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Income Tax - Case Laws
Showing 421 to 440 of 9151 Records
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2015 (12) TMI 1021
Disallowance made u/s 14A r.w. Rule 8D(2)(ii) - CIT(A) had directed the AO to re-compute disallowance - Held that:- A look at the balance sheet of the assesee placed show that its share capital of ₹ 21,19,01,000/- and reserves and surplus of ₹ 17,81,28,688/- totaling to ₹ 39,00,29,688/-. Its investments as on 31-03-2011 were only ₹ 13,01,27,472/-. Obviously, assessee had more than enough own funds with it for justifying the investment. Further, it is not disputed that the assessee had made a suo-motu disallowance of ₹ 56,55,867/- as the interest expenditure attributable to the loan fund utilized for the investment. At no place the AO expressed any dissatisfaction with regard to the correctness of the claim of the assessee with regard to expenditure incurred for earning exempt income. Assessee had all along argued that the loans which were used were only for the purpose of its business.
The loans which were used for the purpose of placing investments resulting in tax free income were also furnished by the assessee and this totalled only to ₹ 18,90,931/-. The CIT(A) directed the AO to confine the disallowance under Rule 8D(2)(ii) of the IT Act, 1961 to such amount which is justified - Decided against revenue
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2015 (12) TMI 1020
Penalty u/s. 271(1)(c) - disallowance of Exhibitor Promotion expenses - Held that:- Assessing Officer had given a specific show cause notice and examined the relevant invoices for Exhibit Promotion expenses and thereafter found that invoices for Euro 36993.45 were actually meant for Chinese exhibitions and as such were not related to the exhibition/fairs organized by the assessee. The disallowance was accordingly made to the equivalent amount in Rupees amounting to ₹ 24,96,318/-. This is not a case where disallowance originated due to difference of opinion as tried to be convinced by the assessee. The explanation of the assessee was that by mistake invoice to that extent relating to exhibition in India were sent by the parent company to China and that way tired to explain that the expenses debited in the Profit & Loss Account were actually incurred and there was no concealment and assessee had not furnished any incorrect particulars of income. If that was so, then the assessee had ample opportunity to get those invoices from its counterpart and/or could have obtained copy thereof from the parent company itself and submitted to the Assessing Officer at least during the penalty proceedings. Unfortunately, no such evidence was filed neither before the Assessing Officer nor even before the CIT(A) in the appellate proceedings. In view of the above the CIT(A) was justified in upholding the order of the Assessing Officer wherein he has held that the assessee has concealed its income by filing inaccurate particulars. Therefore he rightly imposed penalty under section 271(1)(c). - Decided against assessee.
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2015 (12) TMI 1019
Reopening of assessment - Held that:- The order of the A.O, no where speaks about having a new material or any tangible material to reopen the case. The Learned CIT(A) has recorded a finding that the assessing officer has called for relevant details during the course of original assessment proceedings. Hence it is quite clear that the reopening was done on the basis of change of opinion. It is well settled proposition that reopening cannot be done on the basis of change of opinion. - Decided in favour of assessee.
Consideration of sale price - substitution of sale value - Held that:- The assessee sold 7,99,800 shares to Rainbow Agri Industries at the face value at ₹ 1/-. The A.O. determined fair market value at ₹ 3.50/- without bringing any material on record to show that the assessee received more than the agreed consideration. In the above said judgments of K.P.Varghese Vs. ITO (1981 (9) TMI 1 - SUPREME Court) and Rupee Finance & Management (P) Ltd. Vs. ACIT 7(2), Mumbai (2007 (2) TMI 240 - ITAT BOMBAY-J) it has been held that the fair market value and sale value is clearly distinguishable. Therefore, we are of the view that, without any supporting material, the A.O. cannot substitute market value. Therefore, order of the CIT(A) under challenge is not required to be interfered with on any ground. - Decided in favour of assessee.
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2015 (12) TMI 1018
Interest income earned on business advances kept with the sister concerns - treated as ‘business income’ OR ‘income from other sources’ - Held that:- On perusal of the said Tribunal’s order in the case of ACIT vs. M/s. Piem Hotels Ltd, assessee’s sister concerns case we have no hesitation to come to a conclusion that the ‘interest income’ earned on business advances kept with the sister concerns should be treated as ‘business income’ instead of ‘income from other sources’. Considering the same, we find no infirmity in the order of the CIT (A) and upheld the decision taken by him. - Decided in favour of assessee.
