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Income Tax - Case Laws
Showing 481 to 500 of 9151 Records
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2015 (12) TMI 892
Disallowance of commission - the same was not accrued in the assessment year under consideration - Held that:- As per clause 4 of the agreement, the commission payable to KSB Singapore(Asia Pacific) at the rate not exceeding 12.5% on FOB value of the order in the currency in India in which the order is placed. These charges will fall due for payment on receipt of payment from the clients. Being so, it is clear that the payment of commission accrued only on realization of sale value. The assessee’s claim is that it is booking expenditure on the basis of sale value and not on the basis of sale realization and this system has been accepted by the department in earlier years as well as in the subsequent year. In our opinion, we are not concerned with the any other year which are not before us. In our opinion, if the department has accepted in earlier year, it was a mistake and there is no merit in continuing the same mistake in the assessment year under consideration. The payment of commission accrued only on realization of sale value and it is to be allowed when the realization of sale value which is in compliance with the agreement cited supra and disallowance is based on the above agreement brought on record by the authorities and hence, we do not find any infirmity in the orders of the authorities below, which is confirmed.- Decided against assessee.
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2015 (12) TMI 891
Penalty u/s 271(1)(c) - cessation of liability u/s 41(1) in respect of two trade creditors and in respect of one trade debtor - Held that:- It clearly emerges that the amounts in question were carried over trade credits from earlier year, corresponding purchases were included in trading a/c thus legally speaking if trade credits are added as cessation of liability, the relevant entries exist in books and if they are held as bogus then they belong to earlier years.
These pleas can be taken by assesse in penalty proceedings and in that case penalty can be imposed not on the sole basis of alleged surrender but after consideration of merits of the explanation. AO has held that the surrender is not acceptable and chose to add it u/s 41(1) of the Act. Thus technically even the surrender is not accepted.
The details about trading liabilities and transactions were reflected in the accounting statements which were part of the return of income. Hon’ble Supreme Court in Reliance Petro Products case (2010 (3) TMI 80 - SUPREME COURT ) has held that if the relevant information is filed with the return of income in that case any variation in the claims of the assesse will not entail penalty. This judgment also supports the case of the assesse, in view thereof also the penalty in this case can not be imposed by merely referring to the alleged surrender and without considering the explanation. Thus, in consideration of entirety of facts, circumstances and case laws as relied on by assesse, we delete the penalty. - Decided in favour of assessee.
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2015 (12) TMI 890
Disallowance u/s. 43B - Held that:- AO has erroneously or inadvertently overlooked the accounting treatment given by the appellant, (i.e. remittance of interest entries of earlier years), which has increase the book profit of the appellant in notional manner, and ignored the reversal entire made in this regard to nullify such effect. Accordingly the claim of the appellant in this regard is found justified and the AO is directed to reduce the book profit of the appellant to the extent of ₹ 39467254/-. Consequently this ground of appeal is upheld.'' Since the ld. CIT(A) has given detailed account of the nature of the entries, its effect on book profits and as to how the action of the AO was not justified, therefore, no interference is called for in ld. CIT(A)'s order.
PF and ESI contribution of the employees - Held that:- As the assessee had actually paid the PF & ESI contributions before due date of filing of the return which has not been disputed by the ld. DR at the time of hearing. - Decided in favour of the assessee.
Disallowance on vehicle and telephone expenses - Held that:- We have found that the assessee has paid FBT tax thereon. Besides, this issue stands decided in favour of the assessee by the Hon'ble Gujarat High Court in the case of Sayaji Iron and Engg. Co.vs CIT [2001 (7) TMI 70 - GUJARAT High Court] holding as the Tribunal was wrong while disallowing 1/6th of the total car expenditure and depreciation claimed by the assessee on account of the personal use of the cars which were used by the directors. We, therefore, answer the question in the negative, i.e., in favour of the assessee and against the Revenue.
