances by applying the ratio laid down by Hon’ble jurisdictional High Court in the case of Riyaz A. Shekh [2013 (12) TMI 248 - BOMBAY HIGH COURT] wherein held Amounts received on retirement by a partner is not subject to capital gains tax - Decided against Revenue
Deduction u/s 54 - Held that:- As there is uncontroverted finding in the impugned order that all the payments to the contractors were by cheque only, thus as per the provisions of section 54(2) of the Act, the assessee was to invest the capital gains as per the provision of the Act, we find no infirmity in granting deduction u/s 54 to the extent mention in the order thus we find no substance in the appeal of the Revenue. - Decided against Revenue
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2014 (12) TMI 1174 - ITAT VISAKHAPATNAM
Revision u/s 263 - as per CIT(A) the amount has been split into two parts so as to avoid the attraction of provisions section 40A(3) - Held that:- The copies of the ledger account of the Lorries demonstrate that the payment in question has been made in different points of time. The advance has been paid to the lorry at the first instance and, thereafter when the delivery of the goods has been made, the balance amount has been paid. This fact is reflected by way of passing of journal entries, wherein, the lorries have been credited with the balance payable on the day of payment of advance and it was on subsequent date that the balance has been paid after deducting TDS. This journal entry has not been properly understood by the ld CIT. This is clear from the show-cause notice, where it states that the amount has been split into two parts so as to avoid the attraction of provisions section 40A(3). This is factually incorrect. After the assessee has demonstrated before the ld CIT that the manner in which the entries in the books have been passed, he at page 5 acknowledged that the amounts were split into two parts and one was taken as advance and was given to lorry owners and the balance was paid subsequently by way of cash. This means the ld CIT admits after enquiry that the version of the assessee is correct. While so, we don’t find any justification in the ld CIT directing the AO to verify the details filed by the assessee and determined whether they are factually correct. When the enquiries conducted by the ld CIT have not thrown up any material to demonstrate that the order of the AO was erroneous and prejudicial to the interests of the revenue, the ld CIT should have dropped the proceeding u/s.263.The Ld CIT also cannot without himself conducting enquiries and coming to a conclusion on the basis of material found as a result of enquiry, give direction to the AO to conduct fresh verification. The assessee has satisfactorily explained the issues raised by the ld CIT and in such circumstances, it cannot be said that the order of the AO is erroneous or prejudicial to the interest of the revenue. - Decided in favour of assessee.
Deduction u/s.80C - Held that:- Coming to deduction u/s.80C of the Act, it is not the case of the ld CIT that the AO has not verified the claim of the assessee. In fact, the assessee has submitted the details to the ld CIT and ld CIT, on examination of such details, has not recorded any adverse conclusion. A simple direction is given to AO to verify the claim of the assessee. Such a direction is erroneous for the reason that the ld CIT has not recorded that any prejudice is caused to the revenue.- Decided in favour of assessee.
Insurance commission - tds u/s 194C or 194D - Held that:- On the issue of alleged insurance commission earned by the assessee, M/s. Bhaskar Prakashan Pvt. Ltd. has clearly explained that a mistake has occurred while mentioning the section 194D instead of 194C and the commission was never received by the assessee. Despite of such categorical confirmation, the ld CIT directed the AO to verify this claim of the assessee without recording a finding that the order of the AO on this issue is either erroneous or prejudicial to the interests of the revenue. In our view, when proper material has been furnished before the ld CIT and the ld CIT has examined the same, he cannot without recording specific finding that the order is erroneous and prejudicial to the interests of the revenue on certain specific aspects invoked his power u/s.263 - Decided in favour of assessee.
