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Income Tax - Case Laws
Showing 21 to 40 of 9151 Records
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2015 (12) TMI 1877
Nature of receipts - Income accrued on account of carbon credits - revenue or capital receipt - HELD THAT:- The issue is covered in favour of the assessee by order of DCIT Vs Kotla Hydro Power Pvt. Ltd. [2015 (4) TMI 1346 - ITAT CHANDIGARH] assessee was carrying on the business of power generation for the assessment year 2007-08. Carbon credit was not an offshoot of business of the assessee but an offshoot of environmental concerns. No asset was generated in the course of business but it was generated due to environmental concerns. There was no cost of acquisition or cost of production to get entitlement for the carbon credits. Therefore, the income from sale of carbon credits was to be considered as capital receipt and not liable to tax under any head of income under the Income-tax Act, 1961 - Decided against revenue.
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2015 (12) TMI 1875
Compounding of offences punishable u/s 276B r.w.s.278B - admitted default in deposit of TDS - HELD THAT:- Issue notice.
There shall be stay of initiation of prosecution. The prayer in respect of other interim reliefs stands rejected.
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2015 (12) TMI 1874
Penalty u/s 271(1)(c) - bogus purchases - AO treated the additional income as concealed income considering the fact that only after the finding of the bogus purchases by the department, assessee accepted and filed the revised return of income - HELD THAT:- In the present case, the assessee had accepted the bogus purchase as additional income voluntarily due to the fact that assessee was not in a position to substantiate the claim, even though, the transaction was made through banking channel. The assessee had declared the additional income voluntarily and filed return of income, which the AO accepted the revised return of income to complete the assessment u/s 143(3) r.w.s. 147.
We are inclined to note that the assessee filed the revised return of income which was duly accepted by the AO. From the above observations, it is clear that the assessee had neither concealed the particulars of the income nor furnished inaccurate particulars of such income. Hence, this is not a fit case to attract penalty proceedings u/s 271(1)(c) - Appeal of assessee allowed.
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2015 (12) TMI 1873
Undisclosed income u/s 69A - undisclosed cash receipt on sale of stone quarry is handwritten loose paper termed ‘isar pawati’ signed by the partners and also signed on behalf of the buyers - addition assuming a piece of paper as constituting “Issar Pavati” i.e. advance receipt - piece of paper was found in survey action u/s 133 - as argued piece of paper i.e. ‘Isar Pavati’ has been wrongly presumed as agreement to sell - HELD THAT:- Since the concerned loose paper is found to be pertaining to the Appellants herein, seizure of the same in the hands of other corporate entity represented by one of the partners of the Appellant firms herein will not render it extraneous per se for assessment purposes. In our considered view, the Revenue is entitled to use the incriminating evidence against the assessee in the given facts.
It is also pertinent to notice the other limb of the argument on behalf of the Assessee that impugned loose paper found in survey under S. 133A do not constitute evidence and can not give rise to presumption against the Assessee in the absence of any actual cash found as alleged to be unaccounted income. We have already observed that contents of loosed paper i.e. isar pawati impounded is entitled to great weight due to its substantial corroboration of payments with registered document, naturally without cash. We are of the opinion that once it is concluded on facts that the contents of the document found are relevant and true which establishes ownership, non-detection of physical cash or other equivalent asset per se would not be a handicap to invoke section 69A of the Act. Hence, notwithstanding nondeduction of physical cash, deeming provision of section 69A of the Act will apply.
In the facts of the case, loose paper found in the drawer of the director of the company surveyed who is also the partner of the Assessee and contents found to have been vindicated, the presumption against the assessee is supportable in law. The loose paper or isar pawati in our opinion assumes the colour of valid evidence against the assessee on its corroboration by payment details of registered document. Thus, the plea of the Assessee in this regard does not hold water.
Addition u/s 69A No merit in assessee contention since no unaccounted cash were actually found, nor any investment was found, section 69A of the Act is not attracted - The word ‘owner’ employed has to be understood in the context. We have already observed that physical presence of cash or other corresponding unaccounted investment per se to support an entry found in the documents is not the pre requisite to support its ownership for assessment purposes under section 69A.
