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Income Tax - Case Laws
Showing 161 to 180 of 1116 Records
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2015 (10) TMI 2555 - ITAT JAIPUR
Disallowance u/s 40A(2)(b) in respect of professional fees - payment to a partnership firm whose partners are having substantial interest in the business of the assessee company - Held that:- As decided in assessee's own case in AY 2007-08 the onus u/s 40(A)(2) being directly on the Revenue, we find that the same has not been discharged by it in any manner. For, a satisfaction of the ingredients of the section would require an analysis of the services provided, and (further) categorizing them into various components, as (say): retainership, foreign exchange matters, appearance fee, etc. It is only such a comprehensive analysis, the details of the expenditure being available from the relevant bills raised, so that the details of the charges raised qua various services performed or charged for is available, that would yield the basis for a decision with regard to the reasonability thereof, including with reference to the legitimate needs of the assessee’s business, could if at all be taken; in the clear absence of which, the Revenue’s case is no more than an allegation or a surmise. The assessee has rightly relied on the decision in the case of Upper India Publishing House (P.) Ltd. v. CIT, (1978 (12) TMI 2 - SUPREME Court ). We, accordingly, find little merit in the Revenue’s case, and direct the deletion of the impugned disallowance. - Decided in favour of assessee
Disallowance u/s 115JB - unascertained liability - As per ld. AR, it is an ascertained liability as it represents actual payment of management fees to RIICO in order to arrive at the settlement of secured loan as per scheme of BIFR - Held that:- The contention of ld. AR has neither been controverted by the lower authorities nor by ld. DR. It is thus clearly a case of actual payment of management fees and the same cannot be held to be a provision towards an unascertained liability u/s 115JB(2) (c ) of the Act.
As regards the other observation of the AO that the said amount has been shown below the line, in our view, whether the amount is shown above the line or below the line, so long as the amount is charged to profit and loss account and profit and loss account has been prepared in accordance with Companies Act, the same should be allowable in computing the book profits subject to specific adjustments as specified in Section 115JB. In this regard, in response to the specific query from the Bench, it was informed by ld. AR that the amount has been actually charged to the profit and loss account for the year under consideration. Hence, the contention of the AO does not have a legal basis and hence does not find favour with us. Accordingly, we are of the considered view that ld. CIT(A) is not justified in confirming the addition - Decided in favour of assessee
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2015 (10) TMI 2554 - ITAT JAIPUR
TDS u/s 194C - non deduction of tds on payment to truck drivers - Held that:- The assessee is a transporter but did not own any truck but arrange the truck from the market. The customer is generally made contract to transporter for arranging the trucks for transportation of goods. In the present case, the assessee is an intermediary and conduit to make available the trucks from the market and issue GR in his own name but only charged commission for making builty. It is a fact that the customers deduct tax in the name of appellant but the truck owners was to be paid the amount of TDS by the assessee. The assessee got the refund and adjust the refund against the payment made by him to the truck drivers. The assessee has not debited any expenses on account of freight charges in the P&L account. Therefore, Section 40(a)(ia) is not applicable and is also not liable to be deducted TDS U/s 149C of the Act.
The assessee also had filed Form No. 15J before the Addl.CIT and at the time of assessment proceedings before the Assessing Officer, which has not been controverted by the DR. if the assessee has produced the evidence regarding submission of Form No. 15-J before the lower authority, in which some fault had been found on the ground that no signature, number of receipts has been provided by the Range office, is not any fault on part of the assessee. The assessee has furnished the Form No. 15-J in the office of the Commissioner. Various Courts also even considered and held justified Form No. 15-J before the Assessing Officer at the time of assessment proceedings. Therefore, we reverse the order of the ld CIT(A). Accordingly, this appeal is allowed in favour of assessee
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2015 (10) TMI 2553 - ITAT JAIPUR
Denial of TCS credit u/s 206C(1C) - Held that:- The fact that State Govt. has collected TDS and paid it to Govt. treasury is undisputed. It is abundantly clear that assessee's case is covered under the TCS provisions and that is why the TCS is collected in this behalf u/s 206C. It is undisputed fact that that TCS payment is duly certified by payer Rajasthan Govt. in prescribed Form No. 27D; consequently the credit of TCS has to be given to assessee as a matter of right, more so, when the corresponding income from contracted activities as per Rajasthan Minor Minerals Concession Rules, 1986, is included in assessee's income. In these facts and circumstances, I find merit in the arguments of the ld. Counsel for the assessee that denial of credit tantamount to confiscating assessee's tax for which corresponding income is included in its taxable income. Such confiscation amounts to unjust enrichment on the part of the Govt. which is not permissible. In view of the entirety of the facts and circumstances of the case, the assessee claim of credit of TCS amount as mentioned above is justified and deserves to be allowed. This ground of the assessee in both the years is allowed.