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2015 (12) TMI 1017
Penalty u/s. 271(1)(c) - addition u/s. 68 - Held that:- In the present case the assessee had disclosed the material facts before the AO. When the assessee has made a particular claim in the return of income and has also furnished all the material facts relevant thereto, the disallowance of such claim cannot automatically lead to the conclusion that there was concealment of particulars of his income by the assessee or furnishing inaccurate particulars thereof.
It is a settled legal position that penalty proceedings are different from assessment proceedings and the findings given in the assessment though it may constitute good evidence but same is not conclusive in the penalty proceedings Further, merely because Assessee has not challenged the order of assessment levying tax and interest and has paid tax and interest that by itself will not be sufficient for the authorities either to initiate penalty proceedings or impose penalty. In the present case, we are of the view that in the absence of complete and convincing corroborative evidence, the Revenue may justify addition, but in the matter of penalty proceedings, the onus lies heavily on the Revenue to prove that the assessee had concealed its income or has filed inaccurate particulars of its income.
No penalty is leviable u/s 271(1)(c) and therefore direct its deletion. Decided in favour of assessee.
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2015 (12) TMI 1016
Reconciliation of the difference between receipts as per TDS Certificates and receipts disclosed by the assessee - Held that:- On an appreciation of the facts on record we do not find the arguments and claims put forward by the assessee to be factually tenable. As per the business agreement dt.10.10.2003 and the letter dt.4.11.2003 supplementing the aforesaid agreement, the assessee's principal, M/s. Oyzterbay Pvt. Ltd. was to grant the assessee rentals of ₹ 36,000 per month in lieu of rents paid to the landlord; which works out to ₹ 4,32,000 per annum (viz. ₹ 36,000 x 12). This, in our considered view, certainly does not account for the difference of ₹ 8,91,075 between the receipts ofRs.43,94,366 as per the TDS Certificates and receipts of ₹ 35,03,291 declared by the assessee. In this view of the matter, we concur with and uphold the finding of the learned CIT (Appeals) that the explanation put forth by the assessee in an attempt to reconcile the difference in the receipts / turnover declared in the profit and loss account vis-ŕ-vis the receipts/turnover in the TDS Certificates, is unacceptable as it does not controvert the findings of the learned CIT (Appeals) in the impugned order. - Decided against assessee
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2015 (12) TMI 1015
Disallowance of the claim for deduction u/s. 37((1) - recruitment of employees before commencement of business - Held that:- The undisputed fact is that the assessee has recruited employees for the purpose of its business and as per the details exhibited at page-10 of the Paper Book about 16 employees are for the job of quality assurance. The assessee is in the business of Merchandising of diamonds/gold/jewelleries. Undisputedly, this line of business requires expertise who have proficiency in understanding the carats of diamonds and related jewellery, without such recruitment, it would be a futile exercise to commence the business.
Therefore in our understanding of the law, the claim of the expenditure is allowable. We, accordingly, set aside the order of the Ld. CIT(A) and direct the AO to allow the claim of expenditure - Decided in favour of assessee.
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2015 (12) TMI 1014
Eligibility to claim long term capital gains on sale of shares at a concessional rate of 10% during Asst Years 2001-02 to 2004-05 - exemption u/s 10(38) for Asst Year 2005-06 in respect of sale transactions routed through recognized stock exchange - Held that:- When purchase and sale of shares were supported by proper Contract Notes, deliveries of shares were received through demat accounts maintained with various agencies, the shares were purchased and sold through recognised broker and the sale considerations were received by Account Payee Cheques, the transactions cannot be treated as bogus and the income so disclosed was assessable as LTCG.