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2015 (12) TMI 889
Tds u/s 195 - disallowance under section 40(a)(i)in respect of the amount paid to non-resident M/s. Fund Quest for the purpose of investment management - non deuction of TDS - whether the payments made by the assessee to Fund Quest is in the nature of royalty? - Held that:- A perusal of the term of 'Royalty' as defined in the Act shows that it does not include any information provided in the course of advisory services. We do not agree with the findings of the CIT(Appeals) on the issue. Since, payments made to M/s. Fund Quest are not in the nature of 'Royalty' and the services were rendered abroad, no part of income had accrued or arisen in India. The assessee is not liable to deduct tax at source on the payments so made. The findings of the CIT(Appeals) on this issue are set aside - Decided in favour of assessee.
Disallowance of expenditure incurred on improvement/renovation of leasehold building - CIT(A) deleted the addition - Held that:- The expenditure incurred by the assessee for demolition, painting, flooring, partition, modular and electrical works on the leasehold premises is revenue expenditure. Thus, we uphold the orders of the Commissioner of Income Tax (Appeals) on this issue and reject the grounds of appeal raised by the Revenue. See Sundaram BNP Paribas Asset Management Co. Ltd. v. ACIT [2011 (1) TMI 1242 - ITAT CHENNAI ] - Decided in favour of assessee.
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2015 (12) TMI 888
Grant of registration u/s 12AA - grievance of the assessee since the assessee has applied for registration on 18.12.2009, the CIT should have granted registration w.e.f. 1.4.2009 as per sub-clause (ii) of proviso to section 12A(1)(a) and secondly the condition imposed by the CIT for grant of registration u/s 12AA of the Act by requiring the assessee to get itself registered u/s 43(1) of the Andhra Pradesh Charitable & Hindu Religious Institutions and Endowments Act, 1987 - Held that:- As per clause (ii) of the first proviso to section 12A (1)(a) of the Act in a case where the application for registration is not filed before the commissioner before the expiry of a period of 1 year from the date of creation of the trust or the establishment of the institution, then the registration shall be granted from the first day of financial year in which the application is made. However, as per the second proviso the clause shall not apply in relation to any application made on or after the first day of June, 2007. Similarly, sub-section 2 of section 12A of the Act which was inserted into the statute from 1.6.2007 mandates that in a case where application for registration is made after the first day of June, 2007, the provisions of section 11 & 12 shall apply in relation to the income of such trust or institution from the assessment year immediately following the financial year in which such application is made. Therefore, in view of the clear statutory provision as contained u/s 12A(2) of the Act which is applicable to applications for registration made after 1.6.2007 we do not find any infirmity in the order of the CIT in granting registration for the assessment year 2010-11. Therefore, assessee’s contention in this respect cannot be accepted.
Requirement of registration u/s 43(1) of the Andhra Pradesh Charitable & Hindu Religious Institutions and Endowments Act, 1987 is concerned, we are not able to agree with the view of the CIT in this regard. Law is now fairly well settled that for registration u/s 12A of the Act the society is not required to be registered u/s 43(1) of the Andhra Pradesh Charitable & Hindu Religious Institutions and Endowments Act, 1987. Further, it is a fact on record that the assessee had applied for registration u/s 43(1) of the Andhra Pradesh Charitable & Hindu Religious Institutions and Endowments Act, 1987 before the Assistant Commissioner, Endowments Department. However, assessee’s application for registration was not acted upon and the assessee was informed that as there is a ban on new registrations, assessee’s application cannot be accepted. That being the case, when the authorities are not granting registration under the Andhra Pradesh Charitable & Hindu Religious Institutions and Endowments Act, 1987, registration u/s 43(1) cannot be made a condition precedent for getting registration u/s 12AA of the Act. Assessee cannot be expected to perform an impossible act. Non-registration u/s 43(1) of the Andhra Pradesh Charitable & Hindu Religious Institutions and Endowments Act, 1987 will not be a bar for the assessee in getting exemption u/s 11 of the Act when there is no such restriction put u/s 11, 12 & 13 of the Act. In view of the aforesaid we direct the CIT to grant registration u/s 12AA of the Act to the assessee without insisting upon registration u/s 43(1) of Andhra Pradesh Charitable & Hindu Religious Institutions and Endowments Act, 1987.