Interest charged by the Govt. on late deposit of royalty installments under the head royalty expenses - allowable expenditure u/s 31(1) - Held that:- Interest @ 12% paid to Govt. for late deposit of monthly royalty instalemnts for delay in payment is clearly compensatory in nature and not penal in nature as held by the lower authorities. My view is fortified by above judgments. The contentions about the business expediency and allowability of interest in the view of the decision of Hon'ble Apex Court in the case of S.A. Builders vs. CIT (2006 (12) TMI 82 - SUPREME COURT) is well placed and deserves to be accepted. These being the Govt. payments, find no merit in the findings of the ld. CIT(A) that no evidence was produced in this behalf as the payments are demonstrated by the assessee's account in assessment year 2007-08. In view of thee facts and circumstances of the case, the payment of royalty expense is compensatory in nature and is an allowable expenditure u/s 31(1) of the Act.
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2015 (10) TMI 2552 - ITAT HYDERABAD
Revision u/s 263 - turnover non disclosure - Held that:- We are of the view that on the facts and turnover available on record, AO has already verified and reconciled Form 16 of the respective companies. It shows that all the gross turnovers were properly reported and offered for tax. Relying on the judgment of the Hon’ble Gujarat High Court in case of CIT Vs. Smt. Minalben S. Parikh (1994 (10) TMI 9 - GUJARAT High Court ), there has to be twin test, not only erroneous but also prejudicial to the interests of revenue. In the given case, the turnover relating to assessee and JV companies were submitted before AO and also reconciled with the statutory form 16 filed by M/s FA CAO (Construction) and South Central Railway with books of the assessee and JV companies. It demonstrates that there is no escapement of income or prejudicial to the interests of revenue. Moreover, if we add the turnover of the JV companies to the assessee’s gross turnover, it amounts to double taxation. Accordingly, we hereby reject the observations of the Pr. CIT and quash the order passed by him u/s 263 of the Act. - Decided in favour of assessee.
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2015 (10) TMI 2551 - ITAT HYDERABAD
Levy of penalty under S.271(1)(c) - claim u/s 80IB made - Held that:- A new line of business engaged in by the assessee, viz. manufacture and sale of electronic street light timers, has come to light, and it led to disclosure in the returns filed in response to notices under S.153A, higher income than what was declared earlier by the assessee. Assessing Officer in the present case is not attributing any concealment or furnishing of inaccurate particulars in respect of the entire income relating to this new line of business, but confining himself only to the claims made for deduction under S.80IB, while proposing penalty under S.271(1)(c). This approach of the Assessing Officer, in considered opinion is not justified.
Having not proposed any penalty in relation to the larger portion of profit of the new line of business, there is no justification for penalty in relation only to the claim made by the assessee for deduction under S.80IB of the Act. Had the assessee not made the claim for deduction under S.80IB, if the approach of the Assessing Officer is approved, there is no case for penalty for concealment, because everything would have remained profit of the new line of business discovered, in relation to which no penalty proceedings were initiated. Considering in the light of the fact that disclosure of profits from such business did not attract any penalty u/s 271(1)(c), making a claim u/s 80IB out of those profits can only be considered as genuine claim.
This is not a fit case for levy of penalty under S.271(1)(c) - Decided in favour of assessee.
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2015 (10) TMI 2545 - ITAT CHANDIGARH
Guarantee Fee paid - revenue or capital expenditure - Held that:- It is not in dispute that assessee has taken loans from HUDCO for maintaining and improvement of State Highways and other District roads in State of Haryana and same loan was capitalized. The Haryana Government has given guarantee for State Corporation of HUDCO against grant of loan. For this activity of giving guarantee, the Haryana State Government has taken the Guarantee Fees. The counsel for assessee was directed to explain and justify that it was revenue expenditure. It is also admitted fact that assessee in its books of account has amortized the total guarantee fees of ₹ 1121.56 lacs in the period of loan taken for various schemes i.e. for 13 to 14 years. Therefore, guarantee fees was amortized by the assessee in the books of account. The ld. CIT(Appeals), in the background of these facts noted that assessee is a creation of State Government and no other basis or justification has been submitted for giving guarantee fees to the State Government by its own corporation.