In the assessment orders under consideration the AO has not considered any of these facts. He has treated the transactions as bogus only on the basis of the suspicion that the difference in purchase and sale price of these shares are unusually high. It is a settled law that assessment cannot be made on the basis of suspicion or surmise. The AO has not brought any material on record to support his finding that there has been collusion/connivance between the broker and the appellant for the introduction of its unaccounted money. In view of the decisions of Sri Anil Kr. Khemka (husband of the appellant) thus hold that the AO is not justified in treating the long term capital gain as bogus. Direct the AO to treat the long term capital gain as claimed by the appellant and tax them at the rates applicable for assessment years 2001-02 to 2003-04 and for assessment year 2005-06 exemption u/s. 10(38) should be allowed - Decided in favour of assessee
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2015 (12) TMI 989
Invoking of provisions of section 145(3) for rejecting the books of accounts of assessee - only reason for which the Assessing Officer has rejected the books of accounts is for non-maintenance of quality-wise and piecewise detail of polished diamonds and has prepared vouchers for payment of labour charges - Held that:- Assessee is dealing in polished diamonds, better GP rate in comparison to preceding year, no specific default in the books of accounts, prepared quantitative details with calculation of wastage and yield duly recorded in books of accounts and certified by Chartered Accountant. It seems that Assessing Officer has tried to impose his experience of similar types of assessment done by him in case of other assessee(s). This action of the Assessing Officer cannot be held correct. However, assessee has its own way of doing business and preparation of books of accounts and there is no set bench mark that the quality wise or piece wise details of goods dealt has to be kept by each assessee. Therefore, applying the ratio of the decision of M/s Dhami Brothers vs. ACIT [2010 (8) TMI 817 - ITAT AHMEDABAD ] we are of the view that Assessing Officer was not correct in invoking the provisions of section 145(3) of the Act and accordingly, we uphold the order of CIT(A) and reject this ground of Revenue. - Decided in favour of assessee.
Addition on account of disallowance of excess labour expenses - CIT(A) deleted the addition - Held that:- The Assessing Officer has tried to compare the business style of the assessee with other assessees engaged in similar type of business, wherein in some cases he may have observed that other assessees paid to the labourers on the basis of their bills and the labour charges vary on the basis of quality of goods whereas in the case of assessee they have been paid on the basis of quantity. The assessee has been paying job charges @ of ₹ 375 per carat of roof diamond consistently since last three years whereas the Assessing Officer on the basis of his experience of assessing another unit has come to an average rate of ₹ 236 per carat of job work charges. This comparison and imposing of rates charged by other units can be justified only if the Assessing Officer proves that assessee had paid less amount than the amount actually shown in the supporting vouchers and there has been no such case observed by the Assessing Officer. So much so that when Assessing Officer called a few labour contractors for cross examining as to what is actual amount they have received, those labour contractors have confirmed that they have received the same amount of labour charges as mentioned in the supporting vouchers which have been countersigned by them.Therefore, considering the history of the assessee and nature of business and that profit is higher as compared to the preceding assessment year, would prove that assessee spent genuine expenditure wholly and exclusively for the purpose of business. We accordingly set aside the orders of the authorities below and delete the addition. - Decided in favour of assessee.
Addition on account of suppressed yield - as per AO there was NIL rejection in the preceding year in comparison to 1.78% rejection during the year and secondly qualitywise and piece wise details were not available and he has tried to place in the facts of other assessees assessed by him - CIT(A) deleted the addition - Held that:- Assessing Officer did not appreciate the fact that yield in the case of precious stone cannot be set by a similar bench mark because no body can predict the possible yield of finished goods which can be derived from cutting and polishing rough diamonds and also rough diamonds are in itself different in their quality but generally when there is fine quality of rough diamonds there is always a possibility of higher yield and vice versa in case of inferior type of rough diamond. As submitted by assessee that variation in yield has arisen due to variation in rates and use of little inferior quality of rough diamond during the year in comparison to previous year. However, overall yield in Asst. Year 2008-09 is 29.25% in comparison to 29.12% yield in asst. year 2007-08. Further regarding rejection it is only from the rough diamonds of lower purchase price. Assessee has properly maintained quantitative details along with quantity of goods produced and quantity of wastage and yield. The very basis taken by Assessing Officer that there was no wastage in preceding year and, therefore, the wastage in this year is manipulated is far from truth and without any basis and therefore, there is no weightage in the observation made by the Assessing Officer. As discussed earlier business style of each assessee has its own unique way of working and all cannot be examined with a similar bench mark else there always be the similar percentage of profit earned by every assessee. Business is controlled by the owner or the management and the level of yield, GP/NP achieved will vary from case to case depending on the application of strategic mind by the businessman. In view of above discussions, we find no infirmity in the order of ld. CIT(A) and uphold the same.- Decided in favour of assessee.