We are alive to the fact that the scope in respect of coverage of premises under section 133A of the Act are limited. Also, the circumstances have to be weighed to come to conclusion about the alleged unaccounted money for assessment purposes. In the instant case, in our view, money in the form of cash was found to be attributable to the assessee as per the incriminating document i.e. Isar Pavati, nature and source whereof has not been explained satisfactorily. AO has sought explanation on alleged cash not founded to be recorded in book and found the explanation offered by the assessee as unsatisfactory. Therefore, we do not find merit in the plea of the Assessee with regard to non applicability of S. 69A. - We endorse the essence of the findings of the CIT(A) that in view of the speaking facts narrated in the loose paper found at the time of survey which clearly matches on material particulars with the registered sale deed executed subsequently, there is no room left to disbelieve the contents of the loose paper. It is trite that when a part of the document has been accepted, other part of the same document cannot be ignored in the absence of any tangible proof to the contrary. In our considered view, assessee failed to rebut the contents of the loose paper satisfactorily and thus failed to discharge the onus which lay upon it to prove what is apparent as per loose paper is not real. - Decided against assessee.
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2015 (12) TMI 1872
Eligibility of Deduction u/s 80IB - HELD THAT:- We find that since the facts are identical and in assessee’s own case the Tribunal has decided the issue, judicial discipline mandates that we follow the order of the Tribunal. We further note that the Revenue has already filed appeal before the Hon’ble High Court in Income Tax Appeal - In this view of the matter since the Hon’ble jurisdictional High Court [2010 (4) TMI 1232 - BOMBAY HIGH COURT] has not reversed the decision of ITAT, we follow the above said order of ITAT in assessee’s own case - Hence we set aside the order of learned CIT(Appeals) and hold that the assessee is eligible for deduction u/s 80IB.
Addition of electricity expenditure - AO while making the disallowance relied on the statement of Smt. Anju Saraf recorded on 07-12-2009 before the ACIT, Circle-1, Nagpur wherein it has been stated that crushing and screening machines are run on generator and there is no electricity connection is available for running crushing and screening machines - HELD THAT:- It is clear that the assessee has paid the expenditure on account of electricity to its associate concern. The expenditure is duly supported by bills and vouchers. Such expenditure were claimed in earlier years and were allowed. Merely because the expenditure was paid to sister concern, the same cannot be disallowed. Accordingly we uphold the order of learned CIT(Appeals) on this issue.
Addition on account of wind mill maintenance expenses - CIT-A deleted the addition - HELD THAT:- We find that the AO’s main plank of argument is that the expenditure incurred was excessive. For this he has compared some agreements entered into with other concerns with the payee. We agree with the learned CIT(Appeals) that no case has been made out as to whether the maintenance charges paid by others were comparable to the one paid by the assessee. Hence in our considered opinion the AO is trying to enter into shoes of the businessman to decide as to how he should enter into an agreement. No case has been made out that the payments are bogus or the services were not rendered. In these circumstances, we do not find any infirmity in the order of learned CIT(Appeals). Accordingly we uphold the same. The appeal of the Revenue is dismissed.
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2015 (12) TMI 1871
Gain on sale of agricultural lands - Nature of land sold - taxable as business income OR was exempt from tax - Whether CIT(A) failed to appreciate that the lands sold in this year were capital asset of the firm and since the said lands were agricultural lands and beyond 8 kms from the municipal limits, the gain arising on sale of lands was exempt from tax? - HELD THAT:- The assessee is a partnership firm and the main activity in which the assessee is engaged is in dealing the lands. The factual finding of the CIT(A) in this regard is that the assessee had owned various lands, which have been declared in the balance sheet under the ‘list of Sundry Debtors related with land transactions – Scheme – VII’ starting from assessment year 2003-04 and then in assessment year 2004-05.
During the year under consideration, there is certain movement in the lands and two of the lands have been sold by the assessee. In view of the large number of transactions carried out by the assessee in lands reflect the nature of assessee to carry on the business of sale and purchase of lands, where the lands purchased by it were shown as stock-in-trade. The nature of the lands purchased by the assessee is claimed to be agricultural lands.
No iota of evidence has been filed by the assessee to establish that any agricultural activity was carried on the aforesaid lands. Further, even 7/12 extract filed by the assessee reflects no agricultural activity. In view of the above said facts and circumstances, where the assessee is admittedly engaged in the business of purchase and sale of lands and in view of the assessee having declared the said lands as part of its current assets, we find no merit in the plea of the assessee in this regard and dismissing the same, we uphold the orders of authorities below in treating the profit on sale of land as business income in the hands of the assessee. The grounds of appeal raised by the assessee are thus, dismissed.