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2014 (12) TMI 1172 - ITAT HYDERABAD
Reduction of operating profits of the tax-payer being the income from settlement of patent infringement suit credited to Profit & Loss Account - Held that:- As the issue involved in the year under consideration as well as all the material facts relevant thereto are similar to assessment year 2008-09, we respectfully follow the decision of the Tribunal for assessment year 2008-09 and uphold the impugned order of the Assessing Officer, whereby he reduced the operating profit of the assessee being the income from the settlement of patent infringement suit to held incomes of extraordinary nature are to be excluded and further extraordinary events in any company also make it non-comparable while doing exercise of FAR analysis for comparability purpose. For the reasons stated above, we agree with the Assessing Officer/DRP that this income from settlement of patent infringement cannot be considered as operational income while working out the segmental profits or as total profits of the assessee for the purpose of comparison. At best, it can be considered as another segment of income for which no expenditure was charged, but the same cannot be included in either of the segmental operations of the assessee. - Decided against assessee
Claim for weighted deduction under S.35(2AB) in respect of expenditure incurred for registering patents outside India - Held that:- When the learned counsel for the assessee was required by the Bench to clarify as to how the claim of the assessee is covered by the above Explanation, he has contended that the expenditure in question is incurred by the assessee for filing application for patent rights under patents Act, 1970. He has also submitted that the assessee is in a position to support and substantiate its claim by filing relevant documentary evidence and has urged that an opportunity may be given to the assessee for this purpose by sending the matter to the Assessing Officer. Since the learned Departmental Representative has not raised any objection in this regard, we restore this issue to the file of the Assessing Officer with a direction to examine the assessee’s claim for weighted deduction under S.35(2AB) in respect of expenditure incurred for registering patents outside India - Decided in favour of assessee for statistical purposes
Claim of the assessee for deduction under S.35(1)(i) and (iv) at 100% of expenditure in respect of amount not considered by the prescribed authority under S.35(2AB) for weighted deduction is squarely covered in favour of the assessee by the order of the Tribunal in assessee’s own case for assessment year 2008-09 wherein held that we do not see any reason in not allowing this amount. We are of the opinion that both Assessing Officer and DRP has not applied their mind to the amounts involved. Since the entire claim of the assessee was rejected summarily without examining the facts, we are of the opinion that this expenditure in respect of R & D expenditure is to be considered under section 35(1), if not for the weighted deduction under section 35(2AB). - Decided in favour of assessee
Deduction under S.10B in respect of export oriented undertaking situated at Jeedimetla - Held that:- A perusal of the relevant portion of the DRP’s order reproduced above shows that a direction has been given by the DRP to the Assessing Officer to follow the judgment of the Hon’ble Andhra Pradesh High Court in assessee’s own case for assessment year 2005-06 as and when it is received on the issue of assessee’s claim for deduction under S.10B. It is observed that a similar direction was given by the DRP in assessee’s own case for assessment year 2008-09 and the same was upheld by the Tribunal vide its order dated 16.1.2014 cited supra, thereby allowing the relevant ground of the assessee’s appeal on this issue for statistical purposes. Respectfully following the decision of the Tribunal on similar issue in assessee’s own case for assessment year 2008-09 - Decided in favour of assessee for statistical purposes.