When assessee was asked to justify as to for what purposes, the guarantee fee was paid to the State Government, assessee was not able to explain anything in this regard. It is well settled law that when assessee claimed deduction on account of business expenditure, burden would be upon assessee to prove that the said expenditure was not in the nature of capital expenditure and has been laid out or expended wholly and exclusively for the purpose of business. The assessee, however, failed to produce any evidence or material before authorities below to prove that the guarantee fees paid to State Government, was wholly and exclusively incurred for business purposes. CIT(Appeals) was correct in upholding the addition by treating the Guarantee Fee paid as Capital expenditure - Decide against assessee
Addition u/s 40(a)(ia) - non deduction of tds on the payments made for consultancy charge - Held that:- No merit in this ground of appeal of the assessee. The assessee specifically pleaded before authorities below that since amount is actually paid, therefore, assessee is not required to deduct TDS on the same amount. No other submissions were raised before authorities below. The issue of ‘paid’ and ‘payable’ has already been decided against the assessee by Hon'ble Punjab & Haryana High Court in the case of PMS Diesels (2015 (5) TMI 617 - PUNJAB & HARYANA HIGH COURT ). Now, the ld. counsel for the assessee has come up with new plea that since tax has been deducted, therefore, matter may be remanded to the Assessing Officer. First of all, the plea of the assessee has no merit because once assessee pleaded before authorities below that amount of ₹ 4,03,129/- has been paid on 15.09.2009, where is the question of deduction of TDS on the same amount. Further, assessee has not filed any application for admission of the additional evidences and has not explained any reason why assessee has not filed these documents before the authorities below which have been now filed at pages 11 to 15 of the Paper Book, genuineness of same are in doubt. - Decided against assessee
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2015 (10) TMI 2543 - ITAT JAIPUR
Notice of hearing not properly served - authorized person - Held that:- The affidavit filed by the assessee shows that the notice has been received by the employee of the firm, who had not informed any of the partner, therefore, partners of the firm had not represented the case on the date fixed. The case is required to be decided on merit after providing reasonable opportunity of being heard to the assessee. Therefore, we in the interest of justice, recall our order dated 17/10/2014 passed in ITA No. 256/JP/2012. The registry of this office may fix the case in regular hearing. The assessee is directed that if any paper book to be filed, should be filed in advance and also provide copy of same to the revenue.
In the result, the present MA petition is allowed.
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2015 (10) TMI 2541 - ITAT CHANDIGARH
Levy of fees under section 234E - intimation issued under section 200A in respect of processing of TDS - Held that:- We find that the issue in all these appeals is now squarely covered in favour of the assessee by the decision of ITAT Amritsar Bench in the case of Sibia Healthcare Private Limited vs. DCIT [2015 (6) TMI 437 - ITAT AMRITSAR] adjustment in respect of levy of fees under section 234E was indeed beyond the scope of permissible adjustments contemplated under section 200A.
The impugned levy of fees under section 234E is unsustainable in law. We, therefore, delete the impugned levy of fee under section 234E of the Act. - Decided in favour of assessee.
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2015 (10) TMI 2538 - ITAT KOLKATA
Unexplained investment - CIT(A) deleted the addition - additional evidence - assessee-company has supported the impugned order of CIT(A) stating that there was no additional evidence filed by the assessee before CIT(A) and CIT(A) having given relief to the assessee relying on the same evidence which was available before AO, there is no violation of Rule 46A of the IT Rules - Held that:- Keeping in view this assertion made by the assessee-company in its CO which was reiterated by Ld. Counsel of assessee, opportunity was given to Ld. DR to point out specifically the additional evidence, if any, filed by assessee before CIT(A) for the first time which has been relied by the CIT(A) to give relief to the assessee. After having gone through the relevant assessment record, Ld. DR has not been able to point out any such additional evidence filed by the assessee and relied upon by the CIT(A) to give relief to the assessee. Ld. Counsel for assessee on the other hand, has taken us through the impugned order of CIT(A) to show that there was no new evidence filed by the assessee for the first time before CIT(A) and this position clearly evident from the order of the CIT(A) has not been rebutted or controverted out by the Ld. DR. We therefore find no merit in this appeal filed by Revenue and upholding the impugned order of CIT(A), we dismiss the said appeal. - Decided against revenue
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2015 (10) TMI 2517 - ITAT AHMEDABAD
Disallowance u/s 14A - Held that:- If there is no exempt income claimed by the assessee, then there is no disallowance ought to be made u/s 14A of the Income-tax Act. See CIT vs. Corrtech Energy P. Ltd [2014 (3) TMI 856 - GUJARAT HIGH COURT ] - Decided in favour of assessee.