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2015 (12) TMI 887
Registration u/s 12A denied - Held that:- Undisputedly, the assessee was created by registered trust deed dated 5.10.2012 and it applied for registration on 25.4.2013. Therefore, it is not unusual that it could not commence any activities within such a short period. Further, admittedly when it has not received any funds nor commenced its activities, there is no need to maintain books of accounts. In the aforesaid circumstances, it cannot be held that as the assessee has not maintained books of accounts or commenced its activities, the activities are not genuine, hence, registration cannot be granted u/s 12A of the Act. So far as objects of the assessee as mentioned in the trust deed are concerned, a perusal of the same would clearly show that they come within the meaning of ‘charitable purpose' as defined u/s 2(15) of the Act. It is well settled principle of law that at the time of grant of registration, the CIT is only required to look into the object of the trust and genuineness of its activities. So far as the object of the trust is concerned, there is no adverse comment by the CIT that they are not charitable in nature. That being the case, only because it has not commenced its activities within such a short period of time, there is no justification in rejecting the application for grant of registration u/s 12A of the Act. Commencement of activity cannot be the sole criteria for not granting registration u/s 12A of the Act.
We direct the CIT to grant registration to the assessee u/s 12A of the Act. - Decided in favour of assessee
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2015 (12) TMI 886
Registration u/s 12AA and approval u/s 80G denied - Held that:- It was not proper on the part of the CIT to reject the application solely on the ground that the assessee has not commenced charitable activities as per its objects. When he has not expressed any doubt with regard to the charitable object of the assessee and when there is no other material before him to conclude that assessee’s activities are not genuine, there is no reason to refuse registration u/s 12AA of the Act. The grant of registration u/s 12AA of the Act does not automatically entitle the assessee for exemption u/s 11 of the Act. The Assessing officer is empowered under the Act to look into both the genuineness of the activities and application of fund and in case of any violation of the provisions contained under section 11 to 13 of the Act, the assessee would not be entitled for exemption u/s 11 and would be subjected to tax. That being the case, in our view, refusal of grant of registration u/s 12AA of the Act is not justified solely on the ground that the assessee has not commenced its activities. We are supported in our view by the decisions relied upon by the assessee. In that view of the matter, we set aside the order of the CIT and direct him to grant registration u/s 12AA of the Act to the assessee. - Decided in favour of assessee.
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2015 (12) TMI 843
Claim of writing off of bad debts - CIT(A) allowed the claim - main contention of the Department is that the assessee has written off the debts of Kinetic Motor Co. Ltd. a group concern, to reduce the profits of the assessee company and thereby reducing the tax liability - Held that:- A perusal of the facts clearly shows that Kinetic Motor Co. Ltd. was in financial distress and it could pay only part of its debts. Since, the assessee in its books of account had written off bad debts, the assessee was not required to establish that debts were in fact irrecoverable. The Hon'ble Supreme Court of India in the case of TRF Limited Vs. CIT (2010 (2) TMI 211 - SUPREME COURT ) has held that after the amendment of section 36(1)(vii) of the Act w.e.f. 1st April,1989 it is not necessary for the assessee to establish that the debt, in fact, has become irrecoverable. It is enough if the bad debt is written off as irrecoverable in the accounts of the assessee.