Quantification of the deduction under S.10B, by reducing the benefit under S.10B for Unit 3.2 situated at Jeedimetla, is squarely covered in favour of the assessee by the order of the Tribunal dated 16.1.2014 in assessee’s own case for assessment year 2008-09 cited supra, wherein a similar issue was considered and decided that assessee has allocated the corporate overheads on a rational basis based on the material cost of purchase and number of people worked for the unit and also on the basis of head account which is reasonable. Adopting sales turnover as the basis may result in skewed allocation. since Assessing Officer has not given any rationale in adopting the turnover as the basis, ignoring the assessee's method, we are of the opinion that allocation of expenditure as was done by the assessee is more rationale and is in tune with the principles laid down by the Institute of Cost Accountants and also for the purpose of Company Law. Therefore, considering the detailed objections raised by the assessee as placed in the objections to the DRP, we are of the opinion that the allocation by the assessee is to be upheld. - Decided in favour of assessee
Depreciation @ 25% on brought forward written down value of non-compete fee paid to amalgamating company - Held that:- As in assessee’s own case for assessment year 2008-09 wherein a similar issue contained corresponding Ground no.15(a) in the appeal for that year, was considered and decided in favour of the Revenue held that the cases against the assessee are more in number and there is a consistent view of the ITAT in not allowing the depreciation on non-compete fee. The non-compete fee is outcome of an agreement entered into between two parties. It does not represent any intangible asset, such as, know-how, patents, copyrights, trade marks, licences, franchises, etc. Therefore, in view of decision of the hon'ble Delhi High Court in the case of HindustanCoca Cola Beverages P. Ltd. [2011 (1) TMI 138 - Delhi High Court] non-compete agreement would not create an asset of intangible nature eligible for depreciation under section 32(1)(ii) of the Act. - Decided against assessee
claim of depreciation on brought forward written down value in respect of non-compete fee paid to M/s. Medispan Ltd by Medicorp Technolgoies Ltd. in previous year relevant to assessment year 2002-2003 - Held that:- As in assessee’s own case for assessment year 2008-09 Even though the assessee's claim was crystallized by the Orders of the ITAT wherein the payment of fee was considered eligible for depreciation, the Assessing Officer did not grant the depreciation on the reason that reference application is pending before the Hon'ble High Court and the issue has not been finalized. This cannot be a reason for denying the depreciation claimed. Since, ITAT has already ordered the depreciation to be allowed in assessment year 2002-2003, consequently, depreciation has to be allowed by the Assessing Officer in this year. He is empowered to take rectification proceedings in case that order was not upheld by the Hon'ble High Court. In view of this, to that extent of claim of depreciation on brought forward written down value, Assessing Officer is directed to allow the depreciation after verifying the WDV figures. - Decided in favour of assessee
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2014 (12) TMI 1170 - ITAT MUMBAI
Disallowance of provisions for expenses - Held that:- It is to be seen that provision was made looking to the nature and quantity of expenses on a bona fide estimate. Had the assessee was having exact details of expenses then it could have quantified the expenses. It has made the provision because it was difficult to quantify the expense with supporting details. Thus n our opinion the assessee made the provision on a bona fide belief, while setting off the provision with the actual, certain amounts resulted to be excess. The moment such excess amount resulted assessee has returned it back and offered it for taxation. If this amount is disallowed here then it will be taxed twice, once in this assessment year and again in the year in which assessee has offered it. Whenever any provision is made for the expenses some plus and minus is possible because provision cannot be made with exactness. As far as the other aspect is concerned that assessee has offered it for the next year, we are of the view that after adjusting the account when assessee realized the real facts it offered the excess provision for taxation immediately in the subsequent year. Thus, looking into the entire facts and circumstances we are of the view that the disallowance does not call for and we delete the same. - Decided in favour of assessee.
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2014 (12) TMI 1169 - ITAT MUMBAI
Penalty u/s 271(1)(c) - inaccurate particulars furnished by assessee in respect of value adopted for computation of capital gain in view of the mandatory provision of section 50C - CIT(A) deleted the addition - Held that:- As it is clear that the assessee has disclosed all relevant details as well as documents in support of its computation of Short term Capital Gain by taking into consideration the actual sale consideration received by the assessee. The fact of actual sale consideration received by the assessee has not been disputed by the Assessing Officer but the addition was made simply by applying the deeming provisions of section 50C. Therefore, in view of the various decisions as relied upon by the Ld. Authorized Representative as well as by the CIT(A), we do not find any error in the impugned order of CIT(A) in deleting the penalty levied u/s 271(1)(c). - Decided in favour of assessee.