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2015 (10) TMI 2513 - ITAT DELHI
Sale of software and maintenance services – Payments to be taxable as Royalty u/s 9(1)(vi) of the Act – Article 12 of DTAA between India and US - Held that:- Even though there is amendment to the Finance Act, 2012, there is no change in the DTAA between India and USA and the same was not refuted by the DR. Therefore, in light of assessee’s own case for the A.Y 2008-09 [2014 (4) TMI 369 - ITAT DELHI ]appeals are covered in assessee’s favour wherein held what has been transferred is not copyright or the right to use copyright but a limited right to use the copyrighted material and does not give rise to any royalty income - The consideration received on grant of licences for use of software is not royalty within the meaning of Article 12(3) of the Double Taxation Avoidance Agreement between India and the United States of America – the addition made for sale of software and provisions of maintenance/other support services to the customers in India is not taxable - Decided in favour of Assessee.
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2015 (10) TMI 2512 - ITAT MUMBAI
Disallowance of claim for deduction u/s. 37(1) in respect of revenue expenditure - Held that:- The assessment order and the order of the First Appellate Authority in the case of M/s. Reliance Footprint Ltd (2013 (12) TMI 161 - ITAT MUMBAI ) are identical to the assessment order and the order of the First Appellate Authority in the case in hand and as no distinguishing decision has been brought to our notice, respectfully following the same we set aside the order of the Ld. CIT(A) and direct the AO to delete the impugned addition. - Decided in favour of assessee.
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2015 (10) TMI 2511 - ITAT KOLKATA
Expenditure on account of consultancy fee disallowable u/s. 14A - as observed that the assessee had considerable business income from management consultancy during the relevant year and majority of expenses were incurred by the company for earning such business income - CIT(A) deleting the expenditure on account of consultancy fee as not disallowable u/s. 14A oHeld that:- While applying Rule 8D(2)(ii), the AO should have excluded those expenses which were directly attributable to consultancy business income earned by the assessee. We find from records that the assessee filed the details of consultancy income and expenses incurred for the same before AO during the course of assessment proceeding but he has not considered the same. We further find that the dividend income amounting to ₹ 1,66,06,788/- was received by the assessee only from eight companies and dividend cheques were received though post or were directly credited to the assessee' bank account through ECS. As such no major expenses were incurred by the assessee for earning such income and collection of dividend cheque. Similarly, in respect of long term capital loss of ₹ 3,97,694/- there were only two transactions for purchase and sale of shares and two for investment and redemption of units of mutual fund which too were transacted over telephone through the broker/bank. No separate staff was employed for this purpose and extra expenses were incurred for such transactions. - Decided against revenue
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2015 (10) TMI 2509 - DELHI HIGH COURT
ALP of the payment of royalty - Held that:- On the question of addition made by the AO on account of ALP for the payment of royalty, learned counsel for the Assessee has rightly referred to the decision in Commissioner of Income Tax v. Sony Ericsson Mobile Communication (2015 (3) TMI 580 - DELHI HIGH COURT ) where the determination of the ALP of the royalty paid as Nil was not approved. There is merit in the contention of learned counsel for the Assessee that once the TPO found that no adjustment was called for under the TNMM method, no adjustment could have been made by applying some other method as that would be contrary to Section 92C(1) of the Act.
The Court also finds that there is no justification for the TPO to come to the conclusion that the payment of royalty was not necessary in the present case particularly since the collaboration agreement between the Assessee and Stanley has been continuing since 1984. As held by the ITAT, after a detailed examination of the clauses of the collaboration agreement, the Assessee did receive full technical assistance from Stanley for which the royalty payment was made. Thus the Court is not inclined to frame a question on the issue of deletion of the addition sought to be made by the AO for the AYs in question on account of ALP of the payment of royalty.