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2015 (12) TMI 1870
Disallowance u/s 40A(7)(b) - HELD THAT:- The co-ordinate Bench of this Tribunal in the immediately preceding assessment year in assessee’s own case restored this issue to the file of the Assessing Officer for adjudication afresh. Following the said order of this Tribunal, we restore this issue to the file of the Assessing Officer, who shall decide the issue afresh following the direction of the co-ordinate Bench [2013 (3) TMI 869 - ITAT CHENNAI]
Deduction u/s 10B - CIT-A directed recompute the deduction by excluding freight and clearing expenses and business development fee from export turnover and total turnover also - HELD THAT:- CIT-A correctly following the Special Bench decision in the case of ITO Vs. Sak Soft Ltd. (2009 (3) TMI 243 - ITAT MADRAS-D] directed the Assessing Officer to reduce the said amounts from the total turnover also for the purpose of computation of deduction under section 10A.
Disallowance u/s 14A r.w.r. 8D - As argued assessee has not earned any dividend income - HELD THAT:- On going through the decision of the co-ordinate Bench of this Tribunal in the case of M.Baskaran [2015 (3) TMI 192 - ITAT CHENNAI] we find that the issue in appeal is squarely covered by the said decision wherein the Tribunal held that when the assessee has not earned dividend income, disallowance under section 14A is not warranted.
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2015 (12) TMI 1869
Disallowance u/s 40A(9) - Substantial question of fact or law - HELD THAT:- The said order was assailed by filing an appeal which was partly allowed and as such the department as well as the assessee approached the tribunal by preferring the second appeal and the tribunal by means of order and judgment [2011 (6) TMI 900 - ITAT KOLKATA] allowed the appeal so preferred by the assessee and at the same time dismissed the departmental appeal.
The order so passed by the Income Tax Officer was assailed before us.
Being aggrieved thereof, the instant appeal has been preferred. We have gone through the records and we are of the opinion that no substantial question of law arises out of the orders so passed tribunal.
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2015 (12) TMI 1868
Correct head of income - treating the interest income as income from other sources and not business income - crux of arguments advanced by the Ld. Counsel for the assessee is that there was no deployment of surplus income and it was not an independent transaction de hors by business rather JV partner had kept it in the account - HELD THAT:- We note that Hon’ble Jurisdictional High Court in CIT Vs. Lok Holdings [2008 (1) TMI 365 - BOMBAY HIGH COURT] while coming to a particular decision distinguished the decision from Hon’ble Apex Court, pronounced in CIT Vs. Bokaro Steel Ltd. [1998 (12) TMI 4 - SUPREME COURT] and TUTICORIN ALKALI CHEMICALS & FERTILIZERS LTD [1997 (7) TMI 4 - SUPREME COURT] then held that accrued interest arises out of business activity is assessable as business income and not income from other sources. Identically, Hon’ble Jurisdictional High Court in the case of CIT vs. Indo Swiss Jewels Ltd and Another [2005 (9) TMI 47 - BOMBAY HIGH COURT] wherein amount was set apart for import of machinery was invested in short term intercorporate deposits. Such interest income was held to be assessable as business income. There are various decisions in an identical situation but the fact of each case has to be kept in juxtaposition before taking any decision.
Interest of income on the funds placed with banks - As assessee had neither started commercial production nor even trial production during the year under consideration and the funds were kept in banks from which interest was earned. In such a situation, it can be said that interest income was earned prior to starting of business, therefore, it cannot be said to be business income of the assessee and has to be assessed as income from other sources. Funds were available with the assessee before the same are invested in actual business activity, therefore, it can be concluded that such interest income is not incidental to the business activity of the assessee. There is further finding in the impugned order that in the present case the source of funds on which the interest was earned were not the business funds. It is not the case that business funds were kept in bank for a short duration before starting the business. The expression “derived from” is narrower in scope than the expression “attributable to” as was held in CIT Vs. Sterling Foods Ltd. [1999 (4) TMI 1 - SUPREME COURT], Pandyan Chemicals Ltd. [2003 (4) TMI 3 - SUPREME COURT] and Ashoka Leyland Ltd. [1996 (12) TMI 4 - SUPREME COURT].