Both the companies i.e. the assessee as well as Kinetic Motor Co. Ltd. are separate legal entities and the assessee have been able to show that Kinetic Motor Co. Ltd. is a loss making company. Thus, we reject the contention of the ld. DR that the assessee and the debtor company are the part of same group, writing off of bad debts is a colourable device to set off the profits of one group company from the loss of other group companies being devoid of merit. - Decided against revenue
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2015 (12) TMI 842
Exclusion of excise duty and sales tax in the total turnover while computing deduction u/s 80HHC - Held that:- This issue is now covered, in favour of the assessee, by Hon’ble Supreme Court’s judgement in the case of CIT vs. Laxmi Machine Works (2007 (4) TMI 202 - SUPREME Court). - Decided against revenue.
Proportionate allocation of expenses - CIT(A) directing that apart from indirect expense already considered by the assessee for proportionate allocation, only auditor’s expenses need to be allocated proportionately and directing the A.O. to rework the indirect expenses for export of trading goods - Held that:- This issue is also now covered, in favour of the assessee, by order in assessee’s own case for the assessment year 2001-02. - Decided against revenue.
Disallowance of excess claim of depreciation - reducing the foreign exchange fluctuation gain from the WDV of plant and machinery in view of the provisions of section 43(1) - CIT(A) deleted the addition - Held that:- As learned CIT(A) has rightly held, the provisions of section 43A of the Act come into play only when the asset in question is acquired from outside India whereas, as is the undisputed position on the facts of this case, the related plant and machinery was “indigenous”. There is a categorical finding to that effect by the Assessing Officer himself. As such, the provisions of section 43A of the Act do not come into play at all. Learned Departmental Representative could not point out any other statutory provision under which impugned adjustment could have been made. In view of these discussions, we see no reasons to disturb the relief granted by the ld. CIT(A). We approve the same and decline to interfere in the matter. - Decided against revenue.
Depreciation on computer software - Held that:- This issue is rendered infructuous as the matter has been decided , in favour of the assessee, in the case of DCIT vs. Icon Data Management Limited [2012 (11) TMI 1096 - ITAT AHMEDABAD]- Decided against revenue.
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2015 (12) TMI 841
Addition made u/s.2(22)(e) - CIT(A) deleted the addition - Held that:- Not inclined to agree with the quantum of addition made by the Id.A.O. He has taken accumulated profits of M/s. K.V. Fashions Pvt. Ltd. as on 31.3.2009. Perusal of copy of account of M/s. K.V. Fashions Pvt. Ltd. in the books of the appellant i.e. M/s. Kamal Process reveals that the appellant has received the last installment of ₹ 13,00,000/- on 23.10.2008. As per the provisions of sec.2(22)(e) the accumulated profits for the purpose of 2(22)(e) is to be taken as on 23.10.2008 and not as on 31.3.2009 as adopted by the Id. A.O. The facts available on record further indicate that M/s. K.V. Fashions Pvt. Ltd. started its business from 1.10.2008. During the year under consideration M/s. K.V. Fashions Pvt. Ltd. has earned a profit of ₹ 2,25,678/-. This way it can be said that M/s. K.V. Fashions has earned a monthly profit of ₹ 37,613/- (Rs.2,25,678 / 6). In view of these facts, it can be said that M/s. K.V. Fashions Pvt. Ltd. was having accumulated profit of ₹ 37,613/- at the end of October, 2008. This way the accumulated profit as on 23.10.08 can at the most be taken at ₹ 37,613/-. In view of above facts, I hold that M/s. K.V. Fashions Pvt. Ltd. was having accumulated profit of ₹ 37,613/- at the date of payment of loan of ₹ 13,00,000/- on 23.10.2008 and accumulated profits to the extent of ₹ 37,613/- can only be taxed as per the provisions of sec.2(22)(e). Accordingly, addition to the extent of ₹ 37,613/- is confirmed. The appellant will get a relief of ₹ 1,88,065/- (Rs. 2,25,678 - 37,613). - Decided against revenue.