Adjustment under Section 115JB on account of provision for retirement benefits - Held that:- ITAT noted that the provision was made on the basis of actual valuation and was not a contingent liability. Reference was made to the decision in Bharat Earth Movers v. Commissioner of Income Tax (2000 (8) TMI 4 - SUPREME Court ). The order of the ITAT upholding the order of CIT (A) is not found to be perverse. The Court declines to frame a question on this issue.
Disallowance of expenses on account of foreign trips of the Director of the Assessee after holding that the visits made to USA and Dubai were for the business purposes. The disallowance by the AO of the said expenses was found to be not justified. Since the above finding turned purely on facts, the order of the CIT (A) as affirmed by the ITAT, does not give rise to any substantial question of law.
Disallowance of the expenses on account of provision for warranty - ITAT deleted it since the provision was made by the assessee based on actual warranty expenses incurred for the unexpired warranty period - Held that:- As rightly pointed out by learned counsel for the Assessee the question is covered in its favour by the decisions in Rotork Controls Pvt. Ltd. v. Commissioner of Income Tax (2009 (5) TMI 16 - SUPREME COURT OF INDIA ) and Commissioner of Income Tax v. Becton Disckinsion [2012 (12) TMI 210 - DELHI HIGH COURT]. Therefore, no substantial question of law arises as regards this issue as well.
Depreciation on computer peripherals @ 60% - Held that:- Revenue does not dispute that the question stands answered in favour of the Assessee by the decision in Commissioner of Income Tax v. BSES Rajdhani Power Limited (2010 (8) TMI 58 - DELHI HIGH COURT ).
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2015 (10) TMI 2507 - ITAT AHMEDABAD
On-money received in cash - AO branding the assessee as trader in the land - assessement u/s 153A - Held that:- As we have held that the assessee is not a trader. Therefore, if any cash component received by him, the same be treated as receipt from transfer of agricultural land exempt from tax.
Addition u/s 50C - Sale of land - addition on between the sale consideration shown in the sale deed vis-a-vis the value on which the stamp duty was paid - Held that:- Section 50C of the Income Tax Act provide that where consideration received or accruing as a result of transfer by an assessee of a capital asset being land or building or both is less than the value adopted or assessed by any authority of a State Government for the purpose of payments of stamp duty in respect of such transfer the value so adopted by the assessee for the purpose of section 48 be deemed to be full value of the consideration received or accrued as a result of such transfer. Thus, a conjoint reading of both sections would indicate that while calculating the capital gain under section 48, the value adopted for the payment of the stamp duty would be considered as full sale consideration received or accrued to the assessee on transfer of a capital asset. In the present case no capital gain computation is there. The assessee is a purchaser therefore deeming fiction provided under section 50C cannot be applied upon the assessee.
Addition on account of accrued interest income of the assessee - Held that:- AO atleast ought to have proved that it is in the hand-writing of the assessee or of any family member. In the absence of corroborative evidence, it is quite difficult to give any categorical finding. The first onus is upon the Revenue to charge the assessee with exact details pointing out that these details relate to the assessee. No such effort was done by the AO also. Therefore, we give benefit doubt to the assessee and on the basis of such insufficient incomplete evidence, the assessee cannot be burdened with taxability. Thus additions deleted
Addition on opening capital balance - Held that:- This aspect needs verification. The AO has not recorded any categorical finding on this issue. We direct the AO to verify whether the assessee has filed the balance sheet with the return of income in earlier years, more particularly, for the Asstt.Year 2002-03 and disclosed the capital balance in the closing account at ₹ 19,11,522/-, then no addition will be made on account of opening capital balance in the Asstt.Year 2003-04. The ld.AO shall carry out this exercise after providing due opportunity of hearing to the assessee.