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2015 (12) TMI 988
Addition made on account of alleged suppression of sales - addition based on consumption of electricity as per US standards and evasion of Excise duty by the manufacturers of TMT bars in Jalna cluster found by Director General of Central Excise and Customs - working out the addition by applying GP rate of 4% on the alleged suppression of sales, after rejecting the books of account under section 145 - Held that:- No extrapolation of sales for 300 days can be made in the hands of the assessee on the basis of the evidence found for clandestine removal of material without payment of Excise duty for few days, which in turn, has been admitted by the assessee by way of filing petition before the Settlement Commission, which in turn, has also been accepted by the Settlement Commission. Merely because the Settlement Commission accepted the claim of the assessee of additional Excise duty payable on the said clandestine removal of material without payment of Excise duty does not establish the case of the Revenue that the said figures of additional production should be utilized for extrapolating the sales in the hands of the assessee for the entire year. Admittedly, the assessee had offered additional income on the said clandestine removal of material without payment of Excise duty, which is to be added as income in the hands of the assessee.
Assessee fairly admitted that in case the said additional income has not been added while computing the income in the hands of the assessee for the respective years, the same may be directed to be added in the hands of the respective assessee in respective years. Accordingly, we direct the Assessing Officer to verify from the records for the respective years and include the additional income on account of such admitted clandestine removal of material without payment of Excise duty, by the assessee either before the Settlement Commission or before the Excise authorities, in the hands of the assessee. We have heard bunch of appeals and in some years, there is no admission of clandestine removal of material without payment of Excise duty and in those years in the absence of any evidence and / or any investigation or inquiry made by the Assessing Officer and where the Assessing Officer has failed to collect additional evidence, no addition can be made in the hands of the assessee, by way of extrapolation of sales for 300 days on account of any evidence found in any preceding or succeeding years. Further, no addition can be made in the hands of the assessee, where no petition has been filed by the assessee before the Settlement Commission in any of the respective years or before the Excise authorities. In the case of Bhagyalaxmi Steel Alloys Pvt. Ltd., there is no investigation by DGCEI and hence, no addition on account of extrapolation can be made, in the absence of any evidence found against the assessee.
Since we have deleted the addition in the hands of assessee on both accounts i.e. addition made on account of erratic consumption of electricity and addition proposed on the basis of evidence found for the part of the year of clandestine removal of material without payment of Excise duty, next addition made in the hands of the assessee i.e. alleged investment in the purchases for effecting such sales which goods have been clandestinely removed, is not sustainable. Accordingly, we hold that no addition can be made in the hands of the assessee on account of alleged investment in purchases under section 69C of the Act.
In view of our deleting the addition in the hands of the assessee the grounds of appeal raised by the Revenue i.e. against application of GP rate and allowance of expenses are also dismissed. See Bhagyalaxmi Steel Alloys Pvt. Ltd. vs. Addl.CIT [2015 (11) TMI 14 - ITAT PUNE ]- Decided in favour of assessee.
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2015 (12) TMI 987
Computation of capital gains - whether the date of agreement or the date of execution of sale deed has to be considered for the purpose of adopting the SRO value under S.50C? - Held that:- For want of any evidence to the contrary, we hold that the property in question was in residential zone on the date of transfer and therefore, the SRO value for residential property as on 6.3.2006 or the sale consideration received by the assessee whichever is higher is to be adopted under S.50C of the Act. Assessing Officer is directed to compute the capital gains in the hands of the respective assessees accordingly.