Disallowance of interest on partner’s capital as well as secured and unsecured loans - CIT(A) deleted the addition - Held that:- CIT(A) has given a finding in para-4.7 of his order that the assessee has got huge interest-free funds of ₹ 5,12,26,212/- [Rs.4,84,86,738/- as sundry creditors, ₹ 11,63,551/- as advances from customers and ₹ 15,75,923/- as unpaid expense] during the year under consideration. This finding of the ld.CIT(A) is not controverted by the Revenue by placing any contrary material on record. Therefore, we do not see any reason to interfere with the order of the ld.CIT(A), same is hereby upheld. - Decided against revenue.
Rejection of book of account - Held that:- CIT(A) has not upheld the book of account on the ground that during the course of assessment proceedings the assessee has furnished details of sales and purchase, quantitative monthly summary of grey cloth and finished cloth sales. The details of income and expenditure were also available on record. The AO has not found any specific details either in the book of accounts or in the details furnished by the appellant. The ld.CIT(A) observed that the AO has not found any specific details either in the book of accounts or in the details furnished by the assessee. The ld.CIT(A) relied on the judgement of CIT vs. Vikram Plastic (1998 (8) TMI 43 - GUJARAT High Court). The AO has proceeded to reject the book of accounts on the ground that the yield shown by the assessee was not correct since in the subsequent year, the assessee has shown yield at 96.63% for AY 2010-11. We find that the AO has noted the fact that the certificate dated 12/11/2011 was given to the assessee by one Shri G.G.Shroff, B.Sc. (Hons) M.Sc. Tech. (Bom.). The assessee has also enclosed the test report dated 8/12/2011 of Ahmedabad Textile Industries Research Association (ATIRA). The AO has not conducted any enquiry on the facts given by the assessee and, therefore, we do not see any reason to interfere with the order of the ld.CIT(A), same is hereby upheld.- Decided against revenue.
Addition made on account of suppression of production - CIT(A) deleted the addition - Held that:- The cost of suppressed production at the rate of ₹ 211.9 per meter as adopted by the A.O. is apparently wrong. The facts available on records indicate that the appellant manufactured 7,77,184 mtrs of cloth on his own account. This cloth was sold for a sale consideration of ₹ 1,86,31,031/-. This way the average selling price of cloth manufactured by the appellant works out to ₹ 23.96 per meter (18631031 / 777184). Thus the cost of production of cloth cannot be more than ₹ 23.96 per meter. It is seen that the A.O. has taken cost of production at ₹ 17,39,12,483 [cost of raw material of ₹ 12,56,95,265/- + direct manufacturing expenses of ₹ 4,82,17,218/-]. These expenses include, expenses incurred on job work also. Since, in the case of job work, cloth is not produced, considering these expenses for the purposes of suppression of production has given an erroneous figure. These facts, clearly indicate that the A.O. had adopted erroneous figures for working out the value of suppression which has resulted into disproportionate or unrealistic value of suppression - Decided against revenue.
Addition made on account of fall in G.P. Ratio - CIT(A) deleted the addition - Held that:- AO himself has stated in his order that since the addition in respect of suppression of production and disallowance of interest u/s.36(1)(iii) of the Act has been made, therefore the ground raised is ill-conceived. We find that the AO, however, proceeded to make the addition of ₹ 24,33,112/- and decided not to make separate addition in respect of fall in GP rate. Therefore, this ground is not arising out of the assessment order and, hence, rejected. - Decided against revenue.
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2015 (12) TMI 840
Taxability of income - Whether activities carried on by the Applicant, which is a Singapore based company and a non-resident as per provisions of section 6(3) the Applicant can be held to have earned any income taxable in India from its activities of execution of “Installation Project” ? - Held that:- Since the project executed by the applicant in India for Brahmaputra continued only for 178 days in a fiscal year and as the duration of the project is less than 183 days in a fiscal year, Permanent Establishment of the applicant cannot be constituted in India for the FY 2012-13 as per the provisions of Article 5.3 of the India-Singapore DTAA. Hence, the business profits accruing or arising to the applicant by way of the execution of the project under reference is taxable only in the country where the applicant is a resident, as per Article 7.1 of India-Singapore DTAA.