Addition on account of unaccounted cash found at the time of search - Held that:- CIT(A) has granted telescopic benefit to the assessee. Once the ld.CIT(A) has accepted the fact that the additional income offered by the assessee of ₹ 9 lakhs can easily be take care of alleged unaccounted cash found during the course of search carried out during the accounting period 2009-10. We find no error in the finding of the ld.CIT(A), which is confirmed
Addition on cash credit - Held that:- A perusal of the finding recorded by the CIT(A) would indicate that the seized documents pertained to Asstt.Year 2001-02. These are loans taken by M/s.Liberty Polymers Industries and not by the assessee. Therefore, their additions cannot be made in the hands of the assessee, more so, in the Asstt.Year 2009-10. The ld.AO has not assigned any particular reasons for treating the income in the hands of the assessee. We, therefore, do not find any error in the order of the CIT(A)
Addition on promissory notes inventory - Held that:- no amount is outstanding towards the assessee taken from the Shroff. Because, according to the CIT(A), if the assessee has taken loan and then returned that loan and collected back his promissory note, then also no unaccounted income could be construed as generated. The AO did not find unexplained investment during the course of search. Thus, we do not find any error in the findings of the ld.CIT(A) in deleting the addition
Undisclosed investment - Addition on account of some rough working - CIT(A) deleted addition - Held that:- First Appellate Authority has deleted the addition on the ground that it is difficult to infer the nature of income whether the investment or otherwise. The entries reflected in the seized paper do not goad adjudicating authority to any logical conclusion. The ld.DR also failed to point out the error in the conclusions arrived by the CIT(A). He simply relied upon the order of the AO. Therefore, we do not see any reason to interfere with the order of the CIT(A) on this issue.
Appeal decided partly in favour of assessee
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2015 (10) TMI 2504 - ITAT MUMBAI
Bogus purchases - Held that:- We find that the FAA had,during the appellate proceedings directed the assessee to file various details with regard to the discrepancies highlighted by the AO in his assessment order, that after obtaining the reconciliation statement she had given a categorical finding of fact that in case of 44 parties the amount claimed as purchases made of raw cotton remained outstanding as on 31.3.2009,that in case of remaining purchases the assessee had produced necessary documents, that there was no justification for upholding the entire addition, that the AO had accepted the sales with regard to purchases made, that entire purchases could not be doubted.We find that after segregating the purchases in two categories the FAA had judiciously upheld a portion of it and deleted the other portion.It was found by her that the assessee had not proved the purchases to the tune of ₹ 1.05 crores and she had confirmed the addition.As far as the remaining addition is concerned,we are of the opinion that her order does not suffer from any legal infirmity especially after the reconciliation statement was filed by the assessee before her. - Decided against revenue
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2015 (10) TMI 2503 - ITAT DELHI
Addition u/s 69B on basis of the valuation report of the District Valuation Officer (DVO) - Held that:- Here is a case in which the assessee claimed to have purchased the property for a sum of ₹ 3.50 crore and the AO has made addition of ₹ 5,59,66,000/- lac simply on the basis of difference between the DVO’s report and apparent sale consideration. No attempt has been made for verifying the price from the seller of the property. There is no positive material evidencing the making of actual investment by the assessee over and above ₹ 3.50 crore.
Under such circumstances, there can be no point in making any addition towards unexplained investment u/s 69B of the Act. It is relevant to mention that the legislature has carried out amendment by the Finance Act, 2013 w.e.f. 1.4.2014 by substituting section 56(2)(vii)(b) providing that where an individual or HUF receives any immovable property, inter alia, for a consideration which is less than the stamp duty value of the property by an amount exceeding ₹ 50,000/-, the stamp duty value of such property as exceeded such consideration shall be taxed as ‘Income from other sources.’ The legislature has brought in section 56(2)(vii)(b) with the sole intention of bringing under-hand payment of sale consideration of immovable property to tax. This provision has been enshrined w.e.f. the A.Y. 2014-15 and is not applicable retrospectively to the A.Y. 2006-07 under consideration. Since this provision is prospective and there is no other authentic evidence of the assessee having actually made any investment over and above the declared sale consideration, we are of the considered opinion that the ld. CIT(A) was justified in deleting the addition to the extent of ₹ 5,59,66,000/-
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2015 (10) TMI 2500 - ITAT CHANDIGARH
Disallowance of earnest money given for acquisition of land - Held that:- If any asset is acquired and if it is a benefit of enduring nature, then, of course, assessee cannot get deduction of the amount for acquisition of land as Revenue expenditure. When land was not acquired, no capital asset has been acquired and therefore, the payment of ₹ 7,46,088/- is to be allowed as business loss. In our view, the CIT(A) has correctly held that the claim of the assessee as business loss and deserves to be allowed. - Decided against revenue