Reopening of assessment - Held that:- As during the assessment proceedings under S.143(3) the capital gains was computed by taking the SRO value and the assessment order was reopened u/s. 147 of the Act for the very same reason, i.e. to consider the DVO report for adopting the value u/s. 50C of the Act. We find that after considering the fact that the DVO value was more than the SRO value, and hence the SRO value is to be adopted u/s. 50C of the Act, the Assessing Officer in the re-assessment proceedings confirmed the assessment order under S.143(3). Thus, as rightly pointed out by the assessee in his grounds of appeal, the assessment order under S.143(3) got merged with the assessment order under S.143(3) read with S.147 of the Act and the assessee’s challenge against the same before the CIT(A) is maintainable and the CIT(A)’s observations are not sustainable. Therefore, the order of the CIT(A) is set aside. However, since the common issue of computation of capital gains is arising in the case of all the co-owners including the assessee, we are of the opinion that no useful purpose would be served in remanding this case back to the file of the CIT(A). Therefore, we remand this case also to the file of the Assessing Officer for re-computation of capital gains in the hands of this assessee also in the light of the decision of this Tribunal in the case of other co-owners. - Decided in favour of assessee for statistical purposes
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2015 (12) TMI 986
Addition as income from other sources as against agricultural income declared by the assessee - Held that:- There is no dispute that there was earlier a search and seizure operation conducted in the case of the assessee in the year 2008, in pursuance of which an assessment was made under S.143(3), wherein the Assessing Officer had accepted the agricultural income declared by the assessee in the original return of income. It is also relevant to note that in the assessment order, the Assessing Officer has not referred to any incriminating material found, while disbelieving a part of the agricultural income and treating it as income from other sources. Consequently, it is well settled that if a particular income is subject matter of assessment in an earlier assessment proceedings and stands concluded, it cannot be reopened unless there are incriminating material found as a result of search to show undisclosed income. In this context, we refer to the decision of the Special Bench of the Tribunal in the case of All Cargo Global Logistics Ltd. V/s. DCIT (2012 (7) TMI 222 - ITAT MUMBAI(SB)). Admittedly, in the present case, as far as agricultural income is concerned, it has been considered in the original assessment proceedings. Therefore, in the absence of any incriminating material found during the second search and seizure operation conducted on 8.12.2011, to show that agricultural income was inflated, the Assessing Officer cannot consider this issue again in the impugned re-assessment proceedings. Accordingly, we delete the addition made by the Assessing Officer treating part of the agricultural income declared as income from other sources. - Decided in favour of assessee
Unexplained investment under S.69B - Held that:- As the statement of Srhi T.Ranga Rao, the entire charge sheet(s) filed by CBI and information gathered by the department through enquiry have not been brought on record before us either by assessee or department, we are unable to examine the extent of assessee’s involvement, if at all, in the irregularities alleged by CBI or whether the assessee has also been implicated by the investigation agency or any other person. Therefore, in our view, issue relating to payment of on-money requires to be examined afresh by Assessing Officer after confronting evidence/material sought to be relied upon to the assessee and seeking his response on them. The Assessing Officer must also disclose to the assessee the material/information on the basis of which he has quantified the on-money payment of ₹ 1,99,20,000. If the Assessing Officer is able to establish on the basis of evidence gathered that the assessee has paid onmoney to the extent quantified by him, then he can make the addition under S.69B. On the flip side, if there is no evidence available on record to directly link the assessee towards payment of on-money, then merely on the basis of the fact that some other buyers have accepted payment of on-money, no addition can be made. With the aforesaid observations, we remit the issue to the file of the Assessing Officer with a direction to re-decide the same afresh in accordance with law - Decided in favour of assessee for statistical purposes.
Disallowance of assessee’s claim for depreciation - as submitted by the assessee that Plasma TV and Home Theatre System were used by the assessee for his business purposes, because the assessee, being a film artist, these electronic items are required to view films, sequences and for finalisation of locations - Held that:- by looking at the nature of the assets and the fact that they are used in assessee’s home, we are unable to accept the assessee’s claim for depreciation. Further, assessee has not substantiated with any evidence that the TV or the Home Theatre System were used for business purposes. We accordingly confirm the disallowance made by the Assessing Officer, rejecting this ground of the assessee.
Disallowance of 20% out of personal expenses - Held that:- We are of the view that the nature of expenditure claimed demonstrate that there would be some amount of personal element in the same, and hence, certain disallowance is warranted. We find that the disallowance worked out at 20% made by the Assessing Officer is reasonable, and the CIT(A) was therefore, justified in sustaining the same - Decided against assessee.