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2014 (12) TMI 1168 - ITAT LUCKNOW
Reopening of assessment - undisclosed receipt of ₹ 50 lakhs - Held that:- During the course of hearing, a specific query was raised from the ld. D.R. as to what evidence they have collected during the course of search or thereafter, on the basis of which the Assessing Officer has formed a belief that the income chargeable to tax has escaped assessment in the hands of the assessee. No satisfactory answer was furnished by the ld. D.R. We have also carefully perused the seized documents and we find that there is a debit entry of ₹ 50 lakhs in the name of Mlik Kannauj, but this entry does not indicate that the amount of ₹ 50 lakhs was given to the Managing Director of the assessee. There may be hundred of Malik in Kannauj but on the basis of this dumb document, the reopening of assessment in the hands of the assessee is not permissible. Moreover, the searched party has also examined Shri. Sohanraj Gupta and the statement is also placed on record and at nowhere Shri. Sohanraj Gupta has deposed about payment of ₹ 50 lakhs to the assessee. In the absence of any relevant material, the reopening of assessment in the hands of the assessee is not proper. - Decided in favour of assessee
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2014 (12) TMI 1167 - ITAT BANGALORE
Depreciation claim - entire cost of the assets have been claimed by the assessee and allowed as application of its income for charitable purposes - Held that:- We find the issue of the assessee's claim for depreciation on addition to assets acquired in the relevant period is to be allowed even if the entire cost of the same assets have been claimed by the assessee and allowed as application of its income for charitable purposes, since this issue has been held in favour of the assessee in a number of decisions of the co-ordinate bench of this Tribunal in the cases of Dr. T.M.A. Pai Foundation (2010 (2) TMI 1156 - ITAT BANGALORE ), Academy of General Education (2015 (9) TMI 272 - ITAT BANGALORE ) following the decision of the Hon'ble Bombay High court in the case of CIT V Institute of Banking reported in (2003 (7) TMI 52 - BOMBAY High Court ).
Following the decisions of the Hon'ble Bombay High Court in the case of Institute of Banking (supra) and of the co-ordinate benches (cited supra in this para), we uphold the order of the learned CIT (Appeals) in allowing the assessee's claim for depreciation on new assets acquired and put into use during the relevant previous year under consideration, even if the entire cost of those assets have been claimed by the assessee and allowed as application of its income for charitable purposes. - Decided in favour of assessee.
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2014 (12) TMI 1166 - ITAT BANGLORE
Determination of total income - disallowance of revenue expenditure incurred towards flooring and wiring in the assessee's hotel premises - 153A Assessment - contention of the assessee that since no incriminating evidence relating to this transaction was found in the course of search u/s.132 of the Act, the resultant disallowance was not called for in the assessment of income u/s.143(3) rws 153A - Held that:- Respectfully following the decision of the Hon'ble High Court of Karnataka in the case of Canara Housing Development Co. ( 2014 (8) TMI 642 - KARNATAKA HIGH COURT ), we hold that once the assessment is reopened, the Assessing Officer can take note of the income disclosed in the earlier return, any undisclosed income found during the course of search and also any other income which is not disclosed in the earlier return of income OR which is not unearthed in the course of search under section 132 of the Act, in order to find out and determine what is the 'total income' of each year and then pass the order of assessment.
Treatment of expenditure incurred on renovation and cost of improvement of building leased as capital expenditure - revenue disallowing the assessee's claim that the said expenditure be allowed as revenue expenditure - Held that:- Whenever an expenditure was incurred in the process of earning profits it has to be allowed as revenue expenditure. In such a case the expenditure incurred by the assessee would be out of the ambit and purview of the provisions of Explanation 1 to Section 32 of the Act of the Act. In the case on hand, it is not in dispute that the expenditure was incurred for renovation. These expenses were incurred only for the purpose of carrying on day to day business and earn profits and do not result in the bringing into existence of any capital asset. Therefore, in our view, the learned CIT (Appeals) was not right in upholding the disallowance of the expenditure by holding it as capital in nature. We, accordingly, reverse the findings of the authorities below on this issue and allow the assessee's claim for deduction of expenditure incurred towards renovation of plant design system, computer cabling, fire detection and alarm system, plumbing, air conditioning work, electrical works, interior work etc. on the hotel/building taken on lease.
Interest under section 234B and 234C - Held that: - As the assessee has filed returns of income for the three assessment years 2008-09 to 2010-11 under section 153A of the Act declaring the additional income, disclosed/admitted in the partners statement under section 132(4) of the Act in the course of search, as its income. In view of the above discussion from para 9 to 9.5.4 of this order, we uphold the decision of the learned CIT (Appeals) confirming the action of the Assessing Officer in levying interest under section 234B and 234C of the Act.