So far as the expression derived from is concerned it must be understood as profit directly arising from business of the assessee and not incidental to it. The ratio laid down by Hon’ble Apex Court in the aforementioned cases, if applied by keeping them in juxtaposition with the facts of the present appeal, it can be said that the interest received from FDRs, can be treated as income from other sources only. If such interest is derived from actual conduct of the business or such interest is oozing out from the direct source and having proximate commercial connection between the interest earned and business of the assessee then it can be said to be ‘derived from’ the business of the assessee, therefore, it was rightly held to be income from other sources, because no direct nexus has been established by the assessee between the interest so received and business of the assessee, therefore, the interest earned on account of FDRs, kept with the banks is income from other sources as it has ‘no direct nexus’ with the business activity of the assessee.
Payment of foreign exchange gain - We note that the expenditure has not been claimed as deduction during the year by the assessee. We find that in the aforementioned case of Enron Oil & Gas India Ltd [2008 (9) TMI 3 - SUPREME COURT] it was held that the loss arising on account of foreign exchange transaction would be allowed as business loss and the gain has to be treated as business receipt. Section 42 of the Act for claiming deduction is a special provision itself. The section becomes operative when it is read with production sharing contract, therefore, the provisions of production sharing contract will prevail as the PSC is an independent accounting regime and a complete code by itself u/s 42(1)(c) for the purposes of computing profit & gains of any business consisting of extraction or production of mineral Oil etc. and allowance as specified in the agreement - And such allowances shall be computed and made in the manner specified in the agreement, the other provision of the said being deemed for this purposes to have been modified to the extent necessary to give effect to the terms of the agreement.
If the provision of the Act is analysed that it can be concluded that the production sharing contract is an independent accounting regime which includes tax treatment of cost, expenses, income, profit etc. it prescribes separate rule of accounting as it is a complete code by itself. Reference may be made to Joshi Technologies International Inc. Vs. Union of India [2013 (7) TMI 809 - DELHI HIGH COURT] - The additional benefits, apart from the normal allowance, admissible under other provisions of the Act is to be allowed as a deduction in computing the business profit of the assessee provided such allowances are specified in the agreement of the assessee entered into with the Central Government etc. and then the allowance shall be computed in the manner specified in the agreement. In the present appeal, neither such agreement was discussed before us nor there is a finding in the impugned finding, therefore, we set aside this issue to the file of the Ld. DRP to examine the facts and then decide the issue in accordance with law, therefore, this ground is allowed for statistical purposes. The assessee be given opportunity of being heard.
Claim of depreciation with respect to assets such as office equipment fixture and furniture etc used at the project office of the assessee - There is a finding in this impugned order that drilling activities has been started thus the claim of depreciation is a statutory allowance, it has to be allowed more specifically when the assessee is the owner of the asset which was used for business purposes. Since the asset was put to use and owned by the assessee, the depreciation has to be allowed.
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2015 (12) TMI 1865
Assessment in the name of company amalgamated - corporate death of an entity upon amalgamation - Amalgamation of two companies - Assessment to be made on which entity? - HELD THAT:- In view of the decision of this Court in Commissioner of Income Tax(Central-II) v. P.D. Associates (P) Ltd [2015 (7) TMI 1400 - DELHI HIGH COURT] no substantial question of law arises for determination by the Court in these appeals.
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2015 (12) TMI 1864
Addition u/s 68 - Addition of sum received by assessee trust as unsecured loan - onus to prove - CIT -A deleted the addition - HELD THAT:- Creditor has explained that the amount was withdrawn from Rajasthan bank Limited and same were deposited in union bank of India and then cheques were issued to the assessee trusts. These facts were also confirmed by AO in remand proceedings also. Now looking at the information that has been gathered by AO from ADIT is very simple which is available in case of every company and is also based on the information filed by those companies as per the Companies Act 1956. Therefore it is the same information which company has uploaded on the website of MCA and same information is supplied by the assessee and lender company to the AO.
On perusal of information received it does not suggest that the company is not in existence or the sources of the funds which are given as loan to the assessee trust are not proper in spite of the compliance made by lender by making himself available before AO for examination. It is also not important that whether the company is carrying on any business activity or not but what is important is that funds lent by that company are also shown in the balance sheet of the lender who is assessed to Income Tax - assessee has discharged its onus cast up on as per the provisions of section 68 by proving identity, creditworthiness and genuineness of the transaction and therefore we confirm the order of CIT (A) in deleting the addition - Decided against revenue.