Disallowance treating the expenditure claimed as deferred revenue expenditure in P&L and incurred on employee restructuring and re-engineering of business, as capital expenditure - CIT(A) allowed the claim - Held that:- The expenditure was essentially of Revenue nature as it was incurred for improvement of business practices linked with marketing and human resource utilization. It is claimed that the scope of the study relates to the promotion of products of company in order to sustain market pressure and to maintain its market position. It is also explained that the scope further included employee restructuring also so as to save the manpower cost and to achieve best utilization of human effort. , Thus it is clear that there was no creation of capital asset in the case of assessee company. In view of the above, we do not find any merit in the ground raised by the Revenue - Decided against revenue
Additional depreciation claim - Held that:- Considering the entire facts and circumstances of the present case, we uphold the order of CIT(A). In our opinion the Ld. CIT(A) has correctly directed the Assessing officer to examine the claim of the assessee pertaining to additional depreciation on merits and, if found to be entitled, the same may be allowed to the assessee. There is no merit in this ground of appeal and accordingly the same is dismissed. - Decided against revenue
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2015 (10) TMI 2499 - ITAT CHANDIGARH
Disallowance u/s 14A - Held that:- From the perusal of the balance sheet and other documents filed in the Paper Book, we see that the total investment in shares and mutual funds as on 31.3.2007 was of ₹ 3,83,82,47,226/- while the investment as on 31.3.2008 is of ₹ 4,64,37,73,922. Therefore, there was an increase of around ₹ 80 crores in the investment during the year. While reserves and own funds of the assessee company as on 31.3.2008 are amounting to ₹ 6,24,18,74,854/-. From these figures, it is quite clear that own funds and reserves of the assessee are more than sufficient to cover the investment made during the year. In such a scenario, it can be very conveniently presumed that all the investment have been made out of own funds. Therefore, in such circumstances, no disallowance under section 14A of the Act on account of interest can be made. Though the learned counsel for the assessee has made alternative submissions on the computation made by the Assessing Officer under Rule 8D of the Income Tax Rules, in view of our finding that no disallowance on account of interest under section 14A an be made, we do not find any need to adjudicate these issues. - Decided against revenue.
Administrative expenses disallowance under Rule 8D - Held that:- It is a fact on record that the assessee himself had disallowed an amount of ₹ 2,73,13,827/- on account of expenses incurred for earning tax free income and the Assessing Officer has nowhere recorded a finding as to why the disallowance so made by the assessee is not correct. Reliance is placed on the judgment of the Hon'ble Jurisdictional Punjab & Haryana High Court in the case of CIT Vs. Deepak Mittal (2013 (9) TMI 764 - PUNJAB & HARYANA HIGH COURT ) to the effect that in the absence of any satisfaction recorded by the Assessing Officer as to why the calculation made by the assessee is not correct, the disallowance made by him on account of administrative expenses under Rule 8D of the Income Tax Rules is not as per law. In view of the above disallowance made by the Assessing Officer under section 14 of the Act read Rule 8D of the Income Tax Rules is deleted. - Decided against revenue.
Capitalization of interest - Held that:- The disallowance has been made by the Assessing Officer on account of proportionate interest for three months, on the premises that interest bearing funds are used for the purposes of acquisition of the paint shop. The reply filed by the assessee was that the funds have been used from the C/C account with ICICI bank, which is allowed by the bank for the purposes of business only. The C/C account is an interest bearing fund. Therefore, disallowance made by the Assessing Officer on this account is correct. As regards the contention of the assessee that there is no extension of the existing business, we do not find any infirmity in the observation made by the CIT (Appeals). It is clear from the record that a new asset has been purchased in the form of paint shop which was imported from Germany. This shop clearly adds to the business of the assessee. No evidence is there on record that this is in replacement of an existing assets. As regards the alternative contention of allowing depreciation on such capitalization, we see that the disallowance itself has been made after providing depreciation. - Decided against assessee.
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2015 (10) TMI 2498 - ITAT DELHI
Penalty u/s. 271(1)(c) - addition made on account of bogus purchases - Held that:- It is not in dispute that the ld. CIT(A) deleted the addition made by AO on account of alleged bogus purchase. Besides, the addition made on the basis of estimation of gross profit rate does not warrant to hold that the assessee has furnished inaccurate particulars of income as held in plethora of decisions, relied upon by the ld. CIT(A) in the impugned order. The ld. DR could not adduce any contrary decision on the issue. In view of this discussion, we do not find any justification to interfere with the impugned order deleting penalty. - Decided against revenue
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