Quantum of profit on suppression of unrecorded sales - Held that:- We concur with the view of the learned CIT (Appeals) that the said additions made by the Assessing Officer on account of profits earned on suppressed sales for Assessment Years 2008-09 to 2010-11 are unsubstantiated and therefore uphold the order of the learned CIT (Appeals) deleting the said additions as the conclusions arrived at by the Assessing Officer are farfetched, and the additions made on account of profit on suppressed/undisclosed sales, are not substantiated by any material evidence
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2014 (12) TMI 1162 - ITAT MUMBAI
Estimation of Turnover - CIT(A) estimated the income of the assessee at the rate of 3% of the sales at ₹ 29,42,380/- against ₹ 1,02,63,160/- assessed by the AO at the rate of 10% of the turnover - Held that:- Order of the Ld. CIT(A) is well reasoned. The assessee has explained that the facts and circumstances for the year under consideration were altogether different from that of preceding year. The assessee had diverted its business from being stockist of vehicles into consignee of the vehicles. Since there was not much requirement of investment of funds in consignment business, hence the risk factor involved was negligible.
The turnover for the year under consideration had considerably increased in comparison to last year. It is commonly observed that when turnover is increased the profit margin is generally decreased. The assessed income of the assessee for the year under consideration even at the rate of 3% of the turnover at ₹ 29.40 lakhs was much more than the assessed income at the rate of 10% of the turnover of the preceding year at ₹ 13.57 lakhs. The Ld. CIT(A), after taking into consideration the facts and circumstances of the case and also taking into consideration the assessed income of the assessee in the subsequent year, has directed the assessment of income at the rate of 3% of the total turnover. We do not find any infirmity in the well reasoned order of the Ld. CIT(A) and hence the same is upheld. - Decided against revenue.
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2014 (12) TMI 1161 - ITAT MUMBAI
Disallowance of advertisement and marketing expenditure - reopening of assessment - CIT(A) deleted the addition whether by acceptng additional evidence in contravention of Rule 46A without giving opportunity to the AO - transfer pricing adjustment - Held that:- As from the record that the documents highlighted by Ld. DR in support of his contention that there was violation of Rule 46A, it is found that these documents comprises of copies of agreement with distributor, statement of advertisement and marketing expenses showing details of bills, name of the distributors, amount and date of payment which were submitted by the assessee in the course of original assessment, wherein the assessment was framed u/s 143(3). Before AO during reassessment proceedings assessee vide his letter informed that all these documents were furnished before AO and TPO during original assessment proceedings and by considering the same vide order dated 25th January, 2005 passed u/s 92CA(3) has examined all materials relating to claim of expenditure of advertisement. Similarly AO vide his order dated 23rd February, 2005 advanced assessee’s claim after examining all these documents. Thus all these documents, as pin pointed by DR was not additional documents so as to invoke the provisions of section 46A. - Decided against revenue.
As found that claim of such advertisement expenses were made on reimbursement basis, details of which were placed before the original assessment proceedings, completed u/s 143(3) on 28th February, 2005 as well as before Transfer Pricing Officer, who has allowed the assessee’s claim vide his order dated 25.01.2005 passed u/s 93A(3). The CIT(A) has also recorded the finding to the effect that the AO has not placed any material or evidence as mentioned in impugned assessment order to support that the expenses were bogus. The CIT(A) observed that a mere intimation from Investigation Wing cannot be basis for any addition. The finding recorded by CIT(A) has not been controverted, by department by brining any positive materials on record. Accordingly, we do not find any reason to interfere with the finding of CIT(A) resulting into deletion of addition on account of advertisement expenses. - Decided in favour of assessee.