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2015 (12) TMI 1862
Unexplained share application money - Information u/s 133(6) as received from the following parties - Proof of identity of the share applicants, their creditworthiness and genuineness of the transaction - HELD THAT:- In the present case the assessing officer himself has not doubted the identity in respect of all the share holders of the assessee company. Hence, the following the decision of the Hon’ble Co-ordinate bench in the case of M/s Agrawal Coal Corporation[2011 (10) TMI 496 - ITAT INDORE]the amount of share application money as received by the assessee requires to be accepted as genuine.
As regard share premium of ₹ 990/- Per share is concern, the assessee company is a big player in the Media segment and engaged in the Print and Boarding business. The assessee company was incorporated on 05-04-1989 and therefore having more than 20 years experience of this line of business. The assessee company declared total income in its books of account prior to depreciation was of ₹ 9995881/- as on 31.03.2008 and the same was increased to ₹ 12489838/- as on 31.03.2009. That considering the long standing in the business and huge profit the amount of share premium is duly justifiable. That in case of private limited company the amount of share premium is mutually decided between the Management of the company and share applicant. Hence, the issue in dispute should not be the amount of share premium but the identity of the share holders who has applied in the share application money of the assessee company.
Once the assessee has established the identity of the share holder in that case the amount of share premium is not an issue. If the assessing officer has not satisfied with the explanation of the share applicant, necessary addition is to be made in the hand of the share applicant but not in the case of the assessee.
That as regard the blank transfer deed duly signed by the share applicant as found during the course of survey. The assessing officer himself after being satisfied not taking any cognizance for the same. Since, by the time of assessment proceeding these transfer deed was not used by the assessee and therefore after the date of Annual General Meeting , old date transfer deed has no legal value.
Additional evidence filed before the Ld CIT[A] - department in this ground of appeal has challenged the Rule 46A of the Income Tax Rules - HELD THAT:- During the course of hearing, we find that the assessee has submitted all the documentary evidence before the Assessing Officer and the ld. DR has not disputed this fact, therefore, we are of the view that this departmental ground deserves to be dismissed. We dismiss the same.
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2015 (12) TMI 1861
Seeking stay against the balance outstanding demand - assessee has already paid 50% of the total demand - AO has already granted stay against recovery after payment of 50% of total demand but stay granted by the AO is only till the disposal of the appeal or 29/02/2016 - assessee’s grievance is that if the assessee’s appeal is not disposed of by 29/02/2016, then there is an apprehension for taking a coercive action by AO for recovery of balance of 50% - HELD THAT:- Since assessee has already paid 50% of total demand and AO himself has stayed recovery till disposal or 29/02/2016, therefore, assessee has made out a good prima facie case for stay of balance outstanding demand till disposal of appeal or for a period of 180 days whichever is earlier. Accordingly, balance outstanding payment which is 50% of total demand is hereby stay for a period of 180 days or till disposal of appeal of assessee whichever is earlier. Appeal of the assessee is already fixed for hearing on 05/01/2016 which may be listed in the category of stay granted cases out-of-turn hearing. In the result, stay petition is allowed.
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2015 (12) TMI 1858
Deduction u/s 54F - capital gain declared on sale of two residential houses - assessee sold two residential flats and one shop located at Pune - As per AO assessee should not own more than one residential house, other than the new asset, on the date of transfer of original asset - Date of sale of shop - HELD THAT:- As assessee had sold the residential flat on 31.7.2007 and thereafter sold the shop on 01-02-2008, while the tax authorities have presumed the residential units have been sold after the sale of shop. Since the factual aspects relating to this contradictory stand require verification, we set aside this matter to the file of the assessing officer for carrying out proper examination of the facts.
Assessee has violated the second condition prescribed u/s 54F - We have noticed that the assessing officer has already submitted a remand report by obtaining details from the society office, where in it was certified that both the flats are used by the assessee as a single residential unit. Since this fact has been accepted by the tax authorities, merely because, the two flats have been purchased by way of two separate agreements, in our view, will not make any difference. Accordingly, we are of the view that both the flats purchased by the assessee and joined and also used together as a single unit should be considered as a single residential house for the purpose of sec. 54F.