In view of this positive above response by the department, it is held that the income earned shall not be taxable in India. On this basis, the application is directed to be disposed of.
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2015 (12) TMI 839
Deductions under Sections 80-IB and 80HHC - whether Tribunal is justified in holding that the deduction u/s 80-HHC and 80-IB on the same figure of profit without reducing deduction allowed u/s 80-HHC ? - revision u/s 263 - Held that:- It is not a case where the assessment order is based on incorrect assumption of fact. We also find that it is not a case where the Assessing officer has not applied its mind to the provision of Section 80-IB (13) read with Section 80-IA(9) of the Act. The Assessing Officer after considering the matter in detail has passed an assessment order by applying its mind. The Assessing officer had allowed the deduction under Sections 80 HHC and under Section 80-IB of the Act to the extent of the amount of profits and gains as contemplated under Section 80-IA(9) of the Act. The question as to whether the deduction under Section 80HHC was to be computed after reducing the deduction under Section 80-IB of the Act from the profits and gains is a legal consideration. The Assessing Officer allowed the deduction in terms of Section 80 IA(9) of the Act and, therefore, it cannot be said that the Assessing Officer had not applied its mind and had failed to make an enquiry.
We are of the view that there was no material to indicate that the Assessing Officer had not applied its mind to the provisions of Section 80IB(13) of the Act and Section 80IA(9) of the Act nor we find that the Assessing Officer had passed the order without application of mind or the assessment order was based on incorrect application of law. The assessment order, on the other hand, was passed under Section 143(3) of the Act by the Assessing Officer on applying its mind and after due discussion and enquiry.
From the aforesaid discussion, it is apparent that the expression "prejudicial to the interests of revenue" appearing in Section 263 of the Act has to be read in conjunction with "erroneous" and that every loss of revenue as a consequence of the assessment order could not be treated as prejudicial to the interest of the revenue. Where the Assessing Officer has adopted a view, which is permissible in law or where two views are possible and the Income Tax Officer has taken one view, we are of the view that the Commissioner of Income Tax could not exercise its power under Section 263 of the Act to differ from the view of the Assessing Officer even if there was a loss of revenue. There is no doubt that the provision cannot be invoked on each and every type of error committed by the Assessing Officer. It is only when an order is erroneous then Section 263 of the Act could be invoked.
In the light of the aforesaid, we are of the opinion that the Tribunal was justified in setting aside the order of the Commissioner of Income Tax passed under Section 263 of the Act. The appeal fails and is dismissed. - Decided in favour of the assessee
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2015 (12) TMI 838
TDS liability - tax liability in terms of Section 201 (1) - Held that:- In the present transaction, admittedly there is no liability to tax. As a result, the question of deducting tax at source and the assessee violating the provisions of Section 195 does not arise and therefore, the assessee cannot be treated as an assessee in default. The Supreme Court has clearly held that the provisions relating to TDS would apply only to those sums which are chargeable to tax under the Income Tax Act and also has clearly held that in a transaction of this nature, the assessee was entitled to take a plea that there arises no tax liability and therefore, the provisions of Sec. 195 do not get attracted. Once we hold that there is no tax liability, the question of deduction of tax at source, terming the assessee as ''assessee in default" will not also arise and the resultant question of levy of interest becomes purely academic and the demand unsustainable in law. In the instant case, we hold that the original authority having accepted "Nil" tax liability, the question of levy of interest would not arise. The C.I.T. (Appeals), in paragraph 24.1 of his order dated 30.01.2004, had held that there should be determination of interest under Section 201 (1A) contrary to his own findings in paragraph 24.2. The authority has accepted in the second limb that there exists '' no tax liability'' in terms of Section 201 (1) of the I.T.Act.