Addition as undisclosed income - Held that:- On careful examination of the seized document, it is seen, against the name of every person to whom payment is supposed to have been made, a date is mentioned. Interestingly, against assessee’s payment no date is mentioned. Further, the payment dates are in sequence. It is to be noted, as per the seized document, the payment immediately after assessee is ₹ 10 lakhs to Puri Jagannadh in February, 2011. Since, all subsequent payments are in chronological order, assessee’s contention that payment made to him, if at all, is prior to February, 2011 is acceptable. Keeping these facts in view when the Bench made a specific query to Learned Departmental Representative to explain how Assessing Officer has correlated the payment to the impugned assessment year, he has no valid answer for the same. Therefore, even accepting for argument’s sake that contents of seized document are correct, but certainly, it cannot be linked to the impugned assessment year. Thus, looked at from any angle, the addition cannot be sustained. Accordingly, allowing assessee’s ground, we delete the addition of ₹ 2 crores. - Decided in favour of assessee
Allowance of TDS credit of ₹ 5 lakhs - Held that:- Assessing Officer does not dispute the fact that the assessee actually received ₹ 45 lakhs by way of cheque and balance ₹ 5 lakhs by way of TDS. It is also not disputed that the assessee returned the entire amount of ₹ 50 lakhs received as Advance from Madras Talkies. Under these circumstances, the assessee in our view was entitled for getting credit of ₹ 5 lakhs deducted by way of TDS and remitted to the Government account, as it is in the name of the assessee. The apprehension of the Department that the deductor will take credit for the same, in our view is totally misplaced. Therefore, we do not find any infirmity in the order of the learned CIT(A) in directing the Assessing Officer to give credit to the TDS of ₹ 5 lakhs.- Decided in favour of assessee
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2015 (12) TMI 985
Reopening the assessment originally framed under Section 143 (3) - genuineness of the gifts and to scrutinize the corresponding entries in their books of account in their respective countries - Held that:- Below the office note, list of 16 donors has been set out. The office note states that in order to verify the genuineness of the gifts and to scrutinize the corresponding entries in their books of account in their respective countries, a detailed letter has been sent to the FTD Branch of the CBDT. It is, in that context, stated that “if anything achieve received from the FTD (Foreign Tax Division) Branch the assessment shall be reopened”. In other words, the reopening of the assessment was made contingent upon some material being received from the FTD. It is not denied by the Revenue that till date no such adverse material qua the Assessee has been received from the FTD.
In the absence of any material, as anticipated by the AO in the office note, it is difficult to appreciate on what basis the AO could form the “reasons to believe”, that for the AY in question any income has escaped assessment. What seems to have been overlooked by the CIT (A) as well as the ITAT is that the original assessment was framed after detailed questionnaires were sent to the Assessee and replies furnished by him thereto giving the details of all the donors as well as their affidavits. These were examined by the AO. The mere fact that the AO may not have mentioned in the assessment order that the above exercise was undertaken need not mean that he did not pay attention to the materials before him. There was no warrant for the ITAT to have drawn such presumption. In fact the affidavits of the donors coupled with the confirmation letters of the Bank, as noted hereinabove, were materials touching upon the aspects of genuineness of the identity of the donors. Unless there was material which controverted the said documents produced by the Assessee in the form of the report of the FTD, it could not be said that there was any adverse material which could justify the formation of ‘reasons of believe’ within the meaning of Section 147/148 of the Act for reopening the assessment. - Decided in favour of assessee.
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2015 (12) TMI 984
TDS u/s 194I - Lease premium for the land given on lease - whether is in the nature of a capital expense not falling within the ambit of Section 194I - Held that:- In Durga Khanna v. Commissioner of Income Tax [1969 (1) TMI 1 - SUPREME Court ] the Supreme Court held that, prima facie, premium or salami was not income and the onus was on the Revenue to show that facts existed which would make it a revenue payment. As far as the present case is concerned, the facts brought on record, and which have not been contested by the Revenue, unmistakably show that the payment of the lease premium for the land given on lease to the Assessee for a period of 80 years with "all the rights, easements and appurtenances" was in the nature of a capital expenditure. This coupled with the fact that the MMRDA did not treat the receipt as income clinches the issue in favour of the Assessee and against the Revenue.