Quantum of deduction allowable u/s 54F - We are of the view that there is merit in the contentions of the A.R. There is nothing in the provisions of the Act that the cost of new asset shall be arrived at by deducting the deduction allowed u/s 54 of the Act for the purpose of computing deduction u/s 54F of the Act. There is also no provision in the Act which list out the priority of the deductions. Accordingly, we direct the AO to compute the deduction u/s 54F of the Act by taking the cost of new asset without deducting the deduction allowed u/s 54 of the Act, subject to the decision taken with regard to the verification of the dates of sale of residential house and shop.
With the above said observations, we set aside the matter relating to the deduction u/s 54F of the Act to the file of the assessing officer. Assessee Appeal partly allowed for statistical purposes.
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2015 (12) TMI 1854
Reopening of assessment u/s 147 - as argued no reasons were recorded for reopening before the date of issue of notice u/s.148 - HELD THAT:- From the notesheet, we found that the first entry pertains to issue of notice u/s.148 dated 6-3-2009 and the last entry is dated 16-12-2009. However, we do not find any entry in notesheet recording the reasons for reopening, after the date of issue of notice on 6-3-2009 u/s.148, it means reasons for reopening was not recorded after issue of notice u/s.148 dated 6-3-2009.
Since note sheet recording entries prior to the date of issue of notice u/s.148 dated 6-3-2009 was not made available to us, it is not possible for us to find out independently as to whether any reasons for reopening was recorded prior to issue of notice u/s.148. As per entry on the note sheet, between 24-8-2009 to 16-12-2009, the assessee had asked for issue of reasons and the AO has sent the reasons. However, the notings of the proceedings carried out by AO before issue of notice u/s.148 was not made available to us. Thus, the copy of notesheet so filed by ld. DR which is incomplete, do not help us to reach to the conclusion as to whether any reasons were ever recorded by the AO prior to the issue of notice u/s.148 on 6-3-2009. Under such circumstances, we have no option other than relying on the finding recorded by CIT(A) to the effect that no reasons were recorded for reopening before the date of issue of notice u/s.148 on 6-3-2009. - Decided in favour of assessee.
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2015 (12) TMI 1852
Treatment of carbon credit receipts - revenue or capital receipts - HELD THAT:- As decided in M/S. ARUN TEXTILES PRIVATE LIMITED VERSUS ASST. COMMISSIONER OF INCOME TAX, COMPANY CIRCLE, TIRUPUR [2014 (9) TMI 922 - ITAT CHENNAI] we are inclined to hold that the receipt from sale of carbon credits has to be considered as capital receipt and accordingly, it is not taxable. Thus, there is no question of considering the same for deduction u/s.80IA.
Deduction u/s.80IA - Whether depreciation of earlier years, which have been absorbed, cannot be notionally carried forward and considered in computing the quantum of deduction u/s.80IA? - HELD THAT:- This issue is covered by this Tribunal in favour of the assessee in the case of M/s. Ambika Cotton Mills Ltd. & Others [2015 (12) TMI 1851 - ITAT CHENNAI] mere pendency of Special Leave Petition before the Apex Court cannot be a reason to take a different view. The judgment of Madras High Court is binding on all the authorities in the State of Tamil Nadu and Union Territory of Pondicherry. Commissioner of Income Tax (Appeals) has rightly allowed the claim of the assessee by following the binding judgment of Madras High Court in Velayudhaswamy Spinning Mills (P) Ltd [2010 (3) TMI 860 - MADRAS HIGH COURT] - Decided against revenue.
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2015 (12) TMI 1851
Deduction u/s 80-IA in respect of windmills - AO rejected the claim of the assessees on the ground that the Department has filed a Special Leave Petition against the judgment of Madras High Court in Velayudhaswamy Spinning Mills (P) Ltd[2010 (3) TMI 860 - MADRAS HIGH COURT] - HELD THAT:- This Tribunal is of the considered opinion that mere pendency of Special Leave Petition before the Apex Court cannot be a reason to take a different view. The judgment of Madras High Court is binding on all the authorities in the State of Tamil Nadu and Union Territory of Pondicherry. Therefore, the Commissioner of Income Tax (Appeals) has rightly allowed the claim of the assessees by following the binding judgment of Madras High Court in Velayudhaswamy Spinning Mills (P) Ltd (supra). Therefore, this Tribunal do not find any infirmity in the order of the Commissioner of Income Tax (Appeals). Appeals of the Revenue are dismissed.