By virtue of the ratio of the decision of the Supreme Court rendered in the case of GE India Technology Centre P. Ltd., [2010 (9) TMI 7 - SUPREME COURT OF INDIA ] the transaction in the present case will not fall within the para meters of Section 195 and 201 (1) of the I.T. Act. We, therefore, answer the questions of law raised in favour of the appellant and against the Department.
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2015 (12) TMI 837
Transfer pricing adjustment - Held that:- Since the provisions of the Act makes it very clear that under Section 92 CA of I.T. Act the only option is to place the matter to the TPO and the same has not been followed, this Court feels it appropriate to set aside the order of the assessing authority so that the matter can be referred to the TPO.
Accordingly, the order impugned in this writ petition is set aside and the matter is remanded to the Assessing Authority who shall in turn refer the matter to the Transfer Pricing Officer. On such reference, the Transfer Pricing Officer shall proceed in accordance with the C.P.D.T. Regulations dated 20.05.2003. This writ petition stands disposed of in the above terms. Connected miscellaneous petition is closed. There shall be no orders as to the costs.
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2015 (12) TMI 836
Allowability of depreciation on goodwill - whether the Tribunal was justified in permitting the respondent assessee to for the first time raise an additional ground on the issue of liability of depreciation on goodwill before it? - Held that:- Any ground, legal contention or even a claim would be permissible to be raised for the first time before the appellate authority or the tribunal when the facts necessary to examine such ground, contention or claim are already on record. In such a case, the situation would be akin to allowing a pure question of law to be raised at any stage of the proceedings. Adverting to the facts of the present case, the Tribunal has, on facts found that the additional ground raised by the assessee is purely a legal ground. Moreover, as pointed out by the learned counsel for the assessee, the additional ground does not require further facts other than the facts which are already available on record. Under the circumstances, the above decision of this court in the case of Commissioner of Income Tax v. Mitesh Impex (2014 (4) TMI 484 - GUJARAT HIGH COURT ) would be squarely applicable to the facts of the present case.
The impugned order passed by the Tribunal, being in consonance with the principles laid down in the above decision, the question is required to be answered in the affirmative, that is, in favour of the assessee and against the revenue.
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2015 (12) TMI 835
Revision u/s 263 - CIT(A) directing the Income-tax Officer to make enquiries regarding the sources of investment in purchase of silver bars - Tribunal has held that the Commissioner of Income-tax had no jurisdiction to invoke the provisions of section 263 of the Act in view of the fact that the material obtained from the custom authorities did not form part of the record of the Assessing Officer - Held that:- This issue stands concluded by the decision of the Supreme Court in the case of C.I.T. v. Manjunathesware Packing Products (1997 (12) TMI 4 - SUPREME Court ) wherein the court has held that the revisional power conferred on the Commissioner of Income-tax under section 263 is of wide amplitude. It enables the Commissioner to call for and examine the record of any proceeding under the Act and pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment or cancelling the assessment and directing a fresh assessment, if he considers that any order passed by the Assessing Officer is erroneous insofar as it is prejudicial to the interests of the revenue. After examining the record and after making or causing to be made an enquiry if he considers the order to be erroneous then he can pass the order thereon as the circumstances of the case justify. Obviously, as a result of the enquiry he may come in possession of new material and he would be entitled to take that new material into account. If the material, which was not available to the Income-tax Officer when he made the assessment could thus be taken into consideration by the Commissioner after holding an enquiry, there is no reason why the material which had already come on record though subsequently to the making of the assessment cannot be taken into consideration. Also see COMMISSIONER OF INCOME TAX Versus VALLABHDAS VITHALDAS [2015 (5) TMI 615 - GUJARAT HIGH COURT ]
The reference is, accordingly, answered in the negative, that is, in favour of the revenue and against the assessee. The Appellate Tribunal was not right in law in holding that the Commissioner of Income-tax had no jurisdiction to invoke the powers under section 263 of the Act and direct the Income-tax Officer to make enquiries regarding source of investment in purchase of silver bars - Decided against assessee
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2015 (12) TMI 834
Reopening of assessment - Held that:- This Court does not find any tangible material warranting the Assessing Officer to reopen the assessment.