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2015 (12) TMI 983
Surrender of tenancy rights - ITAT treating not as capital assets liable for tax as long term capital gain - whether the assessee was tenant of the said property and surrender of tenancy rights amounts to Transfer u/s 2(47)? - Held that:- We find that on examination of the agreements, both CIT(A) as well as Tribunal have categorically rendered a finding that there was, in fact, no surrender of tenancy under the two agreements dated 9th May, 2007 and 25th July, 2007. Thus, no transfer for the purposes of capital gains. This finding on the basis of the examination of various clauses of the agreement coupled with the inspection report of the Inspector who visited the premises, concludes as a fact that the Appellant continues to occupy the tenanted property and the entire process of redevelopment is stalled because of a legal dispute. Further, Documents on record such as rent receipt, addresses in bank account etc., indicated that tenancy continued. In this case, the Respondent-Assessess disputes the surrender of tenancy and/or any transfer and on examination of the clauses of the Agreements, the CIT(A) and the Tribunal accept the fact that no surrender/transfer took place. - Decided against revenue
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2015 (12) TMI 982
Reopening of assessment - undisclosed cash deposit - Held that:- When the bank account was not only disclosed by the petitioner at the outset along with return but was also noticed by the Assessing Officer during scrutiny, the main foundation of the allegation of the cash deposit having escaped to the notice of the Assessing Officer of the bank account not having been disclosed, stands falsified. The question of application of Explanation-1 to Section 147 of the of the Act would simply not arise. Even otherwise, it would appear that the petitioner gave full details of the bank account. During scrutiny assessment, if the Assessing Officer had any curiosity about the deposits made in such bank accounts, it was for him to question the assessee on such cash deposits. He simply cannot take shelter of Explanation-1 to Section 147 by contending that since such cash deposit was not pointedly brought to his notice by the petitioner, he can reopen the assessment beyond a period of four years alleging that the assessee did not disclose fully and truly all material facts.
Coming to the second element of the reasons for reopening the assessment, the petitioner pointed out to the Assessing Officer in objections raised to the reopening of assessment that he never owned or operated any bank account in Kotak Mahindra Bank as alleged. He would presume that reference to cash deposit of ₹ 14,67,075/- was to the loan sanctioned and disbursed by the said bank for purchase of car. These objections, however, met with a total silence by the Assessing Officer in the order that he passed on 15.06.2015 disposing of such objections. If his stand was that the contention of the petitioner that he never had any such bank account in Kotak Mahindra Bank was false, it was his duty to state so, with atleast prima facie material to so establish.The disposal of the objections was thus done in a mechanical manner. Even today, the Department has not been able to bring on record anything to suggest that the petitioner's frontal assertion that he did not have any bank account in Kotak Mahindra Bank nor did he make any cash deposit in the said bank account as alleged, is false. In fact, the petitioner reconciled the said amount of ₹ 14,67,075/- by pointing out that this was exactly the same amount which the Kotak Mahindra Bank released by way of car loan, which was, in fact, paid over directly to the dealer. - Decided in favour of assessee
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2015 (12) TMI 981
Addition of a loss incurred by the assessee for block assessment - ITAT deleted the addition - Held that:- ITAT correctly held that "there was no material with the Assessing Officer to disallow the claim of loss claimed by the assessee while filing its regular returns of income, because there being no material evidence found during the search and, therefore, it was beyond the power of the AO to review the position already accepted while passing the assessments u/s 143(3) on the basis of regular returns filed in due course of time. Accordingly, we delete all the additions made by the AO in the block period." - Decided in favour of the Assessee.