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2014 (12) TMI 1160 - ITAT KOLKATA
Penalty u/s 271(1)(c) - assessee has concealed its income by not showing the same u/s 45(1A) in spite of its known facts - CIT(A) deleted the penalty - Held that:- In the present case we find there was no furnishing of inaccurate particulars and concealment of income. The assessee has suffered loss on fire. It was duly disclosed in the Profit and loss account and in the audit report. AO did not allow loss as business loss by referring to provision of section 45(1A) of the Act. On appeal the ld. CIT(A) allowed the loss as business loss. In further appeal ITAT held that the same was not allowable as business loss. From the above we note that the issue was debatable and it cannot be said that the assessee had any malafide intention. It is a settled law that penalty cannot be imposed unless the conduct of the assessee is contumacious. It is also not the case that assessee’s case was a bogus claim which was prima facie liable to be disallowed. The assessee was under bona fide belief that the loss on fire will be allowed as business loss. If the AO does not agree with the assessee and hold that loss cannot be allowed as business loss it cannot lead to a conclusion that the assessee has furnished inaccurate particulars of income or has concealed any income. See CIT vs Reliance Petro products (P) Ltd (2010 (3) TMI 80 - SUPREME COURT) and Hindustan Steel Ltd vs State of Orissa(1969 (8) TMI 31 - SUPREME Court) - Decided in favour of assessee.
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2014 (12) TMI 1159 - ITAT CHENNAI
Non deduction of TDS - whether wheeling, scheduling and transmission services amount availing of professional/technical services u/s 194J r.w. 9 (1)(vii)? - Held that:- As decided in ITO (TDS) Udaipur vs Hindustan Zinc Ltd [2015 (6) TMI 345 - ITAT JODHPUR] in identical wheeling and transmission charges paid to the State Power Utility Department holds that mere availing the power network system and making payments in lieu thereof does not amount to paying any ‘fee for technical services’. It has been observed that these activities do not involve any human element as per case laws CIT vs Bharti Cellular Ltd [2008 (10) TMI 321 - DELHI HIGH COURT] and Skycell Communications Ltd 'Compact Spinning System' The Dy. CIT [2001 (2) TMI 57 - MADRAS High Court ]. The co-ordinate bench concludes that section 194J aforesaid applies only in case some technology or technical knowledge is made available to others and not merely in a situation involving use of technical systems. Similar principle stands echoed by another coordinate bench in Maharashtra Electricity Distribution Co. Ltd vs Addl. CIT [2012 (8) TMI 519 - ITAT, MUMBAI].
The Assessing Officer’s order is silent on both these counts i.e involvement of any human element or making available of any technology or technical knowledge. The lower appellate order does not state anything specific about this technical know-how aspect but draws inferences based on assessee’s agreements that some manual element is always embedded therein in distribution and wheeling activity. No details are quoted in support thereof. Therefore, we observe that the assessee’s identical wheeling, scheduling and transmission facilities availed from the TANGEDCO do not attract sec.194J(1) Explanation (b) of the Act. At this stage, the Revenue places strong reliance on Ajmeer Vidyut Vitran Nigam Ltd decision (2012 (8) TMI 742 - AUTHORITY FOR ADVANCE RULINGS). We quote section 245S(1) to observe that the said decision applies as a precedent only in specific conditions enumerated therein. The Revenue fails to draw any distinction on facts or refer to any case law to the contrary. - Decided in favour of assessee.
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2014 (12) TMI 1158 - ITAT DELHI
Transfer pricing adjustment - Royalty payment was at arm's length which cover a substantial part of TPO's disallowance at ₹ 156,43,832/- - Held that:- We find that the TPO has made the elaborate order whereby he has only dealt with royalty aspect and not dealt with the other allied payments. The royalty payment has been allowed by the DRP. In these circumstances, assessee will be put to great hardship, if the TPO is given a second inning to make out a fresh case. Hence, we reject these submissions made by the Ld. Departmental Representative. - Decided in favour of assessee.
Reimbursement of expenses disallowed - Held that:- Interest of justice demands that’s the matt4er may be remitted to the file of the A.O. Accordingly, this issue is remitted back to the file of the A.O. A.O. is directed to examine in detail the details and break-up in the time charts submitted by the assessee and thereafter consider the issue afresh - Decided in favour of assessee for statistical purposes.
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