As far as the first respondent has no power to reopen the assessment year after a period of four years and the same is hit by limitation, the judgment relied by the petitioner reported Fenner (India) Ltd [1998 (11) TMI 66 - MADRAS High Court ] holds the field. - Decided in favour of assessee.
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2015 (12) TMI 833
Tds on commission paid to the agent who is a non-resident - Held that:- The commission amounts which were earned by the non-resident assessees for services rendered outside India cannot, therefore, be treated as an income which have either accrued or arisen in India. Therefore, the question of deducting TDS does not arise. - Decided in favour of assessee
Reopening of assessment - whether non-speaking and composite order have been passed - Held that:- Pursuant to the notice issued by the assessing officer, he is bound to consider the objections of the parties and pass a speaking order. But, in the instant case, without passing a separate order by considering the objection of the petitioner, the respondent has passed a composite and non- speaking order. Since it is a non-speaking and composite order, the same is liable to be set aside.
In the instant case, this Court does not find any tangible material warranting the assessing officer to re-open the assessment. ection 147 of the Act is exercised beyond a period of four years, therefore, the same is hit by limitation. Viewed from any angle, the respondent has not made out any ground to reopen the assessment order and the orders impugned in these Writ Petitions are liable to be set aside - Decided in favour of assessee
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2015 (12) TMI 832
Valuation of property - Adoption of State P.W.D. rates or the Central P.W.D. - Held that:- As decided in T.M.P.N.Murugesan -vs- Commissioner of Income-tax [2014 (8) TMI 57 - MADRAS HIGH COURT ] no justifiable ground to adopt the rate prevailing in cities like Delhi for the purpose of working out the cost of construction of house at Virudhunagar. When the details regarding the cost of construction at PWD rates for Virudhunagar District is applicable, there is no reason for the Valuation Officer to adopt the rate, which is prevalent at distant places and metropolitan cities like Delhi.
As in the present case the Tribunal was right in directing the Assessing Officer to adopt the State P.W.D. rates on the ground that the building is located in interior Tamil Nadu. - Decided against revenue
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2015 (12) TMI 831
Addition on account of alleged excess cost of construction - as per AO cost should be taken at ₹ 511 per sq. ft. as against ₹ 750 per sq. ft. shown by the Assessee - ITAT confirmed AO order - Held that:- An authentic determination of the cost of construction for the flats which were sold during the AY 2010-11 is not available in the record. Dr. Rakesh Gupta, learned counsel for the Assessee, states that the Assessee has in its possession all the relevant records which it is prepared to produce for determining the cost of construction in any manner that may be considered appropriate so that an arbitrary figure is not adopted.
In the considered view of the Court, the approach adopted by the ITAT in the matter was possibly not the best way of going about determining whether the CIT (A) was in error in adopting the figure of ₹ 700 per sq.ft. as the cost of construction of the flats in question. One method was to insist on a proper report of valuation taking into account the books of accounts maintained by the Assessee himself. The alternative method of taking the figure for 2008 and applying to it a 'mark up' by the cost inflation index should normally be resorted to when the Assessee is unable to produce its books of accounts or documents. Where it is prepared to do so, as in the present case, the former method should be adopted.
In view of the statement made by the counsel for the Assessee before this Court, the Court is of the view that the ITAT should re-examine the above issue on merits by calling for a report of valuation by any approved registered valuer as may be considered appropriate by the ITAT. The ITAT will issue appropriate directions regarding the production by the Assessee of its records relevant to the issue of determination of the cost of construction of the flats sold during the AY in question.
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