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2015 (12) TMI 980
Capital gain computation - Whether ITAT was right in ignoring the fact that as per provisions of section 50-C (2)(b) the matter should not have been referred by CIT(A) for valuation as the assessee had already challenged the Juntry Value assessable by the Stamp Valuation authority, before the Nayab Collector and in that case, further reference to valuation is prohibited as per the Act and value determined by Nayab Collector has to be adopted as full value of consideration ? - contention of the DR is that where the value of the property made by the stamp valuation authority is higher than the value of the property determined by the departmental valuer, then the higher value should be adopted for the purpose of working out the capital gain of the assessee
Held that:- Under clauses (a) and (b) of sub-section (2) of section 50-C, however, assessee has a right to ascertain before the Assessing Officer that the value adopted or assessed by the stamp valuation authority exceeds the fair market value as on the date of transfer upon which the Assessing Officer would refer the valuation of the capital asset to the Valuation Officer. Under sub-section (3) of section 50-C, where the value ascertained by the Valuation Officer exceeds the value adopted, assessed or assessable by the stamp valuation authority, the latter, i.e. the valuation of the stamp valuation authority, would be taken as the full value of the consideration for the purpose of computing capital gain. In other words, the valuation of the property adopted by the Stamp Duty authority of the State would be deemed to be the full value of the consideration for the purpose of computing capital gain. However, in case the assessee challenges such valuation before the Assessing Officer and the Assessing Officer calls for the valuation report from the Valuation Officer and the valuation adopted by the Valuation Officer exceeds the value adopted by the State Stamp Duty Authority, it would be the valuation of such stamp duty authority which would prevail for the purpose of computing capital gain. The Revenue intends to contend to the contrary which is simply not born out from the statutory provisions noticed. There is no error in the view taken by the Tribunal
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2015 (12) TMI 979
Revision u/s 263 - ITAT cancelling the order u/s 263 by holding that the order passed by the Assessing Officer is not erroneous and prejudicial to the interest of revenue where the Assessing Officer had failed to initiate penalty proceedings while completing assessment under Section 153A - Held that:- Initiation of proceedings under Section 263 of the Act was not justified and we uphold the order of the Tribunal cancelling the revisional order passed by the CIT as where the CIT finds that the Assessing Officer had not initiated penalty proceedings under Section 271(1)(c) of the Act in the assessment order, he cannot direct the Assessing Officer to initiate penalty proceedings under Section 271(1)(c) of the Act in exercise of revisional power under Section 263 of the Act. See Commissioner of Income Tax v. Subhash Kumar Jain (2010 (9) TMI 772 - Punjab and Haryana High Court) - Decided in favour of assessee
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2015 (12) TMI 978
Source of the deficit investment made towards the purchase of new agricultural lands - Sole source - Held that:- The cash flow statement furnished by the assessee had rightly been admitted by the ld. CIT(A), which is not in dispute. As mentioned the ancestral agricultural land had been sold, which was held jointly by the assessee along with his brother Sh. Amarjit Singh and agricultural land, which has been purchased by the assessee along with his brother Sh. Amarjit Singh in equal share is also not in dispute. Therefore, the deficit of ₹ 11,75,000/- belongs equally to the assessee and his brother Sh. Amarjit Singh and assessee alone cannot be said to be liable for the entire deposit of ₹ 11,75,000/-. The argument of the Ld. DR that Power of Attorney by Sh. Amarjit Singh brother of the assessee had been given to the assessee, does not mean the deficit or levy of tax in toto shall fall on the assessee. Accordingly, the deficit of ₹ 5,87,500/- is on account of the assessee and the other deficit of ₹ 5,87,500/- is on account of brother of the assessee, Sh. Amarjit Singh. Accordingly, the addition confirmed by the Ld. CIT(A) is restricted to ₹ 5,87,500/- in view of our findings hereinabove.
As regards the arguments by the Ld. Counsel for the assessee that the assessee is having only source of income as salary income or agricultural income and the deficit so arisen should be treated as sale proceeds of the agricultural land and not to be accepted for the reason that the assessee had never treated the said deficit as agricultural income in his cash flow statement or recasted cash flow statement before any of the authorities below or even before us. Also in the absence of any cogent explanation or any evidence or arguments made by the Ld. Counsel for the assessee, the decision of Hon'ble Supreme Court in the case of Smt. P.K. Noorjahan vs. CIT (1997 (1) TMI 6 - SUPREME Court) cannot help the assessee. Accordingly, the AO is directed to sustain the addition of ₹ 5,87,500/- and is directed to delete the rest of the addition amounting to ₹ 5,87,500/-. Thus, the appeal of the assessee is partly allowed
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