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2015 (12) TMI 1850
Unexplained expenditure under section 69C relating to the purchase of goods - addition based on name of the two suppliers figured in the list of suspicious dealers in the website of sales Tax department - eligible proof that the assessee has indulged in the bogus purchases - CIT(A) deleted the additions - HELD THAT:- When the AO himself has not doubted the purchase and sale transaction and all the expenditure has been duly accounted in the books of account, then it can not be said to be a case of unexplained expenditure. It is not the case of the AO that the goods were purchased by the assessee at a lesser rate or that someone has supplied the goods to the assessee for free or that the assessee has booked a bogus expenditure. When it is not so, solely on the basis of unconfronted and general statements of alleged suppliers made before sales tax authorities, addition u/s 69C under the circumstances on account of purchases are not warranted at all.
Assessee has relied upon the decision of Nikunj Enterprises (P.) Ltd.” [2013 (1) TMI 88 - BOMBAY HIGH COURT] wherein the Hon’ble Bombay High Court has upheld the findings of the tribunal that where the assessee filed letters of confirmation of suppliers, copies of bank statement showing entries of payment through account payee cheques to suppliers and stock reconciliation statements, sale of purchased goods was not doubted, the transactions were supported with evidences and confirmations, in such an event merely because the suppliers have not appeared before the AO or the Ld. CIT(A), one can not conclude that the purchases were not genuine.- Decided in favour of assessee.
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2015 (12) TMI 1849
Computation of deductio u/s 10A - Assessee incurred sales commission in foreign currency during the previous year relevant to the assessment year 2006-07 - AO excluded it from the export turnover, however, not reduced from the total turnover - CIT(A) by following the decision of ITO vs Sak Soft Ltd [2009 (3) TMI 243 - ITAT MADRAS-D] observed that for the purpose of applying the formula u/s 10A, the sales commission expenses which was incurred in foreign currency for providing technical services outside India are to be excluded both from export turnover as well as total turnover - HELD THAT:- Since the issue is covered in favour of the assessee by the decision of the Special Bench in Sak Soft Ltd (supra) and the CIT(A) has followed the same, we do not find any infirmity in the order of the CIT(A). Accordingly, the same is confirmed. - Decided against revenue.
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2015 (12) TMI 1847
MAT Computation u/s 115JB - Deduction on account of prior period expenditure from net profit shown in Profit & Loss Account for the purpose of computing book profit u/s 115JB - HELD THAT:- Only in cases where a particular item of income or expenditure is required to be disclosed in the Profit & Loss Account but was disclosed in the notes to accounts, then such item of income or expenditure will be treated as part of Profit & Loss Account for the purposes of computing profit u/s 115JB. Assessee has not brought on record anything to show as to how this amount was required to be part of Profit & Loss Account prepared in accordance with part II of Schedule VI of the Companies Act.
We further note that the CIT(A) has allowed the claim of the assessee on the premise that once assessee has disclosed this amount in notes to accounts, then the same will be treated as disclosed in Profit & Loss Account and consequently has to be adjusted for computation of book profit u/s 115JB.
CIT(A) has not gone into this aspect of the issue whether this prior period expenditure was required to be part of Profit & Loss Account as per Schedule VI of Companies Act or not. Therefore, if this amount was not required to be part of Profit & Loss Account prepared as per Schedule VI of the Companies Act, then undisputedly this amount not being part of any of the clauses of Explanation to sec. 115JB cannot be excluded from net profit for the purposes of computing book profit u/s 115JB.
Since neither the revenue nor the assessee has furnished any record in support of their respective claims, whether this amount of prior period expenditure was required to be part of Profit & Loss Account prepared as per provisions of Schedule VI of the Companies Act, therefore, we set aside this issue to the record of the CIT(A) to re-examine the issue in light of the relevant provisions of Schedule VI of the Companies Act as well as the relevant accounting standard applicable on this item of expenditure and then give a finding whether this amount of prior period expenditure is required to be part of profit and loss account or not - Appeal of the revenue allowed for statistical purposes.
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9911796707
